Stephen P. Gallagher, Director
Law Office Economics and Management Department
and liaison to the Electronic Communications Task Force  
New York State Bar News

If you are a sole practitioner, take a few minutes to collect your thoughts regarding the future of your practice. If you are in a firm setting, in addition to collecting your own thoughts, take a few minutes to walk around the office to see if your colleagues have a clear and collective point of view about how the future will be or could be different. Try to determine what percentage of your time and your colleagues' time focuses on merely catching up to your competition, and what percentage focuses on creating advantages new to the practice. 

As you continue to reflect upon your walk through the firm, try to determine what percentage of senior management's time is spent on internal issues -- such as firm overhead and billable hours, rather than external issues -- such as the implications of a particular new technology and its potential impact on new client services. What percentage of your own time is devoted to controlling overhead, and what percentage of your time is devoted to creating a future for yourself? 

Were you left with a sense of hope and confidence in the firm's ability to find and exploit opportunities for growth and new business development, or a sense of vulnerability and concern about the firm's ability to maintain competitiveness in the traditional practice of law? Finally, did it appear that people were having fun? Is the firm creating its own competitive space for the future by taking on the best and winning and by delivering totally unexpected benefits to clients and shareholders, or is the firm more of a bystander than a driver on the road to the future? Are you having fun?

Competing for the Future
While touring the office, did you sense that your colleagues had a clear understanding of how the practice of law may be different in five or ten years in the future? Did you observe a sense of urgency about the need to reinvent the current business model, or were your colleagues comfortable with the status quo? Are you comfortable with your vision of the future? 

As the competitive environment becomes more complex, law firms will need to provide greater leadership in shaping the future direction of the legal industry. Gary Hamel and C. K. Prahalad, authors of Competing for the Future, (Boston, Mass.: Harvard Business School Press, 1994) one of the most important strategic management books of the 1990's, suggests that in order to create the future a firm must be prepared to:
(1) change in some fundamental way the rules of engagement in the practice of law,
(2) redraw the boundaries between related industries, and/or
(3) create entirely new industries.

Where formerly law firms were able to control most of the resources needed to provide new products and services, the most exciting new opportunities will require the integration of complex systems rather than innovation around a stand-alone product. Hamel and Prahalad report that few companies (law firms) will be able to create the future single-handedly. The future holds great opportunity for those firms that are able to form coalitions and alliances to shape the future:
"The need to bring together and harmonize widely disparate technologies, to manage a drawn-out standards-setting process, to conclude alliances with the suppliers of the complementary products, to co-opt potential rivals, and to access the widest possible array of distribution channels, means that competition is as much a battle between competing and often overlapping coalitions as it is a battle between individual firms." 

Elder Law - Model for Future Practice
It is becoming increasingly more important for lawyers to control the pace and direction of future legal services, and to help develop and articulate a shared vision of the future. Today's business strategy is as much about competing for tomorrow's industry structure, as it is about competing within today's industry structure. Since a great deal of the competition facing lawyers in the years ahead seems not to be a problem with foreign competitors, but rather a problem of nontraditional competition, lawyers will need to assume a greater role as integrators and facilitators, not as watchdogs and interventionists. Lawyers will spend more time working across boundaries with peers and partners to develop networks of cooperative relationships among all people, groups, and organizations that have something to contribute to an economic enterprise. Hamel and Prahalad believe that, "Your business survival may depend on courage and imagination -- the courage to challenge prevailing business models and the imagination to invent new markets." 

A great example of a new business model comes from Kathryn Grant Madigan, chair of the NYSBA Membership Committee and chair-elect of the Elder Law Section. According to Kate, in elder law practice we are already seeing increasing uses of practice coalitions and alliances. Kate notes that ten years ago elder law was not a discrete practice area. Rather, elder law has evolved as a result of the aging of the population, and the need for a more holistic approach to serving the senior client and their families. Increasingly, seniors have turned to the legal profession not only to assist them in the traditional areas of trusts, estates, and tax planning, but as a key resource in the more non-traditional areas of asset preservation, government programs, nursing home preplanning and hospital discharge planning.

Kate adds that it is rather interesting to note that many of the new entrants into the elder law field have been younger attorneys, who have developed skills in the wide variety of practice areas (tax, trusts and estates, real property, government programs, Article 81 guardianships, health care, etc.), and have been particularly creative in packaging services, including services that are not considered traditionally "legal." It is not surprising that elder law attorneys sometimes refer to themselves as "social workers of the legal profession." 

Elder law practitioners have also been at the forefront of client development and marketing in terms of client seminars, which have been a very effective tool in educating our aging population as to the role of the elder law attorney -- which, in turn, generates a steady stream of new clients. Clearly, the emergence of the elder law practitioner serves as a good example of how individuals with shared vision of the future can work together to shape the future framework of a new business model. The Elder Law Section continues in its efforts to provide educational programs to help section members acquire the new competencies needed to fill new client demands.

How Does One Begin to Shape the Future?
By looking at the issues that are preoccupying senior management, you have already begun to reshape the future of your practice. You must continue to keep open the channels for others to talk, listen, contribute and reflect, and most importantly, if you ever hope to conceive of fundamentally new types of client benefits and radically new ways of delivering client value, you must permit yourself and your colleagues to promote innovation through insights, intuitions, and hunches. Today's crazy idea can become tomorrow's new business. 

Another important element in creating the future is recognizing that your firm must be prepared to unlearn at least some of its past. The more successful a firm has been, the more difficult it will be to unlearn old ideas. If during your walk around the office you did not observe a sense of concern about the future of the practice, and your firm management could not clearly articulate five or six fundamental industry trends that most threaten the firm's continued success, the temptation to preserve the past could be overwhelming. 

You will need to begin to explore these emerging trends in technology, demographics, regulation, and lifestyles that can be used to transform industry boundaries in order to create new competitive space. Keep in mind that competing for the future must be a firm-wide responsibility, and not just the responsibility of individual business unit heads. It is my belief that the bar association, through strong elder law section leadership, played an important role in creating the new competitive space currently known as elder law. Individual practitioners would not have been able to develop the industry foresight, and intellectual leadership needed to redraw the boundaries between related industries without the association's support. Groups of lawyers, with a shared vision of the future, were able to go beyond existing parameters to experiment and innovate to produce new approaches to client services. 

Finally, we also must recognize that some of the nontraditional competition will be coming from other lawyers, who formerly were either unwilling to look beyond traditional boundaries for client services, or were unable to provide higher levels of service. Through effective use of computers and telecommunications, many innovative sole practitioners and small groups of lawyers are now forming coalitions and alliances with lawyers and non-lawyers to deliver new types of client services in radically new ways. As we continue to battle for intellectual leadership and market share in influencing the direction of the legal industry, no firm can escape the need to re-skill its workforce, redesign its processes, and redirect its resources in order to allow the firm to influence emerging opportunities.
-------------------------------------------
[1] Gary Hamel and C. K. Prahalad, Competing for the Future (Harvard Business Press: Boston, 1994) p.37.

[1] Ibid., p. 69.

Back