Legal Transformation: Strategic Planning Scenarios for the Legal Services Industry in 2020
By
Stephan Hagelauer
Senior Consultant, DSI
In September 2006, Business Week published an article entitled “Let’s Offshore the Lawyers,” which highlighted the observation that the legal industry appears to be evolving at a slower pace than the other economic sectors it serves. Little doubt exists that the pace of change within the legal sector will eventually match that of its client base—what remains unclear, however, is exactly what the nature of these changes will be as the industry is transformed to meet its future challenges.
Published in January 2008, Decision Strategies International’s groundbreaking report, “The Future of Legal Transformation: Your 2020 Vision of the Future,” or the Legal Transformation Study, provides insight into how today’s corporate counsels view the potential adaptations within their world. DuPont’s Vice President and Assistant General Counsel Tom Sager, and Corporate Counsel Justin Miller detail the issues facing corporate legal departments in their introduction to the study:
- “In the last decade, many of the leading legal departments, law firms, and service providers focused on ‘how’ they work—improving operating and process discipline in areas like discovery, budgeting/forecasting, alternative fees, and early case assessment. Along the way, they learned to reduce costs and improve results. During the next decade, operating discipline alone (e.g., ‘how’ we work) will not be enough to meet the challenges our corporate clients face. In the more global, volatile, and uncertain future, ‘what’ we work on with our corporate clients will increasingly define the client’s success (or failure). This is not just repositioning legal’s relationship with our business colleagues; it is a fundamental shift in the nature of our work. To truly engage our businesses differently—and better—we need to radically rethink our approach to risk, uncertainty, and value creation. As our future unfolds, being absolutely right will be far less important than being nimble and adaptive. Studying every aspect of an issue will yield to a new, more rapid style of decision making where the predominant belief is that even a decision that proves to be wrong is likely to provoke more useful information than could be learned by delaying decisions pending further study. Indeed, with the escalating speed of change in business, whole business opportunities could be lost or significantly de-valued if legal continues to exhaustively study every issue. Legal must learn to adapt to the speed of business at the speed of business while continuing to adhere to our company’s core values and our own professional ethical obligation.”
The body of the report explores the changing nature of the role of legal experts, and challenges current assumptions about how value is established within the legal industry. This pioneering study of the global legal sector, conducted by a cross-industry group of legal and business thought leaders, has identified 11 key trends and uncertainties likely to impact the legal profession over the next decade.
The study identified four provocative strategic planning scenarios for how legal services may be delivered in 2020. These four scenarios can be used as a framework for challenging current service models within the industry, answering key strategic questions, and helping stakeholders (including corporate law departments, law firms, and legal service suppliers) identify proactive strategies to ensure future success.
The four possible scenarios for the delivery of legal services between now and 2020 are:
- Blue-Chip Mega-Mania: A model that emphasizes the global consolidation of legal service providers and the dominance of giant law firms with vast global presence and offerings spanning all legal areas;
- Expertopia: A scenario that envisions the increasing complexity of the law and challenges of corporations operating in multiple environments worldwide, thereby placing a premium on specialization and expert-driven cultures at legal services organizations;
- E-Marketplace: A model built on the premise that technology will be a catalyst, but not the core, for an industry transformation in which an array of Web-based technologies will make information more available and expert judgment more valuable; and
- Techno-Law: A scenario that contemplates rising corporate investment in automation capabilities throughout the legal services industry, leaving only the high-end services to be delivered by legal professionals, and potentially requiring a complete reconstruction of the traditional business models in the legal services industry.
These four scenarios have prompted legal experts to pause and strategically consider the potential for both opportunity and risk in the changing competitive landscape: “In the past, law firms and corporate law departments have frequently been taken by surprise by unexpected forces that directly influenced the practice of law,” said Jim Seidl, president of Legal Research Center and co-developer of the DSI study. “The findings of this study will empower legal service providers to proactively compete more successfully in the global legal marketplace, reduce the risk of unexpected business surprises and threats, and identify new opportunities for business growth in the next decade.”
Mark Chandler, general counsel of Cisco Systems and a study contributor, agrees: “There can be no doubt that we are poised for significant change between now and 2020, with a wide range of business, technological, and regulatory forces sure to have a major impact on the way that legal services are delivered to corporations worldwide. This groundbreaking study identifies the likely components of these industry changes and prescribes important guidelines for how corporate law departments, law firms, and other legal service providers can start planning now to seize these emerging opportunities while protecting against competitive threats.”
Today, more than ever before, the legal industry is poised for rapid and dramatic change. The Legal Transformation Study provides focus on the critical success factors that will separate tomorrow’s winners from those who are left behind.
Sponsors of the Legal Transformation Study include Encore Legal Solutions, Altman Weil, Inc., Jomati Consultants LLP, Bridgeway Software, Inc., Deloitte Financial Advisory Services LLP, DuPont Legal, Eversheds, Intellevate, Meritas, and Solomon Page Group LLC. For more information or to order a copy of the complete study, please go to www.legaltransformation.com.
