Innovation in Law

Few fields seem so traditional and non-changing as the business of law firms. It seems that the way law firms operates today is the same as yesterday and will be the same tomorrow. Still there are several new trend, out of which a drastic industry change could come (or not of course).

1) From hourly rates to new price models. Not all legal services, but many can be standardized into fixed services with a fixed price. This could be of advantage for the customer who has transparency and clarity about costs in advance. Other ways of pricing can be sharing profits, bonus based on satisfaction of customer, blended fees, share of settlement (in case of litigation)

2) From high cost, visible location to low cost or virtual office. New technology platforms facilitate communications between lawyers and between lawyer and customer, cutting transportation costs, location costs etc.

3) Automatisation. Many search, read and find / summarize work is done now by in-house lawyers (often the young graduated at the bottom of the ladder). Much of this work will in the near future be done by computers scanning, searching and summarising texts. Of course there will still be a need for a lawyer to check and refine the outcomes of this process, but it will take the bulk work out of the hands of people and will do it better and faster. No more, 'I overlooked this obscure article'

4) Transparency and accountability. Customers feel ripped of because they don't have a clue where do these high tariffs come from. Just be specifying all the true (and hidden) costs, a customer might be more willing to pay these fees. Furthermore, specialized software that tracks the actual time spent by lawyers provide more accountability.

5) New business models. New pricing models, splitting sales and law services to different specialized groups, new global partnerships, from in-house lawyers to self-employed lawyers that group together into a new virtual brand, incentives for lawyers to finish work in less hours and splitting the saved costs between lawyer, law firm and customer.

6) Outsourcing. May only apply to large countries, but India counts more and more lawyers specialised in British or American law that can do a lot of the (pre)-work for an American or British law firm cheaper and faster (overnight!) from India.

7) Specialisation. Law firms tend to be general (covering all fields of law) or specific in one field of law. A new trend could be to be specialist in a certain industry (e.g. biotechnology, agriculture), in order to understand better the clients, their problems and challenges.

See for more information the following articles in The Economist 1, 2, 3, 4, 5, 6

Picture from flickr user IslesPunkFan