There are three categories of intelligence in the legal vertical–intellectual, emotional, and artificial. Many lawyers have elevated IQ’s, though relatively few seem to possess high EQ’s– commonly called ‘people skills’. Only the best lawyers—trusted advisers– have both. Artificial intelligence (AI), a recent entrant in the legal vertical, scores high on IQ, but the jury is still out on whether machines can develop comparable EQ.
The legal industry is known for adherence to precedent, not innovation. While precedent remains a guiding principle in the practice of law, innovation is transforming the models, methods, and players involved in the buy/sell process of legal services. Technology, process, access to institutional capital, re-reregulation, client demand for enhanced value, and changes in other professional service industry delivery models—notably medicine and accounting– are legal innovation’s principal drivers.
It will be a glum holiday season for the lawyers and staff at King & Wood Mallesons (KWM). The multinational law firm giant, a single-branded legal network anchored by British, Australian, and Chinese member firms, is dissolving. The firm website describes the 2,700 lawyer amalgam as ‘the global elite firm of the next century.’ Its motto, ‘The Power of Together,’ is cruelly ironic—especially for many soon to be out of a job.
Good lawyers are problem solvers. The best ones forestall problems and, when they inherit them, prevent metastasis. So with demand for legal services robust and law firm demand flat three years and counting, law firms have a problem. Its crux is a misalignment of the traditional law firm model with the marketplace—except, perhaps, in certain high-value matters. Is it being fixed? Soaring partner profits (PPP) suggest it is. But the increasing percentage of legal services rendered outside law firms indicates the contrary. Which is it? Short answer: partners have fixed their challenge—how to increase PPP with a declining demand for law firms. Firms, on the other hand, have a worsening, systemic problem that threatens their sustainability.
The steel cage match called the Presidential campaign and the election is over. The people have spoken. The orderly transfer of power is underway—even as protests and cries of ‘He is not my president’ remind us that things are different. Deep, painful wounds remain that must be healed. Lawyers alone cannot repair them, of course. But they can—must– look beyond profit-per partner and focus on a bigger bottom line: preservation of the rule of law. They are its guardians, and it is critical that all lawyers—regardless of political persuasion or even political apathy—assume this role individually or collectively.
Miles van der Rohe, the noted architect, remarked: “Architecture depends on its time.” The same can be said about business structure–it depends on its time. A paradigm shift is occurring. Technology has enabled the creation of new business structures. It has facilitated a decentralized delivery structure, creating communities that connect sellers with buyers. This is sometimes called the collaborative or sharing economy, where individuals deploy underutilized assets—everything from cars and apartments to lawyers—to “share” with buyers. This eliminates centralized institutions that control supply and stifle competition by protectionist self-regulation. It has produced“ faster, cheaper, better” delivery of goods and services available on an as needed basis.