With market pressure leading to the rise of non-lawyers, firms are going through the process of learning how to best utilize this group alongside traditional legal resources
In a recent Prism UK survey, two-thirds of law firms surveyed said that they are concerned about the threat posed by accounting firms and alternative legal service providers, with 45 percent considering them a major threat.
As competition continues to grow, law firms are shifting their focus from a “practice of law” to a “business of law” mindset, transforming the DNA of the traditional model. Firms are evolving their operations to grow, or even merely survive, in part because clients demand it. They want greater efficiency, cost savings, and transparency, pushing law firms to demonstrate value in new and creative ways.
These pressures are affecting traditional leadership structures, as the business skills of non-lawyers are growing in importance within the new competitive climate. Daniel Rodriguez, Professor of Law at Northwestern Pritzker School of Law, explains that the legal profession has to be “de-siloed and multidisciplinary, creating a seamless synergy between law, business, and technology.”
Kevin Hogarth, Global Director of People and Culture at Norton Rose Fulbright, adds, “It’s driven a more fundamental reappraisal of a firm’s operating model. The traditional structure of partners effectively running the business, with some limited support services under their direction, is outdated and leaves a firm ill-equipped for today’s legal landscape.
“A new group of disciplines has emerged that is creating real value for our legal practitioners and our clients: resource management, project management, pricing and commercial terms, and technologies that automate or augment the delivery of services.”
Previous generations of lawyers may have been resistant to this type of change, but few, if any, senior lawyers today would deny that these new capabilities, and the professionals needed to lead them, are now a matter of survival.
This is driving a changing dynamic in the power structure of firms, leading to more collaborative approaches. As these functions have grown in size and strategic importance, their leaders have claimed a seat at the table, along with the autonomy and accountability to make choices that are best for the business.
These new skill sets offer both promise and challenges, which means firms need to not only define the capabilities and roles they need going forward, but also ensure collective buy-in among their leadership team. This requires partners to be open to reviewing legacy processes, with the inevitable need to confront politics, power bases, and resistance to change.
Otherwise, “unresolved governance problems may precipitate organizational crises,” notes Professor Laura Empson, Director of the Centre for Professional Service Firms at Cass Business School in London. “These crises may in turn lead to dramatic shifts in the balance of power within the firm and to changes in its structures and systems of governance.”
Another challenge lies in an influx of these new non-fee earning roles, which creates the risk of adding overhead expenses at a time when cost and efficiency are daily client demands. Juliane Diefenbach, Europe Practice Development and Knowledge Manager at Dentons Europe, believes education and positioning are crucial.
“Rather than simply transplanting a team of project managers into the firm, we first started with training, helping our lawyers to understand the discipline of project management, how it creates value, and the best practices they can apply to client work,” she says. “This made it tangible for partners and associates, giving them tools they can use in their role at the same time.”
This is why collaboration is essential. “We see ourselves as working in a team of teams and when we talk about collaboration, we don’t just mean internally,” Diefenbach adds. “Our clients are increasingly looking to move beyond one-way advice and our legal expertise to tap into our broader law firm expertise, helping them with knowledge structuring project management, automation. This is a really powerful way of building deeper client relationships.”
Collaboration means that all professionals in the firm work to deliver tangible value to clients, removing any counterproductive “us versus them” mentality. “We can’t maintain the artificial divide between the practice and the business of law,” argues Caryn Sandler, Partner and Chief Knowledge and Innovation Officer at Gilbert + Tobin. “It’s absolutely essential for lawyers to understand both to be successful in their legal careers, so it’s critical that it forms part of their education and ongoing training right from day zero.”