The “New Normal” Calls for an Old Standard
Pretty much everyone associated with the US legal industry now understands what Barry Wolf, Executive Partner at Weil, Gotshal meant when he referred to the “new normal”—a surplus of legal services resulting from a downturn in business from large clients. The term “the new normal” has now become almost synonymous with AFAs (Alternative Fee Arrangements), which typically means fixed-fee pricing.
So what does the "new normal" mean for large law firms? In a recent article onABAJournal.com, Legal Rebel Patrick J. Lamb explained that, “It means that pressure continues to build on the Old Normal.” In other words, law firms that continue to transact business as usual are facing ever more pressure to adapt to the economics of the “new normal,” a world where hourly billing and blank checks from large corporate clients is rapidly disappearing.
“How firms choose to respond to this continuing pressure,” states Lamb, “is surely of interest, but there is scant evidence to suggest anything other than change at the periphery, which is hardly going to relieve the pressure. How individual partners choose to respond to the pressure is perhaps of greater interest. Simply turning a blind eye to the pressure is using hope as a strategy, a fool’s errand.”
Not to sound too unsympathetic, here, but large law is now facing the same problem that small law has been dealing with for years: commoditization of its core product offerings. What’s more, what is now considered the “new normal” for law firms is the old normal for most of the corporate world, where the harsh laws of supply and demand have shaped survivors into lean, agile competitors that, by necessity, adopt every technological advantage that comes along. It’s life in the jungle, and it’s not for the timid or ill prepared.
Beyond common platforms and business applications, it’s now time for large law to take the next technological step—embracing process automation on a broad scale. The most obvious first step is for law firms to deploy one of the oldest and best established standards in the technology world—document generation, which not only allows firms to virtually eliminate human error from the document generation process but, also, to go far towards fixing transactional costs, a necessity when clients are demanding fixed prices.
Beyond document generation, firms would do well to implement Business Process Management systems (BPMs) to automate entire practice areas, taking caution, of course, to choose a BPM that integrates well with its chosen document generation platform. Leaders in this space are Pegasystems, Appian, K2, Nintex, Micropact, and Agilepoint. Enterprise-grade document generation platforms and elite BPMs will have highly evolved APIs, enabling firms to integrate the two types of process applications to create unified line-of-business solutions.