The quarterly publication of the International Legal Technology Association
Issue link: https://epubs.iltanet.org/i/11430
For the law business in the coming decade, this sort of geologic comparison seems especially appropriate. Taking it perhaps a bit too far, the preceding decade was, at least until its waning 18 months, a high plain indeed. That decade marked unprecedented revenue and profit growth, the latter driven by annual price increases that for some firms reached double digits. The year 2007 was, for many in the AmLaw 200, the best year on record. We all know what happened next. The mortgage crisis hit in 2008, then the credit markets collapsed, and global equities began a months-long decline. The Great Recession rose up like a storm cloud and everything changed, perhaps forever. Exhilaration or Dread? Until the recession turns, not much is certain. The law business is as stressed as it has been at any time in the last 50 years. But what will come of that stress? Should we be exhilarated, or full of dread? Commentators such as Richard Susskind believe the coming decade will be one of dramatic change: When the storm lifts, the terrain is going to look wildly different . . . Those who think the techniques they must adopt to survive over the next few months will be irrelevant to the future are fundamentally mistaken. They are with us for life. Implicit in such pronouncements is a certain kind of mortal dread: Some firms will fail. Only those that adapt will succeed. Susskind’s last book did not leave his conclusion implicit, by the way. It’s titled The End of Lawyers. Point taken. At the other end of the spectrum are those curmudgeons, including, apparently, a number of law firms, who think that we have experienced a disruption, not a major shift, and that everything will soon be just peachy again. In a recent Altman Weil survey, for example, 75 percent of corporate chief legal officers (CLOs) reported that, in spite of unprecedented pressure for change, law firms had “little or no interest” in changing the traditional law firm model. Implicit in that position is the assumption that, given enough time, the industry will get back up on its high plain of profitability and continue happily onward. So, which will it be — exhilaration or dread? What will the coming decade bring? We will begin to answer that question in this article by comparing the legal industry’s current position with that of another industry — the newspaper business. A decade ago, it too stood on a precipice. What happened next is a lesson in the costs of complacency in the face of a rapidly changing marketplace. Following that object lesson, we will begin addressing related questions. How can we manage profound change and do so not only to cope with the stresses it imposes, but to positively thrive in the coming decade? What skills for lawyers and professional staff will be imperative for the firms that will emerge as leaders? What technologies will be paramount? What will the law firm of 2020 look like and how will it differ from the firm of today? In coming months and years, we will explore these and other critical questions as part of the ILTA’s Law2020 initiative. But before we look forward, let us first look back, in the spirit of Santayana: “Those who cannot remember the past are condemned to repeat it.” Stop the Presses John Morton, an observer of the newspaper industry, wrote this in the American Journalism Review in October 1994: Newspapers are renowned, and sometimes vilified, for their high profits. Even during recessions, when the profits of many other businesses fall sharply or disappear, newspapers usually still post more-than- respectable earnings. Newspaper Industry Ad Revenue: 1950-2009 70 60 50 40 30 20 10 1950 1955 1960 1965 1970 1975 Nominal Dollars 44 www.iltanet.org Peer to Peer 1980 1985 Real Dollars Source: Columbia Journalism Review 1990 1995 2000 2005 2010 Billions of Dollars