The NewLaw buzzword
Version published in the Law Institute Journal, December 2015
What is “NewLaw”?
With increasing pressures disrupting and reshaping the legal industry and its markets, there have been increasing calls to change the way lawyers traditionally work (for example, Susskind in The End of Lawyers?). Some have answered with the rise of “interesting, flexible and viable alternatives to traditional law firm practices” (McCarthy).
Beaton coined the “NewLaw” phrase with the blog “The rise and rise of the NewLaw business model' canvassing recent developments in the legal services industry “and specifically the rise of providers that do not fit the traditional law firm mould”.
Furlong broadened the concept of NewLaw to “Any model, process, or tool that represents a significantly different approach to the creation or provision of legal services than what the legal profession traditionally has employed.” This covers law firms and also “new legal talent combinations, legal service managers, and legal technology” that change how lawyers practice and how clients access legal services.
In summary, NewLaw is shorthand for the various emerging and alternative business models being adopted by an increasingly large and diverse range of providers. It is describes the business model of the law firm or legal services provider, that is, how the organisation intends to make money via its combination of customers, value propositions, key resources, key activities and finances (revenue and costs).
Examples of “NewLaw”
There is no single business model for NewLaw. However there are common themes including emphasis on clients, access to legal information, awareness of branding, importance of talented people, focus on efficiency and standards, use of technology, new look workplaces, value-based pricing and, always, a mindset of innovation and flexibility in the delivery of legal services.
Furlong suggests two broad categories of NewLaw business models being 1. Aligning human talent with legal tasks and 2. Applying technology to the performance of legal tasks. He observes that many new legal talent arrangements are found in the UK (and Australia) while the majority of technology solutions are found in the US. There are also hybrids or combinations of these.
Within the first category are subgroups of New-Model law firms such as fixed fee law firms and virtual-only law firms. Another subgroup is Project/Flex/Dispersed legal talent providers that provide to (often) corporate clients the services of lawyers with pedigreed credentials to work flexibly from mobile, office or home, for set periods of time or on a project basis, and at a competitive price. A third subgroup is managed legal support services such as legal process outsourcing (LPO), specialised back-office centres, outsourced legal document management, review and analysis, and intelligent automated commercial contracts drafting.
Within the second category are three subgroups of Technology-based tools: Tools to help lawyers in legal work, Tools to help clients resolve disputes directly and Tools to help clients conduct their own legal matters. Examples include online legal forms, expert legal applications, graphical data visualisation, DIY probate, online document retailers, automated contract assembly engines, guidance on the best way to negotiate and sign documents online, collated multi-disciplinary information about legal areas, and advanced predictive analytics software.
Where to from here?
For Australia, NewLaw is more than just a passing trend. (Beaton, Jagger, Vickers, Szwider, Baker). The market has shifted - changing the way clients use lawyers and pay for legal services. Because different models offer the best outcomes for particular circumstances, “traditional firms will continue to best service some clients.” (McCarthy).
Yet the emergence and early success of NewLaw is answering the increasing market demand for legal services that are equally capable and competent, and also more innovative, accessible, efficient, and more staff as well as client-oriented.
These NewLaw business models are available to all legal service providers. Some are “certainly watching and learning and thinking” (Vickers). Some law firms will find this challenge to change and innovate easier to implement than others.
What is your response?