Non-traditional Practice Groups: The Context
Non-traditional Practice Groups: The Context
Traditional practice groups are transforming into new types of services. It is happening at a quickening pace throughout the market. Responding to changing market conditions and client needs, these practice groups are integrating new types of talent, digital technology, process engineering, and user experiences to create completely new and different service models. These new models can be a slight or significant departure from the traditional manner in which a law firm and its practice groups interact and co-exist.
The law firm business model is designed and managed to support and foster the traditional approach to legal service delivery. The market for traditional services is by far the largest part of the commercial market. The firm’s operations, talent model, technology stack, culture, management and governance, and most importantly, its strategy, have all been built to support the existence of the traditional legal service delivery model.
Typically, when a practice group or team of lawyers discover an emerging opportunity outside this traditional approach, they have the freedom to explore it. This is one of the advantages of contemporary law firm culture – autonomy and entrepreneurialism thrive in this context. Partners have a fair amount of freedom to serve clients in a manner that still drives revenue and maintains profits.
At first these explorations of different services and service deliveries come at a relatively low cost to the firm. Exceptions are made to various standards, procedures, and so-called rules, in the effort to provide the partner(s) with what they want. As these explorations mature and transform into more fully built and on-going services, this legal team’s needs change. Beyond ad hoc exceptions and exploratory freedom, they need a more tailored and sustainable support mechanism that recognizes (and ideally appreciates) its unique and evolving service delivery model and its customer needs. As the team seeks to define its business model and scale its services, the gaps between what the team needs and what and how the firm can support it begin to emerge. Pursuing scale is often the catalyst for changing how the firm and the practice group view one another.
What does it mean to scale? Scale within legal services has typically been confused with growth and expansion, which is unfortunate, as scale has a unique and specific meaning.
To scale, the gap and divergence between (i) topline revenue and (ii) underlying costs must widen, ideally at a predictable rate. Scaling, in every case, demands upfront investment of capital and resources. In knowledge intensive services, such as the legal profession, scale has historically been nearly impossible to accomplish for a whole host of reasons, but mainly because the bias has been that only lawyers can do the work and that key tools such as process and technology offer negligible returns. As certain practice areas begin to adapt and respond to changing market conditions and client demands, the pressure to address these emerging challenges continues to grow.
Seeking scale sparks the need to evaluate one another, not based solely on the lawyer-centric culture and mode of management but based on business fundamentals and operational contingencies. It requires an accounting of and appreciation for all the ingredients the new practice needs to succeed and scale.
Beyond the application of legal expertise, service delivery is comprised of (i) workflow, (ii) operational processes, (iii) digital technology integration, and (iv) user experience.
By exploring and ultimately engineering each of these elements to work in concert, scale and acceleration can be gained.
It is this effort that requires viewing practice groups and the firms they are part of with a new lens.