What is NewLaw?
It’s a concept that’s been around for years, but with a rush of new firms claiming to be “NewLaw”, the legal industry today is struggling to answer one simple question: What does NewLaw mean?Read the article
A lot has changed since we started almost a decade ago with a bold vision to ‘Create The Future of The Law’.
Perhaps the biggest change has been change itself. When we started people called us naïve. Few believed the industry would ever change. Now the industry is transforming more rapidly than even we expected.
This has come with two consequences.
As CEOs demand a different kind of legal function many legal leaders have been ill equipped to respond. As a result, GC turnover has raised 65% across the past two years. Our research suggests GCs are younger, more female, and more focused on driving transformation. It is difficult for many of us to influence the first two variables – nailing at the last appears to be the key determinant of success.
‘Data’ is the ‘new oil’. GCs who don’t understand this emerging domain will find that oil is explosive…and privacy is the match.
Our GC Thought Leaders survey of over GCs suggests that legal functions will increase adoption of technology by 111% across the next two years, while only 3% forecast any material headcount increase across the next three years.
As we explain in The Agile Legal function there is increasing recognition that businesses have such volatile demand for both legal capability and capacity that a static headcount won’t get it done. Progressive GCs are reserving 10-20% of their headcount spend to bring in the expertise they need – through resourcing like Plexus Engage.
All data points to the fact the traditional strategy of building Legal’s capacity to support more decisions has failed. It has driven up ‘Legal Drag’, reduced employee engagement, and frustrated the business to the extent that only 24% of the business feels they are getting value based on the time and money spent with Legal. The answer? Focus your scarce resources on building more scalable ‘Legal IQ’. In other words, instead of building Legal’s capacity to support decisions, focus on building the business’s capability to manage legal risk.
As we forecast more than two years ago, Legal A.I. is 'high on artificial and low on intelligence’. As happens in all Hype Cycles, most applications of ‘A.I’ will enter the trough of disillusionment’ (along with blockchain), likely to re-emerge in the next cycle (our best guess late 2022).
Most GCs we speak with have recognised (and are frustrated by) the fact that 99% of ‘law firm innovation’ is 'all sizzle no steak’. The truth is that most ‘innovations’ to date have been funded out of the marketing budgets and are seen as a necessary evil by The Partnership. The reality is that law firm profitability is at an all-time high, and there is no incentive to change.
Economic historians will tell you industries reform and re-order during down-turns. The ‘boom years’ of the past decade have masked systemic issues with the traditional law firm business model. When the tide goes out, we will see who still has their pants on.
As we enter the prophetic year 2020 we are disappointed we won’t see hoverboards cruising the street anytime soon. However, we are incredibly optimistic about The Future of The Law – and excited to be playing a role at the heart of this transformation.
As you plan for the year ahead, we encourage you to remember Jack Welch’s advice; ‘change before you have to’. Darwin’s theory of natural selection doesn’t suggest ‘survival of the fittest’ but survival of the species most able to adapt to new environments. It's those GCs who drive change in 2020 who will not only survive…but thrive.
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