Peter Kalis: There’s room enough for Big Law and LPOs

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  • In his inimitable way Peter Kalis makes the case for a pluralistic future of providers of legal services to corporate clients. With this I agree; it fits the scenario my colleagues and I have built and named 'kaleidoscope'.

    Peter refers to my blog thread in which he coined the term ABLACS. This may be found at http://www.beatoncapital.com/2013/10/rise-rise-newfirm-business-model/ – scroll to 4 November, 2013 at 10:21 am to find it; the thread is some 40,000 words so a navigation guide is needed!

    I also agree that the arrival of NewLaw 'upstarts' – like LPOs and other forms or provider described in NewLaw New Rules (available on Amazon: http://www.amazon.com/NewLaw-New-Rules-conversation-services-ebook/) – are raising the efficiency stakes for BigLaw business model firms. But, and it's a big but, my concern is that while most BigLaw firms leaders fully intellectually grasp the challenge, their capacity to drive their firms to respond sufficiently deeply and quickly is severely limited.

    My observations and Beaton's surveys show too many partners believe a 'nip and a truck' constitutes the necessary behavioural change that will drive efficiencies to match that of NewLaw providers.

    Perhaps the burning platform of steadily declining PPP will accelerate responses, but for many it's looking like too little, too late, I regret to say.

    That said the stake equity partners have in the profits of the BigLaw firms of the world is truly huge (in the order of USD20,000,000,000 or more), so we can expect many to respond to the clarion calls that Peter Kalis is making.

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  • I really like this article for the truths it tells, but just as there is more nuance to BigLaw, there is more nuance to the ABLACs too. When the rest of the legal service industry takes its cue from BigLaw where the billable hour is derigueur and all forms of automation, unbundling or limited representation are unthinkable, then that's a problem. There will always be clients for BigLaw, but there is less room for BigLaw-like practices in SmallLaw situations.

    I would take exception to Peter's characterization that competition is driving efficiency in BigLaw. I am not very much seeing it. Efficiency is anathema to the billable hour for one thing and rather than efficiency allowing firms to serve the more clients and those of more modest means, there is a race to the top of the food chain and a resulting gap in the middle. Middle income people cannot find affordable legal representation and so go without resulting in a huge increase in self-representation. Good or bad, this is happening.

    My area of interest is below even that - legal aid and the poor. Fully 50% of the people who are already eligible for legal aid cannot get service because of the dearth of legal aid attorneys and so they too, go without. I am not a lawyer, but a developer who creates tools that lawyers can use to help people represent themselves (See www.a2jauthor.org). Our tool has been used over 2 million times in the past several years by SRPs who cannot get in the door and cannot afford an attorney in today's market. You have got to believe that tools like ours are going to be used on other places to make legal services more efficient - even in BigLaw. This is a good thing IMHO. The law needs more engineers to be involved.

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