Future firm What your practice will look like in 2044

A survey of law firm professionals has highlighted four key factors that will shape the future of law firms in the next three decades – and you had better be ready to adapt, writes James Boocock.

Legal professionals are very good at finding new and ever-more prudent ways to work in order to maximise their time – and that means embracing innovation and emerging technologies wherever possible. This is not going to slow down anytime soon. In fact, the next 30 years will see this change-cycle accelerate even faster, with ever-more ground-breaking changes and innovations emerging in our industry, driven by a variety of technological, economic and cultural forces.

Unfortunately, many firms – by their own admission – remain unprepared for this future. For the lucky ones, that will mean stagnated growth, but for the majority it will mean fighting over price-driven commoditised work – that is, if they are still around at all. However, for those willing to understand and, more importantly, adapt their firms accordingly while embracing technology, the rewards will be great. The future presents an exciting wealth of opportunities.

This is a topic of particular interest to Thomson Reuters, which is why we commissioned research into the key trends and issues on the radars of senior practitioners at law firms across Australia, helping us better understand where the market is heading in 20, 30 and even 40 years’ time. Following are some of the key findings.

1. Consumers are king
Professionals predicted three main trends in the law firm landscape by 2044; the emergence of more niche and specialised practices; fewer firms in a period of market consolidation; and, perhaps most worryingly for practitioners, a rise in ‘end-users’ managing their own legal affairs.

This last point is being driven by continued industry deregulation, resulting in the emergence of more commoditised legal services, something we are currently seeing with conveyancing and even family law, where online do-it-yourself tools and information are increasingly ubiquitous. Herein lies the rub for law firms; do they continue to accept capped-fee work, which in the short-medium term will more than likely drive profit, or do they embrace innovation, added-value and increasingly novel ways of offering clients value?

The time is now to decide because commoditisation is already well under way in many fields of law. So the investment in tools that make practitioners’ daily tasks more efficient, such as document assembly tools and preconfigured workflow, will make for higher chances of survival in an increasingly competitive market.

2. ‘Virtual’ firms come of age
While working remotely is already popular, in 30 years’ time this trend is set to dramatically grow, with a huge proportion of practitioners set to operate permanently outside of the office. To date, the technological practicalities of doing this have prevented this practice from becoming truly mainstream, but that will not be the case in years to come. The entry of ever-younger practitioners into the profession means that so-called ‘digital natives’ are rapidly becoming the dominant force. Already comfortable with researching and consuming information via mobile devices, this group will drive demand and adoption of remote working, and a paperless office, from the bottom up.

However, for true change to occur we also need to look to government. There remain myriad regulatory issues prohibiting true mobile working and paperless offices; for example, the need to hand-sign a cheque requisition in most states. However, we are seeing progressive regulatory attitudes from some quarters that indicate a willingness to change.

3. Super-specialism
The majority of decision-makers questioned in our survey predicted that, in response to legal services becoming more commoditised, their own firm would become more specialised, or highly specialised, in the years to come in order to stay competitive in the market. We will, no doubt, see further deregulation in the legal market, which will not only fuel further commoditisation, but also drive more non-traditional providers of legal services, making the market even more competitive.

For those firms that can successfully specialise, they will need to manage the inevitable demand from their clients to provide more predictability in the cost of completing their matter. Similar patterns can already be seen in the United Kingdom, where a sharp market correction has sped up this change and changed the legal landscape.

4. The vanishing legal library
Most respondents predicted their firm’s legal library would ‘virtually disappear’ by 2044. As dramatic as this may sound, it is already happening. This is being driven, in part, by the increase in digital and online information sources, and evolving information consumption habits (for example, tablets and smartphones, which bring major productivity benefits). Another major factor we will see driving this trend is cost saving, with technology offering other options in terms of saving expensive real estate.

However, apropos of this, we will also see librarians themselves evolving. Law firms will open up new revenue streams by placing increasing emphasis on non-lawyer experts who will provide specialist ‘know-how’ services to clients, including market insight, research and analysis.

These four issues, as different as they may all seem, are in fact all intrinsically linked. While to some they may seem scary, in many ways we are already halfway there. The good news is that in many cases future-proofing your firm can be as simple as adopting a sophisticated new practice management or workflow solution. And remember, the world will always need lawyers.

James Boocock is general manager of legal solutions and a future market trend specialist at Thomson Reuters.
www.thomsonreuters.com.au