The Next Big Thing in Law

The "tumult and shouting" Ransom referenced takes on a considerably subtler form in 2017. Political and economic chaos might still abound, but lawyers continue to adapt as they deal with the technology of the times.
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Almost without being noticed by the public, the legal profession is undergoing a significant transformation. New technologies and outsourced services are changing how attorneys practice. These trends also mean that clients become the beneficiaries of reduced fees, more focused and diligent legal representation, and efficient processes.

Of course, transition has been a relatively consistent characteristic of the practice of law. Attorney William L. Ransom, in a 1924 essay for the American Bar Association Journal, described the "changing profession," which had responded with innovation to the chaos of a world war, and an economy that seemed based more on aspiration than production.

"When the tumult and shouting dies, however, and human affairs again resume their more tranquil course," Ransom wrote, "it has always been found that the legal profession has survived what seemed a crisis, and has adapted itself handsomely to the changed conditions."

The Great Recession of 2008 also required adaptation of lawyers and their businesses, which created more "tumult," but also opportunity. Brenda Barnes, who had managed large law firms as an MBA and CPA, noticed younger lawyers leaving their partnership tracks, or dealing with being victims of staff reductions. They were opening boutique offices with a few partners, or going it alone.

"These new small firms that were starting up didn't need to hire legal admins to run their back office," Barnes said. "There was no reason to spend money that way. They couldn't afford it. I told them I could help with that. There were suddenly just so many small to medium-sized boutique firms that can leverage efficiencies and reduce overhead using outsourced services like we provide."

Barnes launched her Austin company, B2 Management and Consulting, on the front end of a trend that has come to be called Legal Process Outsourcing (LPO). The paradigm shift that began because of economic recession continues to grow in popularity as law firms and corporate legal departments push to minimize their costs by transferring to external vendors services for niche legal expertise, paralegal, accounting, and human resources demands.

Instead of consuming billable hours, which now average $408 in the legal profession, lawyers are turning to technology and external providers. Butch Hayes, who left a legacy global firm and formed a private practice with a few colleagues, is confident the quality of legal representation has improved with new business models and technology.

"I think if a small firm is creative and careful," Hayes said, "They can come close to eliminating most of the competitive advantages, historically, that giant law firms had. And sophisticated clients are starting to understand that. If they have a good lawyer who is savvy from a tech standpoint they can get great value and not pay one thousand dollars an hour. Plus, those of us in the boutique firms have more freedom in our lives and professional practices and get to a better work-life balance."

Barnes of B2 is evolving LPO services further with the introduction of a cloud-based platform called "Plug and Practice." The software enables law firms to acquire services like billing, accounting, human resources, payroll, recruiting, time and billing, and insurance without hiring "layers of people."

"I think what we are doing," Barnes said, "is leveraging our processes with technology to create an almost burden-free system for lawyers. The responsibility to manage the business side of their work still exists, but the pressure to deal with that is gone and their focus on legal work improves, and their level of services goes up. These are progressive attorneys, not the traditional lawyer of the past."

The "tumult and shouting" Ransom referenced takes on a considerably subtler form in 2017. Political and economic chaos might still abound, but lawyers continue to adapt as they deal with the technology of the times.

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