New protocols for traditional services

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By definition, when we talk about the future of the legal profession we’re talking about something somewhere on the horizon.

But there are some out there who aren’t waiting for that ephemeral “sooner” or “later” to arrive – for them, the future is now. They are putting into practice the possibilities being mooted as solutions to the profession’s current or coming travails.

These legal service providers are “responding to pressures to remain profitable while providing clients with quality legal services at lower, predictable rates,” according to a background paper prepared for the CBA’s Legal Futures Initiative, which dubs these operations “pioneers in 21st century legal service.”

The paper looks at 14 case studies, firms that have found new ways to provide – and bill for – traditional services. These are firms that aren’t talking about new business models, they’re working with them. Alternate billing isn’t a “some day, maybe” thing, it’s already being practised.

Furthermore, and most importantly, these providers are prospering.

Think about this: at a time when legal grads in Canada and the U.S. are finding jobs thin on the ground, Co-operative Legal Services Ltd. in the U.K. – wherein legal services were combined with the retail industry to provide low-cost legal services to The Co-operative Group’s seven million members – is planning to hire 3,000 legal professionals over the next five years to meet demand for services.

Or about this: Australian firm Slater & Gordon has reported 31 per cent compound annual revenue growth since becoming the world’s first publicly traded law firm in 2007. In 2010-11, revenue grew 46 per cent over the previous period.

The paper looks at freelance lawyering, fixed-fee arrangements, off-shoring, online dispute resolution, process-mapping, cloud computing, external investments, automated document assembly and information sharing.

In all 14 cases studied, both lawyers and clients reap the rewards. Clients benefit not only from reduced fees, but also in many cases services tailored to their unique needs.

Lawyers, on the other hand, benefit in a number of ways depending on the model – in a publicly traded firm, for example, the authors note that clients may become shareholders, which has the potential of increasing client loyalty. The firm can use its capital resources to invest in ways that benefit clients, and incorporation allows it to benefit from corporate tax advantages.

By reaching a legal process outsourcing deal with CPA Global in 2009, Rio Tinto saved $14 million within a year, estimates suggest, while freeing up in-house counsel to attend to more complex matters.

By allowing external investment, law firms can increase their access to capital while taking management out of the hands of partners, which may increase its revenue growth. Freelancing means in-house counsel and law firms can bring in legal help when they need it without staff costs, while lawyers benefit from flexible work-hour arrangements.

Canada’s regulatory environment may not currently allow for these business models, but that doesn’t mean there’s no room for innovation right now, for those with the will to see the way.

Others are already enjoying success with futuristic business models. Does that make you more motivated to try them?

May 27, 2013 |
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