What’s happening in the legal profession these days? According to Toronto lawyer, innovative thinker and writer Mitch Kowalski, this is the most disruptive time in history of the legal profession. Kowalski spent over 20 years in law, most of those with major law firms, and, as he says on his website, he is not happy with what he found.
What did he see?
The legal model is failing lawyers
Underpinned by the billing by the hour, or billable hours, the legal business model creates an inherent conflict between lawyer and the client. Billing by the hour creates a disincentive for lawyers to work quickly and efficiently, as this means they will make less money on a file.
When the emphasis is on billable hours, clients are unable to budget effectively for the costs of legal matters. Best practices such as project management—balancing the constraints of the schedule, scope, budget, and quality—are still relatively new to the legal profession and are rarely used.
As a result clients often feel powerless! As a lawyer, are you going to put up with this ad infinitum or do what others are doing elsewhere—disrupt the status quo?
To be fair to this very conservative and risk averse profession, lawyers haven’t had much choice. As a result, neither had clients. Times are changing though, as the winds of innovation have reached the law firm quarters, too.
Much of the innovation seen in the recent decades has been enabled by technology. Technology is flattening power structures and ill-fitting practices across the world. The client no longer needs to fee powerless, and innovative lawyers who see beyond the billable hours paradigm now have options.
A lawyer’s biggest competitor is no longer another lawyer
There is another reason why the lawyers should not ignore technology and should not be comfortable in the billable hours modus operandi. Kowalski told lawyers in the audience at the 2012 Law Tech Camp in Toronto that their biggest competitors are not other lawyers but the smart young people who write code—the app builders.
Many think this doesn’t affect them, yet. Meanwhile, clients are gaining access to more and more apps that allow them to bypass the lawyers and resolve more and more legal issues themselves.
The new law firm
The new law firm, Kowalski adds, is built on the following principles:
- Smaller numbers of lawyers and greater use of non-lawyers
- Clearly defined niche: lawyers affiliate themselves with other lawyers for services they don’t specialize in
- Client-centric: provides quality service
- Culture of objectives: sells products, not time
- Predictable cost: moves away from billable hours
- Greater use of technology
Follow the above practices and watch the speed of delivery and the quality of legal services increase. The cost will have to decline on both sides—the lawyer’s and the client’s.
To lower the cost for the client, Kowalski suggests working with estimates and splitting the difference if the total spend comes under budget. Such an approach will surely convince clients to ignore an app or two!