Tag Archives: law

Legal

It’s like an Avatar Sequel – Consolidation within the UK 200

Leave a comment

I wrote a post in 2009 on consolidation in the UK top 200 law firms, I honestly thought that the UK marker would go through a series of mergers and end up with a much much smaller set of firms. But like the film Avatar (also released in 2009) it’s taken 13 years to be able to put out a sequel to that post.

It was a post from The Lawyer that caught my eye this week and reminded me of this topic. The line that jumped out was this one:

This data offers the clearest indication that more consolidation is on its way

13 years it’s taken and still the market is consolidating. This quote

Consider this: the overwhelming majority (94 per cent) of the UK 200’s total £33.47bn revenue is generated by the firms in the top half, leaving just 6 per cent (£2bn) to share between the 100 firms in the lower half

shows that even though the vast amount of revenue is in the top half, that’s still 100 firms! And it’s that top half that I can’t fathom. Of course there will always be a large number of independents in any industry, but you expect the top to consolidate to a handful of players, don’t you? Most markets talk about the Big n, never the Big nnn. Even if you take the Top 10 out (about £17bn) there’s still 90 sharing about £16bn.

So, look out for part 3 of this series in about 2035!

Share
Legal

Are We Off Back To The 90’s For A New Battle In The Lawyer Salary War?

Leave a comment

In the past I’ve occasionally skipped a tech focussed post and looked at some general legal market posts. This is one of those posts.

A couple of stories caught my eye this last couple of weeks, an email from The Lawyer’s Horizon mailing and some data from Thomson Reuters market insight report, both related to lateral hiring and lawyer salaries.

The first was an article on Cripps, a Tunbridge Wells based law firm. It is countering larger (higher paying) city firms poaching all their lawyers by adjusting it’s leverage, as The Lawyer article puts it:

has essentially decided that hiring more junior lawyers to plug the holes left behind isn’t worth the faff. Instead, it’s now picking off paralegals from larger firms

It’s an interesting model, one similar to the Insurance practices of large firms when I started in the legal industry in the late 90’s. That led to a real commoditisation of the insurance sector, the jettisoning of said practice groups from many firms to insurance specialist juggernauts of now.

The Thomson Reuters report was on the “flight risk” of staff in law firms (legal staff) and the role most at risk, Associates. Up from an 11% likelihood in 2018-22 to a 45% risk in 2020-22. Backing up the thinking of Cripps I guess. Interestingly the report highlights that these were likely conservative numbers and the flight risk was higher than reported numbers as more than one-third of laterals changed firms even when they were not considering a move.

It may all be a moot point as reports are starting that the job market is cooling, but I have always wondered if a significant recession hit again what would be the big moves from firms, last time it was a move to lower cost bases for back office work (eg moves from London north to Manchester) or service centres in lower cost places (eg moves to Belfast, Warsaw etc). Possibly the new trends have started, but currently addressing other issues, like this to battle the current salary wars and also like technology innovation pushes in firms to both provide efficiency and new business opportunities?

Share
General IT, General Legal IT, Legal

Should we stop chasing blockchain?

1 Comment

At the back end of last year I saw an excellent presentation on blockchain, a technology I have tried to keep an open mind on. But this talk kind of confirmed all my fears. Let me take you through the key parts of the talk and then I’ll leave the comments open to see whether you all come to the same conclusion or can point out what I’m missing.

Blockchain is  a distributed ledger technology.

A ledger is a essentially a list of transactions.

A hash is created for each transaction, a value that is unfeasible to reverse. So it verifies the transaction hasn’t been changed. If you then hash a “block” of these transactions with a hash record together you get a block hash. Then if you add each block hash to the next you get a ….. chain.


Then distribute these ensuring the chain is agreed between them all, the more copies the harder it is to change or fake the ledger.

That’s blockchain and so far seems pretty useful as a way of protecting data?

But if the ledger cannot change and isn’t regulated then errors cannot change either right?

But it’s good for smart contracts right? The blockchain tech makes the contract unalterable. But a bug in the code and, well back to the point that the block chain makes the contract virtually unalterable ie impossible to unpick! (something that has happened)

All technology has issues, so I get this is not a reason to dismiss the concept. But unless you have zero trust in other parties and require unalterable data and where regulation or law doesn’t help, I can’t help think a standard secure database can do the job you’re after?!

Pretty much what the Australian Government said, this is a quote from Peter Alexander, Chief Digital Officer at Australia’s Digital Transformation Agency :Oh and one more reason blockchain technology like bitcoin may not be worth pursuing : “Bitcoin Mining Now Consuming More Electricity Than 159 Countries Including Ireland & Most Countries In Africa” source

To me the key question then is simply why do you need a distributed ledger, especially laws firms as it kind of removes the need for them in the transaction. If both parties agree a contract on a distributed ledger, you’re pretty much saying it doesn’t matter if we don’t trust the other we’ve an unalterable contract without the need for a middle man. Maybe it just shifts everything from transaction law to litigation? And if you actually still need the lawyer to create the contract then why not just put it in a secure database of the law firm?

Thoughts?

Oh and a big credit to Paul D Johnston who’s original presentation on what is blockchain was the jump off point of pretty much all of the above!

 

Share
General Legal IT, Legal

Legal Tech question: Is the abundance of lawyers stifling innovation?

Leave a comment

Like at many other legal technology conferences, I’m sure that at ILTA last week in the US there was lots of questions about the billable hour, questions on when law firms are going to change and a good use of the good old buzzword “innovation”.

In fact a quick twitter search and I can find a few quotes from sessions:

But what if the big thing that is really holding everything back isn’t a lack of desire or an inability to do so? Maybe it’s much more simple than that. This thought crossed my mind when I came across this article on UK productivity over the summer break, in particular this part:

“if you provide an economy with an almost endless supply of cheap labour as the UK government has, employers will use it instead of investing in any kind of productivity raising automation?”

I thought maybe this is it for law firms. There is certainly not a shortfall of the number of people entering law, in fact there are probably more than is needed. So are we simply seeing this over supply play through firms? Yes I know there are some exciting ventures into automation and machine learning, but I wonder whether they are mainly driven by marketing the firm than real productivity drivers in the firm?

I would be interested in hearing comments and thoughts, to me it doesn’t yet feel like we’ve hit the tipping point as we did in personal injury and insurance work. A point that really accelerated the use of case management technology in the late 90’s and led to boosted productivity and huge competition in that sector.

Share
General Legal IT

Return to the Future part 1

Leave a comment

A friend of mine commenting on their work situation last year used a phrase that chimed with me at little, they said referring to their job that they’d “lost their mojo”. For me it was a feeling that Legal IT had lost that something that it had, the reason I really liked working in this sector as opposed to say the utilities industry I’d started in, what was it? Was it the endless talk of AI, big data, blockchain…..how many years have we been talking about these now? Was the legal industry of the late 90’s just more exciting?

Well I knew a place to start looking, I’d revisit the classic “The Future of Law” by Richard Susskind (revised 1998 edition) a book that every IT person in the industry back then had on the bookshelf.

In this first post I’m going to look at ten of the “likely developments in IT over the next ten years” according to Mr Susskind in 1998.

  1. Global telecommunications – great start with the predictions here and a big tick, this was pretty much spot on. Richard predicted a global telecoms infrastructure that would “enable the instantaneous transmission of seemingly limitless amounts of digital information at negligible cost”. Given I’m typing this directly into the cloud whilst listening to music streamed from somewhere other than my PC, I’d say conclusive evidence.
  2. Information industries – basically this was the idea that we’d have systems that led us through complex issues on a question and answer basis, domestic examples he gave were online booking! So another tick then. I mean this can anyone imagine not conducting a transaction this way anymore?
  3. Virtual private networks – not VPN’s as we know now, but walled off restricted parts of the internet. The concept has been achieved with specific communities and sites, but perhaps not in the way thought at the time with walled off networks. So yes think this is a tick as the concept has come to fruition.
  4. Computing power – “holographic memory”, maybe not specifically but the promise of capacity way beyond DVD’s certainly achieved. Also “such that credit card sized machines more powerful than any PC of today with detachable, slim-line screens are entirely conceivable within the next ten years or so”, iPhone anyone?
  5. Convergence of computers and television – need I say anymore on this one!
  6. Smarter Technology – now I’m going to come back to this one in a later post, but let’s just pluck two words from the section “artificial intelligence” and think Hmmm.
  7. Multi-media – this section was on the move from print to digital. Another big tick, from Kindles to online newspapers and magazines, we’re definitely digital first nowadays.
  8. Usability – “continuous speech systems will be widely used within five years” so 2003. The concepts of voice, augmented reality and customised interfaces are mentioned. The latter has changed with the advent of the app and the touchscreen, but we’re still nowhere near in the others if we’re honest!
  9. Interpersonal and interorganisational computing – “groupware – a category of system and software specifically designed to encourage and enable collaborative, interpersonal and interorganisational activity”. So like Facebook, Microsoft Teams, Slack etc? Tick.
  10. The Web as the “first port of call” – “will become as commonplace as the telephone and the television”, well given it’s supplanted them both you can’t argue with that!

So pretty good to be fair, given the difficulty in predictions within IT it’s actually very good. Sets things up nicely for me to start to pick at some of the sections later in the book that look at some specific Legal IT areas, areas that I think Richard Susskind got right (similar to above) it’s just, well you’ll see!

Share
General Legal IT, Legal

Lawyers coding – are we belittling the IT developers skills?

2 Comments

There have been a few articles in the legal press about lawyers training in coding and I’ve been meaning to write a blog about it for a while, I’ve just had a voice in the back of my head saying “Surely this isn’t the solution to the alleged problem with legal and technology”, one professional doesn’t solve a problem by retraining as another surely? I mean Tesco and Sainsbury’s didn’t retrain their checkout staff as coders when they decided they needed to move into online selling did they? OK I know that is a little beyond what is happening in legal, but it crudely highlights the point.

Reason I have taken time to write this is that I don’t want to sound like a Luddite and a dismisser of change, but equally I really dislike the notion that you can simply train to be a coder and develop secure, scalable applications. It belittles those that have spent years learning, developing their skill and gaining a huge amount of experience building applications. A whole profession of developers and other IT professionals.

I think there are huge benefits of gaining a knowledge of technology in any profession and wholeheartedly welcome developing this knowledge in lawyers. I equally think law firms could do a huge amount to develop the knowledge of IT professionals in the practice of law, something that doesn’t get the airtime in the legal press. Innovation will come by looking at the problems and utilising the whole workforce to solve them in new ways, not by simply retraining those that frankly are the core to any law firm, the lawyers.

I think this quote for me shows where the right balance is (full article here):

“If you want to be a lawyer who knows what technology can do then you should learn to code – or at least have an understanding of coding. Which is different to learning to code. As a Spanish-speaker I can read a book in Italian but I couldn’t write a book in Italian.”

It’s understanding the language, but trusting the native speakers when you need to write the book. At the moment for me (at least in the legal press narrative) the current trend seems to dismiss the natives. Get the balance right though and there could be some great solutions to the challenges ahead!

Share
General Legal IT, Legal

Looking back on 5 years of blogging part 2 – Recession and Legal

1 Comment

Looking back the trigger for me starting a blog was the credit crunch and global financial crisis that hit at the end of 2008. Because of this timing I’ve followed the impact of the financial crisis on Legal through the last five years and posted a number of entries along the way.

Below are some of the posts I’ve picked out:

In February 2009 I was clearly a little optimistic on when the upturn would appear! Looking back we didn’t realise just how long it would take to start the road back to economic recovery. Are we prepared now? – Are you ready for the upturn?

I still stand by my post from March 2009, though I don’t see the type of Legal shakeup favoured by Susskind etc. I see more of a long haul change of a saturated market. Lots more consolidation, shrinking supply, lower fees = lower lawyer take home. It’ll be the next generation of lawyers, the ones still in primary school now, that will be the ones to shake it up as they won’t have any expectation of the salaries currently in BigLaw – Last time it was manufacturing, this time it’s white collars turn! I also took a look at this consolidation of law firms in a post from July of 2009 – Consolidation within the UK 200?

I then revisited the above thinking in February 2010 as well, looking at the whether the good times would ever return to Legal – Law Firms, the good times are gone for ever! and yet again in November  of that year – “A company from here doing rather well over there” and vice versa

By 2011 outsourcing was on the radar in a big way in Legal as many firms continued to look at ways of cutting costs. I looked at this in a post in February 2011 – Outsourced!

By 2012 the long talked about ABS structure started appearing more and more. I took a look at this in February 2012 – ABS on ABS (or another blummin’ story on alternative business structures!) and looked at how it could be interesting for Legal IT. Looking back and hearing some stories from within IT depts within ABS firms I’m not quite as optimistic now.

By the end of 2012 the economy was clearly on the verge of turning the corner, but consolidation and cost cutting was still going on in Legal. This led to a slightly topical Olympics title in October – London 2012 – the rise of the regional upstarts?

2013 saw only one topic on this subject after reading Richard Susskinds latest book, I wavered a little on my thinking for a “revolution” in Legal but I think the post roughly follows the thinking I’ve had since 2009! – Tomorrow’s Lawyers – still waiting for tomorrow!

And finally there were a number of posts where I looked specifically at Legal IT depts. Echoing a recent post in the wake of the NatWest IT issues I took a look at the impact of the recession on the IT depts in law firms in July 2009. – Does IT matter in law firms?. Then in January 2011 took a look at whether the Legal IT dept had a future when the rapid technology change combined with the recession. – RIP Legal IT?

Share
Legal

London 2012 – the rise of the regional upstarts?

4 Comments

I read an article in The Lawyer at the start of August that I’ve been meaning to blog about for a while. The article was about mid-sized regional firms opening small London offices. Not in the Millennium style of wanting to join the big law firms with a plush London office, but in the “let’s nick their work” mantra of a competitive market. The idea being the London office would be more a sales office to drive work to their regional offices where the work could be done more cheaply. Thus undercutting the costs of their London based mid-tier rivals.

I posted back in early 2010 how I thought that the mid-tier would be where the real competition and innovation would start to take place. I can’t believe how little we take advantage of geography in our own country, I recall working for a utility in Yorkshire who eventually got taken over by a southern rival. Rather than locate the head office with associated costs to the cheaper northern headquarters they kept the more expensive southern base. Same goes in legal, how many London law firms still locate their IT functions in the capital? I blogged about this too in 2011 and still no major shift has happened.

The Legal IT revolution and innovation in business process within law firms in my view will remain a talking point in conferences whilst there is no movement in simple innovative cost savings. However maybe these regional upstart neighbours  shaking up the London mid-tier will finally be the start of the revolution we’ve talked about since 2008?

Share
General IT, General Legal IT

Does IT matter in law firms?

4 Comments

I read my copy of Computing magazine today and the comment section caught my eye. It was an article entitled “Focus Resources on what really matters” by Martin Butler, the basic premise is that IT has become caught up in a drive for efficiency at the expense of business success. In the current “economic climate” there is of course a natural tendency for cutting costs, corporate IT departments are usually large cost centres and thus are prime targets for cost savings. 

It reminded me though of an article I read some years ago about the shift of IT to a utility function akin to the railways or electricity companies (IT Doesn’t Matter by Nicholas G. Carr published in the Harvard Business Review). The premise being that these businesses “open opportunities for forward-looking companies to gain strong competitive advantages. But as their availability increases and their cost decreases – as they become ubiquitous – they become commodity input”.

These are opposite views of IT, one as a continuing driver for business growth and one as a driver for business efficiency and cost savings.

Now, I’ve started reading Richard Susskind’s “The End of Lawyers?” and I’m currently at the point where he talks about “technology lag”. This is the lag between two forms of technology: data processing and knowledge processing. The former (data processing) he puts as the “use of technology to capture, distribute, reproduce and disseminate information.”, the later (knowledge processing) a “set of technologies that help us analyse, sift through and sort out the mountains of data that we have created and helps make them more manageable.”

Richard Susskind points out that we are between these two forms of technology, in law firms I agree. And I think Martin Butler’s view of the IT function is the one that will facilitate this move and be able to supply the “Knowledge Processing” in law firms. I’m afraid that Nicolas Carr’s IT function will give us very efficient and cost effective departments that are stuck in “Data Processing”! It’ll be interesting as we climb out of the recession which law firm IT departments become.

Share
Legal

Free! Why £0.00 Is the Future of Business

3 Comments

I caught sight of this article “Free! Why $0.00 Is the Future of Business” in The Spectator. It suggests a new business model where the product is free, the consumer gets the product for nothing and the business makes its money elsewhere. This is especially prevalent online where the thought of paying for things you would in the “real world” are, well, crazy (would you pay to read your quality daily newspaper online? conversely would you expect the paper copy of your quality daily newspaper free?).

The Spectator points out that the business model isn’t necessarily that new, but what is new is it’s less a marketing trick to get your product out there but a new economy, in the words of the Wired article :

Once a marketing gimmick, free has emerged as a full-fledged economy. Offering free music proved successful for Radiohead, Trent Reznor of Nine Inch Nails, and a swarm of other bands on MySpace that grasped the audience-building merits of zero. The fastest-growing parts of the gaming industry are ad-supported casual games online and free-to-try massively multiplayer online games. Virtually everything Google does is free to consumers, from Gmail to Picasa to GOOG-411.

In the UK an ISP revolutionised the market in the early days of the internet boom. Traditionally (before broadband) you would pay a monthly fee for your ISP and then your phone calls on top of that. Freeserve came on the market and dispensed with the monthly charge, making its money from a proportion of the call charge. Within a year it had grown to 1.5m subscribers and changed the market forever.

So my question is can this business model be translated to legal work?

From a consumer point of view I remember buying my first house in 1995 and getting the conveyancing for nothing (thanks to the builder).

But could a law firm really offer services for nothing?

Could we every get to the point that the knowledge systems in law firms become so good that a simple search could trawl thousands of precedents and cases in a firms KM (Knowledge Management) and DM (Document Management) systems and bring you back the agreements that could be used with virtually no partner/associate billable time. Meaning very low costs that could be covered elsewhere (e.g. by adverts)?

I imagine the response now is “Don’t be stupid!” but then I’m sure if I stood in “Our Price” or “HMV” music stores 20 years ago and said “in the future you’ll be able to get every record and tape in this store in far better audio quality, for free!”

I’d had said the same thing back then “Don’t be stupid!”. And now we have Spotify!

Share