Recently, I was interviewed by Lawtalk regarding the future of legal services in New Zealand. Here's my take:
What are the biggest changes you think New Zealand legal services providers need to make to remain viable?
There are effectively two groups in New Zealand who provide legal services: law firms and in-house counsel. The latter group is gaining ground and learning fast about how best to add commercial value to their clients and how to operate most effectively and efficiently. For this group, I think the challenge will continue to be how best to resource their departments, and how best to exert influence on their CEOs and boards so that they are perceived to be much more than lawyers managing reputational and legal risk. The growth of in-house counsel augurs well for their future.
Law firms on the other hand face much bigger challenges which will require them to completely re-think how they operate if they are to remain viable. The fundamental difference today compared with 10 years ago is that legal services has become a buyer’s market. Clients call the shots not the lawyers. Law firms have to understand and be prepared to meet new criteria for purchasing legal services such as pricing, convenience, and overall commercial value. Time, and billing by the hour, has already become irrelevant. Increasingly by their numbers and assisted by social media, the new generation of employees are calling the shots when it comes to the conditions of their employment. Employers need to shape new vibrant workplace cultures that breakaway from the traditional structures and offer a whole new way of flexible working, autonomy, high-trust and motivation. Numerous studies and ‘best employer’ benchmarks show that those organisations who invest in their people are more productive and profitable.
There will be some casualties as the progressives take on the conservatives, but it is both inevitable and imperative if firms want to stay ‘ahead of the curve’. This will require visionary leadership, something that has been as scarce as hen’s teeth in the 30 years I have been involved in the ‘profession.’
What do you see as the major developments which will happen in the delivery of legal services in New Zealand over the next five years?
I think legal services will become much more accessible and affordable with solutions available for straightforward work at the push of a button on an I-phone. Buyer sophistication will force legal service providers to meet the market by embracing technology and redesigning their business models. In the process we will see new structures, new automated processes, and new styles of law firm emerge to take advantage of a latent market for legal services.
In-house counsel will continue to grow in numbers and influence, offering better career options than private practice.
Traditional law firm structures (partners, senior associates etc) will disappear to be replaced by more agile, accommodating and innovative models. Law firm personnel may reduce with only the essential workforce retained full-time; the rest of the work will be contracted out to specialists in their respective legal or operational fields. Firms will be populated by more non-lawyers with new skills essential for service delivery. Traditional offices may be a thing of the past as progressive firms scale down, work from home or use hubs to carry out essential work. Increasing emphasis will be placed on making law businesses great places to work by adopting a ‘one team’ inclusive approach and by providing sufficient inspiration to engage the team. To facilitate all of this, I believe it would help to de-regulate the legal services industry in New Zealand so as to allow non-lawyers to be directors of law firms and to allow for alternative service providers similar to the UK and Australia. Failure to do so could prove to be a hindrance for incumbents and start-ups looking to make the most of the brave new world! It could also be the final nail in the coffin for the New Zealand ‘legal profession.’
Do you think the New Zealand legal profession in 2028 will be very different to the profession in 2018?
Yes. I think the ‘legal profession’ as we know it will become increasingly irrelevant and will eventually disappear to be replaced by a competitive ‘legal services industry’, one full of opportunity and one that is already taking shape thanks to some fundamental events and changes in our society. Generational change, technology and globalization are just three of the major triggers of change that are revolutionizing the world of business, not just the legal profession. For decades, lawyers and law firms have had a monopoly on the delivery of legal services but not anymore. Buyers of legal services no longer need to consult a lawyer or a law firm to access legal services, thanks to deregulation (overseas), the emergence of law firm/lawyer substitutes (accountants, online documentation, expert applications that automate traditional tasks), and ‘NewLaw’ innovation start-ups such as Riverview Law (UK), Hive Lawyers (Australia) and Valorem (USA) who have taken real steps to meet the needs of a buyer’s market. through specialization, restructuring and automation and in the process, are redesigning the DNA of ‘legal market’.
These trends are not temporary fads. You cannot put the genie back in the bottle. There is no going back to ‘the good old days’. Firms that ignore the trends and their ramifications do so at their own peril. It was Professor Stephen Mayson, former director of the UK-based Legal Services Institute who stated as far back as 2007: “The profession would be well advised to lose its current tendency to equate the legal services market with the legal profession. The market may grow and prosper; the legal profession may not.”. Take note.
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On April 27, Simon spoke to members of the Whitsunday Chamber of Commerce. Thanks to Allan and the rest of the team for having me. Met some great people.