When I taught a law school course to upper-year students last year, I encouraged them to do something that was not part of the class and would not result in any credit, but that I felt sure would help them in their future careers. I advised them to go out and hire a lawyer.
It didn’t really matter what kind of lawyer or for what kind of matter. It could be as simple as getting a will made out — it’s never too early to check that off your to-do list, it’s a service that’s commonly available in most university towns, and as legal retainers go, it’s not that expensive or complicated.
But the point of the exercise was not to end up with a legal document. The point was to experience what it felt like to hire a lawyer.
It was to understand, from a first-person perspective, the experience of a typical client: entering an arcane and intimidating environment with little knowledge, money, or confidence, in search of a needed service or outcome. I advised any students who tried this experiment to write down and reflect on everything about the experience:
How easy or difficult it was to find a nearby lawyer you thought could help;
How clear or opaque was the amount of money the lawyer’s services would cost you;
How convenient or inaccessible the lawyer’s hours and location turned out to be;
How warmly or distantly you were treated by the people who first greeted you;
How warmly or distantly you were treated by the lawyer who served you;
How well or poorly you felt understood and engaged by everyone at the firm; and
How clear or opaque were the information and instructions you left with.
Keep in mind, this foregoing list of items includes just the initial retainer and everything leading up to it. It’s the merest and least interesting tip of the iceberg from the lawyer’s point of view. But from the client’s perspective, the experience to this point has been decisive in setting the tone of the relationship.
I told the students to remember what this felt like — write it down or record it in some fashion. After a few years as a lawyer, you’ll completely forget what it was ever like on the other side of the table. If you do someday hire a lawyer yourself, it’ll probably be some colleague down the hall or a former classmate across town — and more importantly, you’ll be an experienced lawyer navigating this process with knowledge and confidence.
If you’ve never been a client — or if you’ve been one, but forgotten what it was like — then you will be a less effective and less professional lawyer than you would have been otherwise. The client is the cause and purpose of everything we do as lawyers, and it’s incumbent upon good lawyers to prioritize the client’s interests and needs above our own. That we’ve largely ignored or forgotten that, as lawyers, is a principal reason behind the legal profession’s current struggles.
Because the client is gaining power. That was the fundamental observation that inspired me to write my book, Law Is A Buyer’s Market: Building A Client-First Law Firm, and that drives everything I now say to law firms, legal organizations, and other legal market participants. The buyer is the one who’s calling the shots, and she’s going to be calling more and more of them as time goes on. So you’d better know how the buyer thinks and what she cares about even before she shows up in your office.
This is a buyer’s market because the buyers of legal services have more power and resources than they’ve ever possessed. They have access to detailed and accurate legal information, obtained free both from other buyers and from law firms themselves. They have recourse to other options for obtaining legal services - either from “lawyer substitutes” such as licensed paraprofessionals and increasingly sophisticated software programs, or from “law firm substitutes” such as online legal document providers, flex-time lawyer agencies, LPOs and managed legal services companies, and even accounting firms. They have all the motivation they need to seek alternative legal services provision, thanks to unprecedented economic pressures that mandate a different approach to legal spend.
Lawyers are unaccustomed to and unprepared for a buyer’s market in legal services, and their law firms are not adapted to this kind of environment. A law firm that assigns all its work to expensive lawyers who bill by the hour for their efforts and touch base with their clients only when the spirit moves them is a business that developed in a seller’s market for legal services and was never meant for what we now face. If your law firm is struggling with these new market conditions, it’s probably for the same reason that open-air villas don’t cope well with snowstorms — this is not the climate for which they were designed.
What can individual lawyers do? More than you might think. Identify the legal services “substitutes” now entering the market and figure out which ones you can adopt and deploy to increase your own efficiency and amplify your own productivity. Most of these substitutes, especially on the technology side, weren’t conceived as lawyer replacements; they are best viewed as lawyer augmenters, helping you serve your clients better, faster, and (yes) less expensively, because that’s what the client wants. Recalibrate your operations and reconcile your pricing models to focus on client outcomes and value delivered, not on lawyer time and effort spent. Understand that “client satisfaction” is the new benchmark for the success of your efforts, and that you should maximize the time you devote to measuring and improving it.
The road for law firms is going to be rockier. As I mentioned, these businesses evolved in a different environment, and it’s going to be difficult to re-engineer them to function well in this one. The effort is going to have to start with a reconsideration of the firm’s purpose in the market — the “Why are we even in business?” question. For most law firms, that question has long been answered by some variation on “Maximize the short-term annual profits of equity shareholders.” (If we’re being honest with ourselves.) That’s not a good enough answer for a professional business in a buyer’s market. Firms need to recommit themselves to serving the interests of their clients first and foremost, and that starts with delivering their services in ways that clients want.
Law firms are going to need to plot a three-part strategic course out of their current predicament. They need a strategy to ensure clients’ interests are served, one that encompasses the creation of client service protocols to maximize the client’s “user experience” of the firm and the tracking and improvement of clients’ outcomes and satisfaction therewith. They need a strategy to ensure competitive dominance, which should include knowing and acting upon clients’ purchasing criteria and using technological and procedural improvements to offer their services on an accessible and convenient basis. And they need a strategy to develop and sustain a professional culture, to ensure they’re serving the real needs of their diverse, multi-disciplinary workforce and aligning their compensation systems with what they wish their culture to be.
Law firms will also have to diversify their revenue-generating assets. The traditional law firm relies upon a single asset — the real-time efforts of lawyers — to generate nearly 100% of its revenue. Because those assets walk out the door every night and often threaten to defect to other firms, they are not reliable and in fact constitute a strategic vulnerability to the firms that house them. Law firms must develop alternative sources of revenue that are permanent, capital-specific, and scalable — subscription-based software programs, externally facing legal knowledge systems, and ancillary professional services not reliant on lawyers, to name a few examples. Someday, law firms will generate only about half their revenue from lawyers’ real-time efforts — and the sooner that day arrives, the stronger will be the law firm’s position and ability to compete in a multi-dimensional marketplace.
The new legal market is coming fast, and when it fully arrives, we’ll find that it’s far better for clients, who will get solutions to their problems and assistance with their opportunities faster, less expensively, and more effectively than under the old system. But we will also find that the new market will be better for lawyers, who will be forced to give up the billable work of drudgery and seek out other ways to provide value to clients, which is what most of us envisioned when we went to law school in the first place.
But whether we like the new world or not, it’s on its way here. The sooner you and your firm prepare, the better positioned you’ll be to dominate it when it arrives.
About Jordan Furlong
Jordan is a consultant, author, and legal market analyst who forecasts the impact of changing market conditions on lawyers and law firms. He has given dozens of presentations to audiences in the US, Canada, Europe and Australia over the past several years, including to law firms, state bars, courts, and many legal associations.
Formerly an award-winning editor of three major Canadian legal periodicals, Jordan is also a Fellow of the College of Law Practice Management and a member of the Advisory Board of the American Bar Association's Center for Innovation.
His most recent book, Law Is A Buyer's Market: Building a Client-First Law Firm, is available at his Law21 website (law21.ca/books.)