Thriving at the edge of chaos
AI, blockchain and the digital law firm of the future
This paper is intended to provoke thought about what digital transformation means for client legal needs, for the law and for business models of large law firms. In particular, it is about business model transformation and how law firm leaders can plan and implement the difficult task of transforming their firms’ business models, while maintaining the short-term economic performance that is crucial to ensuring that their firms have a future at all.
It is based on three core messages, namely that:
- we stand not amidst but at the threshold of a wave of disruptive change, induced by dynamically interconnected impacts largely of six distinct digital technological trends, that will likely transform client legal needs over the coming decade, on a scale unprecedented in the past century (in what the World Economic Forum calls the ‘4th Industrial Revolution’)
- the law firms with sustainable economic business models in 2025 will be organised in a different way to the pyramid-shaped, people-leveraged ‘Tournament of Lawyers’ model that emerged in the early twentieth century, in response to changes induced by the last wave of globally transformational technological innovations, in the late nineteenth century
- in order to gather the intelligence required to transform their business models in tandem with changes in client legal needs, law firms need to engage in very different conversations with their clients, focused not on current needs and performance but on what their future needs might be and what competencies the firm needs to develop in order to meet them.
In a world where all but the most complex, bespoke legal work is done by advanced digital tools, true excellence will be the key differentiator. In fact, it will probably be essential for survival. This reality presents both opportunity and threat in equal measure. Our intent is to provide you with a template to think about the difficult task of transforming your firm’s business model, while maintaining acceptable economic performance through that transition.
Feedback would be most welcome. Please feel free to email me at the address below, or visit us at camstrategy.com.
My best regards,
Director, Cambridge Strategy Group
Chapter 1: Convergence: Understanding complex, dynamic, inter-related trends
Convergence is a core theme of this paper. In essence, it demonstrates that when one is thinking about any issue and how it might unfold, the drivers need to be considered in their complex,interactive entirety – not individually.
Chapter 2: The ‘tournament of lawyers’ business model and its nineteenth century origins
The character of law firms has changed dramatically over the past half century but, at their core, they remain the people-leveraged, time-driven businesses that they were fifty years ago.
Chapter 3: Digital disruptions that are transforming our world – and those of our clients
For law firms, one of the most fundamental impacts of the 4th Industrial Revolution and its emerging disruptive digital innovations will be the transition from technology being essentially a set of tools to technology being a core generator of actual legal work product.
Chapter 4: The signal through the noise
A plethora of commentators have emerged since the global financial crisis in 2009-10, predicting the imminent demise of Big Law.
Chapter 5: The law firm of the future
By 2025, it is reasonable to assume that the digital tools emerging in legal practice will have advanced to the point where all legal services involving the standard application of legal knowledge will be delivered by technology. Vast swathes of work that have traditionally been done by lawyers, by hand, will be uneconomical to deliver in that way – machines will be fundamentally better at doing that work.
Chapter 6: The edge of chaos
The behaviours and cultures that are the most difficult to change are those that have proved most successful in the past. Messages telling people that behaviours that worked well before will not in future, usually fall on deaf ears when told to those who have been well rewarded for those behaviours.