Last week, I had the pleasure of attending the 2013 Futures Conference hosted by the College of Law Practice Management. It was the first time Mattern & Associates sponsored the conference, and it won’t be the last.
One of the most engaging talks I attended was the keynote presentation by Stephen Mayson, Director and Professor of Strategy of The Legal Services Institute based in London.
The main point of Stephen’s discussion was the broken legal business model and how the UK has taken some steps to repair it. He based his talk on the following four points:
- The legal industry has lost track on how to create value for clients. He blamed this mostly on the principle of billing for time instead of the value created.
- There has not been enough innovation by lawyers on to how source legal services. He cited numerous examples of how in the UK, “legal services” are being provided by “non-lawyers” under alternative business licensing structures—and, in accordance with the new regulations, only 20% of the sum total of legal services must necessarily be provided by lawyers—the other 80% is up for grabs.
- In the UK, law firms are now able to be owned and financed by non-lawyers. This has created an opportunity for current non-lawyer employees of the firms in addition to corporations who want to invest and own the legal entities that are completing their legal transactions. As you can imagine, this second scenario may create some interesting conflicts.
- Under the current compensation model, law firms have been paid too much, too quickly for the wrong things.
Not being a lawyer but a buyer of legal services, I can see the validity of point number 1 which is a factor in alternative fee discussions. Points number 2 and 3 give way to opportunities for both legal and non-legal entities as well as healthy competition.
Point number 4 additionally emphasizes the need for law firms to embrace alternative fee models and cost recovery methods. But as Mayson also discussed, the idea of ‘alternative’ is problematic. Labeling these methods as ‘alternative’ or ‘outside’ makes them seem lesser or outside of the norm—which, Mayson claims, is not what the future holds. In fact, the ones that will, are the ones that will be successful in the future.
All very interesting food for thought.