Radical and necessary change for law firms means that less than half of their revenue comes from “charging for the time of traditional work of human lawyers”, Professor Richard Susskind has suggested.
No law firm in the world “currently comes close” to passing this test but if they did not in future, “I am confident that other alternative legal providers will instead grasp the opportunity”.
The renowned futurist set out his test for radical change and transformation in law firms in the third edition of his book Tomorrow’s Lawyers, which was first published a decade ago.
Though the place of change across “the entire legal ecosystem” continued to accelerate, he said, the world’s leading law firms were still evolving “at a sedate pace”.
“I know that many of their leaders say that they have changed their businesses substantially over the last few years,” he wrote in the preface to the new edition.
“But I believe what we have seen recently in these (massively successful) firms have been some operational shifts at the edges, and some good marketing too, rather than full-scale transformation.
“However, the early shoots of change are now visible and I anticipate that the 2020s will witness great shifts in the business models underpinning these major firms.”
Professor Susskind forecasted that the trajectory of change in law would follow an exponential curve.
The turnover test was his answer to the question of what would count for him as radical change and transformation in law firms.
“The fundamental revolution in law (and other professions) will come about when we move from one-to-one consultative advisory service to one-to-many online or embedded service. Income will come not from selling people’s time but from licensing content.”
He said he was sticking to his 2013 prediction that more would change in the profession in the following 20 years than in the previous 200.
Professor Susskind wrote that, of all the observations he made in the original book, his pessimism for the future of small high street law firms caused the most offence.
His view was they would not be able to compete against alternative business structures fuelled by external investment and driven by experienced business managers.
The new edition says: “Another way to look at this is for partners in small firms to ask themselves this question – in the 2020s, what unique value can we bring as a small legal business?”
Good answers included there being “no obvious competitors” to a firm’s traditional offering, being acknowledged specialists, clients seeing them as general business advisers, being able to offer a high-quality service at a significantly lower cost than others, or clients being willing to pay extra for a personal service.
“Some small firms may feel they can genuinely provide such answers, but not many,” said Professor Susskind.