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Postcards from Europe; Part 4: Madrid – Forbes

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Madrid is a magnificent, sunny city filled with museums, broad avenues and charming cafes. This cosmopolitan Spanish capital offered little hint of the political firestorm and constitutional crisis that is playing out. This was the backdrop for my speech to the Chief Marketing Officers (CMO’s) of many of Spain’s leading law firms. The event was held in an architecturally award-winning building that houses the offices of Perez Llorca, one of Spain’s largest and most prominent law firms. The firm’s reception and meeting areas are in a private two-story granite structure attached to a glass office tower.  The space looks like a contemporary pyramidal chamber—emblematic of the Spanish penchant for blending the past and future.

It was surprising that so many old-line Spanish firms have Chief Marketing Officers (CMO’s). Many CMO’s were formerly fee-earning attorneys before transitioning to their new role. This paralleled the career tracks of attendees at my talk to the UK Law Society Education and Professional Advancement Committee where many former practicing attorneys—almost all female—had transitioned to advancement positions. I asked both groups whether their professional colleagues accord them the same status—and pay– as when they were fee earners. The unanimous answer was ‘no.’ And while most said that having been a practicing attorney enhances their credibility within their firms, they are still swimming against a stiff current. Several told me privately they feel like ‘window dressing’ and are frustrated by firm culture that regards non-fee earners as second-class citizens and views their roles as ‘mommy track.’ Most law firms in Spain relegate non-rainmakers–and ‘non-lawyers’–to second-class status. This is a holdover of  legal culture around the globe that is being transformed by clients and entrepreneurs that favor a corporate structure where diversity, collaboration, digitization, and a different performance/reward process accords equal status between those that practice law and others that deliver it.

My remarks focused on the importance of firm differentiation. A quick look at major firm websites reveals common proclamations of ‘practice excellence,’ ‘elite talent,’ ‘partnerships with clients,’ and ‘cutting-edge technology to promote efficiency.’ These claims are devoid of evidence—curious since law is about relevant evidence, proof, and results. It’s time for firms to take a hard look in the existential mirror and determine ‘What services and/or products can we provide  legal consumers they cannot acquire from other sources?’ And it’s not simply a matter of price. Clients expect solutions to business challenges, not legal tomes. Law firms continue to sell a high-priced, labor-intensive delivery model that is focused on practice, not an integration of practice and integrated delivery. No amount of marketing magic will bridge that delta absent results, customer-centricity, and an alignment of delivery capability with consumer expectations and requirements.

The days of undifferentiated ‘big box store’ law firms are over. Clients are demanding greater expertise from outside counsel, and they expect that it will be leveraged by technology, process, and ‘the right resource for the right task.’ And if law firms do not possess delivery expertise in-house, they must collaborate with others that do. Law firm culture was shaped by legal expertise, and most firms do not attach equal standing or importance to professionals with marketing, technology, and process management skills. The traditional partnership model places a premium on what is valuable to the firm—hours and business generation—not what matters to clients—results. Clients are now driving the bus, and that explains why law firms have lost so much market share, especially during the past decade.

The bulk of the audience questions sought advice on how to persuade senior partners to embrace innovation. Most Spanish law firms–like many other markets– are conservative, male-dominated, and have yet to feel the economic pinch that legal digitization will produce. This is a strong cultural headwind for those bent on changing law firm culture.

The Legal Management Forum, Spain’s largest legal event, was hosted by Wolters Kluwer, the global information services giant, and Inkietos (Spanish for ‘restless’), a diverse group of lawyers—in-house and law firm, IT professionals, academics, and journalists bent on change changing the Spanish legal market. A sold-out auditorium of over 600 demonstrated ‘restlessness’ with the conservative Spanish legal establishment. An in-house panel—four women—discussed their departments’ adaptation of technology and process to streamline legal delivery. They gave examples of using data as benchmarks and risk management tools, discussed their dual roles as corporate defenders and business partners, and emphasized that they expect lawyers to provide business solutions, not legal tomes. The event sponsors included Deloitte Legal, Andersen Tax & Legal, KPMG, and Toshiba, another indication that the  ‘Embracing Innovation’ theme was more than aspirational.

I began my remarks by noting the profound impact technology has had on the way people live and work and its disruptive effect on the buy/sell dynamic across multiple industries. Change has accelerated since the financial crisis of 2007 that caused a reboot in the way business is conducted, resulting in a ‘faster, better, cheaper’ mandate. Incumbent delivery models from retail to ride hailing have been displaced by tech and process enabled ones that provide customers easier access to goods and services, greater choice, faster delivery, more price transparency, performance data, competition, and price reduction. This global transformation is far too powerful for the legal industry to immunize itself from.

Clients—not providers—are driving the bus now, and this applies to legal services. Consumers are separating legal practice—differentiated legal expertise, judgment, and skills—from the business of delivering legal services. The legal industry is becoming digitized; it is morphing from a labor-intensive delivery model controlled by lawyers to a tech and process driven one.  Legal practice is shrinking and delivery is expanding; legal expertise is leveraged by technology and process; data and results are replacing speculation and pedigree; delivery cycles are compressed; and the right resource—lawyer, other professional, paraprofessional, and/or machine—is deployed for the right task. Translation: the legal industry is not just about lawyers anymore, and law firms are not its sole providers. And in the process, what it means to be a lawyer—from a functional perspective—is being redefined.

Postcards from Europe; Part 4: Madrid – Forbes

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