There is a strong fear in the legal market about the changes that are going to happen caused by the new technologies, robots, artificial intelligence, etc. (a certain “hype” or “frisson.”)

Actually, technological advances in every area are really awesome and I have the full conviction that we are approaching a point of singularity (the term “singularity” comes from physics and designates phenomena so extreme that the equations are no longer able to describe them.)

Bringing the discussion to the present in economic terms, what we really have is a tsunami whose epicenter occurred in the 2008 global crisis, which has generated a chain reaction in the global economy and which we are now starting to feel in the legal market.

The companies under crisis are now focusing on optimizing their costs, their governance and there was, (and it is still ongoing) the boom of the enforcement of compliance strict rules, generating major changes and, almost all those aspects, begin to affect the legal services.

Firstly, the gradual change of the “General Counsels” functions, going from managers of legal portfolios to active participants in the strategic decisions of the company and with the brutal increase of accountability on the financial aspects of those portfolios.

Secondly, due to the compliance strict rules, the migration of the accountability in the contracting of outsourced legal services for the companies’ “procurement” sectors or simply the purchase sectors.

Thirdly, the finding that the average ticket for the internally performed services in the legal departments is about one third of the amounts charged by the external offices, generating a wave of internalization inverse to that one occurred in the 90’s, occasion on which almost all the legal services of the companies had been outsourced. Here I refer to the statistics disclosed in my Information Governance event, held in May, 2017, when the General Counsel of an important global logistics company made comments about his figures: in 8 years, it went from 7 to 58 internal lawyers, in an ongoing process to internalize a big portion of the company’s legal services.

Like everything that occurs in the world, the big motivation is always economic and this case is no exception to the rule. The big tsunami that is heading to the legal services providers (“aka” Law Offices) is the challenge to reinvent them and to try to abandon the status of the comfort zone where they remained during the last decades.

The big challenge is the “mindset” change in order to understand that the market was transformed from “sellers pricing” to “buyers pricing” and that this same market expects that all their suppliers are companies that offer agile, innovative and cheaper services.

This mindset encompasses some essential aspects, which any company should be focused on in the current global market:

– to be fully focused on the needs of their consumers (always having in mind that the offices must begin to treat their clients with the broader concept of consumers). To effectively provide what the market wants and not what not what one can do (if the two things coincide, then it will be even better).

– be fully aware of the competition and always try to be one step ahead.

– to change the management to “data centric”, leaving the ‘amateurism’ and the ‘guessing’ behind.

– to try to be innovative, while taking care of the constant improvement and
optimization of your internal procedures and practices.

– to present a service that really adds value to the client.

All that with the intense use of all the technologies that are available in the market!

José Paulo Graciotti, is consultant and founding Partner of GRACIOTTI ASSESSORIA EMPRESARIAL, author of the book entitled “Strategigc Govenance for Law Firms”,  ILTA Member since 1998 (International Legal Technology Association) and ALA (Association of Legal Administrators), with more than 28 years managing Law Firms in Brazil – www.graciotti.com.br


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