A glimpse into the abyss

John Flood has published on his blog an article he co-wrote for The Lawyer. It is essentially a challenge to the traditional UK law-firm business model.

The context for the challenge is clearly the current economic crisis, coupled with the opportunities offered for different organisational structures by the Legal Services Act. In essence the suggestion is that law firms should stop ‘owning’ their stock (lawyers) and instead lease it as and when client demands dictate.

Although legal work has become more commoditised and an increasing proportion of it shipped offshore, it is perhaps lawyers themselves, both associates and partners, who are the commodities, traded and marketed by recruiters and head-hunters. New service models such as Axiom Legal, Rimon Law and Lawyers Direct are flourishing. One recruiter is now even advertising ‘pay as you go lawyers’. At the same time, the equity partnership prize is becoming ever harder to win, and even less sought after by today’s younger lawyers who are more mobile and happier than ever to migrate to newer opportunities.

Since a sufficiently large pool of high-quality and experienced lawyers is emerging from the crisis, why not rent lawyers for a specific period or task and then let them go again? The advantage of temporary resources is that they can be deployed as and when needed and released when not.

What would be the purpose of the firm in this model?

A smaller, tighter front-line team would oversee client relationships, supervise the work and manage the firm. Rather than constantly seeking merger partners, law firms could structure their growth in a more organic fashion which would build collegiality as well as returns.

I am not sure what this would look like. I think there are two (potentially competing) reasons why law firms are organised as they are. The first is that the current model has served private practice lawyers well so far. That is not to say that this will remain true. John Flood and his co-author, Peter Rouse, chief executive of 7 Bedford Row Chambers, have started to make a compelling case for change from this perspective. However, the current model has also grown up in response to client needs. It is at least arguable that clients play some part in designing law firms. There is compelling evidence (see Ron Friedmann and others, passim) that client pressure will define the law firm model to a much greater extent in years to come. The Flood/Rouse model may serve clients well, but it is not clear from the article how or why clients would prefer this approach to one of the many others on offer.

As they are currently organised, law firms can and should offer clients the security that individual lawyers are well-trained and -briefed so that they can apply more than basic legal knowledge. That is one of the functions of firms’ KM activities. How would that be replicated in a firm using the Flood/Rouse model? There is a real risk that clients would get little benefit from this approach. Yes, firms might find that their costs are lower and that this might translate into lower hourly rates (assuming that the billable hour still holds sway), but a poorly-briefed contract lawyer could take much longer to perform the tasks required to the standard required by the client. As a result, the client would see no financial benefit, and might even discern a distinct difference in the quality of the work done.

That is not to say that we should dismiss this approach. No organisation can assume that it will be allowed to remain in its current form forever. Likewise, those of us who work in a particular way because of the form of the organisation we support should also be mindful that change is inevitable and be constantly seeking ways of ensuring that the service we provide is still hitting the mark for our people and our clients.

If the Flood/Rouse model were pervasive, what would law firm KM and training look like?