By Anders Spile.
The COVID-19 pandemic has forced companies to leverage technology like never before. Technology is no longer a promise but a lifebuoy. Physical distant measures have resulted in remote work and a digital working culture – and in that process, the modern office building has proven to be largely redundant. The crisis has worked a bit like photographic developer that exposes some otherwise hidden contours: Now, companies everywhere are looking into cutting costs by reducing their real estate footprint.
Contrary to what has shown to be the technological status quo and nature of their business, most law firms are still weary giants of flesh and steel. They inhabit huge concrete fortresses on fancy locations with expensive modernist artworks on the walls, fountains in the hallway and 3-course menus served at the top floors. But for how long will modern companies put up with financing such a luxury treatment when the core service of lawyers – knowledge – is better provided digitally?
The pandemic shows us that it is time for law firms to drop the trophy real estate and embrace digital fluidity. It requires a new mentality, but the benefits are huge.
In 2019, I published an article titled “The Fluid Law Firm”. The objective of that article was to offer insights on how to combine core aspects of open innovation theories with the way a majority of law firms currently operate. The piece received attention and sparked follow-up articles, an Ebook and several debates on the aspects of fluid law firm theory.
In those dialogues, one important aspect keeps surfacing. Law firm executives are still trying to shove the principles of law firm fluidity into the classic way of doing things in a law firm. In other words, the traditional boundaries of the law firm have not become fluid, they have just been expanded. In this article, I will introduce a different approach to law firm fluidity that I hope will inspire to look beyond the current governance and operational structures of law firms.
The nature of being a lawyer is that you are paid in exchange for establishing the certainty of outcomes for clients. To establish certainty, one must have knowledge obtained through years of hard work. While knowledge is the most valuable resource of a law firm, it is also what fuels the internet.
The main value of the internet - in its current state - is the ease of exchanging information and knowledge. This begs the question if the value of a lawyer is to apply Knowledge, to create certainty, why doesn’t the internet and its infinite opportunities for sharing knowledge play a larger role in the externalization of larger law firms? When you live off the exchange of knowledge and you have access to the greatest platform for sharing knowledge ever seen by man, why are you locking 1000 people up in concrete fortresses located on some of the most expensive addresses in the world? What is truly needed in the industry is the introduction of full on digital fluidity.
While the notion of Fluid Law Firms is about increasing fluidity in the boundaries of law firms, digital fluidity refers to the creation of business units or entire law firms without a fixed address. These units can consist of working legal professionals scattered across the globe, collaborating on a single case using digital collaboration tools. Digital fluidity is about replacing the boundaries with a network mindset, where the law firms or legal professionals form up just one node. In its most basic form, it’s about the establishment of a remote work-culture in the legal industry, but that is only the beginning. The idea is that a firm’s assets are not limited only to what they possess, but rather the networks and systems with whom they interact.
Digital fluidity can be something as simple as realizing that engaging with industry does not mean sending 2 lawyers to a meetup twice a month, but rather establishing an ecosystem for ongoing communication and collaboration with interested stakeholders.
Many lawyers will most likely deny that this is possible. Then they turn around and solve cases for large tech companies and consulting houses who are doing exactly that. It is true that this way of working is a radical change to the operations of the legal industry. But in an industry relying heavily on knowledge, such initiatives should have been adopted years ago. Not only does it offer a significantly more digital approach to legal work, but it also offers a large degree of flexibility to employees in an industry notoriously known for being stressful and inflexible.
It is no secret, that the majority of law firms currently have no idea how to handle Generation Z. Young lawyers choosing family and friends over the partner-track would have seemed insane just 25 years ago. Yet here we are, with bright young legal minds choosing the path of in-house counsel just to be able to come home for dinner or take a vacation longer than 2 weeks. What is equally important is that facilitating a luxurious physical environment is expensive and it’s a terrible message to send to cost-conscious modern clients that are aware of how superfluous to the core business these expenses are. By getting rid of the receptionists and the mahogany-furniture, law firms could lower their prices and gain competitive advantages without it having an effect on revenues.
Digital Fluidity is not a yes-or-no questions. Taking baby steps is the only real way of succeeding and identifying simple business cases where is applies is the true path to success. The current pandemic has shown us that this is possible. Initiatives like Vario introduced by Pinsent Masons is a testament to how larger law firms can approach Digital Fluidity without risking their core business. In my opinion, something much simpler could do, for example, the establishment of a startup community where associates service interesting tech startups on a pro-bono basis, in order to generate new clients and hopefully M&A cases down the road. Same could be applied to specific industries where the inclusion of experts from outside the firms would increase the value of such networks significantly. Starting with a single working group or practice area is a step in the right direction. Start small and scale fast is often the way to succeed in legal innovation.
Digital Fluidity is not an all- or nothing choice. It is to be applied where it makes sense. It would not surprise me, however, to see law firms emerge in the coming 10 years that exists only in cyberspace with the ability to obtain talent, solve complex cases by leveraging experts from around the globe, engage with millions of potential clients through networks and ecosystems, and never walk through the front gate of the concrete fortresses.
About the Author
Anders Spile is client executive advisor in Contractbook. He has hands-on experience as to what it takes to develop an innovation strategy and implement legal tech solutions in larger law firms. Anders also is a European Legal Technology Association (ELTA) ambassador.