publication of the International Legal Technology Association
Issue link: https://epubs.iltanet.org/i/550988
ILTA WHITE PAPER: JULY 2015 WWW.ILTANET.ORG 35 SURVIVING DISRUPTION: KM'S ROLE IN THE FUTURE LAW FIRM FUTURE SPACES What will law firms look like in the future, and how will they operate? Changing workplace demographics will continue to affect law firms profoundly. As the baby boomer generation exits the workforce, law firm leadership will shift to a more diverse group in terms of gender, ethnicity and educational backgrounds, with non-lawyer professional managers becoming the norm. As Gen Y and millennials progress through the ranks to partnership, firms must yield to greater demand for flexible work arrangements to meet these diverse partners' needs. Law firms will come to embrace work-life balance as essential for maintaining a healthy workplace and recruiting and retaining top talent. Firms will also adopt different physical workspaces, following the corporate trend of moving to newer, smarter and more connected offices to reduce costs with a smaller footprint. The desirability of office real estate will be determined by its connectivity (e.g., a building equipped with fiber-optic cable running from top to bottom to allow future technology to be plugged in and used without the need for an overhaul of the building's systems. As 24/7 connectivity reduces the demand for physical presence, lawyers will spend less time working in the office. Firms are examining new physical layouts with hoteling options, where lawyers work from home and come into the office on selected days only. The tradition "one lawyer per office" setup will disappear as firms finally follow the lead of professional service organizations and management consultancies that have used more flexible models for the last 20 years. Firms also must examine where their people need to be to perform their function. While some individuals need to be clustered, others do not. There will always be a need to be close to the client, so firms will likely continue to maintain offices in downtown business centers, but other parts of the team might be located in more cost-effective locations. This also aligns with the trend toward using offshore resources. Professional service firms such as IBM and Accenture have located resources in lower- cost jurisdictions, and some law firms have created their own captive offshore teams (for instance, one firm hired a knowledge management person in the Philippines, as noted in the article "The Emergence of Legal Outsourcing and Its Growth in India"). MORE MERGERS Law firms competing in the top end of the market must focus their efforts on achieving efficiency and economies of scale in response to increased competition and client demand for certainty and transparency in pricing. To date, law firm mergers have been driven primarily by a desire to amass a greater wealth of legal expertise in more locations to better serve clients and win a greater share of their legal spend. Economies of scale will become a second compelling driver for law firm mergers in the future. Potential benefits include: • Reduced operating costs • Lower fixed support costs relative to revenue generated • Smaller capital outlay required per partner for future investment and development of new practice areas Strategic sourcing will drive further consolidation as panels shrink in size, creating the need to offer clients significant and wide-ranging capabilities at home and abroad. Law firms that adapt to their clients' commercial and legal drivers by engaging the right resource for the right matter will continue to succeed. As in-house legal departments become more sophisticated, law firms that invest in the best technology and creatively seize opportunities to monetize their knowledge, processes and know- how to customize solutions that positively affect their clients' bottom lines will prosper. Knowledge management will be essential to keeping law firms in the game. HOW WILL LAW SCHOOLS ADAPT? Law schools will integrate the use of legal technology applications into the curriculum more