A sign of things to come?
Recently, I had the opportunity to attend the Legal Futures conference in London. It provided some fascinating insights into the future of the legal services industry in the UK. Over 150 delegates were given a taste of what’s to come as a consequence of the Government’s ‘liberalisation’ of the legal services industry .
The ‘liberalisation’ I refer to has been brought about by the Legal Services Act which comes into effect on 6 October 2011. Apart from reforms to the regulatory regime, the main change will see the introduction of ‘Alternative Business Structures’ (ABSs) which are intended to create different ways to provide legal services, offer wider choice for consumers and break down barriers to entry. Among the notable changes, ABSs will allow for external ownership of law firms.
Already there have been some innovative developments here. For example, just a couple of weeks ago, the interestingly named national law firm network Quality Solicitors has announced a tie-up with bookstore and newsagent WH Smith to place ‘Legal Access Points’ in hundreds of the high street retailer’s stores following a successful pilot. According to reports, all Quality Solicitors firms will also soon start opening on Saturdays and will offer a wide range of fixed-fee services which will be run by the local Quality Solicitors firm.
In an inspiring keynote address, renowned author and futurist Professor Richard Susskind opened the conference and explained that law firms had to address 4 key ‘pressures’:
1. The need to offer more for less - he predicted that only lawyers who could deliver better and more accessible legal services at a lower cost – ‘more for less’ – would flourish in future. He cited successful innovations in this area such as the outsourcing by Thames Water of its legal department to Berwin Leighton Paisner; City firms sub-contracting legal work to English qualified lawyers in New Zealand and South Africa working on lower hourly rates; and the purchase of global LPO provider Pangea3 by Thomson Reuters, which he identified as “probably the biggest legal business in the world” comprising more than 1,000 lawyers and 2,000 software engineers. “I am speaking to general counsel, in-house lawyers… who are under pressure to take 50% off their legal spend with external law firms. This is pressure of an unprecedented sort,” he added.
2. The ‘liberalistion’ of the UK profession – he suggested that no-one really could predict what would happen post 6 October but that ‘the market would do its stuff’ and that the opportunities provided by liberalization would attract interest from entrepreneurs and investors to this multi-million pound sector of the economy. He went on to predict that medium-sized firms would need to merge to survive. Traditional general practitioners will be hardest hit, he warned, ‘because so many of them are doing routine and repetitive work that will be alternatively sourced’.
3. The move towards ‘commoditization’ of legal services – he indicated that law firms would need to rethink their approach to delivering legal services beyond the traditional ‘bespoke’ approach, especially as the market demands it. Already, many law firms have standardized, systemized and packaged many aspects of their service and this, he predicted, will continue.
4. The exponential growth and impact of information technology - he warned that too many lawyers believe they are immune from technological developments affecting the rest of society. He went on to outline a number of developments that are impacting significantly on the legal industry:
- the exponential growth of computer processing power that could mean desktop machines would be able to process information at the speed of the human brain by 2020 and as fast as “all of humanity put together” by 2050. ‘It might be time therefore for lawyers to rethink some of their working practices’, he joked.
- the imminent arrival of high-definition desktop video conferencing as a tool which could have a profound effect on the way lawyers practise.
- the development of online forms of dispute resolution driven by people’s desire to avoid litigation and disputes wherever possible. For example, he quoted eBay which gives rise to around 60 million disputes a year, many of which get to settle without recourse to a the court process.
Finally, he stressed the importance of making justice under the law the starting point for the profession and that legal help, of whatever kind, should be accessible and affordable.
To illustrate how technology is facilitating easier access to and management of legal services, delegates also got a first hand look at new products on the market from providers such as Epoq, Peppermint Technology and IRIS.
Overall, a most interesting conference that illustrated how dynamic the legal industry is in this part of the world and what may lie ahead for countries such as New Zealand where the legal services industry is certainly lagging behind its UK counterparts.
I wonder if the regulator there is reading this!