Law firms need to focus on the McKinsey strategy and ensure that in three years time one third of their revenues come from services they do not yet have. Patrick McKenna shares his predictions for the year ahead.
I remember an incident, some years back, where I was called in to facilitate a partner meeting that was intended to develop a strategic plan for, at that time, what was being called a “Technology Group.” Shortly into the discussions I realised that four of the partners were excited about their work with internet providers, three others focused on cable television, another five were serving software development companies, while the final three were into e-commerce operations. One supposed practice group that in reality was comprised of four sub-groups serving entirely different clients. These partners in their different sub-groups really had nothing in common. Welcome to 2018 and Déjà vu!
Many law firms are recognising the tremendous growth opportunities available to them in targeting and serving what I call “Tech-Driven Hybrids.” These are not purely substantive legal practices, nor are they correctly categorised as being industry practices. Rather a hybrid can be both – in that as a partner or law firm you can choose to serve Artificial Intelligence companies (eg Deep Learning) and/or some specific sub-industry niche (eg FinTech) that may be dramatically impacted and disrupted by AI.The challenge for many law firms will be in organising groups capable of effectively serving these hybrids as evidenced by recent announcements from both LeClair Ryan (US) and Clifford Chance (UK).
It's going to get messy
We are told that LeClairRyan has just launched a “new cross-office, cross-disciplinary Technology & Innovations practice team focused on ramping up service for companies that sell—or are heavily dependent upon—technology.” Meanwhile Clifford Chance has pulled together 400 of its lawyers to form a new technology group to be deployed across different practice areas. Based on my prior experience and the little example I conveyed earlier, this is all about to get very messy with lawyers crawling over each other trying to figure out who should best serve which client.
Clients don't care about your technology
By way of contrast, if we were to look at the area of Virtual Reality (VR) we could identify eight players located in places like Seattle, Phoenix, Chicago and Silicon Valley - and ranging in size from a sole practitioner to a 1000-lawyer firm with four partners who focus on this niche area. Here’s a NEWS FLASH: From the client’s perspective, they don’t care whether you have a dedicated Technology practice team of hundreds, they just care whether you can show evidence that you know anything about their particular area and business issues.
Have you expertise in my area of concern?
In a very similar fashion, I authored a paper (Unlocking The Mystique of Understanding Industry Clients) wherein I chastised those law firms promoting their one large, homogeneous Health Care Practice, advocating that there is no such thing as a Heath Care lawyer. In that article I identified how the Health Care industry is now divided into well over 40 different sub-segments and from the client’s perspective (which should be paramount) if I’m looking for legal counsel in emerging litigation risk assessment with CRISPR Genomics Editing, your having hundreds of lawyers in some Health Care Group really has little significance for me . . . unless you have proven expertise in my area of concern.
The age of the Micro-Niche
So, welcome to 2018 and the age of the Micro-Niche. Don’t tell me you have a Technology Practice Team. Tell me what specific legal experience you have and about the business issues related to applying 3D printing to the energy management industry; in utilizing AI to develop treatment plans for brain-cancer patients; in using industrial robots for remote construction site surveillance; micro-chipping employees to enhance workplace surveillance, or how synthetic biology is being used to produce wine without grapes – all things that are happening right now, as you read this.
Services NOT yet provided
I am told that one of the very specific strategic goals at both Deloitte and McKinsey is recognising that within the next three years, by the end of 2020, one-third of firm revenues need to come from services they do NOT now provide. Law firms can achieve that same goal . . . if properly organised and strategically focused.