Law Is a Buyer's Market

LAW IS A Buyer’s MARKET Building a Client-First Law Firm JORDAN FURLONG Cover design by Mark Delbridge Interior design by Patricia LaCroix Copyright © 2017 Jordan Furlong All rights reserved. No part or this book may be reproduced or transmitted in any form or by any means without express written consent of the author. Printed in the United States of America. 22 21 20 19 18 17 5 4 3 2 1 ISBN: 978-0-9953488-0-6 For Mom and Dad CONTENTS Acknowledgments .............................................................. vii Introduction ......................................................................... ix Prologue ...............................................................................xv Chapter 1: The End of the Seller’s Market in Law ............... 1 Chapter 2: The Emergence of Lawyer Substitutes ..............17 Chapter 3: The Development of Law Firm Substitutes ....... 33 Chapter 4: The Fall of the Traditional Law Firm ................ 55 Chapter 5: The Rise of the Post-Lawyer Law Firm ............. 69 Chapter 6: The Law Firm as a Commercial Enterprise ....... 83 Chapter 7: Identifying Your Law Firm’s Professional Purpose ............................................................ 95 Chapter 8: Choosing Your Law Firm’s Markets and Clients ...................................................... 107 Chapter 9: Creating a Strategy to Fulfill Your Firm’s Purpose ...........................................................121 Chapter 10: The Client Strategy ......................................... 129 Chapter 11: The Competitive Strategy .................................141 Chapter 12: The Culture Strategy ....................................... 153 Chapter 13: The New Role of Lawyers in Law Firms ........... 167 Chapter 14: Change Management and Leadership in Law Firms ........................................................181 Chapter 15: What a Buyer’s Market in Law Means for You ............................................................ 199 About the Author ...............................................................209 Index ...................................................................................211 AcKNOWLEDGMENTS any friends and colleagues were invaluable to me as I worked my way through this project. In particular, incisive edits and sage advice Mthroughout the planning and drafting stage were supplied by Yves Faguy, Amy Knapp, Sean Larkan, and Steve Matthews. All of their feedback helped me narrow my editorial focus and improve the text tremendously. Robin McNamara provided timely research on the industry statistics in Chapter 1. I owe special thanks to my great friends Merrilyn Astin Tarlton and Gerry Riskin for their suggestions, counsel, and unwavering support throughout this process. I also had the benefit of a superb production team. Timothy Johnson served as editor of the text and made good copy a great deal better. Patricia LaCroix did a masterful job with interior layout and page design. Mark Delbridge created the eye-catching front and back cover design. Jason Byrnes coordinated all printing and fulfillment arrangements for the book. Steve Matthews and Rob Golbeck set up the online sales apparatus on my website. The last word, and my most heartfelt gratitude, goes to my family. Joan Hatch patiently endured this book’s long and arduous gestation, and her love and support kept my spirits up during its most challenging periods. Claire and Thomas accepted my absence during my lengthy writing sojourns and served as my inspirations at the end of every day. This book would not have been possible without them. vii INTRODUCTION WHY I WROTE THIS BOOK hen I first committed myself to write a book, a wise friend advised me to be very clear, in my own mind, about who I was writing for and W what value I expected this book would provide them. Who is the audience? she asked. Why should they care about what you have to say? Without these guiding lights, she warned me, an author can get lost in the complexity of the subject matter and wind up wasting his time. That, I feel I should tell you, is exactly what I ended up doing in my first draft of this book. I began writing an omnibus dissertation on the future of legal services, a Grand Unified Theory of the Legal Market that would cover everything and explain to everyone all there was to know. What I produced was just about as compelling and useful as you would imag- ine from that description. After several months banging away at that dire project, I stuffed the whole thing into a Word file and saved it under a forgettable name. By that point, belatedly, I had recalled my friend’s words, so I returned to my starting point to try again. This time, I strove for clarity in my rationale, my purpose, and my audience. I realized that one of the keys to writing an effective book was to figure out what you were not going to talk about, and to whom you would not be speaking. So I started narrowing things down. B I would write principally for the buyers and sellers of legal services— in the vernacular, clients and lawyers. This ruled out law students and law professors, judges and court staff, and regulators and government officials, even though my speaking engagements have included all these groups and others. It also ruled out, for the most part, the newest en- trants in the legal marketplace, the “NewLaw” competitors to the legal profession. All these groups could probably derive some value from the book, but they weren’t going to be the primary audience. B I also decided to narrow down even these categories. I would write for lawyers who worked in (ideally, who helped to lead) midsize and large full-service law firms, those that primarily serve businesses, corpo- rations, and large institutions, as well as for the lawyers (and others) ix LAw Is a Buyer’s Market inside these firms. I would not address lawyers in sole practice or small- er firms (which, for present purposes only, I’ll define as practices with fewer than ten lawyers), even though I think they can find value here as well. B I also determined that, because most of my work is performed in and around North America, I would restrict my geographical ambit to Canada (where I live) and the United States (where I usually work and where the largest amount of legal market activity takes place). This was a little more difficult, because a great many interesting things are happening throughout Great Britain, Europe, and Australia, to name just a few other jurisdictions. Nonetheless, most of the examples and analyses in this book are drawn from, and will have the most resonance for readers in, the U.S. and Canada. So that was how I settled on the “who” of this book. The “what” and the “why” of the book were determined together as follows. I’ve been a member of the legal profession for more than 20 years. I was a full-time legal journalist for nearly 15 years, and I’ve been an active observer and analyst of the legal services market for more than a decade. And over that time, two facts have become increasingly clear to me: 1. The market for legal services isn’t working well for its participants. Throughout the course of these past 20 years, I’ve seen a lot of people without the money to get their legal problems addressed, as well as others who didn’t even realize that the problems they were experiencing had a legal solution. I‘ve seen people who knew they needed a lawyer and were able to afford one still come away vexed and disheartened by their dealings with both lawyers and the legal system. I saw courthouses back- logged with aging cases and a justice system overflowing with confused and frustrated users. Most remarkably of all, I saw overworked, dissatisfied, unhappy lawyers, labouring every day just to make a living and serve their clients — the only people, you would think, who could still benefit from an other- wise broken-down system. I looked at all that and thought: “This can’t be right. The market for legal services shouldn’t be this dysfunctional and discouraging for everyone. There’s got to be a better way.” 2. Within the last five to ten years, a better way started to emerge. I began to see new forces coming to affect the legal market, causing fresh possi- x Introduction bilities to occur to its participants. I saw new providers enter the market and begin to change everyone’s expectations of legal services delivery. I saw regulatory reforms make the first small dents in lawyers’ monopoly position and start inching us towards market liberalization. I saw conver- sations about innovation in the legal sphere grow beyond the small, hope- ful community to which they’d been restricted and enter the mainstream awareness and attention of the entire legal profession. Most encouraging of all, I saw legal system users—the people and businesses upon whom lawyers depended for their livelihoods—grow increasingly aware of, confident about, and capable of managing innovative solutions to their legal challenges. I saw change coming to the previously invulnerable legal market, faster than its participants expected or could necessarily manage. Faced with these unprecedented developments in an incredibly impor- tant area of society and the economy, I did what everyone else was doing in the mid-2000s: I started a blog.1 And the more I wrote in my blog about what I saw in the legal market and what I thought it meant, the more I received inquiries from lawyers, legal associations, regulatory agencies, law schools, and even judges, to attend their meetings and talk about what I was seeing. And when these groups elected not to run me out on a rail when I finished speaking, I took that as a sign that I might be onto something. So this is now my full-time line of work. I observe what’s happening in the legal market, I strive to understand why it’s happening and what it means, I try to forecast where these developments are taking the legal market and its participants, and I offer my advice on which responses and adjustments those participants (principally law firms) should make.

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