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EXCLUSIVE: Collaboration between law firms key to future competitive advantage

Firms should 'radically rethink' their legal training and staffing needs, Managing Partner roundtable finds 

19 August 2014

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By Manju Manglani, Editor (@ManjuManglani)

Law firms should stop competing with each other and instead look for ways to collaborate with each other to improve future business performance.

That's the view that emerged at Managing Partner's roundtable on the long-term impact of flexible resourcing on the legal industry.

Some of the key ways in which law firms should look to collaborate is in training the next generation of lawyers and in developing a shared flexible resource of experienced lawyers, panelists said.

"Law firms [should] put their competitive instincts to one side and collaborate on ways of training good lawyers or accessing flexible resources," said Jill King, a member of Managing Partner's editorial advisory board and the former global head of HR at Linklaters.

Agreed Mitch Kowalski, author of Avoiding Extinction: "If we're collaborating, we could have a pooled training centre that feeds into a number of different law firms, whether it's run by a flex provider or not, allowing firms to get out of the trainee business.

"I'm thinking about a future where firms use flex providers as 'farm teams' or 'reserve teams'. The flex provider covers the cost of training and the firms are comfortable with that training."

King warned, however, that there is "a huge amount of inertia, not least from the legal education providers, which mitigates against that".

"Despite all of the reviews of legal education in the UK, all they seem to do is to tinker at the edges. I think it's time for a more radical rethink," she said.

Future competitive advantage

Panelists suggested that the key to competitive advantage in future will be law firms collaborating more with each other and with clients.

"Collaboration, flexible working and value pricing are all elements that firms can use to create competitive advantage. But, there are various versions of how that could work, depending on what each firm wants to do," commented Richard Hinwood, who develops the corporate and business unit strategy at Withers.

"Firms will still be different: they'll all have the same aim of achieving competitive advantage, but there are many different ways for each of them to get there."

King agreed, but argued that, in the short term, competitive disadvantage could be a much greater threat than competitive advantage an opportunity in the legal services market.

"The firms which keep their heads in the sand, who think that, now that the economy is getting better, they can go back to the old ways, the firms who aren't prepared to think in different ways or be more flexible, they are the ones who will find themselves with a very distinct competitive disadvantage," she said.

"Hopefully there will be some pioneer firms out there who really do take bigger strides to create competitive advantage as well, but I think you'll start to see the divide going in the negative way before it takes off in a positive way."

Citing the example of how traditional retail and new online retail models have developed over the past 15 years, Simon Harper, co-founder of Lawyers On Demand, predicted: "Some of the things which the new providers are doing will start to look more like law firms and things that law firms are doing will start to look more like NewLaw."

Panelists said that flexible legal resourcing is not only here to stay but will become much more aligned with client interests in future.

"I can see in future flex legal businesses becoming more closely integrated with a few specific firms or clients, becoming part of their talent and workflow ecosystem. The advantages that will flow include fewer conflicts of interest," predicted Jordan Furlong, a legal innovation strategist at the Boston-based Suffolk University Law School.

"It's also going to give those lawyers a better understanding of the protocols of firms and clients, greater familiarity with client businesses and with the industry, and over time, becoming a more specialised flex workforce," he added.

The roundtable found that, in order to maximise the value of legal services in future, law firms and clients should start looking for new ways to work together today.

"It seems odd to me that in-house legal departments decide which work they're going to outsource, and they then outsource it lock-stock-and-barrel. You could envisage collaboration where part of the matter or transaction is done in-house and part of it is done by private practice," said King.

"For me, if the future held more examples of collaboration like that, then that would definitely be a more rewarding scenario for lawyers and their clients," she said.

The key findings of the roundtable discussion on flexible legal resourcing - including its impact on operational efficiency, value and profitability, remote staff engagement and legal training - will be published in print and online in the next issue of Managing Partner magazine. 




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