Biglaw, Books

alt.legal: The New Law Firm Taxonomy, And One That’s Doin’ It Well

Biglaw is changing rapidly, and this is how one firm bet big to prevent itself from becoming obsolete.

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In our first column we begged you to “stop what you are doing” and take a walk on the alternative side of the legal professions. If, instead, you kept on doing it, well . . . you might as well do it well (cue LL Cool J).

Bring In The Bobs

This week, I got to chat with Bruce MacEwen, star law-firm consultant, author of the leading online law and economics publication, Adam Smith, Esq., and legal entrepreneur. Bruce’s view, which is in line with ours, is that for too long, Biglaw has been viewed as a monolithic industry; and it’s increasingly clear that that model is obsolete.

Before you haters out there dismiss Bruce as one of the Bobs from Office Space, check out his insanely impressive academic bio (graduating magna in economics from Princeton, Stanford Law, and took course work at NYU’s MBA night program in his “spare time”). Bruce also paid his dues as an attorney, working for over five years as an associate at two major law firms and then toiling in-house for another decade at Morgan Stanley as a securities attorney. At Morgan Stanley he realized his true passion –- finding ways to combine “management and technology [ ] to enhance the practice of law.”  This makes Bruce one of our own — leaving the practice to pursue an alternative legal career.

I first met Bruce at an Above the Law event in Chicago where he led a conversation about his new book on the world of Biglaw: “A New Taxonomy: The Seven Law Firm Business Models” (affiliate link). A New Taxonomy leverages the human desire to categorize — “from friend to foe and food to poison” — noting that this organizational drive “has gotten us a long way on the planet so far.”

In his concise book, Bruce offers a Biglaw taxonomy that draws inspiration from other industries, “where there are different sets of firms pursuing fundamentally different business models.” In proposing his own taxonomy of law firm models, Bruce expertly breaks down the Biglaw market into seven models:  (1) Global Players, (2) Capital Markets, (3) Kings of their Hill, (4) Boutiques, (5) Category Killer, (6) The Hollow Middle, and (7) Integrated Focus. For each, Bruce lays out the competitive pros and cons, as well as the “challenges and opportunities” you can expect to face in each model. This is not a detailed book review, but the book is a must-read for anyone who needs to understand and speak articulately about the legal industry (especially law students who are still choosing firms based on their access to corporate discounts at Tiffany’s). For law firm leaders, the book lays out what each category’s priorities “ought to be,” to stay ahead of the competition.

Personally, the book had me at the foreword by A&O’s worldwide Senior Partner, David Morley.  David praises Bruce for presenting “a hopeful, positive vision of the future of Law Land,” while taking the time to call out Bruce’s “well dressed figure” . . . very British. We at alt.legal have been following A&O’s work closely, as it is — in our view – one of the only firms that can boast serious efforts at radical change.

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Case Study: A&O’s David Morley’s Big Bet

The introduction to Bruce’s taxonomy (by David Morley of A&O) was particularly interesting because A&O not only believes Bruce’s view that the Biglaw model “is obsolete,” but takes seriously Bruce’s stated goal: “to spur informed debate, discussion and action within firms about where they see themselves as standing and where they would like to stand.”  Specifically, A&O has created a strategy to radically redefine itself and the nature of a large law firm.  For a detailed view into what is obsolete about the Biglaw model, and how A&O plans to fix it, check out the excellent “Report on the State of the Legal Market” (published by Georgetown Law Center and Thomson Reuters Peer Monitor).

“The market for legal services has changed in fundamental — probably irreversible — ways” according to the report. Laying out these “irreversible changes,” the report focuses on the rapid shift from a sellers’ to a buyers’ market, the growing willingness of clients to disaggregate services among many different services providers, and the growth in market share of non-traditional competitors (read: legal managed services providers).

So how did A&O bet big to navigate these irreversible changes and prevent itself from becoming obsolete? By completely redesigning itself as a “hybrid firm” combining traditional legal services, with contract lawyer services, consulting services, on-line legal services, and LPO-like document review services. The high-level report applauds A&O at length for “carefully looking at the way the market was changing and placing strategic bets on the changes it needed to make to remain competitive and successful for the long run.”  We agree with the report that “this is a process every firm should follow” and believe these moves will distinguish A&O.  To quote Bruce, “[u]ndistinguished is hard to separate from unimpressive, and unimpressive quickly ripens to irrelevant.”

The report concludes: “it is more important than ever that law firms take a long-term strategic look at their primary practices, clients, and markets. . . . Firms that are able to adopt this kind of long-range thinking will enjoy a significant competitive advantage in today’s rapidly changing legal market.” A&O is working towards that, and there are intellectuals like Bruce out there, who can help pave the way for other old dogs to learn some alt.new tricks.

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P.S. — I highly recommend you read the radical A&O strategy report when you have a chance (available here).

Joe Borstein is a Global Director at Thomson Reuters’ award-winning legal outsourcing company, Pangea3, which employs over 1,000 full-time attorneys across the globe. He and his co-author Ed Sohn each spent over half a decade as associates in Biglaw and were classmates at Penn Law.

Joe manages a global team dedicated to counseling law firm and corporate clients on how to best leverage Pangea3’s full-time attorneys to improve legal results, cut costs, raise profits, and have a social life. He is a frequent speaker on global trends in the legal industry and, specifically, how law firms are leveraging those trends to become more profitable. If you are interested in entrepreneurship and the delivery of legal services, please reach out to Joe directly at joe.borstein@thomsonreuters.com.

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