Why large law firms face extinction by irrelevancy

13
Mar
2014

Nicole Black

For some time now, I have encouraged law firms to embrace change or pay the price of irrelevancy. It’s been my contention that because of the wide scale proliferation of mobile and cloud computing, 21st century legal consumers expect more from their legal counsel than ever before. They are used to instantaneous access to information and are more discriminating and demanding. They seek affordable, convenient, 24/7 access to legal representation using the latest technologies. 

The law firms that provide them with what they seek will get their business. In other words, the law firms that pivot with the changing times are the ones that will succeed in this increasingly competitive global legal marketplace. 

One of my favorite explanations of this concept is found in a Fast Company article from a few years ago: Pop Goes the Pivot. The author explains that companies that hope to avoid irrelevancy in the 21st century must re-envision their business practices to conform with the times and the key is to avoid conducting business as usual. For law firms that means constantly reevaluating the methods of delivering legal services.

When it comes to pivoting, large law firms seem destined to fail since, by their very nature, they are: 1) large, 2) precedent-based, and 3) run by lawyers. As a result, large firms are slow to change and cling to doing things the way they have always been done. I base this conclusion on 2 things: conversations with IT representatives from large firms and survey results regarding large law firms’ use of emerging technologies such as cloud and mobile computing. 

For example, according to the 2013 International Legal Technology Association (ILTA) and Inside Legal Technology Purchasing Survey results, which included responses from more than 1,200 ILTA member firms, the top technology purchases among all surveyed firms included desktop hardware (58%), laptops/notebooks (49%), storage area networks (48%), network/server upgrades (44%), and disaster recovery (33%). In other words, the survey results indicated that large firms’ view of the future didn’t include investment in the cloud as a priority. Instead, nearly 50% of firms surveyed were investing heavily in their onsite storage area networks and servers. 

This focus on premise-based technology is incredibly short sighted and detrimental to the long term responsiveness of these firms - and I’m not the only one who believes this to be true. Brian Inkster, a fellow attorney from across the Pond, reaches the same conclusion in this recent blog post, where he discusses a recent article about the IT purchasing decisions of large law firms: “An article on the cloud tells us that lawyers will be able to work using any connected device. Will! They can. I do…(The article is based on) interviews with Chief Information Officers or IT Partners at Big Law. All who are in law firms that are clearly several years behind when it comes to cloud technology. It is, however, recognised that the problem is that Big Law has invested heavily in non-cloud based technology and needs to “sweat their expensive IT investments” before they can justify a move to the cloud.”

And therein lies the problem - large law firms are too invested in legacy systems of the past and are thus too big and clunky to pivot. Not to mention the fact that their in-house IT staff have no incentive to encourage change. To do so would mean the loss of many of their current job functions. 

So for now, the game plan for large firms seems to be to stick to the status quo. Let’s just hope their decision to change at a snail’s pace doesn’t lead them down the same path as the dinosaurs. Because when it comes right down to it, pivoting, while sometimes a painful process, is far better than extinction by irrelevancy.