LB editor-in-chief Alex Novarese recently posted a piece entitled ‘Innovation needs law firm champions’, which hooked on to the story of Axiom’s much-awaited flotation and made some excellent points on the limitations (versus the hype) of New Law. However, in discussing Axiom’s decision to split up its business pre-float, the claim was made that it is easier to see progress in the industry coming from conventional law firms, than New Law equivalents.
This argument just doesn’t hold water. Yes, conventional law firms might have the heft behind them to implement progress, but the hard truth is that they are hampered by their traditional structure. This is what has made the pace of change within the sector slow – the structure lacks transparency and responsiveness, promotes inefficiency and simply costs too much.
In short, it limits the agility and enterprise that would encourage investment in digitisation. To raise some obvious examples, if Uber, Google, or Accenture were structured as partnerships there is no doubt they wouldn’t have scaled or achieved the impact they enjoy today.
Further, the largest law firms can’t match the scale of the major companies they name among their clients or even the Big Four accountancy firms. Many enterprise legal service providers are coming at the market with a scale of investment behind them the like of which we haven’t seen before. And this scale is married to highly complex and global infrastructure, while BigLaw firms almost necessarily cannot have such a focus.
Ultimately, it comes down to client demand. The most demanding clients are after innovative solutions that require more than the top-tier legal acumen that for many years has been the bread and butter of these firms. Clients also need a provider that can identify and manage problems before they form; drawing on data, artificial intelligence, and other technologies to compress delivery time and predict outcomes. They also want the impact of legal services to be expanded beyond the confines of the traditional legal function to add value to other units in the business.
This doesn’t mean that BigLaw is not a critical component of the legal services ecosystem. They will undoubtedly evolve and further refine their ability to meet focused client demand, but they will do so in an ecosystem that also includes enterprise legal service providers that enable an entire new order of client value.
Dan Reed is chief executive of UnitedLex