How much more of this can large firms take?

In one weekend I heard this from a successful entrepreneur and from a General Electric senior counsel: big firms are arrogant,   overpriced, and we will not play with them anymore.

One of my close friends has been very successful in overseas finance over the last 3 years.  Recently, he began several new ventures and approached big law firms for advice and assistance. My friend, let’s call him Arthur as he’s very private, asked the lawyer from the BF to review some paperwork for a real estate venture. From experience as a hands-on, high IQ personality, Arthur knew that he could do it himself. But it would take him too long when he had other priorities to attend with his new ventures.

The lawyer from the BF firm told Arthur he would have to retain the firm for $10,000 before he could take on the project and help him.  Arthur was livid and tried explaining to the BF lawyer that this was an easily contained project of reading and advice which should not cost more than $2,000!  The BF lawyer stood his ground and quickly lost Arthur as a client.  Not only did he lose Arthur as client for that firm, but for all BFs.

Arthur soon after found a former BF lawyer, who not only turned the work around in only 2 days, but for $600!!!  Which leads me to my next story….

My wife is attending an employment law seminar in Miami and heard a senior counsel from GE talk about hiring law firms. I used to be GE legal and from experience GE only used established BFs.  I can only guess that 3 years later, and a recession (GE Capital’s losses are not helping), that GE has now reconsidered. According to this source, GE is now retaining boutique firms, as well as former BF solos and outsourcing discovery operations to India.

Both stories end with people who have the capital and need to retain BFs, that choose not to deal with the bureaucracy, expense and in some cases the perceived arrogance of BFs.  I still believe that BFs will have a role, but some will have to redefine what a BF is.  In many cases, they may benefit from building new ventures and building those brands rather than resuscitating the old one.  Yup, say goodbye to some of our cherished Dudley Fudleys and Moore!

Solos and small firms (SSFs), while a viable service option for less complex tasks, cannot scale up to compete with BF’s massive infrastructure and pedigree stables of talent. Only when SSFs organize themselves into L-VEN’s (legal virtual enterprise networks), will they achieve what was never possible before – scale and autonomy.

SSFs will need to build networks of trust amongst themselves to scale up. When they do, they will have dealt the final blow, the one from which nothing can save the rapid decline of BFs.

Game over!

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L-VENs: These vast global law firms are coming. Don’t even think of adapting. It’s evolutionary.

When SSFs (sole and small firms) around the world launch Legal Virtual Enterprise Networks (L-VENs) that successfully compete with multinational law firms, they will themselves have become big law – but in 1 year, not the 100+ years of development it took a firm like Baker McKenzie.

These L-VENs will be virtual, lean, fast, everywhere and nowhere. Being in an L-VEN will feel like sitting in a high speed train, comfortable, quiet, and smooth. To those outside it will look more like this traffic intersection video (10 seconds).

To refer to these L-VENs using industrial era parameters and measurements will fail – repeatedly. Yet, L-VENs will succeed with such speed and frightening effectiveness that many will scramble to copy them and fail.

One cannot adapt to become an L-VEN, it requires evolution at accelerated speeds.

Failure is assured if you compete against an entity you cannot perceive accurately. Established firms will begin to compete amongst themselves to adapt to the speed of L-VENs. But to adapt assumes rearranging the existing building blocks. You can’t put a jet rocket engine on a car and call it a space vehicle. It’s still a car – a really fast one!

L-VENs predictably have no perceived central administration. There will be many cores, but those cores endlessly shift and appear to move chaotically. In contrast, the product will appear like a movie in that you don’t see the years of work, the countless people handling every minute detail that goes into making a movie. The client will see only the spectacularly elegant, fast, flexibility and mostly predictable results.

Not everyone can play this game.

L-VENs are by necessity the exclusive playground of the self-motivated. L-VENs are made up of lawyers that can balance life and work, those that can easily observe a system and step into it with synchronicity. These individuals play nice, have many friends, work joyfully from anywhere in the world and have a high standard of living. They understand the ability to work and collaborate as if ONE entity, while remaining an autonomous individual.

These self-motivated “elites” will simply live in another realm of experience imperceptible to the violent, forceful and command driven. If you have ever experienced how people can live in the same geographic location, but live radically different lives, you will have a reference point. One person can see and experience the world as violent, as a life of struggle and ever present threats. Another, living close by, sees the world as peaceful, loving, generous and prosperous.  They live in different worlds of experience separated only by their choices and consciousness.

Those working in L-VENs or other highly adaptable, self-directed and self-motivated enterprises will trade at rates and speeds that will “shock and awe” those left behind. They will be left behind because they cannot perceive the opportunities or how to take advantage of them.

May you evolve at an accelerated pace. May you choose a peaceful and joyful life with friends that support you in life.

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An Exodus of American and British lawyers heading East?

I recently discovered the Center for the Study of the Legal Profession at Georgetown Law School.  They just wrapped up their annual conference titled: Law Firm Evolution: Brave New World or Business As Usual?

Notice how we all now increasingly use questions as titles. In all fairness, the more I read and attend conferences, the more I realize that no one knows what is really going on. Much like the scene of an accident or mob riot, we all know something is going on because of all the activity, but no one person has a clear idea of exactly what’s going on in our profession.

The conference website generously provides the conference papers to download for free.  I’m hoping we can send an OBA delegation next year to demonstrate the evolution in SSFs and VLOs cooperating on a global scale!  Anyone interested?

Eversheds presented a paper titled: Law firm of the 21^st Century: The Client’s Revolution. (By Bryan Hughes, Chief Executive of Eversheds LLP)

I’m including an excerpt from their conclusion:

“….overall lawyers will actually be more significant business players in the new world. The increasing role of regulation, ethics and the re-examination of risk are heartland areas for the lawyer, ensuring that even as the transaction ‘go-go’ days wane, they still have an important role to play. What they might not see any more are super-high fees and, at the premium end of the profession, headcount may shrink for the next generation.

For Western law firms, the shift to the East is well underway both as a move to follow a global economic trend but also as the drive to efficiency dictates that low-cost jurisdictions are a key component of cost base reductions(italics added).”

In 2008, when the recession hit, I was contacted by recruiters for a position in Singapore with ESPN as media counsel.  I was quite perplexed that they would even interview me all the way from the USA.  The recruiter told me that already very well paid lawyers from Titanic-sized US firms and wall street, and some British firms, were jumping on the available lifeboats and heading East to Asia and the Middle East.

I imagined how different our profession would be as we become net exporters of highly educated and experienced lawyers. How would this minor exodus affect those countries?  We won’t know exactly for another 5 -10 years.  Part of what excites me is the global scale of the opportunities available to us in the next 5 years.

Big Law is going to go through a consolidation for a few more years.  It will be even bigger law as capital investments move into the market at the top. Decentralization in all professions will benefit Small and Solo firms (SSFs) willing to organize into vast networks of mutual support made up of reputable talent from around the world (OBA). If SSFs don’t organize themselves into competitive and trusted enterprise networks, they can still work in niche areas they own, or as labor for the new capital infused and publicly traded firms.

Wait?!  Will we see  lawyer unions next?

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How can lawyers work in virtual teams with distributed leadership?

Check out this video interview between Bas De Baar and Bioteams author Ken Thompson.

I took some broad notes from the video so you have some idea about its relevance to our conversations about VLOs and the future of law firms.

The main question and issue Ken found in leading teams was the command and control model (military) versus nature’s collective leadership model.  In nature everybody is a leader.

Ken adds that there is a conceptual line in these teams:

On the left side the team is playing for collective success. On the right side it is playing to avoid individual blame.  Ken states that bioteams (ants and bees) don’t cross that line. Everyone looks out for everyone else.  Another characteristic is that anyone that has useful information shares it with the whole team.  Ken learned from ants and bees, and his experience with teams, that short messages are better than a long message.  Lots of short messages are better than one big long message that can be misunderstood.  Emails was used as an example.  In bioteams, the most important messages to share is if there is a threat and is there an opportunity?

Bas de Baar: How do people work toward same goal in bioteams?

Ken:  Very important to have a shared belief systems in which all point in the same direction and passionate about something.  Also appropriate behaviours are sharing useful information with other team members immediately.

As for leaders, each person is a leader in a different domain.

Bas De Baar: But then how does leadership get distributed to the right people?

Ken: through facilitated self-organization. What Ken calls the concept of “team karma” or you get out of life what you put into it. In networks, Ken says, people want to get stuff out, but not put anything in.

In a bioteam or distributed leadership team everyone has to assume responsibility for a role, whether to lead a project or follow.

This conversation sounds very much like what we observe in Trump’s show: The Apprentice.

I am convinced that SSFs can best succeed and compete if they can learn to wok in these types of project teams.  That’s why I started OBA.

What do you think?

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Are Public Law Firms coming? Vast, open networks without borders and without jurisdiction.

Imagine when all the Saas and Iaas and Paas needed to practice law are free or almost free.  Aren’t we almost there already??  As a lawyer you no longer need to memorize anything or keep a KM database at your firm.  It’s all available for free or at a minimal cost in the cloud and on your mobile device. Legislation has inflated such that we all consult our mobile devices on every action we take.  Is that legal? Is this legal?  But clients will still need professional legal assistance in resolving disputes, managing contractual relationships, transactions, etc., and navigating all the new laws.  Imagine also the global harmonization of laws and the inevitable competition of lawyers on a global scale.

What then?  What will you do? How will you compete?

Two extreme scenarios could run parallel.

1. Massive global law firms (GLFs) assisting large corporations and governments will consolidate into proprietary “elite silos” numbering 10,000s of lawyers.  They will be distributed, but centrally controlled, and highly political.  Compensation will be astronomical and highly competitive.
2. Many solo and small firms (SSFs), in the 100,000s of lawyers, will organize by necessity into “public law firms”: vast, open networks without borders and without jurisdiction.  PLFs will be completely dynamic in size and direction. They are decentralized except that some may share infrastructure and platforms. The members come and go as they please.  PLF members work the hours they want to, from any location and their only limitations on choice of practice coming from peer reviews. PLFs are intimate networks in which members must earn and build trust to be selected to participate in publicly announced projects.  Anyone can announce a project and build a team, from which professional project and team leaders will evolve.  Earning is varied depending upon who wants to play with you and the market value of your contribution.

I’ve only touched upon the infinite variables of a Public Law Firm as an idea.  What do you imagine your future as a lawyer will look like?

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