Law Firms Are Fat, Not Flat

When you look at what is happening in so many other industries, the so called flattening of those industries, you cannot help but be struck that the legal industry is so resistant to incorporating efficiencies into the legal process. While market forces in other industries drive companies to find the lowest cost alternative to handle a particular task, law firms seem almost impervious to the thought of innovation or efficiency. The same technology which is used in call centers, production, manufacturing, and other professional services is equally available to law firms. Yet, incorporation of the technology to save clients money or reduce legal costs is relatively non-existent across the legal services market, relative to other industries. It has been suggested that until clients demand that law firms deliver lower cost and higher quality services, law firms will not be motivated to act. While there may be something to this notion, I am not buying it.

In other markets, new market players and old market players embrace technology and outsourcing in order to gain market share and stop the competition. They don’t wait for the market to demand. They create the market. Law firms are insulated from the pressures of innovation because of licensing restrictions. For instance, lawyers need to be licensed in every state in which they regularly practice. Most lawyers are only licensed in one state. Ethics rules limit law firm marketing. In addition, there is a negative stigma to law firm marketing. Thus, law firms have very limited ability to get the message out to prospective clients that they are doing it differently, or are able to do more for less. Those law firms that are embracing change and innovation are hard to identify from the outside in. And from the inside out, law firms don’t have sales forces which are devoted to knocking on doors, making phone calls and otherwise providing comprehensive information to prospective clients about their services.

So, what needs to change in the legal market in order to for innovation to ensue? Does the change have to come from the client side? It is my belief that law firms and lawyers will have to employ traditional marketing and sales people who can go out into the market without the demands and pressures of having to bill time or work for clients on important matters and evangelize what they are doing. Without a marketing and sales force, the reach of any particular law firm to distinguish themselves in the market and reach new clients is extremely limited. The market must be educated as to how and why the flattening of the world and the availability of technology can revolutionize the way law is practiced. Without this important piece of the puzzle, the legal market will continue to be the caboose of the global train of innovation and technology adoption.