Remaking Law Firms – imperatives and opportunities in a digital age

Dr George BeatonSenior Fellow, Melbourne Law School

Partner, Beaton

LIV Conference of Council 2016

December 2013

March 2016

What is a business model?

Business model ≠ strategy

Informs how firms make money by:

Winning work

Doing work

Leading and governing

10 Hallmarks of the BigLaw business model

1. Personal brands

2. Lawyers sell and produce

3. Hourly rates

4. Legal excellence

5. Top legal talent

6. Leveraged full-time lawyers

7. Sustaining technology

8. Sustaining processes

9. Partnership

10. Few equity partners

1. Partner-centric

2. Lawyer-centric

3. Clients bear the risk

4. Culture of perfection

5. High salaries

6. High fixed cost

7. Innovation laggards

8. Lawyer efficiency

9. Profit today expectations

10. PPEP maximisation

How work is

won

How work is done

How firm is governed

Hallmarks Consequences

….which describes (almost) all law firms today

DISRUPTIVE INNOVATION & RISE OF NEWLAW | 10 HALLMARKS OF BIGLAW BUSINESS MODEL

© 2016 Beaton

The rise and rise of NewLaw business models…

Dispersed talent

providers

Process outsourcers

Document providers

Artificial intelligence providers

DISRUPTIVE INNOVATION & RISE OF NEWLAW | RISE AND RISE OF NEWLAW

Hallmarks Consequences1. Corporate brands

2. Separate sales and production

3. Alternative fee arrangements

4. Commercial relevance

5. Business savvy talent

6. Flexi lawyers

7. Disruptive technology

8. Processes re-engineered

9. Corporate ownership

10. Non-lawyer shareholders

1. Not key person dependent

2. Effective division of labour

3. Risk shared with clients

4. Culture of efficiency

5. Market-based salaries

6. Variable cost

7. Early adopter

8. Lean culture

9. Shareholder value mindset

10. Diverse perspectives

How work is

won

How work is done

How firm is governed

DISRUPTIVE INNOVATION & RISE OF NEWLAW | 10 HALLMARKS OF NEWLAW BUSINESS MODEL

© 2016 Beaton

10 Hallmarks of the NewLaw business model

….radically changing the way clients are being served

Some BigLaw firms are not asleep at the wheel!

Dispersed talent

providers

Process outsourcers

Document providers

Artificial intelligence

providers

Near shore captives

Onshore captives

+

DISRUPTIVE INNOVATION & RISE OF NEWLAW | BIGLAW FIRMS ARE RESPONDING

© 2016 Beaton

© 2015 Beaton 9

The future is already here – it is just unevenly distributed

William Gibson

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