'Fundamental Transformation' in the Legal Profession

“This car is leaving with or without you.”

I almost could hear my mother’s voice in my head as I read an article in last week’s ABA Journal Weekly Newsletter reporting that the legal profession may be on the cusp of a "fundamental transformation." While many law firms have experienced increasing profitability over the last two decades, they now are being forced to lay-off associates and other staff as their work (and revenues) dwindle. According to Richard Susskind, legal futurist and author of The End of Lawyers?, this change is being promulgated by law firm clients, who are becoming increasingly more sophisticated and discerning when farming out their legal work.

Legal costs are a line item that is an easy target. While other departments of many corporations have benefited from the use of new technology and efficiencies for years, a legal department’s MO has remained relatively unchanged – until recently. Susskind explains that clients now outsource much more of their legal work and are forcing their traditional law firms to collaborate with other legal services firms and vendors. He even suggests that there could be a trend internationally towards more non-lawyer management of legal businesses, which would likely result in the integration of online legal services and the automatic generation of documents.

Many clients, who remain anxious about sending their legal work overseas, are turning to domestic businesses like Counsel On Call to provide attorneys at a fraction of the hourly rates of traditional law firm lawyers. And, unlike law firms, we are accustomed to integration and better positioned to offer flexible, tailored solutions to corporations interested in taking advantage of new technology and efficiencies. As Susskind says, "clients [now] see that legal services can be delivered more cheaply, efficiently, quickly, and to a higher quality using new methods and business models."

That being said, often the toughest question to address is “I know I have to cut costs, but how do I actually do it?” It’s difficult to know where to start, but that’s where we come in. I have been meeting with a lot of in-house department heads and GCs in recent weeks, taking an hour or two to go over spending and budgets and identifying areas where we can create savings and efficiencies in 2009. If you do the same, it will undoubtedly be the most profitable time you spend all year.

Just remember, you’re driving the car. We’re there to make sure it’s a good ride.