You Must Read this Article on The Bright Future for Small Firms
The era of the small law firm is dawning.
The big law business model is stumbling. Since “Bloody Thursday” in 2009 when big law firms laid off more than 748 staff and lawyers, dozens of firms have gone out of business or restructured. Clients are demanding lower costs and more efficient service, forcing law firms to rethink their rigid models. I’m not arguing that all big law firms will disappear entirely. Why should they? Many provide unparalleled service, the crème de la crème of legal services. They will continue to make sense for the biggest deals—the next time I merge my multi-billion dollar corporation with another multinational multi-billion dollar corporation, I certainly intend to hire one. But meanwhile… back to reality.
There are leaner, more cost-effective ways for lawyers to deliver services to most clients most of the time. What I observe every day as the CEO of Priori, a curated marketplace that connects business owners with vetted lawyers at transparent prices, is that mid-tier firms are shedding associates something serious. These lawyers want flexibility and independence—to service the clients that inspire them, at prices and pricing models that don’t cause potential business to blanch, at a rhythm and schedule that is sustainable.
These lawyers are entrepreneurial, gung ho, and ready to compete. I know them; they are the early-adopters of my company, and other legal technology companies, and their numbers are growing by leaps and bounds each year. Technology is the catalyst for their coming dominance. Previously disaggregated and fragmented, they can use technology to improve their efficiency with new tools that automate document production and assembly, workflow management research, and contract review. (PlainLegal, LawPal,Diligence Engine, Ebrevia, Ravel Law, Judicata) With this arsenal, they can maintain high-quality work at lower prices. And companies like mine and others help them connect with the clients they want, with other lawyers to assist (WireLawyer, Hire an Esquire), and back office functions, like billing, invoicing and collections, that they won’t need to build and replicate in house. I know naysayers abound, but… I’d bet my bottom dollar on this reality, and firms that don’t figure out how to compete are going to be undercut, again and again and again, until they disintegrate.
The irony of this new reality is that it’s also an old one. The rise of the gargantuan, bill-by-the-hour law firm is an invention of the second half of the twentieth century. Previously, lawyers worked in smaller firms, often on flat fee retainers, and advised clients on a range of legal and business matters. But what’s old is new again, and technology has the potential to revive this more robust, holistic, frontal-lobe approach to lawyering.
I see a future where being a lawyer isn’t every non-math over-achiever’s back up plan, because technology will erode the vertical hierarchy assembly-line approach to practicing law and create a flatter landscape connected by technology. In the more horizontal legal economy, the pioneering of entrepreneurial lawyers will drive down prices for all businesses and consumers, and foster a more competitive meritocracy of talent.
Article extracted from Forbes.com, writer Basha Rubin