In Chapter 6 of Richard Susskind’s book “Tomorrow’s Lawyers”, he discusses the status quo of how law firms have operated historically, and just how risky these traditions may be in the current global economic and social markets.
In working for a medium sized full service law firm this past summer, I absolutely agree with the concerns surrounding the sustainability of the traditional model of law firm operations. Considering costs associated with the practice in addition to the “extras” which the large firms consider to be a part of the basic “necessities”, it is clear that the amount of money being generated and spent goes beyond what can reasonably be sustained in the current economy. These include corporate lunches, dinners and parties. Although my firm is a medium sized firm, the partnership was always keen on ensuring that the lawyers felt appreciated by hosting lunches, dinners, marketing and networking events in addition to an annual retreat.
It would be a lie to say that I was not happy to receive such generosity and appreciation by my superiors and colleagues, however, I have to be honest in admitting that these “extras” are not as “necessary” as we’d like to think they are.
When I think about where the money comes from to provide such gifts to the lawyers at the firm, I always end up with one source; the clients. It seems problematic to use funds allocated and paid for legal services towards personal expenses in house. However, this has always been “the way”.
Susskind notes that “lawyers have for many years performed routine work for which they have been overqualified and for which, in turn, they have been overcharging”.
Does the above statement explain why the traditional model has become entrenched in firm culture? I would argue that the compensation received from clients for legal services must cover the special knowledge, understanding and reassurance that a lawyer provides their client. Namely, clients pay to have a lawyer deal with their matter in order for them to feel as relaxed as possible with their predicament. The specialized and privileged access to information granted to lawyers is also a chargeable service in my view. Considering the average law school education amounts to sixty or so thousand dollars excluding undergraduate or postgraduate studies, it seems understandable why young lawyers are eager to join a firm where they will have the potential to grow into a gainful practice that follows the traditional model.
Susskind is correct however in stating that “to survive and thrive I suspect most will need to [make] changes to enable the changes from their current approach to a new, sustainable, longer-term business model.”
Personally, I think the primary issue is that clients are able to access plenty of information online through a variety of platforms, including digital lawyer substitutes. These substitutes offer users an online, self-serve options in drafting routine documents such as leases, powers of attorney, etc. Other sites offer legal advice, etc.
If law firms perceived these substitute services as legitimate threats to their business then change would likely arise. However, law firms, specifically the large global firms, do not recognize the threat and therefor are not motivated to change. Maybe this is the root of the problem?
History tells us however, that giants can be defeated by the “little guy”.