A decade of New Law changes the legal industry. What’s next?

5 min read

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Last updated: April 30, 2021

When we launched Lawyers On Demand (LOD) in 2007 it dropped into a quite different world to the one we see in 2017.

The iPhone was yet to launch – like all the lawyers around me, the smartest device I had was my trusty BlackBerry – no iPads, no Amazon Prime, and the Uberisation of anything was a long way off. Later that year Axiom also launched in London and in the following decade the world of alternative legal services has grown apace.

The cultural effect of our 10-year-old companion, the iPhone, is indisputable. Similarly for Amazon and Uber. But in our microcosm of law, what has been the effect of alternative legal services and what should we expect in the next decade?

Birth of the alternative legal suppliers

The catalyst for change a decade or so ago came not from any particular launch of a product or service but from industry context. The law firm landscape had remained largely the same for most of the 20th century, a sheltered and privileged market. Times were good – many industries had already been disrupted by the internet but this did not seem to have had a direct effect on law. However, social attitudes were changing, particularly those to work, which increasingly did not sit easily with a model based on squeezing more and more out of individual hourly labour.

Already in 2007 there was the incremental effect of other factors, none fundamental in themselves but, considered together, potentially transformational – regulatory change and increased technology use for example, as well as a feeling in the air that the legal market would embrace something different. A number of early suppliers sprang up with the hope of filling a gap.

The last decade

After years of change in the legal industry seeming to occur gently, there was a big bump at the end of 2007 with the global financial crisis. In-house legal teams had to justify every penny of external spend and they wanted to make sure they got good value.

It is difficult to assess whether the rise of alternative suppliers would have been faster or less sophisticated without the recession, but it certainly helped many general counsel to get a better service than before by increasing competition for their pounds. Also, legal work started to split into mission-critical, business-as-usual and commodity work, with clients looking to different suppliers for the different elements.

In the years that followed New Law got more than its fair share of press and awards. But has this been a meaningful change or just a lot of noise? Maybe that depends whether we look at revenues or behaviour. From a revenue perspective, notwithstanding substantial year-on-year growth, New Law remains a tiny percentage of the legal industry as a whole. However, its impact on behaviour has been huge – for example, a third of the top 20 law firms now have a flexible lawyer offering and the majority have onshore low-cost centres.

What next?

Change may have been incremental to date but as we near the end of 2017, a decade on from the financial crisis and the rise of the on-demand economy, it may become more fundamental.

It has created a platform for all of us – traditional law firm and new suppliers alike – to offer a far wider and more varied suite of services.

We are at a point of acceleration. This time the main catalysts are our clients themselves – with increasing buying power – looking to do things differently through a focus on legal operations, procurement and data. This is underpinned by other factors – regulators who understand that this is opening up the market in positive ways, legal technologists who see an opportunity and the rise of millennial lawyers to leadership positions.

As market commentator Jordan Furlong said in our recently commissioned report, “The market is changing from a dormant, low-tech, individualistic system to a dynamic, high-tech and collaborative one”.

Lawyers do not like being first movers but once things change we go with the crowd quickly. And the crowd is moving – in the next decade we will see a fundamental shift that makes the last one look sluggish. For those of us considering the strategy for our organisations over the next five to 10 years, maybe the most interesting question is to look at the core we have and ask ‘what’s not going to change?’.

This was also published in The Lawyer.