Law Firms Are Ostriches, Says Georgetown Law Report

Ostrich ManThe just-released 2016 Report of the State of the Legal Profession from the Georgetown Law Center for the Study of the Legal Profession has some damning words for our supposedly best and brightest. Drawing a comparison to how Kodak went from market domination to crash after missing the market shift from film to digital, the report offers this tasty tidbit:

“The current challenge in the legal market is not that firms are unaware of the threat posed to their current business model. . .Instead, the challenge is that firms are choosing not
to act in response to the threat, even though they are fully aware of its ramifications. . . many law firm partners believe they have an economic model that has served them very well over the years. . .They are consequently reluctant to adopt any changes that could put that traditional business model at risk.

My observation: that’s only half the reason. The other half is that they don’t know what the &$@#* to change it to.

Read the full report HERE.

Jenner & Block Jumps Ahead of the Line in the Legal Revolution

Think the Australian, British and (soon to be) Canadian legal revolution hasn’t hit the U.S. yet? Think again.

Quick recap of what’s happening, straight from the Canadian Bar Futures Report, which generally mirrors the Australian and British models.

The key elements of the revolution all flow from the first recommendation of “multidisciplinary practices” (MDP’s) – firms with business structures “that permit fee-sharing, multidisciplinary practice, and ownership, management, and investment by persons other than lawyers or other regulated legal professionals.” That means, for instance, a firm with lawyers, CPA’s, auto body repair shops and doctors, all under one roof.

From that flows the second element, “alternative business structures” (ABS’s) meaning non-lawyer ownership, or participation in ownership, of law firms. Those CPA’s and doctors and auto mechanics can be part or full owners of a firm.

And the third, “fee-sharing with and referral fees to non-lawyers.” That means the doctor or real estate agent or CPA or whatever can either get a referral fee or even a piece of the overall fee – legally.

So – the British Solicitors Regulation Authority just licensed an ABS consisting of Jenner & Block, a major national ABS based in Scotland, and a mediation service. How did they evade the (rapidly aging) U.S. legal structure strictures?  J&B asserted thar “the office will be operated by “a local independent affiliate, Jenner & Block London LLP” – even though its head of legal practice is dual-qualified Chicago-based partner Timothy J Chorvat.

And a lovely dodge of the issues. According to the article in the British blog Legal Futures, “…the firm would not explain the rationale for becoming an ABS. They would prefer at this time not to reply to your questions. The structure they have chosen for their London operations and their relationship with the SRA are not issues about [which] they wish to engage [with] the media currently.”

Smooth, J&B. And by the way, congratulations. You’re breaking ground for the rest of the profession. My spoof article “Berkshire Hathaway Purchases Omaha’s Largest Law Firm” may not be a spoof for long.

Dinosaur Dewey Teaches the Profession Some Simple Lessons

Four lessons for the legal profession from the Dewey LeBeouf debacle:

Lesson One: Law firms are businesses, and need to be run like one. The old law school indoctrination that “you’re not a businessperson, you’re a professional” comes home to roost.

Lesson Two: Most lawyers, like doctors, are crappy business people. Great legal skills don’t equate to great business skills. The Dewey head cheese blithely gathered in other big-ego and big-reputation people like it was 2005 and the boom was on. He made outrageous promises that sank Dewey when they couldn’t deliver. The Executive Committee was even worse. They thought their role was to be the sounding board and implementer of the head man’s grandiose ideas, instead of what they were supposed to be: protectors of the corporate finances and manager of the CEO, not the other way around. A surfeit of bad business people.

Lesson Three: Today ain’t yesterday. It’s more like tomorrow. While big firms like Dewey follow old paths toward oblivion, hundreds of young firms, unencumbered by the structures and traditions of the past, are busy transforming hiring smarter, building more flexible, virtual structures, casting off the caste system, and learning how to profit by delivering great work at reasonable – and often flat – rates.

Lesson Four: Success comes from looking UP from your client’s perspective instead of  from the firm’s lofty perch DOWN. Ask Apple. Ask Google. Great businesses are customer-centered, not ego-centered.