Posted by: johnocunningham | June 19, 2017

Are Clients Seeking Legal Service Alternatives Because the Law Firm Partnership Model Is Obsolete?

Earlier this month, Forbes magazine contributor, Mark Cohen, a lawyer with a distinguished 40-years of practice under his belt, penned an article entitled, “Are Law Firms Becoming Obsolete?”

Cohen contended that “the traditional partnership model was designed for the practice of law, not the delivery of legal services,” adding that “a growing body of evidence points to advancing obsolescence of the incumbent partnership model.” In particular, he cited findings from the 2017 Georgetown Legal Report, which found that corporate legal buyers are directing more work away from large law firms. Ordinary legal consumers are also turning more frequently to non-traditional vehicles of legal service delivery, such as LegalZoom and Rocket Lawyer.

The article pointed out that corporate clients are not necessarily dismissing law firms, but are “disaggregating” tasks once handled entirely by firms. They are outsourcing litigation discovery tasks, hiring contract lawyers to meet temporary surges in demand, and using technology to accomplish contract reviews and other discreet items on their “to do” lists. Thus, firms are still surviving, but they are increasingly forced to de-equitize partners, reduce staff, and cut costs to preserve the Holy Grail of profits-per-partner.

Cohen argued that the law firm partnership model was designed for the benefit of partners, and not for clients, so it is not equipped to meet new and accelerating demands for technological innovation, efficiency and value.

His most searing commentary included the following assertions about law firms:

  • (1) they face growing client dissatisfaction and have failed to address it;
  • (2) they have insufficient knowledge of the client’s business;
  • (3) they have high, unpredictable costs;
  • (4) they have an economic model that is inefficient and fails to assess appropriate value per task from the client perspective;
  • (5) they too often fail to deploy technology to streamline operations and provide enterprise solutions;
  • (6) they have an absence of process improvement and project management;
  • (7) they have a transactional approach to client matters rather than one that provides enterprise solutions; and
  • (8) they are too often guilty of poor customer service.

Actually, I think law firms are listening to clients more now than they ever have, though improvements are still needed. Firms are also innovating, as previously cited on this blog. 

But the clarion call is getting louder for changes in legal service delivery, and firms that are answering the call will only benefit by communicating to the marketplace about the value they deliver to clients, the innovations they are using to improve service and cost, and the technological tools and methodologies they are employing to stay ahead of the competition.

If firms cannot constantly refine and improve on legal service costs and delivery times, there will be a natural increase in the flow of investment capital into artificial intelligence solutions and other technology vehicles for legal service that will ultimately prove out Cohen’s thesis.

Law firms must not only communicate the client-driven imperative for change internally, they must demonstrate and communicate to the marketplace how they are answering the call for change, and leading the way in legal service delivery innovation.


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