The section of the Legal Services Act (LSA) which allows for law firms to operate as Alternative Business Structures (ABS) came into effect in October 2011. In terms of ownership, this legislation means that for the first time non-lawyers are able to own and invest in law firms.
Riverview Law, one of the first firms to take advantage of the regulations, recently hosted a panel discussing the future of the legal services industry. Mitch Kowalski, author of “Avoiding Extinction: Reimagining Legal Services for the 21st Century”, explained his vision and ideas for the development of a modern legal sector.
A Stagnant Model
Kowalski opened his session with an introduction to “Law 1.0”, the widely accepted model currently in use at most law firms. In Kowalski’s opinion this structure, which has been in use as far back as the 1800s, needs to be changed. Issues he raised included the questionable practice of billing by the hour and the difficulty of pursuing a long term strategy, in a firm led by more than 50 partners.
“[Today] we have a series of 1.0 law firms that Dickens, if he were alive today, would readily recognise. This is frightening.”
For Kowalski, the ability to move towards an ABS model represents Law 2.0. This new structure represents a “breath of fresh air” for the legal industry and can serve to drive efficiency and innovation. In terms of billing, he suggests that alternative fees will become the norm.
Looking into the future, Law 3.0, Kowalski discussed the need for firms to adopt a Bigger, Faster, Cheaper model. As competition in the legal sector grows, spurned by the adoption of the LSA, lawyers will need to discard traditional practices in favour of an efficient, client focused approach.
A New Dawn
Whilst the creation of a legal services industry populated by 3.0 law firms may still be some way off, the LSA has the potential to set many changes in motion. Lawyers need to be agile if they are to remain on top of industry trends, and look for inspiration in other sectors if they want to remain part of the legal playing field.
Kowalski ended his presentation with a haiku;
“Sleeping Lawyers miss
Chances to form the pitch
Antony Ray runs the Legal Services Procurement Forum, which meets three times a year to discuss legal procurement best practice and issues affecting the supply market such as the Legal Services Act. The group is made up of a number of Legal Services Category Managers from a variety of large and medium sized firms.
If you are interested in attending please forward your details to email@example.com.