No visible means of support

Why your foundations matter

A couple of weeks ago, I challenged firms to think about what might be possible without resorting to technology. That post was based on an assumption about the nature of most law firms:

The tools, systems and attitudes of technology have to be imported into traditional law firms, therefore they are available to everyone without preference. (The status of technology within the firm is a relevant issue here, but I want to leave that for another time.)

This is that other time.

Every business is constructed around a core set of assumptions. Those assumptions include:

  • Purpose — why does this business exist?
  • Beneficiaries — for whom does the business exist?
  • Platform — what is the business built on?

The answers to these (and other) questions define the nature of the enterprise. Often they are unspoken, but generally there can only be one answer. A business might pretend to serve stockholders and customers alike, for example, but in extremis a choice has to be made between them. One group has to be favoured over the other.

No visible means of supportI want to look more closely at the third of these questions, especially in the context of legal businesses.

The traditional law firm could have a range of purposes, although some manage by committing vaguely to helping businesses and individuals with legal problems. The firm may exist to make a profit for its partners, or it may prioritise client service above partner remuneration. Most, however, are founded on delivering services using people with legal knowledge and experience. That is their platform. If you were to replace all the lawyers with different people, the firm would be a very different entity. That isn’t a likely occurrence, but firms that lose significant partners and other senior lawyers do collapse. We can see this also in the legal directories — The Legal 500 and Chambers and Partners compilations rank firms and lawyers.

It is instructive to look to a different sector for comparisons. In the car industry, a volume manufacturer may have some key personnel, but they are rarely crucial to the final product. Ford may have a carefully expressed design language, but the success of its cars depends more on the reliability and dependability engineered into them in the company’s massively automated production lines. Ford’s platform is a technological one — its people are much less important than technology in the final product.

Not all cars are the same — Rolls-Royce and Bentley depend on craftsmen to produce the finishing touches that mark their vehicles out amongst luxury vehicles. Without them, the product would have much less value in the market. The platform could also be a mixed one. There are high-end motor manufacturers like McLaren and Porsche where designers and high technology (such as composites and advanced gluing techniques) are both critical to the product.

Most law firms are more similar to Rolls-Royce and Bentley in that their platform depends on key individuals and a continuation of experience and craft. Those firms need to contend with the fact that the market values that approach to legal service much less than it used to.

Some of the new entrants into the legal market have done so with a completely different platform. Riverview Law is one of the most forward-thinking in this regard. They make it clear from the front page of their website that technology is at the heart of their work:

One of the key themes that differentiates us is the way we use dashboards, management information, analytics and visualisations to help in-house legal and related teams to make better and quicker decisions, manage risk, and evolve their operating models.

They even offer their technology to in-house legal teams.

I am sure the people at Riverview are really good at what they do, but it seems clear to me as an outside observer that the platform for the business is technology. The technology allows Riverview to provide a service that stands apart from what other legal businesses do. The people might come and go, but losing the technology would fundamentally change the nature of the business. No traditional law firm could say the same.

Another firm that depends on a technology platform is Inksters in Scotland. Brian Inkster and his colleagues have created a business around a set of cloud-based services that allows them to serve clients extremely effectively from any location. This mobility and flexibility sets them apart from other firms. The firm specialises in crofting law and other legal services for the widely-scattered and remote communities of the Highlands and Islands of Scotland, so their clients find it harder than most to get to a lawyer’s office. Inksters has offices, but they also have a ‘Flying Solicitor’ service, and they have provided ‘pop-up’ legal services in a wide range of different locations.

If Riverview Law is the legal equivalent of Ford, Inksters is more similar to the likes of McLaren or Porsche — using a blend of expertise and technology as the basis for a firm that can react quickly to legal need whatever the location. Both Riverview and Inksters depend on technology for their success, but Inksters has also stirred in a larger dose of legal expertise to create a unique recipe.

Riverview and Inksters are just two examples of new legal businesses built on technology foundations. There are others, and there will be more. That isn’t to say that all successful legal businesses must have such a foundation, but it is an indication of where growth will happen.

The problem for existing law firms is that they already have non-technology foundations — and you can only build on one platform. Most have bolted technology onto the work that they do, but there are limits to that approach. Some are starting to shift their work so that they can use technology in a much more fundamental way — DWF is a good example here. Over time, that technology could become so embedded in the way the firm works that it is considered part of the foundation. That is likely to be a long painful process, especially in a business where consensual decision-making is the norm.

Another approach would be to construct a new firm alongside the old one. The old firm could continue the traditional partnership, people-based model, whilst the new one made the most of new technologies and corporate structures. Over time, one would succeed (and it might not be the one with the technology foundation). For most traditional firms, this would be completely counter-cultural. Would clients care about that, or would they just gravitate to the legal service providers that best meet their needs?

Maybe it’s time for firms to start experimenting a bit more.

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