Top Trends Driving the Business of Law in a VUCA World
With increasing challenges afoot in today’s business environment – such as the tumultuous political climate, economic uncertainty, regulatory changes, and privacy concerns – CEOs (myself included) are collaborating across the company’s various business divisions to solve problems companywide. This multifaceted approach is not necessarily a new idea among business leaders at large scale corporations, but according to insights gathered by ALM’s Intelligence and Editorial units, it is becoming more ubiquitous across companies of all sizes as the business environment continues to face global growth barriers. A term – VUCA (volatility, uncertainty, complexity and ambiguity) – which was originally coined by the military, is being adopted across industries to describe these omnipresent obstacles as business leaders struggle to expand and remain successful.
VUCA is already having an impact on the legal industry from a growth perspective. In the most recent AmLaw Rankings, we found that 25% of AmLaw firms saw a reduction in revenue last year, compared to 6% in 2007. So, what can law firms do to overcome the impediments created by VUCA? On January 31, 2017, Legalweek, The Experience will commence, bringing together every facet of the legal industry to discuss trends within the business of law and share best practices for growing and expanding in today’s economic and political landscape. At the conference, there will be many discussions about VUCA and the ways law firms of all sizes can help ensure they are positioned for success both now and into the future. To help jumpstart the conversation, I have outlined a few trends that have been emerging for law firms in this VUCA world, based on data ALM has collected, coupled with information gleaned through conversations my team has had with leading voices in the industry:
· Broken down silos– The legal industry has always been focused on building specialty practices that cater to specific business needs of their clients. But, research shows that clients are now increasingly calling for partner-to-partner collaboration across the entire firm to help them solve their most complex problems. This is because VUCA has caused many global corporations to become leaner and nimbler, which in turn raises the need to access a larger, more diverse network of legal professionals from outside law firms.
· New management structures – According to data collected by the ALM Intelligence “New Partners” survey, approximately one in three new partners of large law firms expect the structure of their firms to change dramatically over the next 10 years. The current changes that are being made to organizational structures seem to be focused on improving cultures through flatter structures as well as bringing on more management people to help ensure that broad intelligence across the firm is being collected, analyzed and utilized on behalf of clients in a way that is more flexible and cross-functional. While these sorts of changes can happen slowly due to firm culture and increased costs, firms are seeing that a shift in management structure leads to a more diversified approach to advising clients on a global scale.
· More diversified talent – Another VUCA by-product among successful law firms is the focus on diversification within the talent pipeline. A call for diversity among law firms is nothing new, but in today’s business landscape, clients are looking very closely at the talent pool of their outside counsel before deciding to partner with them because they want to get efficient, high quality counsel on a host of issues facing their global operations.
While I’ve only touched a few of the trends shaping the future business of law in today’s VUCA environment, it’s clear there are a confluence of global economic, technology and business trends forcing the legal industry to adapt to stay ahead of the curve. I’m looking forward to hearing even more from the industry’s top minds when we gather at Legalweek, The Experience, which is taking place on January 31 to February 2, 2017 in New York City.
Bill took leadership of ALM in March 2012, and has since championed acquisition strategies advancing the growth and expansion of markets ALM serves. In 2013 and 2015, Bill was honored as a C-Level Visionary with a Folio: 100 Award. He joined ALM from Thomson Reuters where he led the successful reorganization and growth of the Small Law Business Unit. An accomplished expert in the digital and legal services industry, Bill also drove significant value creation at LexisNexis, Epiq Systems, Gerson Lehrman Group and GES Exposition Services.