News Flash: In 2018, large law firms continued to cut costs, merge into larger entities, cautiously experiment with new technologies, control entry-level hiring (while wondering exactly what makes Millennials tick), watch in dismay as partners leave for other firms, court partners from other firms, begrudgingly concede to alternative fee arrangements, and make lots of money. Which is to say, 2018 was a continuation of 2017, which was a continuation of 2016.
Does this mean the legal services industry has reached the “new normal”? Anything but that. Rather, what we are seeing is the industry “settling in” on a glide path of underlying change that is far less immediately disruptive than the initial burst of post-Great Recession transformation, but which constitutes change nonetheless. Evolution of previously stable industries following disruption often is more punctuated than steadily incremental, but between those spikes change is still underway. It’s just that it’s rather boring compared to the wilder rides associated with the bursts of energy. So, despite all the media headlines and news flashes trying to make things look really exciting, with only a few exceptions I found 2018 pretty dull.
In fact, only three news items actually struck me new and exciting. One was the growing footprint and innovative business models of non-firm entities such as United Lex, Axiom, and the Big Four. The arrangement between United Lex and General Electric, Axiom’s IPO announcement (admittedly, announced in 2019 but obviously in the works in 2018), the merger of Counsel on Call and DSicovery, and the ever-accelerating expansion of the Big Four into the legal services market opened up a new front of change that had not been on the horizon at this scale and pace even a few years ago.
Another other development that seems to suggest an inflection point is near was the more enthusiastic embrace by some law firms of the artificial intelligence movement, with firms experimenting with joint ventures with AI companies or building AI capacity in house. My take is that this is the leading edge of a larger uptick in law firms taking a role in technology development. Maybe soon?
Lastly, and not covered in the media, a theme I heard time and again by guest speakers in my Law 2050 class, which is devoted to helping students navigate the changes in the industry, was that many firms have shifted to treating associate departure as a given and thus something that should be turned into an opportunity. Not that firms did not often help “place” departing (often burned out or under-performing) associates in opportune settings such as with clients’ legal departments, but it was rarely seen as something to promote or plan. Increasingly, however, firms get that many associates, including those who would easily have a shot at making the diminishing universe of partner slots, have no plans to stick around, and more firms are actively making the best of it by mentoring them for the best possible outcomes.
I am sure I have missed something, but to me, 2018 was a bit of snooze but for these three developments. I am looking for something amazing in 2019!