six trends and the legal industry
TRANSCRIPT
Six trends and
the legal industry
Keith Lipman
CIO Dinner
Rosie O’Grady’s, NYC
Feb. 3, 2015
State of the legal market creates opportunity for change
Agenda
Introduction
Fundamental
Disruption in the
Legal Industry
Moving
forward
Prosperoware, what we do
State of the legal market
Client and firm challenges
and solutions
• WorkSite add-ons
• SharePoint
• Information governance
• Electronic file (Matter Centricity)
• Remote access for email and DMS
• Legal Process Management
and Pricing
Areas of expertise
U.S. CUSTOMERS
40% are Prosperoware customers
U.S. CUSTOMERS
31% are Prosperoware customers
Total customers
200+
Four platforms,
four focus areas
Our WorkSite
add-ons improve
administration and
empower users
Enjoy secure email
management on
your mobile device
with the Zone Mail
app; Zone Remote
Access brings the
FileSite experience
to your web browser
Easily integrate your
DMS with your
SharePoint intranet
and extranet
Transform your
firm into a client-
focused business
through Legal
Process
Management
Six Trends That Are Changing an Industry
Horizontal Issues Vertical specific — Client Pressure
Cyber-Security Threat
(post Sony-Hack)Drop in
demand
Balance of
powerBig Data
Work
Anywhere
Fee
pressure
• No longer if you are going to be
hacked, but when.
• It’s about risk mitigation, not stopping
attacks
• Vendors
• Fighting nation-states and criminals
– Theft
– Espionage
– Embarrassment
Cyber Security
Mitigating the Risk
• Faster transition to the “closed DMS”
– Impact to workflow
• Return of on-site consulting
• Closer monitoring by clients
• Enable fluid “anywhere working”
• Balance security risk against working anywhere
• Support the four-device paradigm:
– Office computer/laptop
– Phone
– Tablet
– Home computer
Impact for the firms
• What is it?
– Ability to leverage advanced
mathematics against database,
email and documents
• The Result
– Better decision-making
– Reduced effort
Big Data
Implications to law firms
• Business of law
– Better staffing decisions
– Predictions on revenue
– Understanding profit centers
– Improving efficiency
• Practice of law
– Reduced eDiscovery costs
– Reduced due diligence costs
– Understanding difference
between contracts
• Our data is homogenous
• Industry has very poor metadata around matters
• To improve business of law, good matter metadata
is a requirement
– Matter type, sub-type, area of law, tags, industry, sector
Challenge for the Legal Industry
How it used to be
“I don’t know,
every matter
is different.”
“I have a new matter
for you to handle,
however,
I need to know how
much it will cost me?
Demand for legal
services
in 2013 declined
slightly across the
industry
Growth in Demand for Legal Services
Percentage Change in Legal Market Revenues vs. Inflation (1999–2013)
Source: U.S. Census Bureau Service Annual Survey and U.S. Bureau of Labor Statistics
What caused the clients to rebel?
According to a study by AdvanceLaw:
What firms GCs will use shifted
AMLAW 200 Law Firms
The New York elite
The amount of fee
pressure is tied to
the risk:
Clients are willing to
pay more for “bet
the business”
representation
Bet the Company
Mid-level Risk
Nuisance
• Lesson from Apple
From Bespoke to Commoditized
Source: Richard Susskind
Bespoke Standardized Systemized Packaged Commoditized
As clients become more aware of the cost of services,
bargaining power increases
• Free flow of pricing information
– Tymetrix Legal Analytics
– Internal matter management
– Number of times doing same type of matter
Pricing equilibrium
What does the pressure look like?
Alternative fee arrangements
• Fixed Fee
– Efficiency & results
• Hold Back / Success Fee
– Results first, efficiency second
• Portfolio
– Long term success and cost
management
• Blended Rate
– Pushing work down (Efficiency?)
• Fee Caps
– Hitting the caps first, concern
about efficiency after that
• Time and Material
– Results Focused
• Discounts
– No incentive
• Collars
– Efficiency, but minimum reward
• RFPs
• Procurement
• e‐Billing / Matter Management
– Data Analytics
• OGCs
• Rise of Law Department Operations Managers
Other client trends
Now that you got rid
of the secretaries,
there is a new question:
How efficient are you
with the technology of law?
Welcome to the test.
A new twist on client pressure
• To save money is No.1 goal
• Other concerns
• Quick resolution
• Specific outcome
• Cash flow management
• Predictability
• Certainty
• Precedent
• Efficiency
What do clients really want?
Partners must shift how they work
From perfect service
• Price irrelevant
to client focus
• Price is key
• Move to a pool model with minimum staff
• Move support services to low-cost regions
• Outsource secretarial staff
• Cheaper real estate in cities
Cutting costs to the bone
Sheppard Mullin cut admin staff / Snell & Wilmer cut 40 admin staff / Nixon Peabody cut 38
• From:Any hour is a good hour
To: A profitable hour is a good hour
• From:Partner comp from origination and billed hours
To: Sales
Manage your matters
Quality of work
Shifts in measurement
Thinking With A System Lens
• . Pricing workflow
and modeling
Pitching and proposal
generation
Monitoring and altering
of budget vs. actual
Pricing database –
good metadata
Task/project
management for lawyers
Experience and
availability management
Business intelligence
and prediction
Merging the business
and practice of law
Umbria
Pricing workflow
and modelingTask/project management for
lawyers
Pitching and proposal
generation
Experience and availability
management
Monitoring and altering of
budget vs. actualBusiness intelligence
and prediction
Pricing database –
good metadataMerging the business
and practice of law