I emailed Bob Ambrogi early in the day to discuss Future Tweet, our discussion on Twitter about the Future of the Legal Industry questions we had developed. Usually the optimist, I told him, “I’m not expecting a big turnout.” We didn’t really advertise or market this, a blog post by me and one by Bob at the most, “so today will be more of an experiment,” I said. Boy were we both surprised.
Future Tweet opened with Bob (@bobambrogi) asking the following question:
“I’m going to go out on a limb with an unpopular prediction: Sorry, but the billable hour is not about to die. Do you agree?
We waited for the crickets. I responded by highlighting the question “will the billable hour die?” and then, our first response!
It’s deeply flawed, but measurable, and getting discounts looks good for GCs
With the first response out of the way, others felt okay chiming in. We heard from @stephenseckler, @jugglenaut, and @glambert, who took a range of opinions. Most people felt the billable hour was not going away anytime soon but that market pressures would see innovative firms offering a blend of flat fees and billable hours. It was generally agreed that recurring tasks with a median of hours are the most likely candidates for flat fee billing. @AndyWinchell added that the scope of work must be well defined for flat fee billing to which @bschorr added flat fees are “often not done right.”
Bob chimed in saying that clients will drive the future of billing. He also posed these two questions:
- Does lawyer supply and demand factor into the discussion about billing models?
- Does social media change consumer expectations at all?
Participants agreed that social media was a game changer for lawyers and that big firms need to be work it into the enterprise side as a collaboration tool (@glambert). Most people said that lawyers have been slow to really adopt the available tools, but that it will happen. Bob said that consumers will “expect ratings for lawyers just as they now do for other products and services,” (see MH Client Review). Others thought that uncontrolled consumer ratings of lawyers, similar to Ebay ratings or Amazon reviews, would be “too easy to game.”
Future of the Big Law Firm Model
Bob asked: What about large firms? Dinosaurs? Will they evolve to a new model (diamond v. pyramid)?
The question was never answered directly. Instead, participants spoke about project management and value. Some questioned whether clients were in a position to measure value since they will tend to look mainly at costs. Others argued that clients can appreciate value when lawyers price things properly (a call for better value propositions was agreed by all). Bob added a thought reminiscent of Justice Stewert in Jacobellis v. Ohio, “So value is like ‘obscenity,’ clients know it when they see it?”
On project management @ronaldbaker stressed that “project Management IS NOT PRICING” and argued that project management is needed even with billable hours. @morepartnerinco provided a helpful link to a guide about successfully implementing alternative fee arrangements via project management. Participants cited pricing measures like cost per matter, risk managed, and disruptive innovation (@IPStrategist).
Law Schools and Business Savvy New Associates
So where do law schools fit into all of this? Bob said that he thought law schools were “partly to blame for lawyer’s lack of business savvy,” and asked what they should do different to better train lawyers. @profjonathan added that law students should be exposed to real-world situations much like MBA students are exposed to case-studies, to help them learn about the business of law. Others suggested that law students need real world work experience before entering law school. Ultimately, the most popular solution suggested a change to law school curricula requiring students to take a clinical or practical business strategy course, despite the difficulty of making such changes. It was argued that an emphasis on lawyering and business skills should be part of the agenda, something that Touro Law is already doing. Bob even suggested cutting down the law school curriculum to 2-years to allow for 1-year of interning, which @mackmary told us that North Western University has been experimenting with and seeing good results.
The final topic discussed involved outsourcing and the commodization of legal services. Bob asked, “will legal services be sold as component parts?” (I call this the iTunes approach). @profjonathan said that some services are already sold as commodities, “but quality representation, even drafting, requires relationships.” Bob pointed to an article on the topic and asked if in “unbundling” legal services is it okay to hire a lawyer for one part of a case. He gave the example of document review, saying that unbundling allows feeding tasks to outsourcing which drives savings. Most participants agreed that component legal parts will happen, but clients and component lawyers need to keep the big picture in mind.
As a possible solution, Bob proposed making the client the hub for multisourcing rather than a firm. He got a mixed reaction on this with some participants thinking savvy clients could handle such an arrangement but others saying clients lacked the experience to evaluate outsourcing providers or the knowledge to synthesize work products (@lisasolomon). As the conversation wound down, Bob provided this New York Times article on unbundling of legal services.
The Future of Future Tweets?
To say that Bob and I were surprised by the outpouring of participation and interest in the event would be an understatement. Like I said above, this was a modest, grassroots effort at getting a substantive discussion going on Twitter, and to see so many people add so many thoughtful insights was a testament to the power of social media (and Bob Ambrogi – thanks Bob!). We plan on doing more of these focused Twitter discussion over 2010 and hope you will all participate.
For those who want to stay on top of the Future of the Legal Industry please check out our group in Martindale-Hubbell Connected (registration required – it’s free to join if you are not already a member!).