2020 brought in unprecedented change for law firms. What will 2021 look like? Here are five predictions for the legal market for 2021.
As devastating as 2020 has been, the legal market performed better than most people had anticipated. Demand was slightly down, rate growth was high, and some practice areas were benefactors of the global turmoil that hit us all. One common thread that we all can agree on: the way the legal industry operates has changed dramatically forever. Goodbye, power lunch. Hello, Zoom meeting wine tasting. The change will continue to evolve as we push deeper into 2021 but no one can predict what it might be. That doesn’t mean we can’t give it try.
Here are our five predictions for the legal community in 2021:
1. The year of legal digital change.
Digital transformation has been all the buzz for years in many industries. In legal, many firms are still dependent on paper processes and manual efforts to execute tasks. When COVID-19 hit, many firms scrambled to improve their digital processes overnight. Simple tasks like approvals, check requests, or expenses were not so simple. After many heroic efforts by the firm’s IT teams, these “simple” tasks underwent a digital process conversion as quickly as possible. In 2021, law firms will continue to escalate their digital transformation efforts. With many of the “need to do” processes off the IT team’s desk, firms will now start shifting efforts towards the processes that provide more firm value and improve the life of their remote and hybrid work staff.
2. The rise of Microsoft Teams.
Video conference tools were some of the unsung heroes of 2020. Zoom got paid the ultimate product compliment by having their name turned into a proprietary eponym. A modern-day Kleenex! “Jumping on Zoom meeting” is now a term that we all use and embrace as we watch our families interact with their friends. Zoom may have filled the void in the short term but look out for Microsoft Teams. Teams has quickly become one of Microsoft’s most used products. The last time we looked, it was somewhere north of 114 million users. The reason why Microsoft Teams will become a bigger part of the legal landscape is due to Teams being more than a video conference tool. Teams has native internal and external collaboration, chat, calendar, and Office integration. On top of that, a whole host of third party applications can easily integrate directly into the Teams application. Teams takes everything that happens before the meeting, during the meeting, and after the meeting and then seamlessly stitches it together for the attorney. This means more time with clients, higher productivity, and less non-billable time. Bonus prediction: At ILTA this year, Teams integrations will be a big showcase item for many of the legal technology vendors.
3. Office space gets a refresh.
Top law firms have some of the best commercial real estate in the world. With COVID-19 changing every attorney into remote workers overnight, We wonder how law firms will stick to their current office models. Law firms will not want to pay high real estate prices for staff that will be in the office on a part time basis. Many attorneys, especially younger ones, will not want to return to a full-time office presence when things return to a ‘normal’ state. Less office space is a great area for law firms to conserve on costs as their leases come up for renewal. Besides reducing square footage, firms will start to rethink their current office space in a post pandemic work environment. Some changes that we expect to see will include less dedicated office space, more hoteling and temporary landing spots, more meeting rooms especially larger ones designed for social distanced meetings, and a video conferencing focus in every meeting room.
4. Rise of the non-lawyer owned firms.
A few years back, at the Managing Partners Forum in Melbourne, the Global Legal Services Lead for PWC Australia took the stage. He discussed PWC’s aggressive plans for delivering legal services in the APAC region. The conference venue was filled with some of the most important legal leaders from the APAC region. Surprisingly, not one managing partner was multi-tasking, checking their phones, or talking. It was dead silence. All eyes and ears were on the presenter and most jaws were on the floor. If the laws ever changed in the US regarding the ownership of law firms, the disruptive change that most industries fear would be coming to the US legal market. Starting January 1, 2021, Arizona has eliminated ethics rule 5.4 which barred nonlawyers from having an economic interest in a law firm. While more states will follow Arizona’s lead over the next several years, but for 2021, Arizona will become ground zero for the Big Four to setup shop and finally get into the US legal market with military-like execution. Expect some big names to be swept away from the top firms to help setup a quick entry into the market. If US law firm leaders thought 2020 was tough, we have some bad news, and no New Year’s Eve ball is going to make this problem go away.
5. Data is the new oil.
There has never been a shortage of data inside law firms but there will be a new focus on its importance in 2021. Law firms will feel the need to execute with more precision as the Big Four enter the US market and we move out the COVID era. Add to this year’s data mix that many law firms have invested heavily in enterprise grade tools like Microsoft Power BI and will be bringing those tools online with perfect timing to support law firms in the post-pandemic world.
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