The Future of the Legal Profession: Challenges and Opportunities

1. The Legal Profession between now and 2038 Michael Leathes Executive Director International Mediation Institute Altenburger 30 Year Anniversary Genève October 1st 2008

2. Groundhog Day February 2nd

3. The past is uncertain, the future is obscure Thales 635BC-543BC The Father of Philosophy

4. Prediction is difficult, especially about the future Niels Bohr 1885-1962 Nobel Prize for Physics 1922

5. The future ain’t what it used to be Yogi Berra Major League Basketball Coach

6. Change is the law of life. Those who look only to the past or present are certain to miss the future President John F. Kennedy (1917-1963)

7. In 2000 51 of the 100 largest economies were corporations Institute for Policy Studies (December 2000)

8. In October 2008 56 of the 100 largest economies are corporations

9. By 2038… Fewer but bigger companies will exist • all with a high public profile • shares sold like lottery tickets, bought on eBay • public perception, trust, confidence are vital • regulation paralysis • compliance crucial • World Economic Forum may be a Quarterly event

10. By 2038 78 of the 100 largest economies may be corporations Each with billions of stakeholders

11. Greater Expectations from Stakeholders

12. Generate Cash Generate Outcomes Increase Efficiencies Reduce Cost Greater Expectations from Stakeholders Reduce risk Increase certainty Move Faster Innovate

13. Lobby Ensure Sustainability Generate Cash Protect Reputation Retain Control Generate Outcomes Increase Efficiencies Reduce Cost Greater Expectations from Stakeholders Reduce risk Increase certainty Move Faster Innovate Adaptability Responsibility Ensure Compliance Act with Integrity

14. Generate Cash Lobby Ensure Sustainability Long Term Profitability Impact Global Issues Protect Reputation Retain Control Generate Outcomes Increase Efficiencies Reduce Cost Greater Expectations from Stakeholders Philanthropic index Social Reporting Reduce risk Increase certainty Move Faster Innovate Adaptability Responsibility Ensure Compliance Act with Integrity

15. We are responsible for our own fate, we reap what we sow, we get what we give… Madonna (1958- ) Quoted in O Magazine, January 2004

16. Business Value Drivers 2038 • Non-Executive Directors • representing stakeholders • Stakeholder satisfaction index • Social & environmental impact • Long term value prized more than short term gain • Low overhead, margin & cash, but long term • More Cultures of Experimentation • Fewer Cultures of Blame • Competitive advantage via Pie Expansion • Not by aggression, win/lose

17. In the new economy, those who live by the sword will be SHOTby those who don’t Gary Hamel “The world’s leading expert on business strategy” Fortune Magazine

18. Which translates to… • Overwhelming need for certainty and closure • Control • Impatience with process • Demand for wise and wide strategic counsel • Simplicity & transparency • Intolerance of complexity • Relationships, trust, respect • Maximum use of tools by the right people • Cost efficiency • More appropriate billing/reward

19. Needs… • Greater reliance on independent counseling • Counsel share responsibility to stakeholders • Not just legal counseling • Specialist counsel will remain critical • Not just legal advice • Also outcome delivery • Extreme cost consciousness • But willingness to pay for real value • Lawyer-Client fiduciary relationship diminishes • Emphasis on partnering and integration

20. imagination at work

22. Leapahead™

23. Human energy ™

24. LOOK CLOSELY INNOVATION AHEAD

25. What does this mean for Lawyers by 2038?

26. The Legal Profession is on the brink of fundamental change Prof Richard Susskind timesonline.com - October 19, 2007

27. Crisis Danger+ Opportunity

29. Impact of ICTInformation & Communications Technology • Much legal practice is being commoditized • Document assembly systems • Drafting, research done by non-lawyers • Better, quicker, cheaper, more convenient • Erodes traditional legal work • But creates new opportunities for lawyers

30. To grasp the opportunities… • Identify distinctive skills & talents • Incapable of replacement by advanced systems • Develop those skills • Market them effectively to the new economy • Lawyers who don’t do this…

31. http://www.britishcouncil.org/kids-songs-skeleton.htm

32. Is that really radical? • Much of what we do isn’t about law • Litigators are project managers • Corporate lawyers are dealmakers • Banking lawyers use market knowledge • Judges are case managers… • We already do much more than just law

33. Maybe we’re just not focusing on the value of our core competencies?

34. It is often not legal knowledge that distinguishes lawyers in the marketplace

35. It’s often your skill as a lawyer combined with other disciplines You will need to be a hybrid to maximize your value in the new economy And market those skills well

36. The 21st Century Lawyer

37. Expresses desires Threatens Likes stamping feet Tough shell Legal expert Claims Positions Well-trodden path Process orientated Single-minded <50% successful Eye-wateringly costly The Lawyer20th Century

38. Expresses desires Threatens Stamps feet Tough shell Legal expert Claims Positions Well-trodden path Process orientated Single-minded <50% successful Eye-wateringly costly Satisfies needs Warns Choreographer Tough core Legal entrepreneur Satisfies Interests Beats new trails Obsessed by outcomes Kaleidoscopic >80% value generation Worth every cent The Lawyer20th Century21st Century

39. In-House Lawyers • Delegate much less to outsiders • Except specialized advice and skill • Control outsourcing more aggressively • Use the right outsider for the job • Empowered to dare • Make mistakes, but not the same one twice • Be a profit centre • Not a cost item

40. Private Practice Lawyers • More general counsel, less legal advice • Persuasion/negotiation skills • Tactical skills • Conflict prevention/avoidance • Resolve conflict fast • Ombuds services • Creative processing • “Counsel to the Deal” - not to the parties • Feedback • Representation of stakeholders

41. Law Firms will metamorphose • Driven by venture capital • Marketed as brands, creatively priced • The product is human ingenuity • Multi-functional • Aimed at many new fields • CSR, Lobbying, Compliance, Regulation • Corporate Governance, Sustainability • Asset Audit, Management & Exploitation • Dispute closure, dealmaking, negotiation

42. By 2038… • Law practice will be unrecognizable • An end to delegation to law firms • Not just high volume/low margin work • Counseling will often be run by non-lawyers • Physical offices will almost vanish • Personal skills predominate over legal knowledge • Persuasion • Lobbying • Negotiating

43. The market will not tolerate expensive lawyers doing jobs that can be done better by smart systems and non-lawyers

44. Many lawyers think… • Nonsense • Scaremongering. Cannot predict the future • We are a special case. A Sacred Cow. A No-Go area • Major firms are beyond being commoditized • Admit there will be further consolidation • Legal fees are a small part of the cost • No viable alternative to billable hour • The status quo might change • But not much • No need to plan +5 years ahead • Computers cannot replace legal work • Document assembly IT will not replace drafting • Don’t kick a sleeping dog. We are very successful

45. Success is the ability to swing from one failure to another with no loss of enthusiasm Winston Churchill Radio Broadcast, 1943

46. And yet, Lawyers are … • Facing huge changes & challenges • Most of their strategic plans look ahead just 5 years • Practicing outdated business models • Minor improvements, nothing too radical • State-of-the-art software = “revolutionary” • Plus ça change, plus que c’est la même chose • Failing to re-skill & re-tool properly • Teaching the young to be clones of themselves

47. Law schools assume a model of legal practice that was valid in the late 20th Century. They assume that legal practice will continue unchanged in the foreseeable future. But it will not.

48. Few lawyers are thinking hard about the long term future of their profession The energy industry thinks 50 years ahead Lawyers need to change the way they view the world, and their role in it.

49. Impediments • Training & Education • Too much reliance on old business models • Attitudes & Habits • Comfort with the process • Reluctance to take real ownership/responsibility • Dare not fail outside the process • Belief that rights must be enforced • Not settled • Dum Pendet Rendet • While the case continues, the money flows

50. In 2038 • Most legal advice will be • Driven by new demand • Managed by non-lawyers, venture capitalists • Multi-disciplinary aid clinics will predominate • Law will be liberalized and de-mystified • Commoditized and systematized • Low overheads and low cost • Provided online and via retail industry - stores/banks • Branding and trusted names will predominate • Will not just apply to low margin/high volume work