https://www.clawscustomboxes.com/krqui3zrn The legal profession around the world is in a period of major – even transformational – change.[1] The global market for corporate legal services has become increasingly competitive. In this legal environment we are seeing the world’s largest accounting firms offering legal services (outside of the U.S.) to mid to large, national, and multinational corporate clients through alternative forms of multidisciplinary practice models.[2]
The Big Four accounting firms – Deloitte LLP, PricewaterhouseCoopers LLP (“PwC”), Ernst & Young LLP (“E & Y”) and KPMG LLP – are sophisticated global organizations that have been “transforming themselves from audit firms, to multidisciplinary professional service firms, to ‘globally integrated business solution providers’ – where an important component of the business solutions that they offer is law.[3]
https://www.psicologialaboral.net/2024/08/07/aji62rwz6y Legal problems are increasingly viewed as business challenges raising legal issues.
https://nedediciones.com/uncategorized/jbm36voe – Mark Cohen, Forbes[4]
https://blog.extraface.com/2024/08/07/yimtc00zq The Big Four are beginning to be looked upon as more than “just the scorers”, they are becoming recognised as multidisciplinary business advisers who can solve complex problems and decrease enterprise risk. This includes everything from regulatory compliance to due diligence, to corporate and commercial, mergers and acquisitions, disruptive technology,[5] cybersecurity, etcetera – the kinds of business and legal problems that only teams of multidisciplinary experts can tackle. In the process, the Big Four are building a reputation in the global market for cost effective business-related legal services – capitalizing on (a) their innovation in respect to processes, technology, multi-disciplinary partnerships, and delivery model, and (b) their expertise in business methodology such as process management, unbundling of legal services and commoditization, outsourcing, and partnering.[6]
It appears that the Big Four may be formidable competitors in the new climate of “more for less”,[7] which even the most skeptical legal commentators now concede is reshaping the global market for corporate legal services.[8] The Big Four are actively competing in the global corporate legal market with other alternative legal services providers, disrupting the business relationships of the traditional law firm model, and fostering new long-term corporate relationships for themselves.
https://sugandhmalhotra.com/2024/08/07/ojroq8lfvr As impressive as the global expansion of the Big Four legal networks has been over the last decade, there are good reasons to believe that they may be even more successful in penetrating the corporate legal services market in the decades to come. It is by now common knowledge that corporate clients are increasingly seeking comprehensive or all-inclusive solutions that cost effectively integrate law into a wider category of “business solutions”—indeed, exactly the approach the Big Four exemplify and advocate in the legal market’s new normal.[9]
Law Firms should be afraid, very afraid. We’ve all been waiting for it, and now it seems like the accountants are finally making their move.
– Colin Cameron, legal consultant[10]
Worldwide the legal profession is in an era of turbulence and change. Sophisticated corporate clients – in particular, but not limited to, national and multinational corporations – are demanding much more value from their legal service providers for their legal spend, more cost effective legal services, and problem solving that straddles disciplinary lines, such as law and business, technology (and the Fourth Industrial Revolution),[11] and strategy.[12] BigLaw and traditional law firms are faced with the urgent question of how to adapt to a legal marketplace in the midst of alternative legal service providers, disruption, and reinvention.[13]
Corporate clients no longer see traditional law firms as a one-stop shop for their legal needs – and according to the Altman Weil 2016 Chief Legal Officer Survey there is a concern about “the lack of innovation in service delivery by law firms”.[14] Corporate clients are engaged in a “paradigm shift”:[15]
“(1) an increasing willingness to procure services from providers with delivery models different than the traditional law firm partnership model; (2) taking more work in-house; (3) sourcing work—either internally or externally—to providers that are better aligned than law firms with the company’s risk tolerance and enterprise objectives; (4) utilizing technology, process, and ‘the right person for the right task’ to promote efficiency, mitigate risk, and reduce cost; and (5) rejecting the longstanding myth that only law firms—and lawyers—must perform all ‘legal’ tasks. Legal problems are increasingly viewed as business challenges raising legal issues.”
This basic change in client attitudes, coupled with a broader shift from a “seller’s” to a “buyer’s” market for legal services, has resulted over the past decade in fundamental changes to the legal market itself. These changes are foundational and, in all likelihood, largely irreversible.
– 2017 Report on the State of the Legal Market[16]
To be a trusted adviser and add value in today’s competitive environment, a professional that offers legal services must know their corporate client’s business challenges and opportunities. Because the accounting/auditing industry is concentrated, each member of the Big Four has been retained by significantly more corporate clients than BigLaw and traditional law firms, and their executive contacts are well positioned in key leadership functions: finance, tax, audit, strategy, and even the C-Suite.[17] The Big Four “have deep executive relationships across the corporate C-suite” (i.e. COO, CEO, CFO, CLO/GC), and as such are “institutionally advantaged in business development” over BigLaw and traditional law firms who (a) generally only have access to the CLO,[18] and (b) are often seen as increasingly isolated expert specialists.[19]
Large corporate clients are progressively seeking comprehensive solutions that integrate law into a wider category of “business solutions”—precisely the approach these internationally integrated Big Four champion.[20] Why is this important? Because many legal commentators opine that the Big Four “are the best examples today of the multidisciplinary approach”.[21]
[Corporate] clients don’t have legal problems; they have problem problems, of which the legal part they would like to reduce to as small a part as possible so they get on with the things that are important—which is what’s happening with their business, what’s happening with their strategy, what’s happening with their people. These problems are fundamentally not just multijurisdictional, but they’re also multidisciplinary.
– David Wilkins, Harvard Law School[22]
The Big Four can credibly claim to be able to provide “global presence” and the “ability to understand businesses and operate pragmatically, in close connection with experts from other areas, at costs optimized through efficient processes and technologies.” The Big Four have been able to accomplish this by:[23]
- Structuring their legal practices through the highly integrated form of multidisciplinary professional service organizations (MDP) in order to enhance the provision of integrated legal services and innovative business solutions.
- An organizational evolution of their operations and a shift toward a matrix model that combines law with deep industry expertise, sophisticated data analytics and technology, and risk management to produce value-based solutions for corporate clients through global teaming and professional development strategies designed to attract and retain top talent.
- Making the most of globalization and the attractiveness of the global market for legal services, particularly in the emerging economies of Asia Pacific, Latin America, Africa, and the Middle East, where they arguably have a significantly greater presence than the BigLaw global law firms.
From a corporate client perspective, new sophisticated and alternative professional players in the legal services arena benefits “informed” corporations and their General Counsel who guide them. However, the organized bar and lawyer regulation in various countries around the world may restrict the growth and competition of the Big Four accounting firms in the legal services market if the legal profession is continued to be permitted to ‘circle the wagons’ and fight the perceived incursion as the unauthorized practice of law.
Discontent with the legal profession runs deep. Around the world there is strong criticism and “voices of concern from outside the profession” that traditional lawyers and their law firms are not sufficiently innovative, collaborative or multidisciplinary, or cost effective – in short: the legal profession is perceived as “often not fulfilling the expectations of consumers of legal services”.[24] How did this state of affairs develop? As noted by one legal commentator, “protected by legislated monopolies, law firms had been allowed to grow complacent, fat and inefficient.”[25] Indeed, in other industries, similar restrictions on competition might be considered anticompetitive and illegal.[26]
In this environment, Justice McLachlin of the Supreme Court of Canada has noted that “the monopoly that the legal profession has traditionally enjoyed on the delivery of legal services is eroding”.[27] Protectionist “assumptions no longer prevail” unchallenged. “Why, they ask, should a client retain lawyers, when integrated professional firms can deliver accounting, financial and legal advice? Public attitudes and demands are changing. Demands to relax the laws and regulations that govern who can offer legal services and how they should be rendered are following swiftly on the heels of questions like these”.[28]
The United Kingdom has been the most aggressive of the jurisdictions to take up this deregulatory crusade in an effort to modernize the delivery of legal services.[29] Following Australia’s lead, the United Kingdom enacted the Legal Services Act of 2007,[30] ushering in the most influential deregulatory reforms in the history of the market for legal services anywhere in the world. These reforms expressly authorized “alternative business structures” (ABSs) and “multidisciplinary practices” (MDPs) and removed self-regulation in the legal profession by creating an independent body to oversee legal regulators in England and Wales.[31]
The purpose of the law is not to prop up the traditional law firm delivery model. Rather, the traditional law firm should survive in this changing competitive environment because it brings value that no one else can – not because other legal providers such as the Big Four are regulated out of the market because the legal profession feels threatened.[32]
Unauthorized Practice of Law rules are designed to protect the public interest, not protect lawyers from competition.
– Mary Jutten, Technology and the Unauthorized Practice of Law[33]
A growing number of governments and jurisdictions around the world have, or are pressing for, deregulation of the market for legal services, with the legitimate goal of promoting competition, reducing prices, and spurring innovation. From a public policy perspective, the organized bar should not be permitted to use the Rules of Professional Conduct as a tool of economic protectionism. The legal profession in the UK lost the right of self-regulation for a number of reasons, but one of the main reasons was that their regulatory bodies were perceived to be anti-competitive. They acted like monopolists.[34]
The rise of the Big Four in business related legal services should certainly continue to be debated in respect to the “fundamental issues of lawyer professionalism and public policy”, unfortunately, while dressed up in the clothing of ethics rhetoric, many legal commentators are of the opinion the real driver is law firm economics and protectionism. Private law firms face daunting economic forces from every direction, and now the Big Four are becoming a major competitor to private law firms for corporate legal work. However, in our society we revel in competition – “we have to look at the public interest first and the parochial interests of lawyers second”.[35]
Ultimately the marketplace of ideas and premium charges will sort this out and strike a balance between claimed expertise, value and cost advantages of the Big Four, and the perceived desirability of wholly independent private law firm counsel.[36] At the end of the day, all things being equal, one would think that an ‘informed’ sophisticated corporation, as the client purchasing the legal service, “should be accorded primacy over lawyer self-interest”.[37]
The stakes are high – as noted by one respected legal commentator: “the radical reinvention of the marketplace that has shaken up the newspaper, hotel and taxi industry” worldwide “is inevitable in the legal market”. The risk for all traditional or alternative legal service providers is that “one of their competitors will crack this problem and destroy everyone else”. [38] In this environment, the Big Four are stated to be “the biggest underestimated threat to the legal profession today”.[39]
The legal profession is undergoing a massive transformation. We at Deloitte Legal see a clear need for a new type of service that combines legal advice with strategic advice across other disciplines. This is not currently provided by other law firms. Our clients want us to bring new solutions to the table, and that’s exactly the gap we want to fill. Our ambition is to become the law firm of the future.
– Piet Hein Meeter, Global Managing Director, Deloitte Legal[40]
We currently have the text, the next few years will supply the commentary.
https://www.psicologialaboral.net/2024/08/07/4dkxfitxu Introduction
As the Big Four’s momentum continues to grow, they are not being shy about their legal divisions or arms – their legal services are displayed prominently on their websites, they are poaching from top tier law firms, and they are applying for alternative business licenses.[41] Deloitte states that it currently has 1700 legal professionals and “is focused on creating the premiere global law firm with the goal of realizing independent legal practices in over 100 countries by 2020”. PwC claims more than 2500 lawyers and a focus “on premium integrated legal services”.[42] The Big Four “have now reached a size where they outgun most law firms: by headcount, PwC’s legal arm is the world’s tenth-biggest, and all four networks’ law divisions are in the top 40 by this measure.”[43]
The Big Four have made substantial inroads into the legal services arena across the globe, and have continued to expand in recent years as they take on not only tax work but a vast array of legal work from law firms around the world. When it comes to competition from the Big Four, BigLaw and traditional law firms are up against global giants – who are seen as multidisciplinary, innovative (with respect to processes, technology, and delivery model), solution oriented, and for certain types of work, very attractive to corporations and their General Counsel. The combined $120 billion annual revenue of the Big Four across their networks[44] exceeds the $89 billion earned by the 100 largest law firms in the world combined, according to a 2015 report by the Economist. The accounting firms’ legal services divisions compete head-to-head with the world’s largest law firms,[45] and “are huge in the market for legal services everywhere but the United States”.[46]
Global expansion is difficult for many traditional law firms, as it generally has to be financed directly out of partners’ profits. … In contrast, multinational corporations generally have shareholders or investors who are more willing to wager on future growth. The Big Four, each of which has annual revenue more than 10 times that of even the largest law firm, can draw on their much larger capital structure to finance expansion.
– Anthony Lin, The Rise of the Megafirm[47]
Rather than building full-service firms, they are concentrating on areas of law that complement their existing services: immigration, which sits nicely with expatriate tax work; labour, which goes with human-resources consulting; compliance; commercial contracts; and due diligence[48], including corporate and commercial, mergers and acquisitions, employment law, data privacy, etc.[49] Outside the U.S., the Big Four accounting firms[50] have invested heavily in growing their legal teams, and in many jurisdictions focusing on high volume, process oriented, repetitive legal tasks and services that can be standardised by process or technology[51] (which is the same space occupied by NewLaw players such as Axiom[52]).[53]
The Big Four are multidisciplinary, that is their business model. Surprise, surprise – corporate clients and their General Counsel want and need multi-disciplinary approaches to business problems, and many “legal problems” are really business problems. Business problems – especially for large, national and multinational corporations – usually take teams to solve, teams that consist of multiple areas of subject matter experts.[54]
Increasingly since the 2008 global financial crisis, in the commercial context, lawyers are “not the straw that stirs the drink”. They are but one feature in a broader supply chain and as solutions become progressively technology or process driven, the best outcomes are going to be achieved by cross-disciplinary approaches.[55] General Counsel have stated that “simply hiring the right law firm is no longer a tenable strategy when reporting to the C-suite and boards of directors.”[56] For General Counsel “its getting harder and harder to see the value proposition with traditional outside counsel”.[57]
The relative economic power between the corporate client … and Big Law … was decidedly unbalanced. And Finance saw its chance to finally require some degree of predictability of spend and some degree of confidence in outcome from their outside counsel.
– Jill Dessalines[58]
Instead of developing long-standing relationships with corporate clients and their range of problems, the traditional law firm is often seen as an increasingly isolated expert specialist.[59] General Counsel for large organizations, and Chief Legal Officers and managers within small- to medium-sized businesses, are demanding more appropriate legal services that deliver value for lower cost.[60] The corporate perception in respect to legal services is that “costs are disproportionate to value”.[61] Many Chief Legal Officers are embracing the role of change agents, wielding their buying power, leveraging technology and process efficiency, and outsourcing to alternative providers in order to build a more effective, multidisciplinary, and flexible legal function.[62]
Armed with enterprise legal management technology systems, external counsel management metrics,[63] ‘third party lawyer rating’ services, and disciplined business knowledge and practices (i.e. supply chain procurement practices, RFP’s, law firm convergence,[64] pricing controls and value based legal fees,[65] key performance indicators and industry benchmarks), General Counsel are having law departments bring more work in-house, requiring traditional law firms to participate in RFPs, strategically relying on NewLaw[66] and the Big Four as alternative service providers, and outsourcing unbundled legal services[67] (for corporate or litigation matters) to obtain the benefit of economies of scale and supply chain economics.[68] Corporate clients are already looking beyond the traditional law firm, and the Big Four are an attractive option for the effective delivery of legal services.
Multinational, national, and large corporations are well on the road to acceptance that legal work is not the exclusive domain of high cost, high status lawyers in traditional law firms – and believe that their legal work is handled more professionally, effectively, and cost efficiently by a legal service provider that is capable of delivering a ‘multi-disciplinary’ professional team.[69]
Corporate clients, under intense internal pressure to reduce the overall costs of legal services, insisted on taking control of their matters and managing the work of their outside law firms to a degree never before seen. Insisting on the necessity of receiving more value for their “legal spend,” clients increasingly emphasized the need for greater efficiency, predictability, and cost-effectiveness in the legal services they received – quality, of course, being assumed.
– 2017 Report on the State of the Legal Market[70]
The key for corporate clients and their General Counsel is a legal services provider that is competitive, efficient, and innovative in respect to appropriate processes, technology, multi-disciplinary partnerships, and delivery model. [71] The Big Four are cost effective[72] and more willing to invest and innovate in respect to training, technology, processes, delivery model, and knowledge management – meaning in most cases more efficient “industrial delivery” and high quality output at a cost effective price point.[73]
In a stark warning to international law firms, the Law Society of England and Wales has highlighted the threat the “Big Four” accountancy giants pose as they implement expansion of their legal services businesses in jurisdictions across the world. According to the UK lawyer’s representative body, the threat posed to BigLaw and traditional law firms by the Big Four “should not be underestimated”.[74] As the accounting/auditing industry is more concentrated, each member of the Big Four serves many more corporate clients than traditional law firms, and their clients are well positioned, in key leadership functions: finance, tax, audit, strategy, and even the C-Suite.[75] The Big Four “have deep executive relationships across the corporate C-suite”:[76]
“For example, Deloitte has a CFO Roundtable for thought leadership… it’s building out a comparable program for Chief Legal Officers (CLO). With access to the COO, CEO, CFO, CLO, the Big 4 are institutionally advantaged in business development versus Big Law, which has access only to the CLO typically. The Big 4 have institutionalized client relationships, which means lateral mobility of their partners has less impact on their business than it does in Big Law.”
Multinationals need people who can cut through the complexity and get stuff done.
– Simon Hayes[77]
Should regulators be protecting lawyers and traditional legal services over the wishes of sophisticated corporations well protected by their own General Counsel and internal legal teams? A growing number of governments and/or jurisdictions have pressed for deregulating the market for legal services with the legitimate goal of promoting competition, reducing prices, and spurring innovation. At the end of the day, “client interest should be accorded primacy over lawyer self-interest”.[78]
However, regulation in various countries has restricted the growth of the Big Four accounting firms in the practice of law. The Big Four cannot practice law in America, which accounts for over a third of global legal spending. In this environment, while only a few countries allow full integration of accounting and law firms (via ABS and/or MDPs), many other jurisdictions permit forms of ABS / MDPs to a greater or lesser extent:[79] (a) accountants can own and control law firms in Australia, Britain and Wales, and Mexico; (b) accountants can collaborate and share costs – to a greater or lesser extent – in China, France, Germany, Italy, Japan, Spain, Scotland, Denmark, Netherlands, Poland, Belgium, Singapore,[80] New Zealand, District of Columbia and Washington State within the U.S.,[81] and Ontario (Canada); (c) accountants are prohibited from legal profession in the U.S., Brazil, India, and Canada.[82]
Sir David Clementi, a former Deputy Governor of the Bank of England with a distinguished career in business, conducted a two- year, exhaustive study of the British legal delivery system, examining both the retail and corporate ends of the market. His conclusions were stark and pulled no punches: that in both segments of the market, clients were not being well-served by the self-regulated legal profession; that law was a monopoly; that the legal delivery system was broken and needed to be repaired; and that client interest should be accorded primacy over lawyers’ (self-) interest.
– Mark Cohen, The Pond Seems Wider: The Regulator Gap between UK and U.S. Legal Practice[83]
To deliver legal services—and to placate regulatory officials in both law and accounting who may be concerned about the integration of the two disciplines outside of the UK and Australia—the Big Four have (where required) utilized a strategy of setting up independent legal networks that nevertheless actually operate under the overall umbrella of the accounting firms.[84] Although this strategy has not been successful in all jurisdictions, it has been effective in many jurisdictions[85] (particularly where the Rules of Professional Conduct applicable to lawyers and law firms have not been permitted to be used by the organized bar “as a tool of economic protectionism”[86] in the face of informed utilization by sophisticated corporate clients and their General Counsel).
The UK Future of Legal Services report suggests that the Big Four are readying themselves for changes in the rules governing the provision of legal services in countries around the world, and emerging markets such as Brazil and India. The question remains as to whether – in light of the rise of globalism[87] – other nations will follow the UK[88] and Australia[89] in liberalizing their legal markets to allow alternative business structures (“ABS”, i.e. includes any form of law firm business structure as well as alternative means of delivering legal services).[90] Internationally, expectations in corporate client service are being transformed by the growth of alternate business structures (ABSs) which permit non-lawyer investment and ownership, and multi- disciplinary practices (MDPs) which combine legal services with other professional services.[91] These new forms for delivering legal services permitted in the UK in 2007 and Australia in 2001, are bringing non-lawyers into the ownership and management of legal practices, stimulating “non-lawyer capital” investment in innovation (processes and technology). Even outside of Europe and Australia, traditional BigLaw firms in the U.S. and Canada are influenced to at least adopt or consider stronger organizational governance and professional management within their own law firms.[92]
According to some members of the Big Four, and a recent PwC survey, as “CEOs plan their strategies to take advantage of transformational shifts they are assessing their current capabilities – and finding that everything is fair game for reinvention.” While most law firms continue to cling to outdated operating models with no transformation plan and little innovation,[93] the Big Four appear to be poised to capitalize by meeting the needs and expectations of sophisticated corporate clients.[94]
The purpose of the law is not to keep lawyers employed. Rather, lawyers should survive in this changing environment because they bring value that no one else can – not because other providers are regulated out of the market.
– Canadian Bar Association, August 2014[95]
In this new normal, the Big Four have structured their legal practices through the most highly integrated form of multidisciplinary professional service organizations in order to meet corporate clients’ expectation of integrated legal services and innovative business solutions. The Big Four say that their legal strategy is driven “pure and simple” by corporate clients looking to raise efficiency in the way they purchase and use professional services.[96] In this environment:[97]
“[T]he Big 4’s legal networks are likely to be important players, since they have been engaged in these practices far longer, and far more extensively, than any traditional law firm. Lawyers seeking to understand the dynamics of the legal services market in the coming decades therefore ignore the Big 4’s re-emergence in this arena at their peril.”
The “monopoly that the legal profession has traditionally enjoyed on the delivery of legal services is eroding”.[98] With respect to traditional law firm ‘protectionism’ in the U.S. and Canada, ultimately for sophisticated corporate clients, it is their organization and shareholders – and ultimately consumers – who are not well served. The emergence of a competitive and innovative legal services marketplace will benefit sophisticated corporate clients, and likely force the legal profession in Canada and the U.S. to come to terms with the reality that the traditional law firm – the guild model of designing and delivering monopoly protected services under the rubric of “the practice of law” – may no longer be an acceptable response to corporations demanding alternative legal providers who are innovative, competitive, multidisciplinary, and cost effective.[99]
Modern corporate clients increasingly require and demand a highly sophisticated interdisciplinary service when seeking solutions to complex problems. The lawyer / law firm monopolies are fading – the real question for protectionist jurisdictions[100] is not “whether” the rules governing the legal profession will continue to be liberalized, but rather in order to meet legitimate corporate client expectations and requirements the question is “how”.[101]
Ultimately the marketplace of ideas and premium charges will sort this out and strike a balance between claimed expertise, value and cost advantages of the Big Four, and the perceived desirability of wholly independent private law firm counsel.[102] In either scenario – private practice delivery model or MDP Big Four delivery model – professional lawyers are engaged, the only difference is an alternative delivery system to that of the traditional law firm. The lawyer’s obligation runs to his or her client in either event (pursuant to the Rules of Professional Conduct), whether a partner/employee in a law firm or a partner/employee within a Big Four organization.
The biggest push has been outside the U.S. to date. But there are many observers who think that the moat that the U.S. legal industry has built around itself isn’t impenetrable, and that corporations with real money will begin voting with their dollars for a new regime.
– David Curle, Why Size Matters: Big Four Accounting Firms Poised to Move In[103]
https://merangue.com/w21g0gs Emergence of the Big Four
The Big Four are interested in the legal market for two reasons: [104]
- Lucrative Financial Stakes: The global legal services market grew 72 percent between 2005 and 2014, reaching a total value of US$616.4 billion. This amount represents three times the value of the audit market. Moreover, the global legal market is fragmented. While the Big Four’s joint turnover for audits in 2014 represents 23 percent of the value of global audits, the turnover jointly generated by all of the top law firms ranked in the Am Law 100 for the same year accounted for only 13 percent of the global legal market. In this context, if any of the Big Four were to capture even a 1 percent share of the global legal market’s forecasted value of $726.2 billion for 2019, that one network would become the largest legal services organization worldwide.
- Ideally Positioned: Multinational companies require consistent services around the globe, including legal services. Given their extensive multidisciplinary experience in organizing, coordinating and managing global resources, the Big Four are in an ideal position to meet this need, particularly in the emerging economies of Asia-Pacific, Latin America, and Africa, which are likely to see the fastest growth in the demand for legal services.
The Big Four are “the biggest underestimated threat to the legal profession today”.
– Michael Roch[105]
Having already tried to enter into the legal business in the 1990s, only to retreat, the accountants have been quietly building up their legal-services divisions.[106] The Big Four have spent the last decade gradually rebuilding and significantly strengthening their legal networks in size, scope and importance. Moreover, they have done so in a manner in keeping with the competitive realities of the twenty-first century, specifically not copying BigLaw’s “separate and largely independent service line” (created to fit the realities of the nineteenth century), but rather embracing “the vision of legal services as part of a globally integrated business solution for global clients”. Although tax-related advisory services remain an important cornerstone, the Big Four legal networks are now important players in a broad range of legal fields, including premium and fast-growing practices such as compliance, finance, mergers and acquisitions, and employment law.[107]
The Big Four are moving into legal services as part of their wider effort to offer corporate clients their delivery model of “globally integrated business solutions”, particularly in Europe and the emerging economies in Asia-Pacific, Latin America, Africa, and the Middle East. Recent trends toward relaxing restrictions against “alternative business structures” and “multidisciplinary practice” are likely to accelerate the growth of the Big Four’s legal networks.”[108] Having said that, how determined are the Big Four in moving into the legal marketplace?[109]
“They want to carve a deep swath into the legal services market, certainly judging from what you’re seeing from the Big Four in Europe and in Great Britain. One thing that was evident in 2016 was a rash of high-end lawyer hiring by the big accounting consultancies away from major law firms, and the building out of much more robust legal functions within these departments. … At this point … I think they’re more interested in what I call “run the company work” — day-to-day straightforward stuff that’s got to happen all the time. This is not just what you would call commodity work or drudge work; this is bread and butter stuff, the kind of thing that keeps companies going and keeps legal departments going and the accountancies are set up perfectly for that. Unlike law firms, they are much more systematized, much more process heavy. And I think law firms over the course of the coming years will start to see this happen in earnest. We’re going to see the “run the company work” move out, and law firms will increasingly become high-end specialized boutiques for complex high-stakes work. Now, are the accountancies and the consultancies going to stay out of that work forever? Probably not, because why would they, right? It’s obviously very lucrative work.”
The Big Four have now reached a size where they are larger than most law firms: by headcount, PwC’s legal arm is the world’s tenth-biggest, and all four networks’ law divisions are in the top 40 by this measure. The Big Four’s international scale – employing across their multidisciplinary professional services network over 700,000 people in 150 countries – is an increasingly valuable selling point. Commentators opine that as the Big Four run out of room to grow in their traditional businesses, they will focus more aggressively on their expansion into the legal market.[110]
To take advantage of this opportunity, the Big Four are more willing than traditional law firms to invest and innovate[111] in respect to training, knowledge management, technology, process, and delivery model.[112] The Big Four have invested heavily during the last decade—investments that dwarf those made by traditional law firms. The Big Four, each of which has annual revenue more than 10 times that of even the largest law firm, can draw on their much larger capital structure to finance expansion.[113] For example, in 2011, EY invested more than US$1.5 billion over five years, “mainly in the emerging markets,” and are reportedly planning to “maintain this investment at comparable levels for the foreseeable future.”[114]
A new study out of the Faculty of Management at McGill University suggests that while Canadian law firms talk a good “innovation” game, little innovation is actually taking place.
– Mitch Kowalski, McGill study reveals ‘illusion’ of innovation at Canadian law firms[115]
The Big Four are not only mobilizing their financial resources to capture a larger share of the legal market, they are also leveraging their role in the technology space through alliances with leading tech companies. For example, PwC has a joint business relationship with Google to co-create solutions for clients, with PwC bringing in the content and Google the technology. EY has an alliance with Microsoft, as well as an alliance with LinkedIn designed to “help companies develop deeper and more trusted customer relationships through the use of social and data analytics.” How these actions will ultimately affect their global legal businesses will play itself out over the next few years. Nonetheless, it prepares and supports the Big Four in respect to the technological disruptions that are currently reshaping the global market for legal services.[116]
Dominic Jaar started an e-discovery firm that was acquired by KPMG. Now, he is a lawyer and information management specialist for the accounting giant. He notes that accounting firms are more proactive than most law firms when it comes to change: “KPMG invests in R&D constantly. … It is people from outside law who have realized that 80% of what lawyers do is not protected, so they are moving into those areas. Those people are innovating.”
– Canadian Bar Association, Futures: Transforming the Delivery of Legal Services in Canada, August 2014[117]
The Big Four have made numerous moves to expand their legal services operations, including for example Deloitte’s decision in March 2016 to acquire legal services provider Conduit Law in Canada, which has allowed it to offer outsourced lawyers to clients,[118] and PwC’s move last September to merge its U.K. legal practice with the wider accounting firm through an alternative business structure.[119] A legal commentator, referencing the UK Future of Legal Services report on the direction of the legal market, noted that in respect to the Big Four:[120]
“Ernst & Young — through its legal arm EY Law — has launched a legal services business in more than 29 different countries since 2013, increasing its number of lawyers by almost 30% to 1,100. Closer to home, EY unveiled its first law training contract late last year [in the UK]. …
Deloitte’s march into China is also noted. Drawing readers’ attention to the accountancy outfit opening its own domestic law firm in Shanghai, it explains that Deloitte has exploited a loophole in regulations that allows international accountancy firms — but not law firms — to offer domestic legal services in the country.
Finally, the actions of PwC and KPMG are considered. Having both obtained their ABS licences, the pair have upped their recruitment of lawyers across the UK, Germany and Asia….”
The Big Four “have now reached a size where they outgun most law firms.[121]
https://inteligencialimite.org/2024/08/07/dhvw9ror Legal Profession and Legal Service Delivery Model in Transition
What unique value does a lawyer and the traditional law firm offer today? Historically the lawyer was the trusted adviser to business and government. As noted by Anthony Hilton in the UK’s Evening Standard, the lawyer was their first call in times of difficulty, the one they all turned to when it mattered. Since the 2008 financial crisis, however, lawyers have “allowed themselves to be pushed further and further down the food chain, and away from the seat of power”. In today’s commercial world, when there is a deal to be done it is picked over by investment bankers, brokers and business advisors, and increasingly the Big Four “accountant firms” who are seen as multidisciplinary “globally integrated business solution advisors” (where an important component of the business solution that they offer is law)[122] — all of whom have a share of the ear of the chief executive. Then “when all the high-level stuff has been sorted by these experts, the package is tossed to the lawyer with instructions to sort it out and make it presentable”.[123]
As the law is becoming commoditised, lawyers are becoming “the last port of call” in the professional services world as this scenario plays out. In this environment, some of the best and brightest lawyers in Canada, the U.S., the UK, Australia and Europe have moved “in-house as general counsel [and leaders] in the biggest companies, taking the interesting legal advisory work with them. They live in a world where, in many cases, competition between firms comes down to who will do it cheapest”.[124]
The traditional law firm model is often seen to sell the client a ‘Cadillac’, even when the client only needs or wants a ‘Ford’. Many of the competing NewLaw models promise the ‘Ford’, with prices to match.[125] It is clear that, as law firms compete for legal business, they face new and difficult business model competitors, including competition from ‘lean’ and innovative alternative legal service providers, the Big Four accounting firms (outside of the U.S.),[126] in-house legal departments (which continue to expand dramatically as more work of increasing complexity is brought in-house),[127] legal process outsourcing companies (LPOs), and legal technology providers.
Innovative legal service providers are embracing lean and design processes,[128] appropriate technology,[129] outsourcing, and alternative value based billing models as a way to (a) meet the needs and expectations of value conscious corporate clients, (b) disrupt the business relationships of traditional law firms, and (c) foster new long-term relationships for themselves.[130]
Lawyers have botched the transition from profession to business in a way accountants have not.
– Anthony Hilton, Evening Standard[131]
The modern lawyer is often seen as an increasingly isolated expert specialist.[132] In this environment, BigLaw and traditional law firms are faced with the urgent question of how to adapt to a legal marketplace in the midst of disruption and reinvention.[133] To compete innovatively in a manner attractive to mid to large, national, and multinational corporations, BigLaw will need to demonstrate that they can provide the same kind of seamless integration of law into effective global business solutions currently being advocated by the Big Four.[134] This is important as sophisticated corporate clients – in particular national and multinational corporations – are demanding much more from their law firms for much less, including problem solving that straddles disciplinary lines.[135]
BigLaw’s Role in the Global Legal Market
In 2007 the Australian BigLaw firm Slater & Gordon became one of the world’s first public law firms. Fast forward to 2017, and the law firm is now struggling as its shares tumble to an “all-time low” and are described as “nearly worthless”.[136] Over the last decade, traditional BigLaw national and global law firms in Canada, the UK and the U.S. have dissolved due to financial and business issues (e.g., Heenan Blaikie, Blakemores, King & Wood Mallesons, Brobeck, Heller Erhmann, Dewey & LeBoeuf, Thacher Proffitt, Thelen, Coudert Brothers, and Howrey),[137] and numerous law firms have merged in order to better position themselves within the increasingly competitive legal marketplace.[138]
International law firm Dentons … lawyer count will approach 7,000 … Dentons’ aggressive expansion has forcefully raised anew two questions that have dogged the legal profession since the dawn of global megafirms: Exactly how big is too big? And can you still call it a law firm? … For them, big denotes the ability to serve clients globally with multiple teams across the globe.
– Anthony Lin, The Rise of the Megafirm[139]
To be successful going forward, whatever the business model lawyers develop, it is clear that experts in other fields need to be included. There is too much information out there to think that superior legal analyses and/or rainmaking abilities – that may have qualified a partner of yesteryear to sit at the apex of a law firm – qualifies that partner to maintain that position today.[140] An important change that is required for law firms is to the ‘caste system’, the artificial divide between lawyers and other professionals and staff, as lawyers alone cannot deliver the required value corporate clients demand.[141]
Disruption of the legal services market means that traditional law firms need a new, long-term strategy for business development and staying relevant in a changing landscape.[142]
The strong theme for success is the importance of leadership, innovative technology and process, and multidisciplinary collaboration — and not just with colleagues and clients, but also other professionals, project managers, data and tech experts, pricing professionals, knowledge managers, legal process outsourcing providers, technology-enabled legal services, contract or project lawyers, accountants, in-house counsel, and others who can work at the intersection of law practice, business and technology. Legal professionals cannot work in a vacuum or in silos. Even small law firms must rely on support staff and team up with co-counsel, experts, and vendors to deliver effective and cost effective legal services. The needs of a client, in particular sophisticated corporate clients, may transcend the skills of a lawyer, practice group, or law firm such that teamwork is essential for the success of the law firm and the client.[143]
What is clear is that both lawyers and clients are increasingly turning to traditional business methods such as unbundling, outsourcing, process management and partnering to reduce the cost of legal services and to increase return that these deliver to the bottom line …. In such a world, the Big 4’s legal networks are likely to be important players, since they have been engaged in these practices far longer, and far more extensively, than any traditional law firm.
– Maria Jose Esteban, affiliated researcher at Harvard Law School Center on the Legal Profession, partner Spanish law firm Bufete Escura[144]
A few innovative law firms have tried to “self-disrupt”, to pre-empt new entrants like the Big Four and NewLaw. In 2011 Allen & Overy, a UK Magic Circle member, set up a service centre in Belfast to handle routine aspects of big deals. It now employs almost 400 people there, including 70 lawyers, at a fraction of London salaries and rent. Similarly, Blake, Cassels & Graydon LLP (“Blakes”) – a Canadian BigLaw firm – in 2013 built an insourced business model for profitable routine document and contract review work with lower cost “staff lawyers”[145] and appropriate technology, BigLaw McCarthys acquired Wortzmans (a document-review outsourcer firm in Toronto), and Torys opened a low-overhead document and contract review office in Halifax, Nova Scotia.[146] At the other end of the market, in recent years groups of large and mid-tier firms across the globe have linked up in mergers to form loosely integrated networks.[147]
Global expansion is difficult for many traditional law firms, as it generally has to be financed directly out of partner’s profits.[148] At least some of the difficulties of BigLaw international expansion have been ameliorated by the vehicle that Dentons, Baker & McKenzie, DLA Piper, Hogan Lovells, Norton Rose Fulbright and some other large law firms have chosen to carry their ambitions forward: the Swiss “verein,” which is German for the word association – a holding structure that allows members to retain their existing forms.[149] Normally, when two law firms merge, they combine their separate partnerships into one. This can be a challenge, especially if there are large financial disparities between partners at the different firms. In recent years, rapid expansion through merger has been a factor in firm collapses like those of Dewey & LeBoeuf and Bingham McCutchen.[150]
Vereins can avoid these issues to a large degree because they include multiple partnerships that, though they adopt a common brand and some management functions, remain legally and financially distinct. With separate profit pools, these entities simply don’t face the kinds of sticky economic integration issues that traditionally merged firms do. For instance, Dentons and Norton Rose each have five such entities, while DLA Piper has three.[151]
In 2015 Dacheng of China joined Denton’s Western confederation to create an alliance that employed 6,600 lawyers at that time. Over the last five years almost every major cross-border merger has utilized the ‘verein’ (although certainly not all), including Dentons, DLA Piper, Eversheds, Hogan Lovells, King & Wood Mallesons, Norton Rose Fullbright, Wragge Lawrence Graham, and Squire Patton Boggs, among others. However, some critics suggest – perhaps unfairly or too harshly – that:[152]
“Although the giants of the legal world have sought to mimic the accountants’ cost and scale advantages, they remain minnows compared with the Big Four. Only the likes of PwC and Deloitte can muster the capital and technology (and relatively cheap labour) to industrialise the artisanal model of legal practice that has endured so long. Businesses that spend heavily on legal advice stand to save a fortune. But law firms that are sub-scale and inefficient risk ruin.”
Some legal commentators are predicting that there will “clearly be a global elite of 10 or 20 law firms who will thrive on large cross-border deals, but the traditional full service model will need to change”.[153] What the law firm model ultimately needs to look like for sustainable success is debateable, however it appears that the elite members of BigLaw are currently taking steps to look more like the Big Four, possibly at a point in time where their organizational form may not be nearly as well developed:[154]
“Several of the largest and most influential global law firms are now advertising themselves in ways that are indistinguishable from the Big Four’s self-presentation, dramatically underscoring just how much the legal world as a whole has moved to the latter’s terrain. When one adds the fact that the legal world is also shifting rapidly toward emerging markets in Asia-Pacific, Latin America, Eastern Europe, and Africa, where the Big Four already have a significant presence, the potential for the Big Four to carve out an even more dominant position in the global market for corporate legal services becomes even more apparent.
Time will tell whether these changes will finally allow the Big Four to achieve their renewed ambition to not only be important players in the global market for legal services but reshape the very definition of that market toward a view that law is simply one part of achieving a “globally integrated business solution.”
BigLaw’s apparent strategy may be the problem in a nutshell—by increasingly making themselves look like the Big Four in how they define and deliver legal services, BigLaw “may actually be hastening a world in which these [Big Four] global giants will no longer have to disguise their ambitions from regulators and the public”.[155] At that point BigLaw and traditional law firms may be substantially under-resourced, comparatively speaking, and whether they have the leadership, “management chops”[156] and true multidisciplinary approach to make the transition will be the issue.[157]
The sudden demise three years ago of well-known national law firm Heenan Blaikie, a postpolitics home to former prime ministers Pierre Trudeau and Jean Chrétien, shook Canada’s legal business. … inexperienced leadership team … [no] training as leaders … it could happen anywhere.
– Jeff Gray, The Inside story of Heenan Blaikie’s frantic final days[158]
To be successful, law firm leaders must be able to build, manage, and lead – to develop the vision, the values, the priorities, the strategies, the people, the innovative processes and appropriate delivery models, the checks and balances, the resources and innovative technology, and the motivation.[159]
For BigLaw and traditional law firms to have sustainable success, it will be the role of strong law firm leaders to lay the foundation for future growth, and fulfill the stewardship role law firm leaders must hold dear.[160] We are seeing among BigLaw some example that strong firm leadership[161] is indeed leading to firm brands “becoming relatively more important than those of lead and rainmaking partners, as has occurred in other professions”.[162] To be successful in the ‘new normal’, law firm leadership must overcome the ‘partnership drag’[163] of the law firm business model, such that partners undermining the survival or long term success of the law firm are not allowed to ‘dictate the firm’s strategy and direction’, or lack thereof. To compete, law firms must “become commercial enterprises as well as professional service shops”, instituting business processes and leveraging technology”:[164]
“In place of partners and committees, firm leadership roles will fall to “C-suite” executives with titles like “Chief Innovation Officer,” who will evaluate 10- and 20-year technology and cultural trends. CFOs and COOs will plan yearly capital investments and make day-to-day operational calls… In the process, experts say, firms will shed the inherent weaknesses of legal partnerships — slow, incremental committee decision-making, often thin management experience, easy dissolution, short-term planning — and replace it with a truly corporatized American law firm.
Many firms have in recent years modified parts of their business to better mimic other professional service businesses, such as implementing fixed fees, hiring non-lawyer CEOs, and outsourcing. Others are moving more aggressively to a corporate hierarchy they argue is better adapted for the overall survival of the business, rather than propped up by tradition to appease individual partners…. Many managing partners have had time since 2008 to realize that downward profit trends and changing attitudes about the value of legal services necessitate a stricter business discipline, and how more top down control can help make it happen.
In addition to the benefits of stability and cost controls, … flat-fee pricing and a de-emphasis of individual partners makes the firm’s business more understandable and appealing to clients who themselves work within a corporate structure.”
There is a path forward for BigLaw and traditional law firms that meets the needs of corporate clients in the ‘new normal’, but leadership and the legal delivery model must evolve. There needs to be a development of models that balance their clients’ needs with their own need to make a fair profit. This requires a fundamental shift in how law firms think of themselves: from simply subject matter experts who must do everything possible to address the legal issue presented, to trusted, competitive and innovative professional legal service providers who are strategically positioned to provide leadership and give their clients what they actually want.[165] For law firms providing legal services to corporate clients, this must include cross-disciplinary approaches.
Private practice lawyers need to be more aligned across the whole firm and better at building relationships both internally and externally with their clients. Leadership skills are now an essential part of their role and will be a substantial part of their legal training in the future.
– Catherine Berney, The Leadership role: how to lead creatively in a changing business context[166]
The path forward requires the investment in, and utilization of, innovative technology (i.e. AI, ‘big data’), processes, and knowledge management. In Canada and the U.S., this must include alternate service-delivery models that permit non-lawyer investment and ownership of law firms, and “sincere” and robust multi-disciplinary legal practices. In the UK, the Legal Services Act of 2007 permitted inter-disciplinary practice; allowed non-lawyer (“outside”) investment in law firms; sanctioned non-lawyer management and equity ownership of law firms; and established a process by which firms could become ‘alternative business structures’. As a result:[167]
“[T]he UK has become the epicenter of legal innovation as well as base camp for global expansion. What is also clear is that the profession has been jump-started, not hijacked, by the UK’s regulatory change … and corporate clients, likewise, have more value driven options.”
Traditional law firms, more than any other time in our legal history, will have to think and act like entrepreneurs, and will need to embody a greater level of leadership and innovation in respect to client relationships, processes, technology and delivery model.[168] To be successful, leadership for BigLaw and global law firms must develop a business strategy and cross-disciplinary model to address the changing global market for corporate legal services and the shifting regulatory landscape. [169] The “Great Shake-out” began about nine years ago and will continue well into the next decade. Perhaps the story of BigLaw’s ultimate winners and losers is only half-written, but for some firms, the ending may already be inevitable.[170]
Technology is affecting the way a number of sectors operate, having significant influence primarily on cost and time efficiency, but the legal sector is still reluctant to change. Although firms have started to invest in technological advancement, it has mainly been to help them maintain their profit margins. Firms have not truly attempted to understand what clients want to achieve through the use of technology, nor have they made much of an effort to pass on the savings to their clients. There is no doubt that a smattering of law firms and alternative legal services providers are genuinely making an attempt to push the boundaries, but the legal sector’s paradigm shift is still a long way off.
– David Burgess [171]
In any event, in the competitive world of legal services BigLaw and traditional large law firms are not going away – and for the foreseeable future (with some exceptions),[172] high-stakes litigation, mergers and acquisition work, and other bet-the-company advisory work will still be in good supply for the traditional large global law firms.
https://sugandhmalhotra.com/2024/08/07/n49vlszyww Legal Monopolies, Protectionism, and Lawyer Regulation – ABS and MDPs
The history of the legal profession and self-regulation is a complex one. The profession has resisted change. When it does institute change, the change is usually directed not at the existing members of the profession, but at new entrants. In most cases, the change that has been implemented has been forced by influences of society, culture, economics, and globalization—not by the profession itself. In short, outside of progressive jurisdictions such as the UK and Australia, the legal profession is generally ponderous, backward looking, and self-preserving.[173]
Lawyers have historically been resistant and even threatened by innovation. Part of this is the economic self-interest one sees in any existing industry—the existing bar is not anxious to foster radical change that would create new competition or reduce profit. But part of the resistance is cultural, which is perhaps not all that surprising given that the craft is dominated by adherence to precedence. Lawyers practice a literally storied profession that emphasizes the independence of the lawyer and the status of the occupation as a profession rather than a business. This cultural tradition includes skepticism of innovation in the provision of legal services or of anything that might challenge the norms of legal professionalism. This tradition – and the Rules of Professional Conduct – have been used to justify opposition to any perceived threat to lawyer “independence”; and it has been used to justify a variety of restrictions on who can practice law and how they can do so.[174]
Indeed, in other industries, similar restrictions might be considered anticompetitive and illegal.[175]
As noted by one legal commentator, “protected by legislated monopolies, law firms have been allowed to grow complacent, fat and inefficient.”[176]
Historically, it was widely accepted that only qualified lawyers – practitioners vetted and certified by bar associations – were permitted to provide legal services to clients, and then only through specific types of organizations, such as partnerships. In this context, traditionally corporations and individuals would seek legal guidance from lawyers, and society granted the legal profession exclusive rights to provide assistance, one policy reason being the protection of the public.[177] Within these parameters, the traditional law-firm business model delivered technically excellent service, but at seemingly whatever cost.[178] With the increasing complexity in society and the business world, corporate clients needed more sophisticated and specialized legal services. The vast majority of those services were only available through a labour-intensive, bespoke billable-hour model. Not surprisingly, legal services delivered under this model lead to dissatisfied clients, but profitable law firms with little incentive to control legal fees, improve efficiency, or innovate.[179]
A walk through history helps tell the tale. For many years, large law firms had carte blanche to charge whatever they wanted for their services to corporate clients. … The undercurrent of resentment from this perceived exploitation was most acutely experienced within the Finance function of corporate clients due to the inherent inability of most law firms to provide a guaranteed product for an agreed upon price as is standard in the business world.
– Jill Dessalines[180]
Discontent with the legal profession runs deep. Around the world there continues to be strong criticism and “voices of concern from outside the profession” that traditional lawyers and their law firms are not sufficiently innovative, collaborative or multidisciplinary, or cost effective – in short: the legal profession is perceived as “often not fulfilling the expectations of consumers of legal services”. [181] https://www.completerehabsolutions.com/blog/9ogy3n3keh
In this environment, Justice McLachlin of the Supreme Court of Canada has noted that “the monopoly that the legal profession has traditionally enjoyed on the delivery of legal services is eroding”.[182] Protectionist “assumptions no longer prevail” unchallenged. “Why, they ask, should a client retain lawyers, when integrated professional firms can deliver accounting, financial and legal advice? Public attitudes and demands are changing. Demands to relax the laws and regulations that govern who can offer legal services and how they should be rendered are following swiftly on the heels of questions like these”. We are “not talking about the future, but of now”.[183]
The purpose of the law was not to keep lawyers within the traditional law firm delivery model employed. Rather, the traditional law firm should survive in this changing competitive environment because it brings value that no one else can – not because other legal providers such as the Big Four are regulated out of the market because the legal profession feels threatened.[184]
The United Kingdom has been the most aggressive of the jurisdictions to take up this deregulatory crusade in an effort to modernize the delivery of legal services.[185] Following Australia’s lead, the United Kingdom enacted the Legal Services Act of 2007,[186] ushering in the most influential deregulatory reforms in the history of the market for legal services anywhere in the world). These reforms expressly authorized ABSs and MDPs and removed self-regulation in the legal profession by creating an independent body to oversee legal regulators in England and Wales.[187] The UK and Australia authorised “multidisciplinary practices” (MDPs/ABS), which let attorneys share profits, without restriction, with members of other professions.[188]
There is a point at which an institution [regulator] attempting to provide protection to a public that seems clearly, over a long period, not to want it, and perhaps not to need it—there is a point when that institution must wonder whether it is providing protection or imposing its will. It must wonder whether it is helping or hurting the public.[189]
How did ABS business models for the delivery of legal services initially take ‘root’, when self-regulated legal professions generally “protect” their members from such outside influence or competition? For the UK, the innovative changes came about through a government initiated and controlled two year study of the British legal delivery system when it was still self-regulated:[190]
“Perhaps the most remarkable aspects of the UK’s Legal Services Act of 2007 are: (1) the Clementi Report which serves as its foundation and legislative history; and (2) that it was enacted in the first instance. Sir David Clementi, a former Deputy Governor of the Bank of England with a distinguished career in business, conducted a two- year, exhaustive study of the British legal delivery system, examining both the retail and corporate ends of the market. His https://www.clawscustomboxes.com/57h98qck7yc conclusions were stark and pulled no punches: that in both segments of the market, clients were not being well-served by the self-regulated legal profession; that law was a monopoly; that the legal delivery system was broken and needed to be repaired; and that client interest should be accorded primacy over lawyers’ (self-) interest. After considerable back-and forth, legislation was passed that fundamentally changed existing regulations (still in place in the U.S. save for DC) that: (1) permitted inter-disciplinary practice; (2) allowed non-lawyer (“outside”) investment in law firms; (3) sanctioned non-lawyer management and equity ownership of law firms; and (4) established a process by which firms could become ‘Alternative Business Structures.’
…
The Act did not take full effect until 2012, so there is still a relative paucity of data gauging its impact. But some things are clear: (1) a growing number of law firms (as well as service providers) are applying for and securing ABS licenses; (2) interestingly, this includes Cahill Gordon, a bespoke, U.S. based firm (who secured licensure via its UK LLC) as well as Legalzoom, a well-known American IT/legal document company; (3) a number of large British firms have done so; (4) so too have several firms from other parts of the globe including Slater and Gordon of Australia (the first law firm to have an IPO); (5) “new model” firms such as Riverview (whose ownership includes partners from DLA) have sprung up, providing consumers with fresh approaches to legal delivery; and (6) the UK has become the epicenter of legal innovation as well as base camp for global expansion https://udaan.org/7voe1cs801j.php . What is also clear is that the profession has been jump-started, not hijacked, by the UK’s regulatory change. Retail clients are benefitting from the market competition being driven by new entrants as well as reconfigured incumbents (the UK has its own access to justice crisis) and corporate clients, likewise, have more value driven options. Even Magic Circle stalwarts like Allen & Overy are flexing their innovative muscles by creating a “hybrid” set of offerings that provide clients different “flavors” of legal delivery based upon matter value and type. The Legal Services Act, soon to be revamped to make it even more client-centric and devoid of red-tape, has done nothing to undermine the profession. Instead, it has freed up lawyers to collaborate with those trained in business management, process, and IT—among others. Better still, it enables these key non-lawyer participants in the legal delivery process their rightful opportunity to have equity in the firms they have become such a critical part of. This will only benefit clients and, at the same time, make law firms more stable.
…
Innovation in the delivery of legal services is occurring on this side of the Atlantic [U.S. and Canada] but its potential impact is being blunted somewhat by the existing regulatory scheme. When will things change? When clients here demand regulatory reform and/or when foreign-based law firms and service providers start eating U.S. firms’ lunches. And the delay is too bad, because it’s a lost opportunity for clients and, as U.S. lawyers might learn the hard way, for them, too.”
Today we need a new generation of law firms and lawyers who think and act like entrepreneurs, and embody a greater level of leadership and innovation to provide more value to their corporate clients – by being competitive and innovative in respect to appropriate processes, technology, multi-disciplinary partnerships, and delivery models.[191] Unfortunately we are not necessarily seeing this approach – in particular innovation[192] – being enthusiastically embraced by law firms in more protectionist jurisdictions.[193]
A major law firm … will tend to say, ‘The old model is working well enough’. It’s hard to convince a room full of millionaires that they’ve got their business model wrong.
– Richard Susskind, Moses to the Modern Law Firm[194]
Although traditional law firms need to adjust and drive change, “that’s not easy in law firms where money is still rolling in”[195] – and it’s certainly “not easy to walk into a room of millionaires and tell them they are doing everything wrong”, especially when “more efficiency” sounds a lot like “less billable hours”:[196]
“BigLaw partners still rake in princely sums, and entry-level lawyers at their firms earn a lavish lunch less than $200K, but that hardly makes the case that the traditional law firm model is alive and well. Consider the shift in buying practices among corporate clients and the delta between overall legal demand and flat demand for law firm services during the past five years. Then note the shrinking number of equity partners, the smaller classes of incoming associates and the overall declining percentage that large firm lawyers represent in the overall legal population. This is the fallout from changing customer expectations that no longer align well with the traditional law firm partnership model. In-house growth–a panacea not a cure to the search for BigLaw alternatives–and a steady migration to well funded, tech and process savvy service providers is the story here. Customers are looking for a new delivery paradigm. It’s coming. Money and entrepreneurs are pouring into the once static legal vertical. New delivery models and players will push the already rapid pace of innovation.”
Sophisticated corporate clients are looking for better value and service from its legal service providers through multidisciplinary professional teams, innovative technologies, processes, delivery models, and valuable ideas.[197] Corporate clients want access to innovative alternative legal service providers. That inevitably means a slow death for those traditional law firms and specialist lawyers who do not have the cross-disciplinary approach and efficiency, cannot adopt the innovative processes and technology, “and who, in their hearts, don’t really believe that is what the law should be about”[198].
In this environment, a growing number of governments have pressed for deregulating the market for legal services with the legitimate goal of promoting competition, reducing prices, and spurring innovation. Many jurisdictions permit forms of ABS / MDPs to a greater or lesser extent,[199] including all Australian jurisdictions,[200] England and Wales,[201] other European countries (Scotland, Italy, Spain, Denmark, Germany, Netherlands, Poland, Belgium),[202] some Canadian provinces (to a limited extent), the District of Columbia and Washington State within the U.S.,[203] Singapore,[204] and New Zealand.[205][206]
Although the 2016 UK Future of Legal Services panel did not foresee ABS or other types of non-lawyer providers as serious competition to large corporate law firms, it did warn that the implications of the Big Four accountancy firms offering legal services should not be underestimated.[207] Similarly, the Economist[208] noted that although the largest legal market, the U.S., can possibly afford to be complacent – because its regulatory structure prohibits non-lawyers from practicing law or owning law practices, and today even more so under the current protectionist President – “there are many observers who think that the moat that the U.S. legal industry has built around itself isn’t impenetrable, and that corporations with real money will begin voting with their dollars for a new regime”.[209] Time alone will tell, but it is difficult to imagine multinational corporations and their General Counsel simply accepting the situation if the Big Four and other alternative legal services providers are able to meet or exceed their business and legal expectations as corporate clients. At the end of the day, all things being equal, one would think that eventually sophisticated corporate “client interest should be accorded primacy over lawyer self-interest”;[210] particularly in light of the fact that in either scenario lawyers will be employed and working, the only difference being the legal services model: law firm versus Big Four MDP.
The position of regulators in Canada[211] (Law Societies) and the U.S.[212] (State Courts[213]) with respect to ABS and non-lawyer ownership and investment is currently as follows:
- Canada – The Canadian Bar Association’s Legal Futures Initiative report in 2014 noted that there is “good evidence from Australia and England and Wales that non-lawyer ownership need not cause harm to client representation or the public interest”, and recommended that the “Canadian regulatory framework should be liberalized accordingly to achieve similar benefits”. In 2015 the Law Society of Upper Canada (Ontario) dropped the idea of allowing non-lawyers to hold majority ownership of law firms – as in England and Australia where firms can list shares on an exchange or raise capital from private-equity funds instead of relying solely on funds raised through debt – although a working group has continued to examine the possibility of allowing non-lawyers to hold a minority stake in areas of legal services not well served by traditional practices in the name of fostering innovation. [Note: in Ontario, the Rules of Professional Conduct prohibit direct or indirect fee-sharing with people who are not licensed legal professionals, other than in a multidisciplinary practice (MDP) and in inter-jurisdictional law firms. However, currently MDPs are limited as they must be effectively controlled by licensed legal professionals – lawyers – and may only provide additional services that support or supplement the licensed activity. Fees may only be shared within an MDP with MDP partners who provide client services].[214]
- U.S. – The Model Rules of Professional Conduct prohibit nonlawyer ownership of law firms, nonlawyer management of law firms, and sharing fees with nonlawyers (except under very limited circumstances). Almost every U.S. jurisdiction follows this restriction (with the exception of the District of Columbia and Washington State).[215] The American Bar Association’s ABA Commission on the Future of Legal Services report in August 2016 – although rejecting the proposal to allow MDPs or Alternative Business Structures – recommended that the Courts consider regulatory innovations in the area of legal services delivery. In respect to ABS, the Commission recommended that “continued exploration of alternative business structures (ABS) will be useful, and where ABS is allowed, evidence and data regarding the risks and benefits associated with these entities should be developed and assessed”. This has generally been considered a ‘dead letter’ in the U.S., the traditional policy of the ABA being a strict prohibition, so the recommendation of the ABA is considered a small step forward.[216]
Chris Bentley, Executive Director of the Legal Innovation Zone at Ryerson University in Toronto, Canada, has noted: “innovation is not waiting. … with technology, jurisdictional boundaries mean less and less. I’m not sure that those who look to the law society to restrict or slow or prevent change – to maintain the status quo – are aware of how quickly things are changing.”[217]
The possibility of new markets opening up (especially Brazil and India) and of more progressive “client focused” jurisdictions allowing ABS is looming, with several countries actively considering adopting reforms similar to the UK and Australia.[218] In addition, the Big Four have been able to work with the legal profession and regulators in emerging economies where regulatory protectionism is far less developed than it is in some Western countries. Consider, for example, China. Although foreign law firms are barred from directly or indirectly investing in, managing, operating, controlling, or taking equity interests in Chinese law firms, there are no regulations expressly restricting the form or nature of cooperation between a Chinese law firm and an international accounting firm. Taking advantage of this regulatory ambiguity, on its website Deloitte China markets the provision of legal services through Qin Li Law Firm, “a licensed Chinese law firm that specializes in cross border legal advisory services,” as part of the international Deloitte legal services network.[219]
As well, as global players in the legal market[220] the Big Four also have expansion plans for the Canadian market. At this time we know that Deloitte has taken serious steps into the Canadian legal market – albeit ensuring its legal arm Deloitte Conduit Law LLP is practicing in “affiliation” with Deloitte LLP – including a focus on outsourcing for legal departments and law firms.[221] In respect to their legal services delivery model, Deloitte and EY have restructured their affiliated law firms in Canada “to address the evolving legal requirements of its clients”, and positioned themselves to draw on their “vast global legal network to support its global inbound clients in navigating the complexities of” the “business environment”. In doing so, they appear to have “signaled” that the “global accountancy firms are ready to go mainstream with their legal offering in Canada” – with an endgame of one stop shopping for professional services.[222] Legal commentator Mitch Kowalski’s has a similar analysis, albeit with an interesting twist, noting as follows:[223]
“I believe that Deloitte’s endgame is unmistakeable: to be the one-stop shop for as many ancillary legal services as possible; to do work that was traditionally done by associate lawyers at most law firms.
The impact of this strategy is two-fold. It provides relief for Deloitte clients in the form of lower costs; and it reduces overhead for law firms by removing the need to constantly hire, train and then fire associate lawyers that do work that can done by a Deloitte offering.
If the other Big Four accounting firms follow suit — and there’s no reason to believe that they won’t — we could very well see a significant restructuring of Canada’s larger law firms to become boutique practices performing only legal work that requires the highest level of subject matter expertise, while outsourcing all other aspects of a particular matter to a member of the Big Four.
If this were to occur, Deloitte and the other members of the Big Four will not merely be responding to a changing legal landscape, they will be the change agents themselves.”
Today’s traditional law firms and BigLaw face challenges of unprecedented scale and complexity . As identified by the Canadian Bar Association’s Legal Futures Initiative, the combined forces of globalization, technology, and market liberalization are creating new services, new delivery mechanisms, and new forms of competition. Those changes are altering client needs and expanding client expectations. Clients want services to be quicker, cheaper, and smarter. They want more transparency and involvement, and they want to be and stay connected. The key to establishing a viable, competitive, and relevant legal profession is innovation and leadership— not just the development and adoption of technology-driven platforms and service delivery models, although they are critical, but also through new ideas about how lawyers are educated and trained, and how they are regulated to maintain professional standards while protecting the public. [224]
If Handled Appropriately: Oscars “Oops Moment” Not Likely to stop International Momentum
How easy is it to lose trust? Just ask Wells Fargo.[225]
When billions of dollars worth of financial auditing and legal-advisory services flow through your offices each year, it’s important to reassure clients that your firm is diligent, detail-oriented and cautious. So when a representative from a member of the “Big Four” – in this case PwC[226] – could not keep two envelopes straight at the 2017 Academy Awards, it was more than an embarrassing error. It was a symbolic knock to what the firm’s brand stands for. Every company makes a mistake at some point, but few mistakes are as public or as striking as PwC’s error at the Oscars. That symbolism may be a problem for PwC’s brand:[227]
“The good news here is that what we’re dealing with is a relatively minor mistake in the scheme of things – no one was harmed, no one was injured. … But the symbolism of it is important. If I’m paying PwC millions of dollars to do my accounting correctly, or give me business advice, or do my forensic work – if they can’t get an envelope straight, how can I trust them with a multimillion-dollar account?”
PwC went from being a venerable partner of the Academy of Motion Picture Arts and Sciences to a punchline.
– Los Angeles Times[228]
The key to turn this “mess into a victory” – a full and sincere institutional acceptance for the error by PwC,[229] and … join the laughter:[230]
“Because here’s the thing about PWC’s Oscars flub. It was just that, a flub. No one died; no one lost their home. We’re not talking about poisoned aspirin, faulty breaking systems, or corrupt lending practices. We’re not talking about evidence something is rotten to the core with PWC’s fundamental competencies. No, we’re talking about a very silly black-tie event having a scene at the end which gave everyone something hilarious to talk about at work Monday morning. …
In business, very few crises give you the chance to join the fray and gently poke fun at yourself. But the truth is, most people love a good loser, and will root for them to win again.”
If it’s a mistake that isn’t related to what the brand stands for, I’m less worried. But accuracy of reporting is one of the tenets of PwC.
– Katie Sprehe (director of reputation research), APCO Worldwide[231]
Most experts have noted that while the mistake “is embarrassing, to be sure, in the short-term, the long-term damage to PwC will be fairly nonexistent to their bottom line” as “large corporate companies that use PwC use them to provide solid audit and accounting services, not to organize envelopes for the Oscars.”[232] PwC has the most powerful brand of the Big Four, and one of the top ten global brands – a touch of humanity, if handled appropriately going forward – may allow the organization to capitalize on its brand and “goodwill accumulated with customers, staff, and other stakeholders” and in fact improve its overall name recognition and ultimately its business performance.[233] Time will tell.
Our brand is all about trust and integrity and the like so we have got to make sure that we double down on that issue.
– Bob Moritz, PwC Global Chairman[234]
https://blog.extraface.com/2024/08/07/vbn6q16g5 Conclusion
Internationally, expectations in client service for the legal services market are being transformed by the growth of alternate business structures (ABSs) which permit non-lawyer investment and ownership, and multi- disciplinary practices (MDPs) which combine legal services with other professional services.[235]
Unfortunately, the legal profession is known for adherence to precedent, not necessarily innovation.[236] While most law firms continue to hold to outdated operating models with no transformation plan and little innovation, new and innovative players are transforming the delivery models and processes involved in the buy and sell process of legal services. Technology, process, access to institutional capital, shifting regulation, client demand for enhanced value, and changes in other professional service industry delivery models – most notably accounting and the Big Four – are seen by many legal commentators as legal innovation’s fundamental drivers.[237]
Those [Law] firms that are able to adjust to the new market realities, not by putting band-aids on the old models, but rather by engaging in a thoughtful review and (where necessary) redesign of their approaches to client service, pricing, legal work processes, talent management, and overall structure will enjoy an enormous competitive advantage. Those that do not will face an increasingly uncertain future.
– 2017 Report on the State of the Legal Market[238]
For corporate clients requiring legal services, the Big Four accounting firms are likely to become an increasingly attractive component within the growing array of alternative legal services providers that are anything but traditional in their approach and their resources.[239]
Regulatory barriers are likely to continue to gradually decline. With respect to ‘protectionist’ jurisdictions, ultimately for sophisticated corporate clients, it is their organization (and their shareholders in respect to public companies) – and ultimately consumers – who are not well served. However, with time, bar regulations applicable to high-end, business-to-business legal work tend to progressively accommodate corporate interests which are (a) “informed”, (b) supported by legally knowledgeable in-house General Counsel, and (c) well financed. In protectionist jurisdictions (such as the U.S.), over the next decade we are likely to see rule changes that will likely support corporate clients, and favour the informed utilization of alternative legal service providers (which will include the Big Four).[240]
If your law firm wants to stay competitive and attract the best people, it has to develop a business strategy to deal with changing client demands, new technology, and a shifting regulatory landscape.
– Beverly Spencer, The Innovation Game[241]
The market will ultimately determine the appropriate legal services provider(s) for sophisticated corporations. At the end of the day, lawyers are not losing their jobs, but simply providing legal services in an evolving alternative format.
The continued emergence of a competitive and innovative legal services marketplace will benefit corporate clients, and likely force the legal profession in protectionist jurisdictions to come to terms with the reality that the traditional law firm – the guild model of designing and delivering monopoly protected services under the rubric of “the practice of law” – may no longer be an acceptable response to corporations demanding alternative legal providers who are innovative, competitive, multidisciplinary, and cost effective.[242] Modern world corporate clients increasingly require and demand a highly sophisticated interdisciplinary service when seeking solutions to complex problems.
Internationally, law firm monopolies are fading – the real question for protectionist jurisdictions[243] is not “whether” the rules governing the legal profession will continue to be liberalized, but rather in order to meet legitimate corporate client expectations and requirements the question is “how”.[244]
From a global perspective, the Big Four legal networks are emerging as important players within the corporate legal market, and they are strategically positioned with an attractive value proposition going forward.[245]
Eric Sigurdson
https://www.completerehabsolutions.com/blog/m30q77y9 [1] Eric Sigurdson, A Way Forward: Disruptive Innovation, the Legal Profession, and the Client – what is the appropriate legal services delivery model in the ‘new normal’, Sigurdson Post, November 15, 2016. See, Matt Fawcett, Things Lawyers Do …, LinkedIn.com, February 14, 2017; John Remsen Jr., 2017 Report on the State of the Legal Market, LindedIn.com, March 20, 2017; Georgetown Law and Thomson Reuters Peer Monitor, 2017 Report on the State of the Legal Market, Managing Partner Forum.org, March 17, 2017.
[2] Maria Jose Esteban and Professor David Wilkins, The re-emergence of the Big 4 in law, Thomson Reuters, April 27, 2016; Attack of the Bean Counters – Lawyers Beware: the accountants are coming after your business, The Economist, March 19, 2015; Peta Tomlinson, Accountancy Firms Make the Move into Legal Services, ACCA, October 1, 2015; Thomas Connelly, Big Four accountancy giants are expanding their legal services arms globally – and solicitors are getting worried, Legal Cheek, January 28, 2016; Michael McKiernan, Accounting firm enters business law market, Law Times, March 14, 2016; Caleb Newquist, It’s Only a Matter of Time before Big 4 Firms Offer Legal Services in the US, Going Concern, May 9, 2016; Ellie Clayton, The Big Four threat to legal services, January 28, 2016; Heather Suttie, Adding More Legal Might to Canada’s Big Four, HeatherSuttie.ca, March 20, 2016; Mitch Kowalski, Deloitte’s deal with Conduit Law continues its march into legal services, National Post, March 22, 2016; Anthony Hilton, Why their profession’s failures mean lawyers don’t win top city jobs, Evening Standard, UK, September 22, 2016.
[3] Maria Jose Esteban and Professor David Wilkins, The re-emergence of the Big 4 in law, Thomson Reuters, April 27, 2016. Also see, Heidi Gardner, Smart Collaboration: How Professionals and Their Firms Succeed by Breaking Down Silos, Harvard Business Review Press, January 2017:
“Professional service firms face a serious challenge. Their clients increasingly need them to solve complex problems–everything from regulatory compliance to cybersecurity, the kinds of problems that only teams of multidisciplinary experts can tackle. … Gardner, a former McKinsey consultant and Harvard Business School professor now lecturing at Harvard Law School, has spent over a decade conducting in-depth studies of numerous global professional service firms. Her research with clients and the empirical results of her studies demonstrate clearly and convincingly that collaboration pays, for both professionals and their firms. But Gardner also offers powerful prescriptions for how leaders can foster collaboration, move to higher-margin work, increase client satisfaction, improve lateral hiring, decrease enterprise risk, engage workers to contribute their utmost, break down silos, and boost their bottom line. With case studies and real-world insights, “Smart Collaboration” delivers an authoritative case for the value of collaboration to today’s professionals, their firms, and their clients and shows you exactly how to achieve it.”
[4] Mark Cohen, ‘Legal Innovation’ is not an Oxymoron – It’s Farther Along Than you Think, Forbes, March 14, 2017.
[5] Steve Lohr, A.I. Is Doing Legal Work. But It Won’t Replace Lawyers, Yet, New York Times, March 19, 2017; Hugh Son, JP Morgan Software Does in Seconds What Took Lawyers360,000 Hours, Bloomberg, February 27, 2017:
“At JPMorgan Chase & Co., a learning machine is parsing financial deals that once kept legal teams busy for thousands of hours. The program, called COIN, for Contract Intelligence, does the mind-numbing job of interpreting commercial-loan agreements that, until the project went online in June, consumed 360,000 hours of work each year by lawyers and loan officers. The software reviews documents in seconds, is less error-prone and never asks for vacation.”
[6] Anthony Hilton, Why their profession’s failures mean lawyers don’t win top city jobs, Evening Standard, UK, September 22, 2016; Maria Jose Esteban and Professor David Wilkins, The re-emergence of the Big 4 in law, Thomson Reuters, April 27, 2016; Heidi Gardner, Smart Collaboration: How Professionals and Their Firms Succeed by Breaking Down Silos, Harvard Business Review Press, January 2017.
[7] “More for less” trend or challenge – see generally, International Bar Association, ‘Times are a-changin’: disruptive innovation and the legal profession, IBA Legal Policy & Research Unit, May 2016; Beverley McLachlin, Legal Profession in the 21st Century: Remarks of the Right Honourable Beverley McLachlin, P.C. Chief Justice of Canada (2015 Canadian Bar Association Plenary), Supreme Court of Canada, August 14, 2015; George Beaton and Imme Kaschner, Remaking Law Firms: Why and How, June 7, 2016; Richard Susskind, Tomorrow’s Lawyers: An Introduction to Your Future, 2013; Canadian Bar Association, Futures: Transforming the Delivery of Legal Services in Canada, August 2014; Law Society of England and Wales, The Future of Legal Services, January 2016; ABA Commission on the Future of Legal Services, Report on the Future of Legal Services in the United States, August 2016; Benjamin L. Barton, Glass Half Full: The Decline and Rebirth of the Legal Profession, 2015.
[8] David B. Wilkins and Maria Jose Esteban, The Reemergence of the Big Four in Law: their rise, transformation, and potential triumph, The Practice (Vol. 2, Issue 2), Harvard Law School: Center on the Legal Profession (thepractice.law.harvard.edu), January 2016.
[9] David B. Wilkins and Maria Jose Esteban, The Reemergence of the Big Four in Law: their rise, transformation, and potential triumph, The Practice (Vol. 2, Issue 2), Harvard Law School: Center on the Legal Profession (thepractice.law.harvard.edu), January 2016.
[10] Michael McKiernan, Accounting firm enters business law market, Law Times, March 14, 2016; Also see, Partrick McComish, Big Accountancy vs Big Law: “Law Firms should be afraid, very afraid”, InfoTrack.com.au, December 15, 2016.
[11] The Fourth Industrial Revolution, or 4IR, is the fourth major industrial era since the initial Industrial Revolution of the 18th century. The Fourth Industrial Revolution can be described as a range of new technologies that are fusing the physical, digital and biological worlds, and impacting all disciplines, economies and industries. At its core is the combination of big data, analytics and physical technology – providing increasingly enhanced, customized offerings to help meet the needs of organizations and individuals that can adapt and evolve to changing situations and requirements over time. Central to this revolution are emerging technology breakthroughs in fields such as artificial intelligence, robotics, the Internet of Things, autonomous vehicles, 3D printing and nanotechnology. Moreover, it is disrupting almost every industry in every country. And the breadth and depth of these changes herald the transformation of entire systems of production, management, and governance. Business leaders and senior executives and their trusted business and legal advisors need to understand their changing environment, challenge the assumptions of operating teams, and relentlessly innovate. See, Klaus Schwab, The Fourth Industrial Revolution: what it means, how to respond, World Economic Forum, January 14, 2016; Irving Wladawsky-Berger, The Fourth Industrial Revolution: Risks and Benefits, Wall Street Journal, February 24, 2017; Ernst & Young, What is the Fourth Industrial Revolution? How will it affect business and society, EY (betterworkingworld.ey.com); Hugh Son, JP Morgan Software Does in Seconds What Took Lawyers360,000 Hours, Bloomberg, February 27, 2017; Alex Gray, The 10 skills you need to thrive in the Fourth Industrial Revolution, World Economic Forum, January 19, 2016.
[12] Graham Richardson, Navigating a Brave New World: Eversheds innovates, The Practice (Vol. 2, Issue 2), Harvard Law School: Center on the Legal Profession (thepractice.law.harvard.edu), January 2016.
[13] Graham Richardson, Navigating a Brave New World: Eversheds innovates, The Practice (Vol. 2, Issue 2), Harvard Law School: Center on the Legal Profession (thepractice.law.harvard.edu), January 2016. – See, Tabby Kinder, Boutiques will benefit from Brexit as big firms struggle to future-proof, The Lawyer, February 22, 2017.
[14] Altman Weil, 2016 Chief Legal Officer Survey [http://www.altmanweil.com/dir_docs/resource/e32f33b3-eeb3-4af6-82c8-4f6f7d9824f6_document.pdf]. Also see, Mitch Kowalski, McGill study reveals the ‘illusion’ of innovation at Canadian law firms, National Post, January 26, 2017; Aly R Haji, The Illusion of Innovation at Canadian Law Firms, McGill University (Faculty of Management, Supervised by Prof. Karl Moore, mentorship support and guidance from Mike Ross and strategy consultant Juniper), jnper.com, January 2017; Mark Cohen, ‘Legal Innovation’ is not an Oxymoron – It’s Farther Along Than you Think, Forbes, March 14, 2017 (“The legal industry is known for adherence to precedent, not innovation. … Legal innovation has lagged compared with other industries”).
[15] Mark Cohen, ‘Legal Innovation’ is not an Oxymoron – It’s Farther Along Than you Think, Forbes, March 14, 2017.
[16] Georgetown Law and Thomson Reuters Peer Monitor, 2017 Report on the State of the Legal Market, Managing Partner Forum.org, March 17, 2017.
[17] David Curle, Why Size Matters: Big Four Accounting Firms Poised to Move In, Thomson Reuters, April 8, 2015. Also see, Attack of the Bean Counters – Lawyers Beware: the accountants are coming after your business, The Economist, March 19, 2015.
[18] Ron Friedman, Will all lawyers work for the Big 4 by 2026?, Prism Legal, October 2, 2016.
[19] Neil Rickman and James Anderson, Innovations in the Provision of Legal Services in the United States: An Overview for Policymakers, Kauffman-Rand Institute for Entrepreneurship Public Policy, 2011. But see, D. Casey Flaherty, Rising: Supply Chain Management and Alternative Service Providers, 3 Geeks and a Law Blog (geeklawblog.com), February 19, 2017.
[20] David B. Wilkins and Maria Jose Esteban, The Reemergence of the Big Four in Law: their rise, transformation, and potential triumph, The Practice (Vol. 2, Issue 2), Harvard Law School: Center on the Legal Profession (thepractice.law.harvard.edu), January 2016.
[21] Anthony Lin, The Rise of the Megafirm, ABA Journal, September 1, 2015.
[22] Anthony Lin, The Rise of the Megafirm, ABA Journal, September 1, 2015.
[23] Maria Jose Esteban and Professor David Wilkins, The re-emergence of the Big 4 in law, Thomson Reuters, April 27, 2016. Also see, David B. Wilkins and Maria Jose Esteban, The Reemergence of the Big Four in Law: their rise, transformation, and potential triumph, The Practice (Vol. 2, Issue 2), Harvard Law School: Center on the Legal Profession (thepractice.law.harvard.edu), January 2016.
[24] Beverley McLachlin, Legal Profession in the 21st Century: Remarks of the Right Honourable Beverley McLachlin, P.C. Chief Justice of Canada (2015 Canadian Bar Association Plenary), Supreme Court of Canada, August 14, 2015. [http://www.scc-csc.ca/court-cour/judges-juges/spe-dis/bm-2015-08-14-eng.aspx#fnb25]; Canadian Bar Association, Futures: Transforming the Delivery of Legal Services in Canada, August 2014; International Bar Association, ‘Times are a-changin’: disruptive innovation and the legal profession, IBA Legal Policy & Research Unit, May 2016; Law Society of England and Wales, The Future of Legal Services, January 2016; ABA Commission on the Future of Legal Services, Report on the Future of Legal Services in the United States, August 2016; Russell Engler, Connecting Self-Representation to Civil Gideon: What Existing Data Reveal about when Counsel is Most Needed, 2010, 37 Fordham Urban L.J. 37 (citing Legal Services Corporation, Documenting the Justice Gap in America: The Current Unmet Civil Legal Needs of Low Income Americans, updated report (Washington, D.C.: Legal Services Corporation, September 2009); Action Committee on Access to Justice in Civil and Family Matters, Access to Civil and Family Justice: A Roadmap for Change, 2013; Dr. George Beaton, 10 reasons BigLaw managing partners are not sleeping very well, Beaton Capital, August 15, 2015. [Lawyers are increasingly unaffordable to most individuals: Statistics support the view that accessing the justice system with the help of a legal professional is increasingly unaffordable to most people. According to an American study from a few years ago, as much as 70%-90% of legal needs in society go unmet. Among the hardest hit are the middle class – who earn too much to qualify for legal aid, but frequently not enough to retain a lawyer for a matter of any complexity or length. Additionally, members of poor and vulnerable groups are particularly prone to legal problems. Increasingly, these needs are being addressed by providers outside the legal profession, including those within the early resolution services sector. Sophisticated corporate clients are demanding delivery of quality legal services more efficiently and at less cost. The power balance between lawyers and their corporate clients has shifted, intensifying price-down pressure on law firms, in particular BigLaw.]
[25] Mitchell Kowalski, Avoiding Extinction: Reimagining Legal Services for the 21st Century, 2012. Also see, Altman Weil, 2016 Chief Legal Officer Survey (“lack of innovation in service delivery by law firms”); Mitch Kowalski, McGill study reveals the ‘illusion’ of innovation at Canadian law firms, National Post, January 26, 2017 (“while Canadian law firms talk a good ‘innovation’ game, little innovation is actually taking place”); Aly R Haji, The Illusion of Innovation at Canadian Law Firms, McGill University (Faculty of Management, Supervised by Prof. Karl Moore, mentorship support and guidance from Mike Ross and strategy consultant Juniper), jnper.com, January 2017.
[26] Neil Rickman and James Anderson, Innovations in the Provision of Legal Services in the United States: An Overview for Policymakers, Kauffman-Rand Institute for Entrepreneurship Public Policy, 2011. Also see, Laurel Terry, The European Commission Project Regarding Competition in Professional Services, 29 Northwestern Journal of International Law & Business 1, 2009; Mark Cohen, The Pond Seems Wider: The Regulator Gap Between UK and U.S. Legal Practice, Legal Mosaic, May 4, 2015.
[27] Beverley McLachlin, Legal Profession in the 21st Century: Remarks of the Right Honourable Beverley McLachlin, P.C. Chief Justice of Canada (2015 Canadian Bar Association Plenary), Supreme Court of Canada, August 14, 2015.
[28] Beverley McLachlin, Legal Profession in the 21st Century: Remarks of the Right Honourable Beverley McLachlin, P.C. Chief Justice of Canada (2015 Canadian Bar Association Plenary), Supreme Court of Canada, August 14, 2015. Also see, Bob Goodman and Josh Harder, Four Areas of Legal Ripe for disruption by Smart Startups, Law Technology Today, December 16, 2014:
“In 50 years, the customer experience at most law firms has barely changed. If you needed legal advice in the ‘60s, you generally went to a nice building and met a lawyer in a suit who would then review your issue, conduct research, and bill you an hourly rate. But even with today’s modern communication tools, both customer experience and lawyer workflow have remained stagnant”.
[29] See, Justin D. Petzold, Comment, Firm Offers: Are Publicly Traded Law Firms Abroad Indicative of the Future of the United States Legal Sector?, 2009 Wisconsin Law Review 67, 81–82; John S. Dzienkowski, The Future of Big Law: Alternative Legal Service Providers to Corporate Clients, 82 Fordham Law Review 6, 2014.
[30] Legal Services Act, 2007, c. 29, sch. 13 (Eng.).
[31] David B. Wilkins and Maria Jose Esteban, The Reemergence of the Big Four in Law: their rise, transformation, and potential triumph, The Practice (Vol. 2, Issue 2), Harvard Law School: Center on the Legal Profession (thepractice.law.harvard.edu), January 2016.
[32] Canadian Bar Association, Futures: Transforming the Delivery of Legal Services in Canada, August 2014. Also see, ABA Commission on the Future of Legal Services, Report on the Future of Legal Services in the United States, August 2016 – “From the outset, the Commission has been transparent about the broad array of issues it is studying and evaluating, including those legal services developments that are viewed by some as controversial, threatening, or undesirable (e.g., alternative business structures).”
[33] Mary Jutten, Technology and the Unauthorized Practice of Law, Law Technology Today, June 12, 2015.
[34] Gavin and Brooke MacKenzie, Should lawyers have a monopoly over the provision of legal services?, CBA National, Winter 2016; Mark Cohen, The Pond Seems Wider: The Regulator Gap Between UK and U.S. Legal Practice, Legal Mosaic, May 4, 2015.
[35] Gavin and Brooke MacKenzie, Should lawyers have a monopoly over the provision of legal services?, CBA National, Winter 2016.
[36] For a discussion of this debate in another context, see: Richard P. Campbell, Welcoming Insurance Staff Counsel, Tort and Insurance Practice Section (TIPS), American Bar Association, The Brief, Fall 2001.
[37] Mark Cohen, The Pond Seems Wider: The Regulator Gap Between UK and U.S. Legal Practice, Legal Mosaic, May 4, 2015.
[38] Beverley Spencer, The Innovation Game, CBA National Magazine, Spring 2017, page 30.
[39] Attack of the Bean Counters – Lawyers Beware: the accountants are coming after your business, The Economist, March 19, 2015.
[40] Deloitte makes its case, CBA National Magazine, June 22, 2016 [http://www.nationalmagazine.ca/Blog/June-2016/Deloitte-makes-its-case.aspx]; Deloitte, Future Trends for Legal Services: Global Research Study, June 2016 – “independent research study commissioned by Deloitte Legal. Findings are based on 243 quantitative survey responses, and 30 qualitative, in-depth interviews with in-house legal services purchasers, mainly occupying positions of CEOs, CFOs or General/Legal Counsel.” [www2.deloitte.com/global/en/pages/legal/articles/deloitte-future-trends-for-legal-services.html].
[41] Partrick McComish, Big Accountancy vs Big Law: “Law Firms should be afraid, very afraid”, InfoTrack.com.au, December 15, 2016.
[42] Partrick McComish, Big Accountancy vs Big Law: “Law Firms should be afraid, very afraid”, InfoTrack.com.au, December 15, 2016. Julie Triedman, Deloitte, Other Accounting Giants, See Legal Services Growth, Law.com, September 9, 2016; Marianna Papadakis, Threat to law firms as PwC, KPMG expand legal capabilities, AFR.com, June 9, 2016.
[43] Attack of the Bean Counters – Lawyers Beware: the accountants are coming after your business, The Economist, March 19, 2015.
[44] Note: the Big Four firms are professional services networks. Each is a network of firms, owned and managed independently, which have entered into agreements with other member firms in the network to share a common name, brand and quality standards. Each network has established an entity to co-ordinate the activities of the network. In one case (KPMG), the co-ordinating entity is Swiss, and in three cases (Deloitte Touche Tohmatsu, PricewaterhouseCoopers and Ernst & Young) the co-ordinating entity is a UK limited company. They are similar to BigLaw firm networks found in the legal profession – s https://blog.extraface.com/2024/08/07/7ji5t0f3 ee re law firms, Chris Johnson, A Big Day for Big Law Mergers, American Lawyer, November 30, 2016. — At least some of the difficulties of BigLaw international expansion have been ameliorated by the vehicle that Dentons, Baker & McKenzie, DLA Piper, Hogan Lovells, Norton Rose Fulbright and some other large law firms have chosen to carry their ambitions forward: the Swiss “verein,” which is German for the word association – a holding structure that allows members to retain their existing forms. Normally, when two law firms merge, they combine their separate partnerships into one. This can be a challenge, especially if there are large financial disparities between partners at the different firms. In recent years, rapid expansion through merger has been a factor in firm collapses like those of Dewey & LeBoeuf and Bingham McCutchen.
[45] Aebra Coe, How to Compete with the Big 4 For Clients, Law 360, November 7, 2016; David Curle, Why Size Matters: Big Four Accounting Firms Poised to Move In, Thomson Reuters, April 8, 2015; Attack of the Bean Counters – Lawyers Beware: the accountants are coming after your business, The Economist, March 19, 2015; Anthony Lin, The Rise of the Megafirm, ABA Journal, September 1, 2015; Chris Johnson, A Big Day for Big Law Mergers, American Lawyer, November 30, 2016.
[46] Anthony Lin, The Rise of the Megafirm, ABA Journal, September 1, 2015.
[47] Anthony Lin, The Rise of the Megafirm, ABA Journal, September 1, 2015. But also see, Chris Johnson, A Big Day for Big Law Mergers, American Lawyer, November 30, 2016. — At least some of the difficulties of BigLaw international expansion have been ameliorated by the vehicle that Dentons, Baker & McKenzie, DLA Piper, Hogan Lovells, Norton Rose Fulbright and some other large law firms have chosen to carry their ambitions forward: the Swiss “verein,” which is German for the word association – a holding structure that allows members to retain their existing forms. Normally, when two law firms merge, they combine their separate partnerships into one. This can be a challenge, especially if there are large financial disparities between partners at the different firms:
“It’s easy to see the appeal: Vereins allow combining firms to sidestep issues around balancing disparate profitabilities and reconciling contrasting tax, accounting and partner compensation systems. Those issues can be particularly challenging in trans-Atlantic combinations, with the cash-based accounting systems and calendar fiscal year favored by most U.S. firms clashing with the accrual-based accounting setups and April 30 financial year end common among U.K. firms.”
[48] Attack of the Bean Counters – Lawyers Beware: the accountants are coming after your business, The Economist, March 19, 2015; Peta Tomlinson, Accountancy Firms Make the Move into Legal Services, ACCA, October 1, 2015.
[49] Peta Tomlinson, Accountancy Firms Make the Move into Legal Services, ACCA, October 1, 2015.
[50] Maria Jose Esteban and Professor David Wilkins, The re-emergence of the Big 4 in law, Thomson Reuters, April 27, 2016; Thomas Connelly, Big Four accountancy giants are expanding their legal services arms globally – and solicitors are getting worried, Legal Cheek, January 28, 2016; Michael McKiernan, Accounting firm enters business law market, Law Times, March 14, 2016; Caleb Newquist, It’s Only a Matter of Time before Big 4 Firms Offer Legal Services in the US, Going Concern, May 9, 2016; Ellie Clayton, The Big Four threat to legal services, January 28, 2016; Heather Suttie, Adding More Legal Might to Canada’s Big Four, HeatherSuttie.ca, March 20, 2016; Mitch Kowalski, Deloitte’s deal with Conduit Law continues its march into legal services, National Post, March 22, 2016; Canadian Bar Association, Futures: Transforming the Delivery of Legal Services in Canada, August 2014; Ralph Baxter, Looking at the Law Firm Partnership Model and How to Fix it, Thomson Reuters, February 25, 2015 [http://legalexecutiveinstitute.com/looking-at-the-law-firm-partnership-model-how-to-fix-it-by-ralph-baxter/]; Professor Johnathan T. Molot, What’s Wrong with Law Firms? A Corporate Finance Solution to Law Firm Short-Termism, Southern California Law Review 2015.
[51] David Curle, Why Size Matters: Big Four Accounting Firms Poised to Move In, Thomson Reuters, April 8, 2015. Also see, Attack of the Bean Counters – Lawyers Beware: the accountants are coming after your business, The Economist, March 19, 2015; Hugh Son, JP Morgan Software Does in Seconds What Took Lawyers 360,000 Hours, Bloomberg, February 27, 2017; Ben DiPietro, Financial Firms Turn to Artificial Intelligence to Handle Compliance Overload, Wall Street Journal, May 19, 2016; Law Society Calls on Law Firms to Embrace New Legal Tech and AI, Seeks to Invest in Start-ups, Artificial Lawyer, January 25, 2017 (UK). Note: Instituting a process or leveraging a legal technology (to streamline or automate routine aspects of legal work) are simply tools to assist legal service providers to work more efficiently. See, Ron Friedman, Will all lawyers work for the Big 4 by 2026?, Prism Legal, October 2, 2016: – “A significant portion of Big Law work is more routine than many lawyers think. Routine work is at risk of shifting to Big 4. “Factory” and “industrial” remain dirty words to lawyers – less so or not so to Big 4”. https://aiohealthpro.com/591ly6j Also see, Steve Lohr, A.I. Is Doing Legal Work. But It Won’t Replace Lawyers, Yet, New York Times, March 19, 2017.
[52] Daniel Fisher, Legal Services Firm’s $73 Million Deal Strips the Mystery from Derivatives Trading, Forbes, February 12, 2015. Buy Cheap Xanax Online Uk Also see, Steve Lohr, A.I. Is Doing Legal Work. But It Won’t Replace Lawyers, Yet, New York Times, March 19, 2017 – “corporate clients often are no longer willing to pay high hourly rates to law firms for junior lawyers to do routine work. Those tasks are already being automated and outsourced, both by the firms themselves and by outside suppliers like Axiom, Thomson Reuters, Elevate, and the Big Four accounting firms”
[53] International Bar Association, ‘Times are a-changin’: disruptive innovation and the legal profession, IBA Legal Policy & Research Unit, May 2016; Peta Tomlinson, Accountancy Firms Make the Move into Legal Services, ACCA, October 1, 2015; Attack of the Bean Counters – Lawyers Beware: the accountants are coming after your business, The Economist, March 19, 2015.
[54] Ron Friedman, Will all lawyers work for the Big 4 by 2026?, Prism Legal, October 2, 2016.
[55] Jason Moyse and Aron Solomon, Remaking the law firm ecosystem, Canadian Lawyer, July 4, 2016.
[56] Ed Sohn, Alt.legal: If We Build It, Will They Come? The Problem of Legal Tech Adoption, Above the Law, September 14, 2016.
[57] Tara Weintritt, What GCs See as the Biggest Challenge Facing Firms, JDSupra.com, February 28, 2017. Also see, Deloitte, Future Trends for Legal Services: Global Research Study, June 2016 – “independent research study commissioned by Deloitte Legal. Findings are based on 243 quantitative survey responses, and 30 qualitative, in-depth interviews with in-house legal services purchasers, mainly occupying positions of CEOs, CFOs or General/Legal Counsel.” Note: Corporate clients are changing their approach to buying legal services across the globe. Conventional law firms are no longer meeting today’s business needs. One in three companies surveyed want their legal services provider to bring industry, commercial and non-legal expertise, which currently they do not; as well, to be more savvy on global data and cyber protection issues and more pro-active in sharing knowledge across many jurisdictions. Traditional law firms are seen to be trailing other professional services firms in this area. The majority (55%) of participants in the study (legal counsel, general counsel, CEOs and CFOs) have taken or are considering a significant review of their legal suppliers.
[58] Jill Dessalines, Adapt or Die: Why Law Firms Must Change to Survive in Tomorrow’s Economy, Linkedin.com, March 6, 2017.
[59] Neil Rickman and James Anderson, Innovations in the Provision of Legal Services in the United States: An Overview for Policymakers, Kauffman-Rand Institute for Entrepreneurship Public Policy, 2011. Gador Xanax Online But see, D. Casey Flaherty, Rising: Supply Chain Management and Alternative Service Providers, 3 Geeks and a Law Blog (geeklawblog.com), February 19, 2017. Also see, for example: For example, see: David Burgess, General Counsel: “Dear Law Firm Partner – it’s not me, it’s you. I want to see other people”, LinkedIn.com, March 20, 2017 – “So, here’s the message to law firm partners, from GCs ‘I want to see other people!’”.
[60] Felicity Nelson, Uberfication Hits Law Firms, Lawyers Weekly (Australia), October 9, 2015; Danny Ertel and Mark Gordon, Points of Law: Unbundling Corporate Legal Services to Unlock Value, Harvard Business Review, July-August 2012; Joanne Goodman, How to: Outsource Legal Work, Law Society Gazette (UK), August 12, 2013; Peter Archer, Outsourcing the law gets new look, Raconteur, April 24, 2014; Scott Forman, Perspective: How Law Firms Can Embrace Unbundling, Bloomberg Law (bol.bna.com), May 4, 2016; Milton Regan and Palmer Heenan, Supply Chains and Porous Boundaries: The Disaggregation of Legal Services, 78 Fordham Law Review, 2010 — “The economic downturn could mark a moment of transition for law firms less because of its immediate financial impact and more because it has highlighted and accelerated the trend toward the disaggregation of legal services that had begun before it. This trend reflects the maturation of legal services sector into a highly competitive industry driven more forcefully than ever by pressures for efficiency. How law firms, clients, and organizations connected with this industry respond could shape not only the future of law firms, but of the legal profession itself.” ; Public Policy, Legal Strategy 101: It’s Time for Law Firms to Re-think Their Business Model, Wharton.upenn.edu, April 29, 2009.
[61] Jill Dessalines, Adapt or Die: Why Law Firms Must Change to Survive in Tomorrow’s Economy, Linkedin.com, March 6, 2017.
[62] Altman Weil, 2016 Chief Legal Officer Survey [http://www.altmanweil.com/dir_docs/resource/e32f33b3-eeb3-4af6-82c8-4f6f7d9824f6_document.pdf]. Also see, Heidi Gardner, Smart Collaboration: How Professionals and Their Firms Succeed by Breaking Down Silos, Harvard Business Review Press, January 2017.
[63] For example: until recently, the majority of corporate clients who managed lawyer performance, did so based solely on legal fees. Sophisticated clients are now using “big data” to track and compare law firms and lawyers on important law firm / lawyer efficiency metrics such as: lawyer performance by jurisdiction and case type, cost per closed case, cost per phase of legal matter, cycle time, win/loss rates (for litigation), etc.
[64] Rebekah Mintzer, More Companies Consolidate Outside Legal Work, LexisNexis Report, Law.com, March 10, 2017; Victor Li, Report finds increase in consolidation of outside legal work, ABA Journal, March 13, 2017; 2017 CounselLink Enterprise Legal Management Trends Report, LexisNexis.com.
[65] Ilina Rejeva, Richard Burcher: In 10 Years Law Firm Pricing is Going to Become Considerably More Sophisticated, LegalTrek, November 2015 – “There is a concept pricing professionals known as Willingness To Pay (WTP). Put simplistically, this is the Holy Grail; it is the maximum price that the client is willing to pay and still feel that they have had fair value while at the same time, the firm feels that it has been properly compensated and remunerated for the value that is delivered”. Also see: Victor Li, Deutsche Bank will refuse to pay UK and European law firms for work done by junior attorneys, ABA Journal, March 22, 2017; Tara Weintritt, What GCs See as the Biggest Challenge Facing Firms, JDSupra.com, February 28, 2017:
“Recently, the GC of global public company shared in an interview that his in-house goal is to be as close to 100% off the billable hour as possible, including litigation. For his company, that will include fixed fees, caps and other alternative billing systems, and he feels strongly that law firms can’t pass along inefficiencies to clients any longer. He was incredibly frustrated that all of his primary firms had sent increase letters for between 2% and 6% at the end of 2016 and noted how angry his company’s customers would be if they received standard cost increases every year. He added that while he can justify increased costs for improved skills and efficiency that occur as an associate develops greater expertise and experience between years three and seven, the reality is a lawyer who has been practicing for 25 years does not get 6% smarter each year.”
[66] Alternative service providers are referred to as NewLaw. NewLaw was devised as a term in 2013 by consultant Eric Chin. NewLaw has been defined as “any model, process, or tool that represents a significantly different approach to the creation or provision of legal services than what the legal profession traditionally has employed” [Jordan Furlong]: see, Ilina Rejeva, What is NewLaw and How It is Changing the Legal Industry Forever, LegalTrek, April 26, 2016. NewLaw models, with some overlap, include among others: secondment firms, law and business advice companies, law firm accordion companies, virtual law firms and companies, and innovative law firms and companies. NewLaw has segmented the legal marketplace with its reliance on non-traditional and efficient business models, leveraging flexible work and billing arrangements, and disruptive business practices and technology (i.e. virtual workspace, value based fixed fee pricing, outsourcing, and legal technology): see, Eric Sigurdson, A Way Forward: Disruptive Innovation, the Legal Profession, and the Client – what is the appropriate legal services delivery model in the ‘new normal’, Sigurdson Post, November 15, 2016. Also see, Andrew Mellett, Legal Transformation: A whole new playbook, Linkedin.com, February 8, 2017; Janvi Patel, The era of legal transformation, Halebury, March 1, 2017.
[67] Katie Walsh and Edmund Tadros, The Great Unbundling of Legal Work, Financial Review, March 9, 2017; Daniel Fish, The lucrative days of document review are over, Precedent (lawandstyle.ca), March 7, 2017; Gerry Riskin, Shift from “Case” to “Task” Approach Will Impact Law-Firm Management, GerryRiskin.com, March 2, 2017; David Ruiz, Clients Are Splitting Litigation Into Affordable Pieces, Report Says, Corporate Counsel, January 27, 2017; Morris Ratner, Restraining Lawyers: From ‘Cases’ to ‘Tasks’, Fordham Law Review (Forthcoming), January 1, 2017.
[68] Joe Borstein, Alt.Legal: The Biglaw ‘Caste System’ – An Impediment to Innovation?, Above the Law, March 9, 2016; Altman Weil, 2016 Chief Legal Officer Survey [http://www.altmanweil.com/dir_docs/resource/e32f33b3-eeb3-4af6-82c8-4f6f7d9824f6_document.pdf]; The Larger the law department, the more likely it undertakes data analysis, JurisDatoris, November 13, 2016; Daniel Katz, Law + Tech + Design + Delivery: Observations Regarding Innovation in the Legal Industry, 2016, 366 slide presentation; International Bar Association, ‘Times are a-changin’: disruptive innovation and the legal profession, IBA Legal Policy & Research Unit, May 2016; Dr. George Beaton, 10 reasons BigLaw managing partners are not sleeping very well, Beaton Capital, August 15, 2015; Danny Ertel and Mark Gordon, Points of Law: Unbundling Corporate Legal Services to Unlock Value, Harvard Business Review, July-August 2012; Joanne Goodman, How to: Outsource Legal Work, Law Society Gazette (UK), August 12, 2013; Peter Archer, Outsourcing the law gets new look, Raconteur, April 24, 2014; Scott Forman, Perspective: How Law Firms Can Embrace Unbundling, Bloomberg Law (bol.bna.com), May 4, 2016:
“But the environment has changed drastically since the Great Recession, and clients now view the scope of legal services as a pyramid. They are still willing to work with traditional lawyers for matters that fall in the middle to the top of the pyramid – matters that require varying levels of specialized knowledge. However, they are demanding more cost-effective solutions for commoditized tasks. For example, some larger companies are starting to require more routinized work such as document review to be handled by contract attorneys.
Successfully integrating an unbundled service approach involves looking at each aspect of a legal matter and determining the most efficient and effective method to address each task, whether it be alternative staffing, technology solutions or a traditional partner/associate team. For instance, in a typical employment litigation matter handled through our Littler CaseSmart platform, we bring in FlexTime Attorneys who focus on specific aspects of the litigation process (i.e., fact investigation, research, discovery and brief writing), data analysts to scrub data and work on damage modeling, e-discovery attorneys, and project managers. FlexTime Attorneys and other legal professionals work side-by-side with associates and shareholders, with each attorney handling a discrete task as part of a larger team. The staffing model is designed to match the right person to the right task, while technology is also applied to streamline the process. The result is the cost savings increasingly demanded by companies, while the law firm continues to deliver high-quality legal work.”
[69] See for example, Attack of the Bean Counters – Lawyers Beware: the accountants are coming after your business, The Economist, March 19, 2015.
[70] Georgetown Law and Thomson Reuters Peer Monitor, 2017 Report on the State of the Legal Market, Managing Partner Forum.org, March 17, 2017.
[71] CBA Legal Futures Initiative, Futures: Transforming the Delivery of Legal Services in Canada, Canadian Bar Association, 2014, page 26-27 – “[S]tudies show that most lawyers are by nature conservative and risk-averse. But attitudes vary with personal circumstances. Age, gender, experience, income, and perceived competitive advantage are only some of the factors segmenting lawyers’ attitudes towards change. Lawyers or law firms may not be motivated to innovate because of their current success (“if it ain’t broke, why fix it?”). They believe it is not worth the effort, time, and cost to make necessary adjustments. In many cases, there is a lack of entrepreneurship. High fees, comfortable incomes, and an aging demographic reduce the motivation to improve, invest, or innovate”. Also see, Eric Sigurdson, A Way Forward: Disruptive Innovation, the Legal Profession, and the Client – what is the appropriate legal services delivery model in the ‘new normal’, Sigurdson Post, November 15, 2016.
[72] Ron Friedman, Will all lawyers work for the Big 4 by 2026?, Prism Legal, October 2, 2016 – legal commentator suggests that “decades of audit price pressure taught the Big 4 how to deliver at lower cost”.
[73] Ron Friedman, Will all lawyers work for the Big 4 by 2026?, Prism Legal, October 2, 2016.
[74] Law Society of England and Wales, The Future of Legal Services, January 2016; Thomas Connelly, Big Four accountancy giants are expanding their legal services arms globally – and solicitors are getting worried, Legal Cheek, January 28, 2016.
[75] David Curle, Why Size Matters: Big Four Accounting Firms Poised to Move In, Thomson Reuters, April 8, 2015. Also see, Attack of the Bean Counters – Lawyers Beware: the accountants are coming after your business, The Economist, March 19, 2015.
[76] Ron Friedman, Will all lawyers work for the Big 4 by 2026?, Prism Legal, October 2, 2016.
[77] Simon Hayes, Why ‘getting stuff done’ is the most underrated leadership skill, LinkedIn.com, February 27, 2017.
[78] Mark Cohen, The Pond Seems Wider: The Regulator Gap Between UK and U.S. Legal Practice, Legal Mosaic, May 4, 2015.
[79] ABA Commission on the Future of Legal Services, For Comment: Issues Paper Regarding Alternative Business Structures, AmericanBar.org, April 8, 2016, page 3-7. [americanbar.org/content/dam/aba/images/office_president/alternative_business_issues_paper.pdf]
A variety of ABS structures exist in other jurisdictions, and they have three principal features that differentiate them from traditional law firms:
- First, ABS structures allow nonlawyers to hold ownership interests in law firms. The percentage of the nonlawyer ownership interest may be restricted (as in Italy, which permits only 33% ownership by nonlawyers) or unlimited (as in Australia).
- Second, ABS structures permit investment by nonlawyers. Some jurisdictions permit passive investment, while other jurisdictions permit nonlawyer owners only to the extent that they are actively involved in the business.
- Third, in some jurisdictions, an ABS can operate as a multidisciplinary practice (MDP), which means that it can provide non-legal services in addition to legal services.
In short, a variety of ABS models exist:
- Entities that deliver only legal services and in which individuals who are not licensed lawyers are permitted to actively participate in the entities’ operations and have a minority ownership interest;
- The same as (1), but where there is no limitation on the percentage of nonlawyer ownership;
- Entities that provide both legal and non-legal services and in which individuals who are not licensed lawyers actively participate in the entities’ operations and are permitted to have a minority ownership interest;
- Same as (3), but where there is no limitation on the percentage of nonlawyer ownership; and (5) any of the above options but with passive investment by nonlawyers.
[80] ABA Commission on the Future of Legal Services, For Comment: Issues Paper Regarding Alternative Business Structures, AmericanBar.org, April 8, 2016, page 3-7 – Singapore now also permits nonlawyer ownership. The Legal Profession (Amendment) Bill 2014, will permit lawyers to own businesses called Legal Disciplinary Practices (LDPs) in which nonlawyers may own up to 25% of the entity. The bill does not permit MDPs, however; Singapore’s LDPs may only provide legal services.
[81] ABA Commission on the Future of Legal Services, For Comment: Issues Paper Regarding Alternative Business Structures, AmericanBar.org, April 8, 2016, page 3-4 – District of Columbia (second category of ABS, see endnote #79 and 199) and Washington State (first category of ABS, see endnote #79 and 199).
[82] Attack of the Bean Counters – Lawyers Beware: the accountants are coming after your business, The Economist, March 19, 2015; ABA Commission on the Future of Legal Services, For Comment: Issues Paper Regarding Alternative Business Structures, AmericanBar.org, April 8, 2016, page 3-7 [americanbar.org/content/dam/aba/images/office_president/alternative_business_issues_paper.pdf].
Also see, David B. Wilkins and Maria Jose Esteban, The Reemergence of the Big Four in Law: their rise, transformation, and potential triumph, The Practice (Vol. 2, Issue 2), Harvard Law School: Center on the Legal Profession (thepractice.law.harvard.edu), January 2016.
[83] Mark Cohen, The Pond Seems Wider: The Regulator Gap Between UK and U.S. Legal Practice, Legal Mosaic, May 4, 2015.
[84] David B. Wilkins and Maria Jose Esteban, The Reemergence of the Big Four in Law: their rise, transformation, and potential triumph, The Practice (Vol. 2, Issue 2), Harvard Law School: Center on the Legal Profession (thepractice.law.harvard.edu), January 2016. Also see, Stephen J. McGarry, Professional Services Networks: The Future of the Accounting and Legal Professions, 2015. [https://lnkd.in/djG_bYP]. In respect to law firms, see: Mark Cohen, Law Firm Networks: A Quiet Giant, Bloomberg Law (Big Law Business), September 14, 2015.
[85] For example, see: PwC launches Hong Kong legal practice, Global Legal Post, March 9, 2017; Mitch Kowalski, Deloitte’s deal with Conduit Law continues its march into legal services, National Post, March 22, 2016.
[86] Note: “economic protectionism” is usually expressed in more lofty terms of conflict of interest, independence, protection of the public/client, and client privilege. For example, see ABA Commission on the Future of Legal Services, For Comment: Issues Paper Regarding Alternative Business Structures, AmericanBar.org, April 8, 2016, page 9-10 (“any form of nonlawyer ownership or management threatens lawyers’ “core values”, particularly independent judgement and loyalty to clients”; Memorandum from the Ontario Trial Law. Ass’n to the L. Soc’y of Ontario Alternative Business Structures Working Group on Alternative Business Structures 2, 34 (Dec. 15, 2014). Also see endnote #32 and 34.
[87] See, for example: Eric Sigurdson, Global Populism: Corporate Strategy, Engagement & Leadership in 2017 – the ‘year of living dangerously’, Sigurdson Post, January 18, 2017.
[88] UK: ABSs, which include non-lawyer ownership, were first adopted in New South Wales, Australia, in 2001, and were subsequently adopted in England and Wales in 2007 [Canada: Canadian Bar Association, Futures: Transforming the Delivery of Legal Services in Canada, August 2014].
[89] Australia: ABSs, which include non-lawyer ownership, were first adopted in New South Wales, Australia, in 2001, and were subsequently adopted in England and Wales in 2007 [Canada: Canadian Bar Association, Futures: Transforming the Delivery of Legal Services in Canada, August 2014]. Note: Australia is a federation of seven jurisdictions with one federal, six state, and three territorial governments. In 1998 the National Competition Policy Review found the partnership model, which was the most common form of business structure for law firms in NSW, to be anti-competitive. Consequently, New South Wales passed legislation in 2001 permitting the creation of incorporated legal practices (ILPs), which could also include multi-disciplinary practices [Steven Mark & Tahlia Gordon, Innovations in Regulation – Responding to a Changing Legal Services Market, J. Legal Ethics 501 (2009)]. In Australia ABSs, called “incorporated legal practices” (ILP), have been permitted since 2001. New South Wales, the most populous State in Australia was the first jurisdiction to allow ABSs. All of the other Australian jurisdictions have since followed suit. [NSW Legal Profession (Incorporated Legal Practices) Act 2000 and the Legal Profession (Incorporated Legal Practices) Regulation 2001; Legal Profession Act 2006 (ACT) Part 2.6; Legal Profession Act 2004 (NSW) Part 2.6; Legal Practitioners Act 2006 (NT) Part 2.6; Legal Profession Act 2004 (Vic) Part 2.7; Legal Practice Act 2003 (WA); Legal Profession Act 2007 (Qld) Part 2.7: Legal Profession Act 2007 (Tas) Part 2.5; Legal Practitioners Act 1981 (SA), Schedule 1].
[90] Law Society of England and Wales, The Future of Legal Services, January 2016; Thomas Connelly, Big Four accountancy giants are expanding their legal services arms globally – and solicitors are getting worried, Legal Cheek, January 28, 2016. See, Law Society of Upper Canada Alternative Business Structures Working Group, Alternative Business Structures and the Legal Profession in Ontario: A Discussion Paper, 2014 – An alternative business structure, or ABS, is a broad term that includes any form of traditional law firm business structure as well as alternative means of delivering legal services. These may include, for example: (a) non-lawyer or non-paralegal investment or ownership of law firms, including equity financing; (b) firms offering legal services together with other professionals offering other types of services (often referred to as MDP); and (c) firms offering an expanded range of products and services, such as do-it yourself automated legal forms, as well as more advanced applications of technology and business processes.
[91] Canadian Bar Association, Futures: Transforming the Delivery of Legal Services in Canada, August 2014.
[92] John Kelly, Partnership Impediment to Innovation in Law “The PIIL Factor” A Future Law Perspective, Linkedin.com May 19, 2015; Jordan Furlong, The lawyer vs. the law firm, CBA National Magazine, Fall 2016; Andrew Strickler, BigLaw’s New Bosses Will have Skills to Pay the Bills, Law360, February 19, 2013; David Perla, Democracy and Law Firm Leadership, Above the Law, July 26, 2016 https://eloquentgushing.com/qjlpzas8 ; Jeffrey Lowe, BigLaw 2016: A Look Ahead, Law360, January 12, 2016 Can I Buy Generic Xanax Online ; John O. Cunningham, Law Firm Leadership in the 21st Century: Say Hello to the Law Firm CEO, Legal Marketing Reader, February 2012.
[93] Altman Weil, 2016 Chief Legal Officer Survey (“lack of innovation in service delivery by law firms”). Also see: Mitch Kowalski, McGill study reveals the ‘illusion’ of innovation at Canadian law firms, National Post, January 26, 2017 (“while Canadian law firms talk a good ‘innovation’ game, little innovation is actually taking place”); Aly R Haji, The Illusion of Innovation at Canadian Law Firms, McGill University (Faculty of Management, Supervised by Prof. Karl Moore, mentorship support and guidance from Mike Ross and strategy consultant Juniper), jnper.com, January 2017.
[94] Andrew Mellett, Legal Transformation: A whole new playbook, Linkedin.com, February 8, 2017.
[95] Canadian Bar Association, Futures: Transforming the Delivery of Legal Services in Canada, August 2014.
[96] Peta Tomlinson, Accountancy Firms Make the Move into Legal Services, ACCA, October 1, 2015; Maria Jose Esteban and Professor David Wilkins, The re-emergence of the Big 4 in law, Thomson Reuters, April 27, 2016. Also see re “efficiency”, Kenneth Grady, You Say Efficiency, I Say Productivity, Seytlines.com, March 9, 2017.
[97] Maria Jose Esteban and Professor David Wilkins, The re-emergence of the Big 4 in law, Thomson Reuters, April 27, 2016.
[98] Beverley McLachlin, Legal Profession in the 21st Century: Remarks of the Right Honourable Beverley McLachlin, P.C. Chief Justice of Canada (2015 Canadian Bar Association Plenary), Supreme Court of Canada, August 14, 2015.
[99] John Kelly, Partnership Impediment to Innovation in Law “The PIIL Factor” A Future Law Perspective, Linkedin.com May 19, 2015. Also see, Heidi Gardner, Smart Collaboration: How Professionals and Their Firms Succeed by Breaking Down Silos, Harvard Business Review Press, January 2017; Kevin Sullivan, Why Collaboration in Law Firms and Other Professional Services is Important, Kevinlsullivan.com, March 3, 2017; Roger Trapp, Working With Others is the Key to Success, Forbes, February 28, 2017.
[100] Note: The resistance to some forms of innovation in legal service provision may be related to lawyers’ self-conception and tradition. Lawyers practice in a literally storied profession that emphasizes the independence of the lawyer and the status of the occupation as a profession rather than a business. Some prominent lawyers are appalled and saddened by innovations in the provision of legal services, and the changing role of the lawyer. This tradition has given rise to a unique professional culture – which in Canada and the U.S. includes the right of ‘self-regulation of lawyers’ and strict restrictions on non-lawyer investment and ownership of law firms, alternative business structures (ABS), and multidisciplinary practices (MDP) – which is not the case, for example, in such jurisdictions as the UK and New South Wales, Australia. It has been used to justify opposition to any perceived threat to the lawyer’s independence; it has also justified a variety of restrictions on who can practice law and how they can do so. Indeed, in other industries, similar restrictions might be considered anticompetitive and illegal. For good or bad, these restrictions, rooted in this tradition, constitute substantial impediments to leadership and innovation for traditional lawyers and law firms in Canada and the U.S.. See, Neil Rickman and James Anderson, Innovations in the Provision of Legal Services in the United States: An Overview for Policymakers, Kauffman-Rand Institute for Entrepreneurship Public Policy, 2011; Laurel Terry, The European Commission Project Regarding Competition in Professional Services, 29 Northwestern Journal of International Law & Business 1, 2009; Mark Cohen, The Pond Seems Wider: The Regulator Gap Between UK and U.S. Legal Practice, Legal Mosaic, May 4, 2015; Law Society of England and Wales, Key facts – Regulatory Regime in England and Wales, Lawsociety.org.uk [www.lawsociety.org.uk/support-services/risk-compliance/regulation/key-facts-regulatory-regime-england-wales/]; Public Policy, Legal Strategy 101: It’s Time for Law Firms to Re-think Their Business Model, Wharton.upenn.edu, April 29, 2009; Australian Law Reform Commission, Australian Government, Ensuring Professional Integrity: Ethical Obligations and Discovery, Alrc.gov.au; Steve Mark, The Regulatory Framework in Australia, ABA 40th Conference on Professional Responsibility: Regulatory Innovation in England and Wales and Australia – What’s in it for Us, May 29, 2014.
[101] International Bar Association, ‘Times are a-changin’: disruptive innovation and the legal profession, IBA Legal Policy & Research Unit, May 2016; Canadian Bar Association, Futures: Transforming the Delivery of Legal Services in Canada, August 2014; ABA Commission on the Future of Legal Services, Report on the Future of Legal Services in the United States, August 2016; Law Society of England and Wales, The Future of Legal Services, January 2016; Beverley McLachlin, Legal Profession in the 21st Century: Remarks of the Right Honourable Beverley McLachlin, P.C. Chief Justice of Canada (2015 Canadian Bar Association Plenary), Supreme Court of Canada, August 14, 2015; George Beaton and Imme Kaschner, Remaking Law Firms: Why and How, June 7, 2016; Richard Susskind, Tomorrow’s Lawyers: An Introduction to Your Future, 2013; Deloitte, Future Trends for Legal Services: Global Research Study, June 2016.
[102] For a discussion of this debate in another context, see: Richard P. Campbell, Welcoming Insurance Staff Counsel, Tort and Insurance Practice Section (TIPS), American Bar Association, The Brief, Fall 2001.
[103] David Curle, Why Size Matters: Big Four Accounting Firms Poised to Move In, Thomson Reuters, April 8, 2015.
[104] David B. Wilkins and Maria Jose Esteban, The Reemergence of the Big Four in Law: their rise, transformation, and potential triumph, The Practice (Vol. 2, Issue 2), Harvard Law School: Center on the Legal Profession (thepractice.law.harvard.edu), January 2016.
[105] Attack of the Bean Counters – Lawyers Beware: the accountants are coming after your business, The Economist, March 19, 2015 – Michael Roch (Kerma Partners) advises professional-services firms.
[106] Attack of the Bean Counters – Lawyers Beware: the accountants are coming after your business, The Economist, March 19, 2015.
[107] David B. Wilkins and Maria Jose Esteban, The Reemergence of the Big Four in Law: their rise, transformation, and potential triumph, The Practice (Vol. 2, Issue 2), Harvard Law School: Center on the Legal Profession (thepractice.law.harvard.edu), January 2016. Also see, The Future of Regulatory Productivity: Is there an answer to rising cost of compliance?, Deloitte.com, 2017.
[108] Graham Richardson, Navigating a Brave New World: Eversheds innovates, The Practice (Vol. 2, Issue 2), Harvard Law School: Center on the Legal Profession (thepractice.law.harvard.edu), January 2016.
[109] Yves Faguy, Looking to 2017: Jordan Furlong on the state of the legal marketplace, CBA National, December 2016.
[110] Attack of the Bean Counters – Lawyers Beware: the accountants are coming after your business, The Economist, March 19, 2015. Also see, Big Four accounting firms, Wikipedia.org; Who are the Big 4 Accounting Firms?, AccountingVerse.com, 2017 – the size of the Big Four from an accounting firm perspective:
- Deloitte – In 2016, it earned $36.8 billion and had approximately 244,400 employees (the largest among the Big 4) in more than 150 countries.
- PwC – With $35.9 billion revenues in 2016, PwC is the second largest accounting firm in terms of revenue. It employs more than 223,400 professionals in 157 countries around the world. It operates through independently owned and managed firms.
- E&Y – Ernst & Young is a global organization of member firms in more than 150 countries, with around 231,000 employees. E&Y earned $29.6 billion in 2016.
- KPMG – KPMG is a global network of firms employing approximately 189,000 professionals in 155 countries around the world. KPMG earned $25.4 billion in 2016.
Also see, Attack of the Bean Counters – Lawyers Beware: the accountants are coming after your business, The Economist, March 19, 2015; Law Society of England and Wales, The Future of Legal Services, January 2016:
- Ernst & Young (through its legal arm EY Law) hired over 250 lawyers in 2013, increasing its total lawyer headcount almost 30 per cent to 1,100. Also in 2013, it launched legal services in 29 countries around the world, including Australia, China, Japan, Mexico, and 14 separate countries in Africa. Its legal services cover transactional, commercial, and employment practices, with a strong focus on the financial services and banking industries. KPMG are also using the ABS model to restructure their legal operations in the UK.
- In 2013, Deloitte Legal opened its own domestic law firm in Shanghai, apparently taking advantage of an idiosyncrasy in Chinese regulations that allows international accounting firms, although not international law firms, to offer domestic legal services in China. England and Wales, and US law firms are currently banned from practising legal services in China, unless with a Chinese domestic firm in partnership. Are accountants getting a head start in Asia by establishing ABS licenses in UK and then setting up under the accountant/legal banner in China? How will these dynamics change if or when the markets open to international law firms?
- In February 2014, PricewaterhouseCoopers obtained an ABS license in the UK, permitting PwC Legal to offer legal services in the UK. Both Deloitte and KPMG have recently expanded their legal service offerings by hiring additional lawyers in the UK, Germany, and Asia.
[111] Altman Weil, 2016 Chief Legal Officer Survey – identifies concern about “the lack of innovation in service delivery by law firms”. [http://www.altmanweil.com/dir_docs/resource/e32f33b3-eeb3-4af6-82c8-4f6f7d9824f6_document.pdf]. Also see: Mitch Kowalski, McGill study reveals the ‘illusion’ of innovation at Canadian law firms, National Post, January 26, 2017; Aly R Haji, The Illusion of Innovation at Canadian Law Firms, McGill University (Faculty of Management, Supervised by Prof. Karl Moore, mentorship support and guidance from Mike Ross and strategy consultant Juniper), jnper.com, January 2017; Mark Cohen, ‘Legal Innovation’ is not an Oxymoron – It’s Farther Along Than you Think, Forbes, March 14, 2017 (“The legal industry is known for adherence to precedent, not innovation. … Legal innovation has lagged compared with other industries”).
[112] Ron Friedman, Will all lawyers work for the Big 4 by 2026?, Prism Legal, October 2, 2016.
[113] Anthony Lin, The Rise of the Megafirm, ABA Journal, September 1, 2015.
[114] David B. Wilkins and Maria Jose Esteban, The Reemergence of the Big Four in Law: their rise, transformation, and potential triumph, The Practice (Vol. 2, Issue 2), Harvard Law School: Center on the Legal Profession (thepractice.law.harvard.edu), January 2016.
[115] Mitch Kowalski, McGill study reveals the ‘illusion’ of innovation at Canadian law firms, National Post, January 26, 2017; Aly R Haji, The Illusion of Innovation at Canadian Law Firms, McGill University (Faculty of Management, Supervised by Prof. Karl Moore, mentorship support and guidance from Mike Ross and strategy consultant Juniper), jnper.com, January 2017. Also see, Altman Weil, 2016 Chief Legal Officer Survey – identifies concern about “the lack of innovation in service delivery by law firms”; Mark Cohen, ‘Legal Innovation’ is not an Oxymoron – It’s Farther Along Than you Think, Forbes, March 14, 2017 (“The legal industry is known for adherence to precedent, not innovation. … Legal innovation has lagged compared with other industries”).
[116] David B. Wilkins and Maria Jose Esteban, The Reemergence of the Big Four in Law: their rise, transformation, and potential triumph, The Practice (Vol. 2, Issue 2), Harvard Law School: Center on the Legal Profession (thepractice.law.harvard.edu), January 2016; Mitch Kowalski, Deloitte’s deal with Conduit Law continues its march into legal services, National Post, March 22, 2016; Canadian Bar Association, Futures: Transforming the Delivery of Legal Services in Canada, August 2014; Thomas Archer, How PwC & Google are driving disruptive innovation across industries, Reinvent Business Blog (google.pwc.com), February 28, 2016; Agnes King, PwC dumps IBM for global Google Alliance, AFR.com, October 29, 2014; Pwc and Google for Work: Reinventing Business, pwc.com; Reinvent your business: Secure your future – Together with PwC’s business insights and Google Cloud’s breadth of technology, increase productivity, improve communication and reduce costs, google.pwc.com; Chris Crum, LinkedIn Partners with EY in Company’s Biggest Deal Ever, WebProNews.com, October 30, 2015; George Anders, LindedIn Overhauled its Strategy for Sales; Did Anyone Notice?, Forbes, November 2, 2015; EY and LinkedIn enter into alliance to help accelerate growth in the business-to-business market, EY.com, October 29, 2015; EY, Microsoft partner to develop analytics advisory services, Economic Times (EconomicTimes.IndiaTimes.com), January 24, 2017; The EY-Microsoft Digital Alliance: accelerate business performance with the full potential of digital, EY.com, 2017.
[117] Canadian Bar Association, Futures: Transforming the Delivery of Legal Services in Canada, August 2014.
[118] Mitch Kowalski, Deloitte’s deal with Conduit Law continues its march into legal services, National Post, March 22, 2016.
[119] Aebra Coe, How to Compete with the Big 4 For Clients, Law 360, November 7, 2016.
[120] Law Society of England and Wales, The Future of Legal Services, January 2016; Thomas Connelly, Big Four accountancy giants are expanding their legal services arms globally – and solicitors are getting worried, Legal Cheek, January 28, 2016.
[121] Attack of the Bean Counters – Lawyers Beware: the accountants are coming after your business, The Economist, March 19, 2015.
[122] Maria Jose Esteban and Professor David Wilkins, The re-emergence of the Big 4 in law, Thomson Reuters, April 27, 2016; Attack of the Bean Counters – Lawyers Beware: the accountants are coming after your business, The Economist, March 19, 2015; Peta Tomlinson, Accountancy Firms Make the Move into Legal Services, ACCA, October 1, 2015.
[123] Anthony Hilton, Why their profession’s failures mean lawyers don’t win top city jobs, Evening Standard, UK, September 22, 2016.
[124] Anthony Hilton, Why their profession’s failures mean lawyers don’t win top city jobs, Evening Standard, UK, September 22, 2016.
[125] Joan Williams, Aaron Platt, Jessica Lee, Disruptive Innovation: New Models of Legal Practice, 2015. [http://worklifelaw.org/wp-content/uploads/2015/09/Disruptive-Innovations-New-Models-of-Legal-Practice-webNEW.pdf]
[126] Maria Jose Esteban and Professor David Wilkins, The re-emergence of the Big 4 in law, Thomson Reuters, April 27, 2016; Thomas Connelly, Big Four accountancy giants are expanding their legal services arms globally – and solicitors are getting worried, Legal Cheek, January 28, 2016; Michael McKiernan, Accounting firm enters business law market, Law Times, March 14, 2016; Caleb Newquist, It’s Only a Matter of Time before Big 4 Firms Offer Legal Services in the US, Going Concern, May 9, 2016; Ellie Clayton, The Big Four threat to legal services, January 28, 2016; Heather Suttie, Adding More Legal Might to Canada’s Big Four, HeatherSuttie.ca, March 20, 2016; Mitch Kowalski, Deloitte’s deal with Conduit Law continues its march into legal services, National Post, March 22, 2016; International Bar Association, ‘Times are a-changin’: disruptive innovation and the legal profession, IBA Legal Policy & Research Unit, May 2016; Peta Tomlinson, Accountancy Firms Make the Move into Legal Services, ACCA, October 1, 2015; Attack of the Bean Counters – Lawyers Beware: the accountants are coming after your business, The Economist, March 19, 2015; Mitch Kowalski, Deloitte’s deal with Conduit Law continues its march into legal services, National Post, March 22, 2016.
[127] Marilyn Odendahl, Trend of in-house counsel doing more internally likely to continue, Indiana Lawyer, October 19, 2016; Kristen Rasmussen, Can In-House Counsel Be Trusted with High-Stakes Litigation? Macy’s Thinks So, Corporate Counsel, November 8, 2016.
[128] Kenneth Grady (Seyfarth Shaw LLP), Lean is the Path to the Perfect Legal Practice, Legal Business World, October 30, 2016; Bev Cline, Design Thinking: Try, Try Again, Lexpert, October 16, 2016; Alex Tran, Ben Krowitz and Laura Sacks, Why Future Leaders Need to Become Designers, Deloitte.com, October 10, 2016.
[129] Law Society Calls on Law Firms to Embrace New Legal Tech and AI, Seeks to Invest in Start-ups, Artificial Lawyer, January 25, 2017 (UK).
[130] Sally Kane, 10 Trends Reshaping the Legal Industry, The Balance, September 16, 2016; Also see, Debra Cassens Weiss, Think higher billing rates are the key to higher law firm revenue? Think again, report says, ABA Journal, October 20, 2016 – “Law firms that raised billing rates at a slower pace in recent years tended to have higher demand from clients and higher revenue growth, according to a new study. … Growth in billing rates for the nation’s top 100 law firms fluctuated … When rate growth slowed, demand rates increased. When rate growth rebounded, demand slumped. For decades, many firms used rate increases to grow revenue. It could be time to re-examine that strategy, the report said, though it cautions against a one-size-fits-all strategy for law firms.”; Peer Monitor Report: Firms with Slower Rate Growth May be Seeing Higher Demand, Thomson Reuters, October 17, 2016 [http://legalexecutiveinstitute.com/peer-monitor-rate-growth/]
[131] Anthony Hilton, Why their profession’s failures mean lawyers don’t win top city jobs, Evening Standard, UK, September 22, 2016.
[132] Neil Rickman and James Anderson, Innovations in the Provision of Legal Services in the United States: An Overview for Policymakers, Kauffman-Rand Institute for Entrepreneurship Public Policy, 2011.
[133] Graham Richardson, Navigating a Brave New World: Eversheds innovates, The Practice (Vol. 2, Issue 2), Harvard Law School: Center on the Legal Profession (thepractice.law.harvard.edu), January 2016. – See, Tabby Kinder, Boutiques will benefit from Brexit as big firms struggle to future-proof, The Lawyer, February 22, 2017.
[134] David B. Wilkins and Maria Jose Esteban, The Reemergence of the Big Four in Law: their rise, transformation, and potential triumph, The Practice (Vol. 2, Issue 2), Harvard Law School: Center on the Legal Profession (thepractice.law.harvard.edu), January 2016.
[135] Graham Richardson, Navigating a Brave New World: Eversheds innovates, The Practice (Vol. 2, Issue 2), Harvard Law School: Center on the Legal Profession (thepractice.law.harvard.edu), January 2016.
[136] Peter Lattman, Slater & Gordon: The World’s First Publicly Traded Law Firm, Wall Street Journal, May 22, 2007; Slater & Gordon: The saga of a publicly listed law firm, CBA National (nationalmagazine.ca), August 31, 2016; Neil Rose, Gloomy Slater & Gordon sees shares tumble to all-time low after warning of UK trading difficulties, Legal Futures (legalfutures.co.uk), February 16, 2017; Neil Rose, More dire results for Slater & Gordon as it admits survival depends on lenders, Legal Futures, February 27, 2017; Neil Rose, Slater & Gordon shares ‘nearly worthless’, Legal Futures (legalfutures.co.uk), March 2, 2017; Neil Rose, Good News at last for Slater & Gordon as new lenders want “solvent restructure”, Legal Futures, March 17, 2017; Jamie Smyth, Banks take big loss on Slater & Gordon investment: Westpac, NAB, RBS and Barclays took 70-80% losses on loans to law firm, Financial Times, March 17, 2017.
[137] See, Jessica D. Gabel & Paul R. Hage, The Belly of the Beast: Law Firm Insolvencies, Unfinished Business, and Jewel Waivers, Business Law Today, August 2013; John S. Dzienkowski, The Future of Big Law: Alternative Legal Service Providers to Corporate Clients, 82 Fordham Law Review 6, 2014; Allan Dodds Frank, The end of an era: Why Dewey & LeBoeuf went under, Fortune.com, May 29, 2012; Amanda Bronstad, Heller Ehrman’s fate echoes Brobeck’s collapse, National Law Journal, September 29, 2008; Nathan Koppel, The Rise and Fall of Thacher Proffitt, Wall Street Journal, March 2, 2009; Erin Guchs, The Eight Most Crushing Law Firm Implosions in the Nation’s History, Business Insider, June 24, 2012; Julius Melnitzer, Another U.K. law firm collapse costs 250 jobs, Financial Post, March 12, 2013; Mark Cohen, The King & Wood Mallesons Collapse: Déjà vu All Over Again, Forbes, December 17, 2016; Jeff Gray and Sophie Cousineau, Death of a law firm: Behind the collapse of Heenan Blaikie, The Globe and Mail, February 7, 2014; Theresa Teesco and Brian Hutchinson, How Heenan Blaikie’s stunning collapse started with a rogue African arms deal, National Post, February 14, 2014; Julius Melnitzer, Another Canadian Law Firm will follow Heenan Blaikie to collapse in 2014, Deloitte report said to predict, National Post (Financial Post), March 12, 2014; Jeff Gray, The inside story of Heenan Blaikie’s frantic final days, Globe and Mail, March 19, 2017.
[138] John S. Dzienkowski, The Future of Big Law: Alternative Legal Service Providers to Corporate Clients, 82 Fordham Law Review 6, 2014; Jan Wolfe, Law Firms Norton Rose Fulbright and Chadbourne & Parke to Merge, Reuters, February 21, 2017; Sara Randazzo, Law Firms Chadbourne & Parke and Norton Rose Fulbright to Combine: Norton Rose’s merger with 285-lawyer New York firm will create 4,000-lawyer powerhouse, Wall Street Journal, February 21, 2017; Sandra Rubin, Law Firm Mergers: The Canadian Rationale, Lexpert.ca, January 18, 2016; Jonathan Ratner, Canada’s legal giant Gowlings gets new boss, Financial Post, November 9, 2015; Chris Johnson, A Big Day for Big Law Mergers, American Lawyer, November 30, 2016; Anthony Lin, The Rise of the Megafirm, ABA Journal, September 1, 2015. Also see, Eric Sigurdson, A Way Forward: Disruptive Innovation, the Legal Profession, and the Client – what is the appropriate legal services delivery model in the ‘new normal’, Sigurdson Post, November 15, 2016; Roy Strom, The Untold Story Behind Big Law Mergers: Revenue Slips, Costs Rise, The American Lawyer, March 7, 2017; Jordan Furlong, How client succession is driving law firm consolidation, Law 21, September 22, 2016; Altman Weil MergerLine, AltmanWeil.com.
[139] Anthony Lin, The Rise of the Megafirm, ABA Journal, September 1, 2015.
[142] John Cunningham, The New Normal for Law Firms, WordPress.com, January 23, 2017; Maniti Barot, 2017 ALSP Study: Understanding the growth and benefits of these new legal providers, Thomson Reuters.com (Legal Solutions UK & Ireland Blog), February 6, 2016; The ‘2017 Report on the State of the Legal Market’ Finds 10 Years of Stagnation Changing the Industry; Says Innovation Key to Law Firm Success, Georgetown Law.edu, January 12, 2017 [http://www.law.georgetown.edu/news/press-releases/legal-market-report-2017.cfm]; The 2017 Alternative Legal Service Study: Understanding the Growth and Benefits of These New Legal Providers, Thomson Reuters.com [http://legalsolutions.thomsonreuters.com/law-products/solutions/legal-outsourcing-services/outsourcing-insights/alternative-legal-service-provider-study-2017?cid=70113000000w4IC&chl=pr].
“Law firms must find new ways of adapting to permanent and growing shifts in the way that corporate clients fill their legal needs. Clients are demanding lower costs per matter and disaggregating services, sending many tasks to alternative legal service providers, and when retaining traditional law firms often reducing the use of less efficient first- and second-year associates. Alternative legal service providers is not just about lower cost, but also about access to specialized expertise and alternative modes of delivery. They are increasingly putting fixed caps on total fees per matter as well, forcing law firms to figure out how they can be more efficient in process improvement and project management. Clients are also favoring firms that have figured out how to deliver services at fixed or predictable costs or even on contingent fee arrangements.”
[143] Sally Kane, Top Ten Legal Skills – competitive and attractive legal skills for job seekers, The Balance, August 3, 2016; Beverley McLachlin, Legal Profession in the 21st Century: Remarks of the Right Honourable Beverley McLachlin, P.C. Chief Justice of Canada (2015 Canadian Bar Association Plenary), Supreme Court of Canada, August 14, 2015 – “The Canadian Bar Association recently conducted a case study of a project initially spearheaded by the international law firm Berwin Leighton Paisner. The project is called “Lawyers on Demand”, and consists of lawyers contracted out to law firms to provide assistance on a project-by-project basis. In-house counsel and law firms can bring in the legal help they need at the point where they most need it, without all the overhead costs. As for the lawyers on demand, in addition to being exposed to challenging and stimulating work, they benefit from flexible work arrangements. The Lawyers on Demand project has inspired others to develop similar models, in the UK and in Canada”.
[144] Maria Jose Esteban and Professor David Wilkins, The re-emergence of the Big 4 in law, Thomson Reuters, April 27, 2016.
[145] Staff Lawyers – full time employees. Earn less than associates and not on a ‘partnership’ track. See, Joe Borstein, Alt.Legal: The Biglaw ‘Caste System’ – An Impediment to Innovation?, Above the Law, March 9, 2016 https://mandikaye.com/blog/t0c2kmehi ; https://aiohealthpro.com/lbw7pcsd Jeffrey Lowe, BigLaw 2016: A Look Ahead, Law360, January 12, 2016 – “the non-partner track / staff attorney model is here to stay: project attorneys, staff attorneys, career associates, etc., can provide high-quality work at significantly lower cost”; Anne Urda, To Take or Not to Take a Staff Attorney Job, Law 360, October 10, 2008:
“Clients and thus law firms are going to be increasingly attentive to calibrating services needed with the expenses associated with those services.” Both will be looking for a lower-cost alternative to doing discovery and various forms of due diligence, a role that staff attorneys often help to fill.
“Our staff attorney model is designed to find that sweet spot, reducing overhead and expense while still providing an extremely high level of service,” he said.
Staff attorneys at places like Paul Weiss receive full health benefits and a starting salary of $100,000, and generally work traditional 40-hour weeks, a far cry from the long hours that most associates are required to put in on a daily basis. They are also eligible for bonuses at the end of the year, though the rewards tend to be doled out on a discretionary basis and at a much lower rate than what associates rake in at the end of the year.
Some are brought in as independent contractors, but others become permanent staffers to assist with specific assignments according to the law firm’s needs.”
[146] Daniel Fish, The lucrative days of document review are over, Precedent (lawandstyle.ca), March 7, 2017; Steve Lohr, A.I. Is Doing Legal Work. But It Won’t Replace Lawyers, Yet, New York Times, March 19, 2017 – “corporate clients often are no longer willing to pay high hourly rates to law firms for junior lawyers to do routine work. Those tasks are already being automated and outsourced, both by the firms themselves and by outside suppliers like Axiom, Thomson Reuters, Elevate, and the Big Four accounting firms”; Buying Xanax Also see, Georgetown Law and Thomson Reuters Peer Monitor, 2017 Report on the State of the Legal Market, Managing Partner Forum.org, March 17, 2017 – “Opportunity for a New Focus on Supply Chain Management”:
In response to the growing influx of non-traditional competitors in service areas historically dominated by lawyers, many law firms – in addition to focusing on their core practices – have chosen to expand their service offerings into other related areas that complement the firms’ existing legal expertise but are beyond the scope of traditional law firm services. While these ventures currently constitute a very small part of the legal market, there has been a noticeable increase in the number of firms willing to experiment with such approaches.
One particularly intriguing opportunity for such expanded services responds to the growing client willingness to disaggregate work among many providers by reimagining a new role of the law firm as the overall coordinator for all of the services being provided to the client. In this supply chain management role, the law firm would offer not only the core services that only lawyers can provide but also the overall supervisory function that would ensure that all of the work of various vendors providing services to the client is consistent with the needs of the project, delivered in an efficient and cost-effective way, and acceptable against agreed upon standards of quality.
For law firms, this expansion of services represents a logical extension of the activities that clients retain law firms to provide – viz., a reliable assurance that the overall work product that is delivered will conform to the highest standards of quality and ethical norms. To fulfill this expanded supervisory function, however, law firms will have to develop in-house capabilities to monitor and coordinate activities across a project and to provide strategic guidance to the client at key inflection points. This means that firms would need to recruit project management and oversight specialists who could provide the supervisory skills necessary to assure success.
To the extent that firms chose to embrace this expanded role, they would need to consider carefully the implications for internal staffing – including the possibility of empowering non lawyer professionals to engage in client matters in a significant way. Admittedly, this proposal that law firms consider expanding their service offerings to include overall project supervision may be a bridge too far for many firms. But it represents one interesting approach to ensuring that law firms remain central players in the radically changed market for law firm services.
[147] Attack of the Bean Counters – Lawyers Beware: the accountants are coming after your business, The Economist, March 19, 2015. Also see, John S. Dzienkowski, The Future of Big Law: Alternative Legal Service Providers to Corporate Clients, 82 Fordham Law Review 6, 2014; Jan Wolfe, Law Firms Norton Rose Fulbright and Chadbourne & Parke to Merge, Reuters, February 21, 2017; Sara Randazzo, Law Firms Chadbourne & Parke and Norton Rose Fulbright to Combine: Norton Rose’s merger with 285-lawyer New York firm will create 4,000-lawyer powerhouse, Wall Street Journal, February 21, 2017; Sandra Rubin, Law Firm Mergers: The Canadian Rationale, Lexpert.ca, January 18, 2016; Jonathan Ratner, Canada’s legal giant Gowlings gets new boss, Financial Post, November 9, 2015. Also see, Stephen J. McGarry, Professional Services Networks: The Future of the Accounting and Legal Professions, 2015. [https://lnkd.in/djG_bYP]; Mark Cohen, Law Firm Networks: A Quiet Giant, Bloomberg Law (Big Law Business), September 14, 2015.
[148] Ralph Baxter, Looking at the Law Firm Partnership Model and How to Fix it, Thomson Reuters, February 25, 2015 [http://legalexecutiveinstitute.com/looking-at-the-law-firm-partnership-model-how-to-fix-it-by-ralph-baxter/]; Professor Johnathan T. Molot, What’s Wrong with Law Firms? A Corporate Finance Solution to Law Firm Short-Termism, Southern California Law Review 2015; William D. Henderson, More Complex than Greed, The American Lawyer (AxiomLaw.com), May 29, 2012; John Kelly, Partnership Impediment to Innovation in Law “The PIIL Factor” A Future Law Perspective, Linkedin.com May 19, 2015; Jordan Furlong, The lawyer vs. the law firm, CBA National Magazine, Fall 2016; International Bar Association, ‘Times are a-changin’: disruptive innovation and the legal profession, IBA Legal Policy & Research Unit, May 2016; Beverley Spencer, The Innovation Game, CBA National Magazine, Spring 2017, page 30.;Law Firms in Transition Survey – the survey was conducted in March and April 2015. It polled managing partners and chairs at 320 US law firms employing 50 or more lawyers, including 47 per cent of the 350 largest law firms in the US: Thomas S Clay and Eric A Seeger, ‘Law Firms in Transition Survey’ (Altman Weil, 2015), available at www.altmanweil.com/dir_docs/resource/1c789ef2-5cff-463a-863a-2248d23882a7_document.pdf.; Altman Weil, 2016 Law Firms in Transition survey.
[149] Chris Johnson, A Big Day for Big Law Mergers, American Lawyer, November 30, 2016:
“It’s easy to see the appeal: Vereins allow combining firms to sidestep issues around balancing disparate profitabilities and reconciling contrasting tax, accounting and partner compensation systems. Those issues can be particularly challenging in trans-Atlantic combinations, with the cash-based accounting systems and calendar fiscal year favored by most U.S. firms clashing with the accrual-based accounting setups and April 30 financial year end common among U.K. firms.”
Also see, Stephen J. McGarry, Professional Services Networks: The Future of the Accounting and Legal Professions, 2015. [https://lnkd.in/djG_bYP]
[150] Anthony Lin, The Rise of the Megafirm, ABA Journal, September 1, 2015; Chris Johnson, A Big Day for Big Law Mergers, American Lawyer, November 30, 2016. Also see, Roy Strom, The Untold Story Behind Big Law Mergers: Revenue Slips, Costs Rise, The American Lawyer, March 7, 2017.
[151] Anthony Lin, The Rise of the Megafirm, ABA Journal, September 1, 2015. Also see, Stephen J. McGarry, Professional Services Networks: The Future of the Accounting and Legal Professions, 2015 [https://lnkd.in/djG_bYP]; Mark Cohen, Law Firm Networks: A Quiet Giant, Bloomberg Law (Big Law Business), September 14, 2015.
[152] Attack of the Bean Counters – Lawyers Beware: the accountants are coming after your business, The Economist, March 19, 2015; Anthony Lin, The Rise of the Megafirm, ABA Journal, September 1, 2015; Chris Johnson, A Big Day for Big Law Mergers, American Lawyer, November 30, 2016; Staci Zaretsky, Whirlwind Romance Leads to Global BigLaw Merger, Above the Law, December 16, 2016; Drew Hasselback, How Scott Jolliffe, a ‘lucky’ managing partner, moulded Gowlings into an international player, National Post, December 29, 2015; Eversheds Sutherland Singapore merger goes live, Biglaw.org, February 17, 2017; Legacy Norton Rose European partners to participate in US merger vote, Biglaw.org, February 10, 2017; Is Big Law Finally Ready for Trans-Atlantic Consolidation?, Indalaw.com, February 10, 2017.
[153] Tabby Kinder, Boutiques will benefit from Brexit as big firms struggle to future-proof, The Lawyer, February 22, 2017. Also see, Isobel Lee, Dentons enters Netherlands through Boekel Merger, Property EU, March 2, 2017; Staci Zaretsky, The Global 100: The Richest Law Firms in the World (2016), Above the Law, September 26, 2016; Debra Cassens Weiss, Latham’s revenue in 2016 is the highest ever for a law firm; equity partner profits top $3M, ABA Journal, February 24, 2017; Chris Johnson, Latham has another Outstanding Year, with Revenue surpassing $2.8B, American Lawyer, February 23, 2017; Anthony Lin, The Rise of the Megafirm, ABA Journal, September 1, 2015:
“Clients don’t have legal problems; they have problem problems,” Wilkins goes on, “of which the legal part they would like to reduce to as small a part as possible so they get on with the things that are important—which is what’s happening with their business, what’s happening with their strategy, what’s happening with their people. These problems are fundamentally not just multijurisdictional, but they’re also multidisciplinary.”
[154] David B. Wilkins and Maria Jose Esteban, The Reemergence of the Big Four in Law: their rise, transformation, and potential triumph, The Practice (Vol. 2, Issue 2), Harvard Law School: Center on the Legal Profession (thepractice.law.harvard.edu), January 2016. Also see, 2017 Alternative Legal Service Study – Understanding the Growth and Benefits of these New Legal Providers, Thomson Reuters / Georgetown Law Center for the Study of the Legal Profession / University of Oxford Said Business School; D. Casey Flaherty, Rising: Supply Chain Management and Alternative Service Providers, 3 Geeks and a Law Blog (geeklawblog.com), February 19, 2017:
The 2017 Alternative Legal Service Study … suggests that “many firms are exploring the idea of serving as a ‘general contractor’ for matters where ALSPs are leveraged to maintain or increase margins while maintaining or expanding service offerings and staying competitive.” The Report further explores this concept:
https://polyploid.net/blog/?p=5eklwfap “Opportunity for a New Focus on Supply Chain Management https://sugandhmalhotra.com/2024/08/07/i8bu7k83 . In response to the growing influx of non-traditional competitors in service areas historically dominated by lawyers, many law firms – in addition to focusing on their core practices – have chosen to expand their service offerings into other related areas that complement the firms’ existing legal expertise but are beyond the scope of traditional law firm services. While these ventures currently constitute a very small part of the legal market, there has been a noticeable increase in the number of firms willing to experiment with such approaches.
One particularly intriguing opportunity for such expanded services responds to the growing client willingness to disaggregate work among many providers by reimagining a new role of the law firm as the overall coordinator for all of the services being provided to the client. In this supply chain management role, the law firm would offer not only the core services that only lawyers can provide but also the overall supervisory function that would ensure that all of the work of various vendors providing services to the client is consistent with the needs of the project, delivered in an efficient and cost-effective way, and acceptable against agreed upon standards of quality.
… there should be opportunities to introduce automation and other forms of technology into the service delivery process. While transitioning to an alternative providers may have upfront costs and introduce some frictions, in the long run their capital structure and culture should be better suited to innovation.
It is also a replicable type of success that can build on itself and move up the value chain. The Study observes that, “the most common use of ALSPs is low-risk or standardized, high-volume tasks” but “corporate law departments were more likely than law firms to say that they would look to alternative providers in situations where specialized expertise was required, indicating some willingness to allow ALSPs to play at least some role in more bespoke tasks.”
Also see, Georgetown Law and Thomson Reuters Peer Monitor, 2017 Report on the State of the Legal Market, Managing Partner Forum.org, March 17, 2017 – “Opportunity for a New Focus on Supply Chain Management”.
[155] David B. Wilkins and Maria Jose Esteban, The Reemergence of the Big Four in Law: their rise, transformation, and potential triumph, The Practice (Vol. 2, Issue 2), Harvard Law School: Center on the Legal Profession (thepractice.law.harvard.edu), January 2016.
[156] David Curle, Why Size Matters: Big Four Accounting Firms Poised to Move In, Thomson Reuters, April 8, 2015.
[157] David Curle, Why Size Matters: Big Four Accounting Firms Poised to Move In, Thomson Reuters, April 8, 2015. Also see, Attack of the Bean Counters – Lawyers Beware: the accountants are coming after your business, The Economist, March 19, 2015; Anthony Lin, The Rise of the Megafirm, ABA Journal, September 1, 2015. Also see, John S. Dzienkowski, The Future of Big Law: Alternative Legal Service Providers to Corporate Clients, 82 Fordham Law Review 6, 2014; Jan Wolfe, Law Firms Norton Rose Fulbright and Chadbourne & Parke to Merge, Reuters, February 21, 2017; Sara Randazzo, Law Firms Chadbourne & Parke and Norton Rose Fulbright to Combine: Norton Rose’s merger with 285-lawyer New York firm will create 4,000-lawyer powerhouse, Wall Street Journal, February 21, 2017; Sandra Rubin, Law Firm Mergers: The Canadian Rationale, Lexpert.ca, January 18, 2016; Jonathan Ratner, Canada’s legal giant Gowlings gets new boss, Financial Post, November 9, 2015.
[158] Jeff Gray, The inside story of Heenan Blaikie’s frantic final days, Globe and Mail, March 19, 2017.
[159] Ben W. Heineman, Jr.: “A Responsibility to Lead”, Duke Law News, Law.duke.edu, Jan. 7, 2008; Ben W. Heineman, Jr., Lawyers as Leaders, 116 Yale L.J. Pocket Part 266 (2007), http://www.yalelawjournal.org/forum/lawyers-as-leaders.
[160] Clayton M. Christensen, The Clayton M. Christensen Reader: selected articles from the world’s foremost authority on disruptive innovation, Harvard Business Review, February 9, 2016; George Beaton and Imme Kaschner, Remaking Law Firms: Why and How, June 7, 2016; George Beaton, Remaking Law Firms: A perfect primer, RemakingLawFirms.com.
[161] Sandra Rubin, Funding Legal Innovation in Canada, Lexpert.ca, June 27, 2016 – “The promising new technologies are not strapped for cash. While some of the money may come from permitted investors such as law firms like Blake, Cassels & Graydon LLP or McCarthy Tétrault LLP, two of LegalX’s sponsors…”; Matthew Field, ‘Unprecedented applications in the legal industry’: Denton’s Nextlaw backs two legal tech startups with funding and training, LegalBusiness.co.uk, October 16, 2016 – “Nextlaw Labs, the legal tech platform launched by Dentons last year, has invested in two legal startups, alongside venture funding company Seedcamp. The pair are backing two startups, Libryo [software platform re regulatory issues] and Clause [contract building platform for automated and data-integrated contracts], as part of an initial co-investment worth around €200,000. The partnership will also offer future training and mentoring from lawyers at Dentons to develop the products”; Victoria Young, ‘Thinking Space’: Reed Smith to collaborate with clients with launch of new innovation Hub, LegalBusiness.co.uk, October 4, 2016 – “Reed Smith has made a concerted investment in the legal technology and innovation space with the launch today (4 October) of a dedicated ‘thinking space’, believed to be the first of its kind in London, after developing its own software to maximise efficiency in corporate deals. The ‘Innovation Hub’ is the brainchild of global chief knowledge officer Lucy Dillon who has employed the former leader of Lexis Nexis’ new product development team, Alex Smith, to run it. Smith joins as the firm’s dedicated innovation manager, to be based in London. He will work internationally with clients to develop technology that cuts costs and enhances legal services”; David Dias, Blakes, LegalX to launch digital innovation contest: Global Legal Innovation Challenge will call on contestants to solve one BigLaw problem, Legal Feeds (Blog of Canadian Lawyer & Law Times), February 4, 2016 – “As corporations increasingly demand efficiency and tech savvy from their law firms, one such firm has teamed up with a legal technology incubator to launch an innovation contest for developers in the space. The Global Legal Innovation Challenge — the brainchild of Blake Cassels & Graydon LLP and LegalX — will call on a broad range of tech companies to solve a specific problem facing Big Law in Canada. Blakes announced the initiative yesterday as part of its sponsorship of LegalX, which oversees a cluster of startups working out of the MaRS Discovery District”; Tali Folkins, Dentons partnering with IBM on legal innovation lab, Legal Feeds (Blog of Canadian Lawyer & Law Times), February 4, 2016; Jordan Furlong, The Intangible law firm, Law 21 Blog, July 11, 2016 – “Berwin Leighton Paisner [London, UK] is using AI-type solutions to carry out standard legal processes hundreds of times faster than traditional methods that use human labour … Mishcon de Reya [London, UK] new ten-year strategy includes a plan to drive the automation of everything that can be automated, whether its legal or process, including an internal laboratory to vet artificial intelligence initiatives in a bid to make the firm an ‘early adopter for new technologies … Gilbert & Tobin [Australia] has filed several patent applications to cover new computer applications it has built: rather than take 20 hours, some tasks can now be done in two hours”.
[162] John O. Cunningham, Law Firm Leadership in the 21st Century: Say Hello to the Law Firm CEO, Legal Marketing Reader, February 2012:
“The role of law firm leader is evolving rapidly toward that of a law firm CEO whose main focus is on managing people, administration, business development, long-term planning and running a business — not practicing law. … Some firms, such as Reed Smith, even have numbers of lawyers now who focus most or all of their time on operations, leadership and management. Many of the most successful firms have done this because they recognized what their clients have long understood – that leadership and management are not afterthoughts or secondary activities. …
The 500-lawyer firm of Pepper Hamilton, for example, announced in February that it hired a non-lawyer with significant business experience to be responsible for both business strategy and operations as CEO of the firm. Scott Green holds a Harvard MBA and is a licensed CPA. He also started his career with Deloitte & Touche…
The Chair of the Pepper Hamilton Executive Committee, Nina M. Gussack (former managing partner) explained to BusinessWire reporting service that the decision to create the CEO role and the decision to hire a non-lawyer executive were the result of a year-long process during which the firm’s executive committee analyzed:
- Succession planning;
- Alternative management structures; and
- Best practices in organizational governance.
Gussack reportedly said: “We began with our clients’ desire for value, creativity, quality and efficiency [and] concluded that a management model that more closely resembles those of our clients would enable the lawyers at Pepper Hamilton to focus on providing legal services in the most effective way.”
This is absolutely revolutionary in the law firm industry because the decision was made based on a study of best practices and management structures, as well as a focus on the desires of clients.”
[163] Ralph Baxter, Looking at the Law Firm Partnership Model and How to Fix it, Thomson Reuters, February 25, 2015 [http://legalexecutiveinstitute.com/looking-at-the-law-firm-partnership-model-how-to-fix-it-by-ralph-baxter/]; Professor Johnathan T. Molot, What’s Wrong with Law Firms? A Corporate Finance Solution to Law Firm Short-Termism, Southern California Law Review 2015; William D. Henderson, More Complex than Greed, The American Lawyer (AxiomLaw.com), May 29, 2012; John Kelly, Partnership Impediment to Innovation in Law “The PIIL Factor” A Future Law Perspective, Linkedin.com May 19, 2015; Jordan Furlong, The lawyer vs. the law firm, CBA National Magazine, Fall 2016; International Bar Association, ‘Times are a-changin’: disruptive innovation and the legal profession, IBA Legal Policy & Research Unit, May 2016; Beverley Spencer, The Innovation Game, CBA National Magazine, Spring 2017, page 30; Law Firms in Transition Survey – the survey was conducted in March and April 2015. It polled managing partners and chairs at 320 US law firms employing 50 or more lawyers, including 47 per cent of the 350 largest law firms in the US: Thomas S Clay and Eric A Seeger, ‘Law Firms in Transition Survey’ (Altman Weil, 2015), available at www.altmanweil.com/dir_docs/resource/1c789ef2-5cff-463a-863a-2248d23882a7_document.pdf.; Altman Weil, 2016 Law Firms in Transition survey. Note:
Some leading experts have suggested that many issues affecting corporate clients is due to the law firm’s “outdated partnership model”, a “poor institutional choice for the delivery of legal services in today’s legal market.” The main reason is that the traditional model encourages partners to fixate on short-term gains rather than the long-term success of the firm. For example:
- A law firm partnership is proprietary. Partners consider themselves first and foremost as proprietors of banks of clients and books of business. Their loyalty and commitment to the law firm is only as good as the law firm is able to sustain an environment for them that’s conducive to maximization of billings.
- Partners under invest in law firms. Their primary interest, often to the point of obsession, is to draw down the maximum allowable amount of income on the monthly basis that’s been apportioned to them by the firm Partnership represents a personal entitlement rather than a professional commitment to an organization. The law firm is just a shell like umbrella that is used to market their expertise and manage their client services.
- Law Firms in Transition Survey, conducted in 2015 revealed that 72.4 per cent of law firm leaders in the United States believe that the pace of change within the profession is increasing. However, 45 per cent of law firms surveyed cited partner resistance as one of the reasons for their firms not doing more to change their practices in order to compete. This was confirmed again in the 2016 survey.
- This is the “war that’s been raging within law firms”, the fight for control of the business between individual Partners and the law firm leadership, with the firm looking long term and the Partner level lawyer looking short term and with a ‘self-interest’.
[164] John Kelly, Partnership Impediment to Innovation in Law “The PIIL Factor” A Future Law Perspective, Linkedin.com May 19, 2015; Jordan Furlong, The lawyer vs. the law firm, CBA National Magazine, Fall 2016; Andrew Strickler, BigLaw’s New Bosses Will have Skills to Pay the Bills, Law360, February 19, 2013; David Perla, Democracy and Law Firm Leadership, Above the Law, July 26, 2016; Jeffrey Lowe, BigLaw 2016: A Look Ahead, Law360, January 12, 2016.
[165] Huron Legal, What General Counsel Want (and Need) from their Law Firms and Other Legal Service Providers, 2013.
[166] Catherine Berney, Law is a people business, Linkedin, November 5, 2016; Law Firm Marketing Summit 2016, The Leadership role: how to lead creatively in a changing business context, Speaker: Catherine Berney, October 5, 2016.
[167] Mark Cohen, The Pond Seems Wider: The Regulator Gap Between UK and U.S. Legal Practice, Legal Mosaic, May 4, 2015.
[168] Richard S. Granat and Stephanie Kimbro, The Teaching of Law Practice Management and Technology in Law Schools: A New Paradigm, Chicago-Kent Law Review, Vol. 88:3, page 757, 2013; CBA Legal Futures Initiative, Futures: Transforming the Delivery of Legal Services in Canada, Canadian Bar Association, 2014, page 7.
[169] Richard S. Granat and Stephanie Kimbro, The Teaching of Law Practice Management and Technology in Law Schools: A New Paradigm, Chicago-Kent Law Review, Vol. 88:3, page 757, 2013; CBA Legal Futures Initiative, Futures: Transforming the Delivery of Legal Services in Canada, Canadian Bar Association, 2014, page 7; Sandee Magliozzi, How Moving from ‘Best’ to ‘Next’ Practices Can Fuel Innovation, Santa Clara Law Faculty Publications, November 2015 – “We need to develop the competencies lawyers and law students will need to anticipate and respond to an increasingly rapidly changing legal landscape https://polyploid.net/blog/?p=6wl2kmpxnup ”; ABA Commission on the Future of Legal Services, Report on the Future of Legal Services in the United States, August 2016; Beverley Spencer, The Innovation Game, CBA National Magazine, Spring 2017, page 30.
[170] Jeffrey Lowe, BigLaw 2016: A Look Ahead, Law360, January 13, 2016.
[171] David Burgess, 9,096 GCs interviewed about their law firms’ adoption of innovative working methods, such as technology and AI: How do the UK’s Top 50 law firms stack up?, Linkedin (Publishing Director, The Legal 500 Series), November 3, 2016 – 2016 Client Intelligence Report.
[172] For example, see: Anthony Hilton, Why their profession’s failures mean lawyers don’t win top city jobs, Evening Standard, UK, September 22, 2016; Marilyn Odendahl, Trend of in-house counsel doing more internally likely to continue, Indiana Lawyer, October 19, 2016; Kristen Rasmussen, Can In-House Counsel Be Trusted with High-Stakes Litigation? Macy’s Thinks So, Corporate Counsel, November 8, 2016. Richard P. Campbell, Welcoming Insurance Staff Counsel, Tort Trial and Insurance Practice, American Bar Association, Fall 2001; Mallen and Smith, Legal Malpractice (4th ed): Chapter 28, “staff or house counsel”; R. Jeffrey Kelsey, Building an In-House Trial Team (Federal Express), Federation.org; Mark A. Cohen, Corporate Counsel: Consumer Becomes Provider, Legal Mosaic, May 17, 2016; Jordan Furlong, You’re not selling what we’re buying, Law Twenty One, November 30, 2016.
[173] James E. Moliterno, The Trouble with Lawyer Regulation, 61 Emory Law Journal 101, 2013; Richard Devlin and Porter Heffernan, The End(s) of Self Regulation?, Alberta Law Review, Vol. 45, No. 5, 2008; Paul Douglas Paton, ‘In the Public Interest’: Threats to Self-Regulation of the Legal Profession in Ontario, 1998-2006, Dissertation submitted to School of Law and Committee of Graduate Studies of Stanford University re Degree of Doctor of the Science of Law, February 2008; Fred Zacharias, The Myth of Self-Regulation, Minnesota Law Review, Vol. 93, July 2009.
[174] Neil Rickman and James Anderson, Innovations in the Provision of Legal Services in the United States: An Overview for Policymakers, Kauffman-Rand Institute for Entrepreneurship Public Policy, 2011. Also see, Laurel Terry, The European Commission Project Regarding Competition in Professional Services, 29 Northwestern Journal of International Law & Business 1, 2009; Mark Cohen, The Pond Seems Wider: The Regulator Gap Between UK and U.S. Legal Practice, Legal Mosaic, May 4, 2015.
[175] Neil Rickman and James Anderson, Innovations in the Provision of Legal Services in the United States: An Overview for Policymakers, Kauffman-Rand Institute for Entrepreneurship Public Policy, 2011. Also see, Laurel Terry, The European Commission Project Regarding Competition in Professional Services, 29 Northwestern Journal of International Law & Business 1, 2009; Mark Cohen, The Pond Seems Wider: The Regulator Gap Between UK and U.S. Legal Practice, Legal Mosaic, May 4, 2015.
[176] Mitchell Kowalski, Avoiding Extinction: Reimagining Legal Services for the 21st Century, 2012.
[177] Canadian Bar Association, Futures: Transforming the Delivery of Legal Services in Canada, August 2014; Beverley McLachlin, Legal Profession in the 21st Century: Remarks of the Right Honourable Beverley McLachlin, P.C. Chief Justice of Canada (2015 Canadian Bar Association Plenary), Supreme Court of Canada, August 14, 2015.
[178] Jill Dessalines, Adapt or Die: Why Law Firms Must Change to Survive in Tomorrow’s Economy, Linkedin.com, March 6, 2017; Ilina Rejeva, The Anatomy of the Billable Hour, LegalTrek, 2016 – “rewards inefficiency … creates budget uncertainty for clients … doesn’t differentiate the value of the work done”.
[179] William D. Henderson, More Complex than Greed, The American Lawyer (AxiomLaw.com), May 29, 2012; Canadian Bar Association, Futures: Transforming the Delivery of Legal Services in Canada, August 2014; International Bar Association, ‘Times are a-changin’: disruptive innovation and the legal profession, IBA Legal Policy & Research Unit, May 2016; Law Society of England and Wales, The Future of Legal Services, January 2016; ABA Commission on the Future of Legal Services, Report on the Future of Legal Services in the United States, August 2016.
[180] Jill Dessalines, Adapt or Die: Why Law Firms Must Change to Survive in Tomorrow’s Economy, Linkedin.com, March 6, 2017.
[181] Beverley McLachlin, Legal Profession in the 21st Century: Remarks of the Right Honourable Beverley McLachlin, P.C. Chief Justice of Canada (2015 Canadian Bar Association Plenary), Supreme Court of Canada, August 14, 2015. [http://www.scc-csc.ca/court-cour/judges-juges/spe-dis/bm-2015-08-14-eng.aspx#fnb25]; Canadian Bar Association, Futures: Transforming the Delivery of Legal Services in Canada, August 2014; International Bar Association, ‘Times are a-changin’: disruptive innovation and the legal profession, IBA Legal Policy & Research Unit, May 2016; Law Society of England and Wales, The Future of Legal Services, January 2016; ABA Commission on the Future of Legal Services, Report on the Future of Legal Services in the United States, August 2016; Russell Engler, Connecting Self-Representation to Civil Gideon: What Existing Data Reveal about when Counsel is Most Needed, 2010, 37 Fordham Urban L.J. 37 (citing Legal Services Corporation, Documenting the Justice Gap in America: The Current Unmet Civil Legal Needs of Low Income Americans, updated report (Washington, D.C.: Legal Services Corporation, September 2009); Action Committee on Access to Justice in Civil and Family Matters, Access to Civil and Family Justice: A Roadmap for Change, 2013; Dr. George Beaton, 10 reasons BigLaw managing partners are not sleeping very well, Beaton Capital, August 15, 2015. [Lawyers are increasingly unaffordable to most individuals: Statistics support the view that accessing the justice system with the help of a legal professional is increasingly unaffordable to most people. According to an American study from a few years ago, as much as 70%-90% of legal needs in society go unmet. Among the hardest hit are the middle class – who earn too much to qualify for legal aid, but frequently not enough to retain a lawyer for a matter of any complexity or length. Additionally, members of poor and vulnerable groups are particularly prone to legal problems. Increasingly, these needs are being addressed by providers outside the legal profession, including those within the early resolution services sector. Sophisticated corporate clients are demanding delivery of quality legal services more efficiently and at less cost. The power balance between lawyers and their corporate clients has shifted, intensifying price-down pressure on law firms, in particular BigLaw.]
[182] Beverley McLachlin, Legal Profession in the 21st Century: Remarks of the Right Honourable Beverley McLachlin, P.C. Chief Justice of Canada (2015 Canadian Bar Association Plenary), Supreme Court of Canada, August 14, 2015.
[183] Beverley McLachlin, Legal Profession in the 21st Century: Remarks of the Right Honourable Beverley McLachlin, P.C. Chief Justice of Canada (2015 Canadian Bar Association Plenary), Supreme Court of Canada, August 14, 2015. Also see, Bob Goodman and Josh Harder, Four Areas of Legal Ripe for disruption by Smart Startups, Law Technology Today, December 16, 2014:
“In 50 years, the customer experience at most law firms has barely changed. If you needed legal advice in the ‘60s, you generally went to a nice building and met a lawyer in a suit who would then review your issue, conduct research, and bill you an hourly rate. But even with today’s modern communication tools, both customer experience and lawyer workflow have remained stagnant”.
[184] Canadian Bar Association, Futures: Transforming the Delivery of Legal Services in Canada, August 2014. Also see, ABA Commission on the Future of Legal Services, Report on the Future of Legal Services in the United States, August 2016 – “From the outset, the Commission has been transparent about the broad array of issues it is studying and evaluating, including those legal services developments that are viewed by some as controversial, threatening, or undesirable (e.g., alternative business structures).”
[185] See, Justin D. Petzold, Comment, Firm Offers: Are Publicly Traded Law Firms Abroad Indicative of the Future of the United States Legal Sector?, 2009 Wisconsin Law Review 67, 81–82; John S. Dzienkowski, The Future of Big Law: Alternative Legal Service Providers to Corporate Clients, 82 Fordham Law Review 6, 2014.
[186] Legal Services Act, 2007, c. 29, sch. 13 (Eng.).
[187] David B. Wilkins and Maria Jose Esteban, The Reemergence of the Big Four in Law: their rise, transformation, and potential triumph, The Practice (Vol. 2, Issue 2), Harvard Law School: Center on the Legal Profession (thepractice.law.harvard.edu), January 2016.
[188] Attack of the Bean Counters – Lawyers Beware: the accountants are coming after your business, The Economist, March 19, 2015; Law Society of England and Wales, The Future of Legal Services, January 2016; Law Society of England and Wales, Key facts – Regulatory Regime in England and Wales, Lawsociety.org.uk [www.lawsociety.org.uk/support-services/risk-compliance/regulation/key-facts-regulatory-regime-england-wales/]; Public Policy, Legal Strategy 101: It’s Time for Law Firms to Re-think Their Business Model, Wharton.upenn.edu, April 29, 2009 (“law firms in Europe and the United Kingdom are now undergoing a period of rapid deregulation … which allows for alternative business structures and non-lawyer ownership of firms”); Mark Cohen, The Pond Seems Wider: The Regulator Gap Between UK and U.S. Legal Practice, Legal Mosaic, May 4, 2015. Australian Law Reform Commission, Australian Government, Ensuring Professional Integrity: Ethical Obligations and Discovery, Alrc.gov.au; Steve Mark, The Regulatory Framework in Australia, ABA 40th Conference on Professional Responsibility: Regulatory Innovation in England and Wales and Australia – What’s in it for Us, May 29, 2014.
[189] In re Op. No. 26 of the Comm. on the Unauthorized Practice of Law, 654 A.2d 1344, 1360–61 (N.J. 1995); Laurel A. Rigertas, The Legal Profession’s Monopoly: Failing to Protect Consumers, 82 Fordham Law Review 2683, 2014.
[190] Mark Cohen, The Pond Seems Wider: The Regulator Gap Between UK and U.S. Legal Practice, Legal Mosaic, May 4, 2015.
[191] Richard S. Granat and Stephanie Kimbro, The Teaching of Law Practice Management and Technology in Law Schools: A New Paradigm, Chicago-Kent Law Review, Vol. 88:3, page 757, 2013; CBA Legal Futures Initiative, Futures: Transforming the Delivery of Legal Services in Canada, Canadian Bar Association, 2014, page 7.
[192] Altman Weil, 2016 Chief Legal Officer Survey (“lack of innovation in service delivery by law firms”); Mitch Kowalski, McGill study reveals the ‘illusion’ of innovation at Canadian law firms, National Post, January 26, 2017 (“while Canadian law firms talk a good ‘innovation’ game, little innovation is actually taking place”); Aly R Haji, The Illusion of Innovation at Canadian Law Firms, McGill University (Faculty of Management, Supervised by Prof. Karl Moore, mentorship support and guidance from Mike Ross and strategy consultant Juniper), jnper.com, January 2017; Mark Cohen, ‘Legal Innovation’ is not an Oxymoron – It’s Farther Along Than you Think, Forbes, March 14, 2017 (“The legal industry is known for adherence to precedent, not innovation. … Legal innovation has lagged compared with other industries”).
[193] CBA Legal Futures Initiative, Futures: Transforming the Delivery of Legal Services in Canada, Canadian Bar Association, 2014, page 26-27 – “[S]tudies show that most lawyers are by nature conservative and risk-averse. But attitudes vary with personal circumstances. Age, gender, experience, income, and perceived competitive advantage are only some of the factors segmenting lawyers’ attitudes towards change. Lawyers or law firms may not be motivated to innovate because of their current success (“if it ain’t broke, why fix it?”). They believe it is not worth the effort, time, and cost to make necessary adjustments. In many cases, there is a lack of entrepreneurship. High fees, comfortable incomes, and an aging demographic reduce the motivation to improve, invest, or innovate”. Also see, Eric Sigurdson, A Way Forward: Disruptive Innovation, the Legal Profession, and the Client – what is the appropriate legal services delivery model in the ‘new normal’, Sigurdson Post, November 15, 2016.
[194] David J. Parnell, Richard Susskind: Moses to the Modern Law Firm, Forbes, March 21, 2014.
[195] Beverley Spencer, The Innovation Game, CBA National Magazine, Spring 2017, page 30.
[196] Mark Cohen, ‘Legal Innovation’ is not an Oxymoron – It’s Farther Along Than you Think, Forbes, March 14, 2017. Also see, Ed Sohn, Alt.legal: If We Build It, Will They Come? The Problem of Legal Tech Adoption, Above the Law, September 14, 2016 – “It’s not easy to walk into a room of millionaires and tell them they are doing everything wrong, especially when “more efficiency” sounds a lot like “less billable hours.”. https://eloquentgushing.com/3ctlf5qoyi And See, CBA Legal Futures Initiative, Futures: Transforming the Delivery of Legal Services in Canada, Canadian Bar Association, 2014, page 26-27 – “[S]tudies show that most lawyers are by nature conservative and risk-averse. But attitudes vary with personal circumstances. Age, gender, experience, income, and perceived competitive advantage are only some of the factors segmenting lawyers’ attitudes towards change. Lawyers or law firms may not be motivated to innovate because of their current success (“if it ain’t broke, why fix it?”). They believe it is not worth the effort, time, and cost to make necessary adjustments. In many cases, there is a lack of entrepreneurship. High fees, comfortable incomes, and an aging demographic reduce the motivation to improve, invest, or innovate”. Also see, Eric Sigurdson, A Way Forward: Disruptive Innovation, the Legal Profession, and the Client – what is the appropriate legal services delivery model in the ‘new normal’, Sigurdson Post, November 15, 2016.
[197] Charlotte Rushton, Three ways the legal world is changing, Thomson Reuters, October 28, 2016.
[198] Anthony Hilton, Why their profession’s failures mean lawyers don’t win top city jobs, Evening Standard, UK, September 22, 2016.
[199] ABA Commission on the Future of Legal Services, For Comment: Issues Paper Regarding Alternative Business Structures, AmericanBar.org, April 8, 2016, page 3-7. [americanbar.org/content/dam/aba/images/office_president/alternative_business_issues_paper.pdf]
A variety of ABS structures exist in other jurisdictions, and they have three principal features that differentiate them from traditional law firms:
- First, ABS structures allow nonlawyers to hold ownership interests in law firms. The percentage of the nonlawyer ownership interest may be restricted (as in Italy, which permits only 33% ownership by nonlawyers) or unlimited (as in Australia).
- Second, ABS structures permit investment by nonlawyers. Some jurisdictions permit passive investment, while other jurisdictions permit nonlawyer owners only to the extent that they are actively involved in the business.
- Third, in some jurisdictions, an ABS can operate as a multidisciplinary practice (MDP), which means that it can provide non-legal services in addition to legal services.
In short, a variety of ABS models exist:
- Entities that deliver only legal services and in which individuals who are not licensed lawyers are permitted to actively participate in the entities’ operations and have a minority ownership interest;
- The same as (1), but where there is no limitation on the percentage of nonlawyer ownership;
- Entities that provide both legal and non-legal services and in which individuals who are not licensed lawyers actively participate in the entities’ operations and are permitted to have a minority ownership interest;
- Same as (3), but where there is no limitation on the percentage of nonlawyer ownership; and
- Any of the above options but with passive investment by nonlawyers.
[200] ABA Commission on the Future of Legal Services, For Comment: Issues Paper Regarding Alternative Business Structures, AmericanBar.org, April 8, 2016, page 3-7 — Australia: ABSs, which include non-lawyer ownership, were first adopted in New South Wales, Australia, in 2001, and were subsequently adopted in England and Wales in 2007 [Canada: Canadian Bar Association, Futures: Transforming the Delivery of Legal Services in Canada, August 2014]. https://aiohealthpro.com/k6z5rner Note: Australia is a federation of seven jurisdictions with one federal, six state, and three territorial governments. In 1998 the National Competition Policy Review found the partnership model, which was the most common form of business structure for law firms in NSW, to be anti-competitive. Consequently, New South Wales passed legislation in 2001 permitting the creation of incorporated legal practices (ILPs), which could also include multi-disciplinary practices [Steven Mark & Tahlia Gordon, Innovations in Regulation – Responding to a Changing Legal Services Market, J. Legal Ethics 501 (2009)]. In Australia ABSs, called “incorporated legal practices” (ILP), have been permitted since 2001. New South Wales, the most populous State in Australia was the first jurisdiction to allow ABSs. All of the other Australian jurisdictions have since followed suit. [NSW Legal Profession (Incorporated Legal Practices) Act 2000 and the Legal Profession (Incorporated Legal Practices) Regulation 2001; Legal Profession Act 2006 (ACT) Part 2.6; Legal Profession Act 2004 (NSW) Part 2.6; Legal Practitioners Act 2006 (NT) Part 2.6; Legal Profession Act 2004 (Vic) Part 2.7; Legal Practice Act 2003 (WA); Legal Profession Act 2007 (Qld) Part 2.7: Legal Profession Act 2007 (Tas) Part 2.5; Legal Practitioners Act 1981 (SA), Schedule 1].
[201] ABA Commission on the Future of Legal Services, For Comment: Issues Paper Regarding Alternative Business Structures, AmericanBar.org, April 8, 2016, page 3-7 – England and Wales now permit ABS as a result of the passage of the Legal Services Act of 2007 (LSA). The LSA permits lawyers to form an ABS that allows external ownership of legal businesses and multidisciplinary practices (providing legal and other services), but with two significant regulatory requirements. First, under the LSA, nonlawyers who want to be owners of law firms must pass a fitness-to-own test. Second, the Solicitors Regulation Authority (SRA) and the Legal Services Board overhauled the regulation of law firms. Among other things, the new SRA Code of Conduct requires that firms “have effective systems and controls in place to achieve and comply with all the [p]rinciples, rules and outcomes and other requirements of the [SRA] Handbook” and to “identify, monitor and manage risks to compliance.”
[202] ABA Commission on the Future of Legal Services, For Comment: Issues Paper Regarding Alternative Business Structures, AmericanBar.org, April 8, 2016, page 3-7 – “While England and Wales permit law firms to be owned entirely by nonlawyers, other European countries permit ABS on a more limited scale. For example, Scotland (up to 49% nonlawyer ownership), Italy (33%), Spain (25%), and Denmark (10%) all require lawyers to have majority control of the ABS. 23 Germany, the Netherlands, Poland, Spain, and Belgium permit various forms of MDPs.”
[203] ABA Commission on the Future of Legal Services, For Comment: Issues Paper Regarding Alternative Business Structures, AmericanBar.org, April 8, 2016, page 3-4 – District of Columbia (second category of ABS, see endnote #79 and 199) and Washington State (first category of ABS, see endnote #79 and 199).
[204] ABA Commission on the Future of Legal Services, For Comment: Issues Paper Regarding Alternative Business Structures, AmericanBar.org, April 8, 2016, page 3-7 – Singapore now also permits nonlawyer ownership. The Legal Profession (Amendment) Bill 2014, will permit lawyers to own businesses called Legal Disciplinary Practices (LDPs) in which nonlawyers may own up to 25% of the entity. The bill does not permit MDPs, however; Singapore’s LDPs may only provide legal services.
[205] ABA Commission on the Future of Legal Services, For Comment: Issues Paper Regarding Alternative Business Structures, AmericanBar.org, April 8, 2016, page 3-7 – New Zealand also permits limited nonlawyer ownership: the nonlawyer owners must be relatives of the actively involved lawyers (or a qualifying trust) and are only permitted to own non-voting shares.
[206] ABA Commission on the Future of Legal Services, For Comment: Issues Paper Regarding Alternative Business Structures, AmericanBar.org, April 8, 2016, page 3-7.
[207] Law Society of England and Wales, The Future of Legal Services, January 2016; Peta Tomlinson, Accountancy Firms Make the Move into Legal Services, ACCA, October 1, 2015 – The Big Four are gaining ground in overseas markets, and apparently readying themselves for changes to the ABS rules in other regimes to be able to offer legal services in currently closed markets.
[208] See, Attack of the Bean Counters – Lawyers Beware: the accountants are coming after your business, The Economist, March 19, 2015; ABA Commission on the Future of Legal Services, Report on the Future of Legal Services in the United States, August 2016 (see Recommendation #2); David B. Wilkins and Maria Jose Esteban, The Reemergence of the Big Four in Law: their rise, transformation, and potential triumph, The Practice (Vol. 2, Issue 2), Harvard Law School: Center on the Legal Profession (thepractice.law.harvard.edu), January 2016 — citing the core values of the legal profession—conflict of interest, independence, and client privilege—in 2000/2001 the American Bar Association’s House of Delegates rejected the recommendation of its own Commission on Multidisciplinary Practice that the Model Rules of Professional Conduct be amended to permit integrated MDPs such as the ‘then’ Big Five’s legal networks. Recently the American Bar Association’s 2020 Commission on the Future of Professional Regulation debated and again rejected a proposal to allow MDPs that would support the ‘now’ Big Four, although in Recommendation #2 suggesting that “continued exploration of alternative business structures (ABS) will be useful, and where ABS is allowed, evidence and data regarding the risks and benefits associated with these entities should be developed and assessed”.
[209] David Curle, Why Size Matters: Big Four Accounting Firms Poised to Move In, Thomson Reuters, April 8, 2015. Also see: Law Society of England and Wales, The Future of Legal Services, January 2016; Thomas Connelly, Big Four accountancy giants are expanding their legal services arms globally – and solicitors are getting worried, Legal Cheek, January 28, 2016. See, David B. Wilkins and Maria Jose Esteban, The Reemergence of the Big Four in Law: their rise, transformation, and potential triumph, The Practice (Vol. 2, Issue 2), Harvard Law School: Center on the Legal Profession (thepractice.law.harvard.edu), January 2016.
[210] Mark Cohen, The Pond Seems Wider: The Regulator Gap Between UK and U.S. Legal Practice, Legal Mosaic, May 4, 2015.
[211] Canada: Canadian Bar Association, Futures: Transforming the Delivery of Legal Services in Canada, August 2014; Law Society of Upper Canada Alternative Business Structures Working Group, Report of the Alternative Business Structures Working Group, Law Society Upper Canada, February 2014 [http://www.lsuc.on.ca/uploadedFiles/For_the_ Public/About_the_Law_Society/Convocation_ Decisions/2014/convfeb2014_PRC(1).pdf]; Noel Semple, Access to Justice: Is Legal Services Regulation Blocking the Path?, 2013, University of Toronto Working Paper [http://papers.ssrn.com/sol3/papers.cfm?abstract_ id=2303987]; Beverley McLachlin, Legal Profession in the 21st Century: Remarks of the Right Honourable Beverley McLachlin, P.C. Chief Justice of Canada (2015 Canadian Bar Association Plenary), Supreme Court of Canada, August 14, 2015; LSUC Professional Regulation Committee, Alternative Business Structures Working Group Report Tab 2.5, September 24, 2015; Law Society of Upper Canada, Alternative Business Structures, lsuc.on.ca:
“The Law Society’s ABS Working Group delivered an interim report to September 2015 Convocation outlining its initial assessment and the directions it will consider further. The Working Group has decided not to continue to consider structures involving majority ownership, or control, of traditional law firms by non-licensees. Through its research and consultations, the Working Group considers that the experience to date in other jurisdictions does not show that the benefits of majority non-licensee ownership, or control, outweigh regulatory concerns.
The Working Group plans to focus its study on change with the potential to foster innovation or enhance access to justice. This includes minority ownership by non-licensees, franchise arrangements, ownership by civil society organizations such as charities and new forms of legal service delivery in areas not currently well served by traditional practices.”
Gail Cohen, Don’t be afraid of change, Legal Feeds (Blog of Canadian Lawyer & Law Times), April 27, 2016; Sandra Rubin, Funding Legal Innovation in Canada, Lexpert.ca, June 27, 2016:
“Canadian law societies are big flirts, at least when it comes to alternative business structures (ABS) and allowing non-lawyers to own stakes in legal-services delivery companies. But what they’re flirting with is irrelevancy.
Last year, the Law Society of Upper Canada dropped the idea of allowing non-lawyers to hold majority ownership of law firms, as in England and Australia where firms can list shares on an exchange or raise capital from private-equity funds instead of relying solely on funds raised through debt.
But the working group has continued to examine the possibility of allowing non-lawyers to hold a minority stake in areas of legal services not well served by traditional practices in the name of fostering innovation.”
Also see, ABA Commission on the Future of Legal Services, For Comment: Issues Paper Regarding Alternative Business Structures, AmericanBar.org, April 8, 2016, page 6.
[212] U.S.: ABA Commission on the Future of Legal Services, Report on the Future of Legal Services in the United States, August 2016; Malcolm Mercer, Unmet Legal Needs – the Challenge to Legal Practice and to Self-Regulation, Slaw.ca, July 13, 2016 – “One conclusion that might be drawn is that non-lawyer investment in law firms is a dead letter in the U.S. because the lawyers in the House of Delegates will never allow it. But I think the better conclusion is that the ABA has ceased to be the practical decision-maker because of its conflicted and ineffective governance in this context”.
[213] Malcolm Mercer, Unmet Legal Needs – the Challenge to Legal Practice and to Self-Regulation, Slaw.ca, July 13, 2016 – “This is mostly but not completely true. In some states, the state legislature has jurisdiction. As well, other authorities before which lawyers practice assume regulatory authority over those lawyers. The SEC is an example. This may be seen as analogous to the courts regulating rights of audience.”
[214] Law Society of Upper Canada, Rules of Professional Conduct (Rule 3.4; 3.6-8; 7.8.1-1); Law Society of Upper Canada Alternative Business Structures Working Group, Alternative Business Structures and the Legal Profession in Ontario: A Discussion Paper, 2014, page 7.
[215] ABA Commission on the Future of Legal Services, For Comment: Issues Paper Regarding Alternative Business Structures, AmericanBar.org, April 8, 2016, page 2-4.
[216] ABA Commission on the Future of Legal Services, Report on the Future of Legal Services in the United States, August 2016 (see Recommendation #2); David B. Wilkins and Maria Jose Esteban, The Reemergence of the Big Four in Law: their rise, transformation, and potential triumph, The Practice (Vol. 2, Issue 2), Harvard Law School: Center on the Legal Profession (thepractice.law.harvard.edu), January 2016 — citing the core values of the legal profession—conflict of interest, independence, and client privilege—in 2000/2001 the American Bar Association’s House of Delegates rejected the recommendation of its own Commission on Multidisciplinary Practice that the Model Rules of Professional Conduct be amended to permit integrated MDPs such as the ‘then’ Big Five’s legal networks. Recently the American Bar Association’s 2020 Commission on the Future of Professional Regulation debated and again rejected a proposal to allow MDPs that would support the ‘now’ Big Four, although in Recommendation #2 suggesting that “continued exploration of alternative business structures (ABS) will be useful, and where ABS is allowed, evidence and data regarding the risks and benefits associated with these entities should be developed and assessed”. See, Reid Trautz, Will Alternative Business Structures Fly?, Attorney at Work.com (U.S.), September 27, 2016:
“What’s the Solution?
So will the profession change the rules and allow ABSs? We live in a state-bar world. There are 51 jurisdictions regulating lawyers. That means 51 different regulatory systems creating 51 ABS ownership variations. That means 51 state bar decisions on whether or not to allow ABSs followed by 51 decisions by state supreme courts or legislatures. With most state bars led by solo and small-firm lawyers, it will take years for the states to decide these issues.
While the legal profession ignores or defers the issue, unauthorized forms of ABSs will quietly infiltrate the market. These businesses — backed by non-lawyer investors — are already delivering legal services. While most lawyers can easily name one or two of these companies, there are hundreds more in development. If our profession can’t find the time to decide whether or not to allow ABSs, how are we going to unite to fight these unauthorized businesses?
The solution lies in simultaneously allowing ABSs, while expanding regulation to all legal services providers. That is the only way to expand the delivery of legal services, protect consumers, and maintain the integrity of the legal profession.
We need to address it now. To do nothing would leave lawyers at a huge competitive disadvantage and fundamentally change the legal profession as we know it today — and that’s just what non-lawyers are hoping we do.”
[217] Sandra Rubin, Funding Legal Innovation in Canada, Lexpert.ca, June 27, 2016. Also see, Law Society Calls on Law Firms to Embrace New Legal Tech and AI, Seeks to Invest in Start-ups, Artificial Lawyer, January 25, 2017 (UK).
[218] David B. Wilkins and Maria Jose Esteban, The Reemergence of the Big Four in Law: their rise, transformation, and potential triumph, The Practice (Vol. 2, Issue 2), Harvard Law School: Center on the Legal Profession (thepractice.law.harvard.edu), January 2016.
[219] David B. Wilkins and Maria Jose Esteban, The Reemergence of the Big Four in Law: their rise, transformation, and potential triumph, The Practice (Vol. 2, Issue 2), Harvard Law School: Center on the Legal Profession (thepractice.law.harvard.edu), January 2016.
[220] Jeffrey Lowe, BigLaw 2016: A Look Ahead, Law360, January 13, 2016.
[221] Mitch Kowalski, Deloitte’s deal with Conduit Law continues its march into legal services, National Post, March 22, 2016 – newly formed Deloitte Conduit Law LLP purchased Conduit Law, which made a reputation as a major Canadian legal upstart by providing outsourced lawyers in support of in-house legal teams. In 2014 Deloitte acquired Toronto-based ATD Legal Services Professional Corp, a NewLaw quasi-legal process outsourcer, to enable Deloitte to deliver end-to-end discovery services to companies’ in-house departments and law firms. Also see: Deloitte Conduit Law website at “www.deloitteconduitlaw.ca “. Also see, Daniel Fish, The lucrative days of document review are over, Precedent (lawandstyle.ca), March 7, 2017 – “… big accounting firms, who have also charged into the document-review game through acquisitions. The Canadian Bar Association, Futures: Transforming the Delivery of Legal Services in Canada, August 2014.e most high-profile example is Deloitte. In early 2015, the global giant bought ATD Legal Services, a commanding force in the Toronto outsourcing game. (It was the brainchild of Shelby Austin, a former partner at Davies Ward Phillips & Vineberg LLP, who founded the company in 2010.)”
[222] Michael McKiernan, Accounting firm enters business law market, Law Times, March 14, 2016.
[223] Mitch Kowalski, Deloitte’s deal with Conduit Law continues its march into legal services, National Post, March 22, 2016.
[224] CBA Legal Futures Initiative, Futures: Transforming the Delivery of Legal Services in Canada, Canadian Bar Association, 2014, page 6.
[225] Maurice Gilbert, How Easy is it to Lose Trust? Just Ask Wells Fargo, Linkedin, March 2, 2017.
[226] PwC is one of the Big Four accounting firms and a huge enterprise that provides accounting, tax and consultant services – including legal services outside of the U.S. – around the world, services that typically are far more complicated than tallying Oscar ballots. The London-based firm has $36 billion in annual revenue and 223,000 employees.
[227] Susan Krashinsky Robertson, Oscar envelope flub could hurt PwC’s brand reputation for accuracy, Globe and Mail, February 28, 2017 – quote cites Gene Grabowski, partner at Washington-based communications firm kglobal, which specializes in crisis communication. But see, Jack and Suzy Welch, Hey PwC, Your Oscars Fail Could be a Big Win. If…, Linkedin, February 28, 2017. Also see, David Gelles and Sapna Maheshwari, Oscars Mistake Casts Unwanted Spotlight on PwC, New York Times, February 27, 2017; James F. Peltz, PwC’s Oscars flop may not do long-term damage to its reputation, Los Angeles Times, February 28, 2017.
[228] James F. Peltz, PwC’s Oscars flop may not do long-term damage to its reputation, Los Angeles Times, February 28, 2017.
[229] Kara Alaimo, Publicly shaming the Oscar accountant was wrong, CNN, March 1, 2017; Megan Thomas and Molly Shiels, PwC accountants at center of ‘envelopegate’ won’t be back to the Oscars, CNN, March 1, 2017; Sandy Cohen, Accountants in Oscar flub off the show, says Academy president, CBC, March 1, 2017; Hannah Furness, Oscars threaten ‘appropriate’ action over best film scandal, as PwC name and shame the man to blame, Telegraph, February 28, 2017. Note: Tim Ryan, PwC’s U.S. chairman appropriately admitted “we clearly made a mistake and once the mistake was made, we corrected it and owned up to it”. However, the handling of the matter went “south” shortly thereafter when the PwC leadership took the unusual step of naming and shaming the employee responsible for the unfortunate error, and appearing to many observers too subtly “attempt to deflect blame”. Companies are always ultimately “accountable for what their people do”, and this misstep – seemingly undermining its brand of trust and integrity – will likely “only deepen the damage to its reputation”, when it could have simply been dealt with otherwise.”
[230] Jack and Suzy Welch, Hey PwC, Your Oscars Fail Could be a Big Win. If…, Linkedin, February 28, 2017. Also see, Scott Eblin, Three Leadership Lessons from La La Land’s Jordan Horowtiz, Linkedin, February 27, 2017:
“You can read the details elsewhere about how it all happened, but the Oscars ended with the biggest surprise of all. The crew from one celebrated movie gave way to another when the producers, creators and actors from Moonlight came to the stage to accept the award that had been intended for them all along. It was an awkward, bizarre and, ultimately, inspiring moment that was handled with as much grace as possible because of the leadership exhibited by Jordan Horowitz. Rather than letting the situation spin further out of control, he seized the moment to correct the error and to ensure that the credit, praise and spotlight was given to those who had won it.
When asked later in the evening what possessed him to do what he did, Horowitz explained: “Listen, I’m a producer. I gather things together and I change directions and I march things forward.”
If you replaced the word “producer” with “leader”, you’d have a pretty good working definition of leadership. There are a lot of admirable things that Horowitz and his team along with the Moonlight team did in that crazy few minutes, but there are three leadership lessons from Horowitz that I think are instructive for any leader who finds themselves in a fluid and charged situation:
See the Bigger Picture … Take Charge … Document the Truth …
I often say that leaders control the weather. However they show up is predictive of how everyone around them will show up. That’s especially true in times of chaos and fluidity. By that standard, the Oscar for best leader at the Academy Awards goes to Jordan Horowitz. Congratulations, sir and thanks for showing us how it’s done.”
[231] Susan Krashinsky Robertson, Oscar envelope flub could hurt PwC’s brand reputation for accuracy, Globe and Mail, February 28, 2017.
[232] James F. Peltz, PwC’s Oscars flop may not do long-term damage to its reputation, Los Angeles Times, February 28, 2017.
[233] Raymond Doherty, PwC has most powerful brand of Big Four – PwC still has one of the top ten most powerful global brands, but its strength is in decline, Economia, February 2, 2017.
[234] Zamira Rahim, What PwC’s Chairman Thought as He Watched the Oscar’s Mix-Up on TV, Fortune, March 1, 2017.
[235] Canadian Bar Association, Futures: Transforming the Delivery of Legal Services in Canada, August 2014.
[236] Mark Cohen, ‘Legal Innovation’ is not an Oxymoron – It’s Farther Along Than you Think, Forbes, March 14, 2017 (“The legal industry is known for adherence to precedent, not innovation. … Legal innovation has lagged compared with other industries”). Also see, Altman Weil, 2016 Chief Legal Officer Survey (“lack of innovation in service delivery by law firms”); Mitch Kowalski, McGill study reveals the ‘illusion’ of innovation at Canadian law firms, National Post, January 26, 2017 (“while Canadian law firms talk a good ‘innovation’ game, little innovation is actually taking place”); Aly R Haji, The Illusion of Innovation at Canadian Law Firms, McGill University (Faculty of Management, Supervised by Prof. Karl Moore, mentorship support and guidance from Mike Ross and strategy consultant Juniper), jnper.com, January 2017.
[237] Mark Cohen, ‘Legal Innovation’ is not an Oxymoron – It’s Farther Along Than you Think, Forbes, March 14, 2017.
[238] Georgetown Law and Thomson Reuters Peer Monitor, 2017 Report on the State of the Legal Market, Managing Partner Forum.org, March 17, 2017.
[239] David Curle, Why Size Matters: Big Four Accounting Firms Poised to Move In, Thomson Reuters, April 8, 2015.
[240] Ron Friedman, Will all lawyers work for the Big 4 by 2026?, Prism Legal, October 2, 2016. https://udaan.org/pcqt37la.php For individual consumers and Unauthorized Practice of Law, see: Victor Li, Avvo, LegalZoom and Rocket Lawyer CEOs say their products help bridge access-to-justice gap, ABA Journal, March 17, 2017 (“While all three CEOs have frequently faced questions about regulations governing the unauthorized practice of law, the trio did not use the Techshow stage to rage about the issue, or about regulations in general”); Richard Granat, North Carolina Restricts the Distribution of Legal Self-Help Software to Consumers, eLawyering Blog, July 12, 2016; Joan Rogers, N.C. Law Regulates LegalZoom, Other Legal Doc Providers, Bloomberg Law, July 26, 2016; Robert Amrogi, Latest legal victory has LegalZoom poised for growth, ABA Journal, August 1, 2014; George Leef, Why the Legal Profession Says LegalZoom is Illegal, Forbes, October 14, 2014; Mary Jutten, Technology and the Unauthorized Practice of Law, Law Technology Today, June 12, 2015.
[241] Beverley Spencer, The Innovation Game, CBA National Magazine, Spring 2017, page 30.
[242] John Kelly, Partnership Impediment to Innovation in Law “The PIIL Factor” A Future Law Perspective, Linkedin.com May 19, 2015. Also see, Heidi Gardner, Smart Collaboration: How Professionals and Their Firms Succeed by Breaking Down Silos, Harvard Business Review Press, January 2017; Kevin Sullivan, Why Collaboration in Law Firms and Other Professional Services is Important, Kevinlsullivan.com, March 3, 2017; Roger Trapp, Working With Others is the Key to Success, Forbes, February 28, 2017.
[243] Note: The resistance to some forms of innovation in legal service provision may be related to lawyers’ self-conception and tradition. Lawyers practice in a literally storied profession that emphasizes the independence of the lawyer and the status of the occupation as a profession rather than a business. Some prominent lawyers are appalled and saddened by innovations in the provision of legal services, and the changing role of the lawyer. This tradition has given rise to a unique professional culture – which in Canada and the U.S. includes the right of ‘self-regulation of lawyers’ and strict restrictions on non-lawyer investment and ownership of law firms, alternative business structures (ABS), and multidisciplinary practices (MDP) – which is not the case, for example, in such jurisdictions as the UK and New South Wales, Australia. It has been used to justify opposition to any perceived threat to the lawyer’s independence; it has also justified a variety of restrictions on who can practice law and how they can do so. Indeed, in other industries, similar restrictions might be considered anticompetitive and illegal. For good or bad, these restrictions, rooted in this tradition, constitute substantial impediments to leadership and innovation for traditional lawyers and law firms in Canada and the U.S.. See, Neil Rickman and James Anderson, Innovations in the Provision of Legal Services in the United States: An Overview for Policymakers, Kauffman-Rand Institute for Entrepreneurship Public Policy, 2011; Laurel Terry, The European Commission Project Regarding Competition in Professional Services, 29 Northwestern Journal of International Law & Business 1, 2009; Mark Cohen, The Pond Seems Wider: The Regulator Gap Between UK and U.S. Legal Practice, Legal Mosaic, May 4, 2015; Law Society of England and Wales, Key facts – Regulatory Regime in England and Wales, Lawsociety.org.uk [www.lawsociety.org.uk/support-services/risk-compliance/regulation/key-facts-regulatory-regime-england-wales/]; Public Policy, Legal Strategy 101: It’s Time for Law Firms to Re-think Their Business Model, Wharton.upenn.edu, April 29, 2009; Australian Law Reform Commission, Australian Government, Ensuring Professional Integrity: Ethical Obligations and Discovery, Alrc.gov.au; Steve Mark, The Regulatory Framework in Australia, ABA 40th Conference on Professional Responsibility: Regulatory Innovation in England and Wales and Australia – What’s in it for Us, May 29, 2014.
[244] International Bar Association, ‘Times are a-changin’: disruptive innovation and the legal profession, IBA Legal Policy & Research Unit, May 2016; Canadian Bar Association, Futures: Transforming the Delivery of Legal Services in Canada, August 2014; ABA Commission on the Future of Legal Services, Report on the Future of Legal Services in the United States, August 2016; Law Society of England and Wales, The Future of Legal Services, January 2016; Beverley McLachlin, Legal Profession in the 21st Century: Remarks of the Right Honourable Beverley McLachlin, P.C. Chief Justice of Canada (2015 Canadian Bar Association Plenary), Supreme Court of Canada, August 14, 2015; George Beaton and Imme Kaschner, Remaking Law Firms: Why and How, June 7, 2016; Richard Susskind, Tomorrow’s Lawyers: An Introduction to Your Future, 2013; Deloitte, Future Trends for Legal Services: Global Research Study, June 2016.
[245] Huron Legal, What General Counsel Want (and Need) from their Law Firms and Other Legal Service Providers, 2013; Maria Jose Esteban and Professor David Wilkins, The re-emergence of the Big 4 in law, Thomson Reuters, April 27, 2016.
