In the wake of COVID-19, the legal industry has grappled with many of the same challenges faced by other industries, like adjusting to remote work and becoming comfortable with new technologies. But what comes next for the future of law is less clear. How will the COVID crisis impact the legal economy, who will win legal work, and where will we see success in the legal profession? In the first episode of The Advisory Board, Casetext CEO Jake Heller’s new live series on the business challenges in legal, leaders from in-house, law firms, and legal tech got together to explore these questions.
As the GC of an insurance company, Trevor Uffleman revealed that economic pressures on legal professionals like him are already leading to pressure to cut costs on legal spend. For Trevor, that means identifying the law firms they get the best value from and consolidating their legal work into those firms. “Where we might’ve done business with 15 or 20 firms 3 years ago, we’re finding which ones really meet our needs competitively,” he says. Trevor also believes that this increasingly competitive environment will also provide opportunities to push for alternative fee arrangements.
Nicole Auerbach has been a major force in popularizing alternative fee arrangements. When she started her own law firm in 2008 after 15 years in big law, this was much less common, but she’s seeing it become increasingly popular as market demand increases. She expects the COVID crisis to be the wake up call other firms need to consider offering AFAs: “The question,” she says, “is how radical are people going to be willing to be?”
Ralph Baxter foresees a shift in law firms driven by clients like Trevor and competition like Nicole, the co-founder of new model law firm ElevateNext. “Competition drives change. The more the buyer is insistent on the kinds of things Trevor already has said, and the more Nicole and others create better mousetraps, the faster the law firms will change,” Ralph says. He sees law firms’ ability to quickly respond to the quickly-shifting landscape, with many firms already transitioned to fully-remote practices, as a positive sign that law firms will be willing and able to learn how to operate differently in response to COVID-19.
For Jake Heller, CEO of Casetext, another optimistic sign for the future of law is the potential for the economic conditions in the legal economy to drive innovation. He describes a “mini-explosion” of legal tech companies that resulted from the 2008 financial crisis, with increasing numbers of attorneys shifting focus away from traditional roles for legal practitioners and toward innovation-focused roles, like the growth of e-discovery, or innovative business models, like Nicole’s.
Law firms’ ability to innovate in order to adapt to the needs of their clients across legal practice areas, whether through new business models or new technology, will be critical to determining who wins legal work after COVID-19 — and given the importance of the legal profession, it may also be critical to our overall economic recovery. For more of Trevor, Nicole, Ralph, and Jake’s predictions for how the legal profession will react to COVID-19, watch episode 1 of The Advisory Board.
Want to know more about what the experts think about the biggest business challenges in the legal industry? Tune in to The Advisory Board, live on YouTube, Facebook and Twitter. Join us for Episode 2 on 5/28 for a look at how venture capital and law firms are approaching investments in legal tech in the wake of COVID-19, from funding start ups to purchasing new tools.