New roles and new business models within legal are creating new revenue streams for firms that embrace them
In today’s legal market, the value creation that a lawyer can bring to a client has broadened beyond its traditional scope. That’s not to say what lawyers have done to serve their clients in years past has not been valuable; however, the reality of today’s legal market allows for much more dynamic possibilities for increasingly valuable service delivery beyond solving a certain problem in a given number of hours at a set billing rate.
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The value delivery possible today with the new business models within legal creates entirely new revenue streams for law firms that would not be possible if firms remained reliant solely on traditional service delivery models.
For example, an ever-increasing number of law firms are creating captive, or in-house, alternative legal service providers (ALSPs). If presented in the right way, these alternative business lines within law firms actually create a twofold business benefit — the elusive win-win for firm and client — as well as a host of additional opportunities for talent development.
The first major business benefit derives from the act of creating a team with a specific base of knowledge and expertise built for the purpose of addressing and solving a certain set of problems, such as the evaluation and adoption of legal tech solutions. A properly composed team can bring together attorneys, process managers, business analysts and tech experts to evaluate not only the efficacy of proposed solutions but also how to best divide the labor and tasks among partners, associates, other timekeepers and tech staff. By carefully evaluating and implementing the right solutions and processes, the firm can create greater internal efficiency, which will benefit both the firm and its clients in terms of how engagements are accomplished.
Further, there is a second benefit to a properly structured and enabled team in that the expertise of that team can become a valuable and commercially viable enterprise in its own right. Turn again to our example of tech transformation in which the same conundrums that law firms must confront also plague their clients. This creates an opportunity for a new mandate with the client in which the expertise and experience of the firm’s business team can help clients to address their own tech and process needs. Not only can clients benefit as the firm improves its own processes, but then the firm can help the client improve its own internal processes across all of its matters, regardless of whether the law firm is actually engaged to do the legal work.
The value to the client is apparent as they find solutions to problems without having to expend nearly the level of internal resources that would have been required in the past. But the firm benefits as well by gaining revenue-generating work outside the confines of typical client mandates. Again, a win-win.
A wealth of new roles
These multifunctional teams not only create new revenue possibilities for their law firms, but they demonstrate new career paths as well. In many of these teams, you’ll find a mix of the roles, including:
- transformation specialists who understand processes and how to reconstruct them;
- project managers comprised of a mix of subject matter experts for specific legal areas and process experts such as Lean Six Sigma professionals working together;
- customer experience managers tasked with creating the best possible experience for the client;
- legal technologists evaluating and constructing the proper tech stack for a given challenge or task; and
- business process analysts minding the financial and business outcomes of matters and experiments.
These roles interface directly with the firm’s attorneys and indeed are often filled by attorneys themselves who have sought alternative career paths. These new professionals represent unique and hybrid skill sets that blend multidisciplinary teams with traditional legal training.
Crucially, the emphasis must remain on the legal experience and expertise of the firm simply because that is the basis for the credibility of the firm’s offerings. Moreover, that legal perspective helps the team to better understand the mindset of the client. Lawyers have a particular way of thinking and looking at problems, and to be successful, the team must be able to relate to the mindset. That’s not to say that everyone needs to have a legal education, but there does need to be a balance. Those in more business operations roles should employ a lawyer-like focus on client service excellence. At the same time, the lawyers on the team can learn from their allied professional colleagues how to sharpen their business skills.
Creating hybrid professionals
This multidisciplinary approach to the legal profession is not likely to recede. Academia currently does not provide much in the way of formal instruction into these types of hybrid skill sets, but that will likely change as the profession continues to evolve. More importantly, clients appreciate this hybrid approach and want to work with it more; as a result, more law firms are likely to start hunting for talent with cross-functional skill sets. This, in turn, will lead law schools and even universities to create new multidisciplinary course offerings geared toward producing job candidates that will fill these evolving roles.
On first impression, these types of job functions may seem the stuff of elite law firms, yet the future will most likely find hybrid professionals soon operating in every area of the legal industry. While small law firms may not have the resources to build full teams of professionals, they will nevertheless see opportunities for well-placed hybrid professionals to improve productivity. Even a single professional versed in these functions can work with attorneys in firms or practices of any size, leading the way to new operational and practice efficiencies.
Of course, there are a few foundational steps law firms should take to help expand and refine their business lines. First, be clear on the value proposition of the new business line or offering: Is it intended to be back-office, client-facing or both? Remember, it will be hard to gather the multidisciplinary skills needed to accomplish the initiative if you don’t fully define its remit.
Second, look at the current drivers within the legal market at a macro level. Law is becoming more data driven; and many ALSPs, by their nature, can capture much more data and create usable, structured data more readily. Indeed, a lot of law is becoming more structured in terms of the types of usable data that’s being created. At the same time, more aspects of law are becoming commoditized. The result of these twin drivers is that clients’ expectations of being able to measure their law firms’ delivered value are growing. And if you’re a law firm leader, you should be examining how a new business line or offering can help address these kinds of market drivers.
Those legal leaders who want to see real progress happen in this alternative business space will start to think about the career progression for the roles needed to accomplish these tasks successfully — the training to be offered and the upskill requirements that will follow suit.
And for those individuals looking for careers in legal that do not depend primarily on billing hours, their path will continue to widen.