Taken at the flood

By | 5th July 2012

It used to be commonplace to read in legal journals and the like, that the legal profession was either going to Hell in a handcart (sorry to use the phrase again so soon but it sums up what I mean brilliantly) or was careering towards a new Nirvana(here I go again) where the only side was up.Long ago, I realised that both were probably true.

Let me explain. It is in the interests of law firms, as with any organisation, to maximise the publicity surrounding the good news and to seek to minimise the bad.

Thus, we have had twenty or more years of tables produced by the likes of Chambers and the Legal 500 where the relative merits of the firms, their size, special areas of expertise and greatest achievements may be pored over by an eager public.

Equally we are accustomed to articles about increases in turnover and/or profit and lateral hires which often gloss over the demise of a particular work type or the loss of a major stream of client work with the corresponding redundancies and/or which fail to connect a rise in profit per partner with the reduction in numbers sharing the pot.

Law firms are beginning to release details of the results for the year ended April 2012 so we can expect to see more of this in the coming weeks particularly as journalists and commentators go on holiday and news is scarce.

Most of the reports will be of increases in this or upswings in that but it cannot all be good news. I say this because we continue to see reports that European law firms are keen to tie up with a US firm (such as CMS Cameron McKenna’s search reported recently and talks between Mayer Brown and SJ Berwin). We also see continued consolidation in our own field where it has been reported recently that Proven, the global investigation firm, has acquired Palmer Legal Technologies thus taking e-disclosure capability in house. It is not so long ago that 7Safe was swallowed up by PA Consulting or Legal Inc. was acquired by Grant Thornton.

We continue to see the fee income of law firms under threat. This seems to be because the law firm model is less appropriate than it was in the light of changed circumstances. In the old days of proper partnerships where the partners not only owned but ran the firm, the pyramid model seemed to be the way to go.

Nowadays we see increasing pressure on margins and profits. This comes from a variety of sources: increasingly knowledgeable clients who demand that their lawyers do things differently and more cost effectively, LPOs who offer to do some of the traditional work for less and our old friend technology, which often means that work which used to be done by teams of lawyers over a substantial period can now be done (at least in part) more cost effectively by software, providing it is handled correctly.

My attention was drawn recently by a number of tweets to an article in The Times on June 21st, which sported a picture of a harassed lawyer or his clerk pushing a trolley piled high with boxes of, presumably, paper documents for review. The headline read Litigators on a journey of e-discovery and the author suggested that technology could now take the strain of sifting electronic files to cut the cost of disclosure but that lawyers were split on the merits.

The pressure for change is becoming (or perhaps I may go so far as to say, has become) irresistible. Clients just will not pay for teams of paralegals or trainees or other junior professionals charging £x00 per hour to turn over pieces of paper. Even if the clients would wear it (and why should they?) the courts are poised to take a hand in the way cases are run and judges will start to use the case management powers under the CPR as from next April, if they have not started already. Of course some have, and we are all familiar with judicial efforts to bring down the cost of e-disclosure/discovery on both side of the Atlantic.

We have seen, in a few short months, how the new phenomenon of a technology such as predictive coding has become mainstream, perhaps not for every case, but it is clear that law firms are keener than only a short time ago to discuss and seek to understand how the technology can help. After April next year, those who do not consider the use of technology and seek the right sort of advice will find themselves at a considerable disadvantage.

I feel positive about the future here and not just because Millnet is in the forefront of these developments but also because it was time for a change and many lawyers acknowledge that that is the case. As I say, and I do not wish to be in any way threatening about this, those who refuse to accept that the time has come for a change, will almost certainly find that the courts and their clients will urge change on them. They will be asked to justify budgets for disclosure and to stick to them, or they will not get paid (at least not by the losing party). Justification involves cooperation and proper enquiry in the arena of disclosure as well as an understanding about what is involved, what is possible at a sensible cost and what is only possible with great expense which is likely to be disproportionate.

Shakespeare has Brutus saying admirably that:

There is a tide in the affairs of men.
Which, taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries.
On such a full sea are we now afloat,
And we must take the current when it serves,
Or lose our ventures.

Julius Caesar Act 4, scene 3, 218–224

The Supreme Court of Judicature Act in 1873 and the Law of Property Act in 1925 are properly thought of as heralding eras of major change in the administration and practice of the law. The Woolf reforms of 1999 introduced further real change into the practice of litigation. Lord Justice Jackson’s report into the cost of civil litigation, its wholehearted acceptance by the Government and the speed with which the Parliamentary process (LASPO) is due to deliver his reforms into practice in April next year, will bring about a sea change in budgets, costs management, allocation of judges, training and case management.

We have recently run a short mini-series on predictive coding by way of podcasts. Interest has been high judging by the number of people who have listened to them. The introduction of the Jackson reforms is, to my mind, the next “big thing” and my plan is to produce a further series of podcasts on that subject over the coming weeks. I do not intend to miss this particular tide in the affairs of men!

Photo: uncomelyandbroken