As you may have read in my previous blog, last week I was in New York attending the ABA Spring Meeting 2014 taking part in a session called ‘The New Normal.’ This was designed to look at the ways in which the legal industry all over the world has been responding to recent change, as well as to the ongoing evolution of legal services. It was a panel discussion attended by a number of leaders in the legal field and I was there to represent both the UK and the reputation and brand issues facing law firms all over the globe.
Each attendee was assigned several specific areas on which to contribute and I was focused firstly on how client demands might be leading to firms becoming more agile organisations overall. The financial crisis has certainly ensured that nothing will ever be the same again in the legal market and the entire sector has changed dramatically since 2008. There are now pressures on in-house counsel to demonstrate they are ensuring value for money and the foundation of billing has changed – clients now expect firms to distinguish between high value work and routine, commoditised work, both with respect to fees and priorities. Social media was an area that I also raised as part of this discussion and the importance of this was demonstrated by Nina Barakzai, in-house counsel from BSkyB, who indicated that at the Legal Week conference recently she had looked at the social media presence of firms as an indicator of whether they were innovative and willing to change. This seemed to be a rather divisive point as several members of the audience picked up on this in the coffee break.
Firms have also had to change the way that they run themselves in response to the need for a legal advisor to now not only be a business savvy, legal expert but also a trusted advisor. This has resulted in changes to allocating work, charging, offshoring and outsourcing, hiring professional business service managers – rather than leaving management to lawyers – client liaison and relationship management.
Another area that I spoke about was those firms in mature markets winning more in growth jurisdictions. The BRIC markets have been targets for a while and there is a lot to learn from this when looking at MINT markets, as there a number of common aspects. For example, it is essential to establish presence and reputation locally so as to compete amongst the indigenous firms – being a ‘branch’ of an HQ firm just doesn’t cut it anymore. Cultural differences are key to the entire process and must be studied and understood, which requires good local hires. I told the audience that we found this in our research when compiling interviews for our White Paper entitled “Untapped Potential – UK Legal Services & Latin America” – which poses the question that while UK plc. has woken up to these opportunities, could UK LLP be doing more? And can it do more in such a way as to assist businesses in Latin American countries to fulfil their economic promise more quickly?
Then there’s the issue of international reputation – demonstrating that this can be useful and adapted on a local level is important so as to make it useful and relevant to local clients. Part of this is appreciating that countries do things differently – for example, some countries don’t bill by the hour so how does an international firm that uses this process avoid being seen as an expensive option?
The legal world needs to adapt in order to keep pace with modern business – the globalisation of trade has reached a stage where legal advice coverage cannot be provided through mergers and office set-ups by large international firms. This is driving a move away from an ‘infrastructure’ approach, to one of collaboration or association. It is worth noting that there is potentially a ‘levelling’ effect here – removing the advantage very large firms enjoy over smaller commercially focused law firms. However, to close the gap, small and mid-size firms need to focus hard on networking, business development, and building business relations with other law firms based on trust. Equally, large firms, to stay ahead, need to develop those same skills, and compete for key contacts in a way that some are unfamiliar with. One of the major challenges firms face with respect to client service lies in describing to the client the ‘client experience’ in this new world. Part of this is emphasising and putting greater value on, the role of lawyer as ‘trusted business adviser’ – a role more talked about than delivered currently.
All these challenges lie ahead in the not too distant future for every member of the legal services market. Whilst the requirement to evolve might be proving challenging, if the ABA Spring Meeting was anything to go by, the industry is more on the ball than many give us credit for.