Peer to Peer Magazine

WWW.ILTANET.ORG 63 We can probably all agree on a few things: 1. Law firms are continually pressed to do more with less 2. Lawyers are increasingly turning to consultants to reduce costs and to alternative fee structures to attract and retain clients 3. Those measures simply aren't enough It doesn't have to be that way. It is still possible for law firms to be profitable, and sometimes in unexpected ways. Consider, for instance, the transactional law space — possibly one of the most underexploited areas of legal practice. QUESTIONING THE STATUS QUO In the United States, transactional work has fallen into a variety of categories. In larger firms, it's one of the departments that forms part of a full-service offering and is frequently considered an auxiliary function provided to high-profile clients — often as a loss leader. There are also boutique firms and regional players of different sizes that practice in typical transactional law areas like residential real estate, personal injury, intellectual property and debt collection. While transactional law firms and departments want to be profitable, their current business model prevents them from working to their fullest potential. Part of the challenge stems from the "hoarding" mentality that appears to be building in some firms — a mentality that results in lawyers keeping work instead of delegating it, so they can amass billable hours and cement their positions in the firm, even if it means sacrificing efficiency. In other cases, firms realize there's an issue but continue to throw resources at the problem blindly, hoping to find yet another solution that will inevitably be short-lived instead of undertaking a more comprehensive review of the situation. All of which raises the question: How long can transactional law continue to be delivered in the way it is today? Global trends tell us the status quo has to change. A BETTER WAY? Change is already underway in jurisdictions other than the United States. For instance, in the United Kingdom over the last several years, legislative amendments have opened the door to alternative business structures (ABS) that have enabled non-lawyers to get involved in the management or ownership of businesses that provide legal services. As a result, organizations other than law firms — including one of the U.K.'s leading grocers — can now offer consumers another option for their legal needs, primarily in the transactional law arena. Similarly, in Australia, a change in legislation paved the way for law firms to raise funds through an initial public offering (IPO), allowing non-lawyers to invest in the firms. In these jurisdictions, as alternative business models become more prevalent, the line is getting blurry between the roles lawyers and non-lawyers play in the provision of legal services. Increased competition has highlighted the commoditized nature of transactional law and has put pressure on traditional law firms to deliver services in faster, cheaper, smarter ways. Although these types of legislative changes haven't been introduced in the U.S. yet, it's only a matter of time until they are. We'll eventually see consumers getting a will and power of attorney with their laundry detergent at a big-box store. That can only mean even further pressure on firms and the way they operate. How will firms deal with that kind of competition? It won't be enough to continue to throw resources at processes that are inefficient or that emphasize people instead of workflows. Instead, wholesale change is needed. And the sooner, the better. RE-ENGINEERING FOR THE FUTURE Although technology will play a critical role in future-proofing your firm, it's even more critical to rethink your business model first. Law firms have traditionally focused on the people part of the equation — sometimes at the expense of efficiency. It's time to develop the workflows that will make firms operate as efficiently as possible. Once those workflows are established, firms can implement the technology that will best support their new processes. As alternative business models become more prevalent, the line is getting blurry between the roles lawyers and non-lawyers play in the provision of legal services. About the Author Jeffrey Brandt has been the CIO for several top 100 U.S. law firms. With almost 30 years of experience in legal automation, Jeffrey now consults with law firms and professionals on a diverse range of information and knowledge management projects. Jeffrey is also the Editor of the PinHawk Legal Technology Digest and a frequent educational speaker. Contact Jeffrey at jeffrey.k.brandt@gmail.com.

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