Predictions can go in many directions.
On one hand predictions might be senseless if events move slowly. On the other hand, predictions may become obsolete if things move quickly. As it is with legal, there usually is a range of possibilities in the middle; it depends.
This marks the third consecutive year we’ve published legal industry predictions and we’d like to believe it’s a both a fun and useful mental exercise. We are equally grateful to the contributors – the beautiful minds – who stepped forward with a prediction.
Other than what we’ve deemed appropriate for readability, there is no intended order-of-merit to the presentation of these predictions. We have made an effort to categorize these predictions along three broad segments:
- legal industry/business of law
- legal technology; and
- legal marketing.
Finally, we close with a contribution from a former journalist, who covered the legal market for a local business publication in Raleigh. He is now a 3rd year law student and has interviewed peers to express a well-reasoned outlook.
And now, here are the predictions for the legal industry in 2016.
Legal Industry/Business of Law Predictions
“The legal market may be flat-lining in terms of growth, but under the surface is a dynamic, fast-changing environment. The hot industries and practice areas from last year have disappeared. In their place are new opportunities for growth. The law firms able to bring a quick and flexible approach to targeting the following market opportunities will see growth in 2016: Cybersecurity is growing at 3 times the market rate; class actions are gaining momentum; health care companies plan to increase spending in 10 legal segments—the most of any industry; complex litigation is growing rapidly.”
Mr. Rynowecer blogs at The Mad Clientist.
“Still frustrating for iconoclasts yet frightening to traditionalists. More talk than action on process, technology, and metrics. But enough talk paired with enough incremental improvement to further close the gaps between knowledge, attitude, and practice with respect to legal service delivery. Continued ascension of legal operations, procurement/pricing professionals, and technologists with the attendant threat to, but not eradication of, the traditional associate- and support-staff-heavy paradigms (i.e., same as 2015).”
Mr. Flaherty has served as a keynote speaker at the LexisNexis CounselLink® annual customer conference and has contributed here: Legal Tech Evolution: Discomfort and Lasting Relationships.
3. Steven J. Harper | Author, adjunct professor, and former partner at Kirkland & Ellis LLP
“Big firm leaders will ignore lessons that the collapse of Howrey, Dewey & LeBoeuf, and Bingham McCutchen should have taught them. They will distinguish those failed firms as aberrations borne of mismanagement, rather than as victims of pervasive trends that persist, including: undervaluing collegiality and cohesiveness as vital to long-run stability, mistaking growth for the sake of growth as a long-term strategic plan, and indulging their confirmation bias as they wait for some other firm to fail because they’re certain it won‘t be theirs.”
“The Day of the Client is finally coming. With the rise of the CLOC group representing the growth of legal operations (a.k.a. as “pricing”) people on the client side, we are finally starting to see real change there. This means the days of asking for AFAs and opting for discounts are numbered. I won’t predict how fast this trend will grow, but I will welcome it with open arms (see my prediction from last year – #3).”
Mr. Brown is “Geek #2 of 3 Geeks” and blogs at 3 Geeks and a Law Blog.
“The pace and complexity of the disruption in the legal marketplace is increasing and many organizations, both law firms, and law departments have adopted a proactive mindset in addressing challenges and opportunities, so the gap is widening for those waiting until the dust settles. Both law firms and law departments will confront two major obstacles hindering progress: incentives and leadership. Clients will do a better job of establishing transparent performance metrics linked to business success, and law firms will revise compensation to reward client-oriented behaviors. Long-term profitability, client satisfaction (as measured by retention and cross-selling), and efficiency will overtake inefficiency, client hoarding, and short-term revenue as key factors in partner compensation plans. These changes will happen first in those law firms and law departments where leaders recognize that the era of the amateur manager relying on a good legal mind is over. The pace and magnitude of change requires trained, dedicated, professional managers committed to applying business discipline to advance the profession.”
Mr. Corcoran has contributed here: 7 Creative Ideas to Kick Start Collaborative Legal Conversations.
“The legal market is buzzing with AI talk this year. in 2016, at least one large law firm will announce an AI offering. It will make a big media splash but have limited actual impact. It will probably be a fairly limited scope application. Even if it is broader than I think, client uptake will be slow because clients change behavior slowly. So other firms will think, ‘what’s all the fuss’ and will not be energized to follow. In other words, the hype cycle will be brought down to earth and AI will be like many other tech innovations preceding it. The impact takes years to be significant. Of course, I hope I’m wrong (not about the announcement, rather about the impact)!”
Mr. Friedmann also blogs at Prism Legal.
“The first major wave of leadership transitions in both legal departments and law firms to the “next” generation of leaders will begin to impact the legal services industry consistent with the overall societal demographic trends. This transition will accelerate changes in operating models, employee recruiting and retention strategies, technology utilization and more. And, the organizations that successfully navigate this leadership transition will be the top law firms and legal departments in 2020 and beyond.”
“My prediction, if you can call it that – is that, because the underlying market dynamics haven’t changed, 2016 will look very much like 2015. Demand growth remains elusive. Many firms continue to suffer from excess capacity and are often indistinguishable from each other. The high-performing firms will continue to pull away from the pack because they ‘know who they are’ and have compelling strategies. Mergers will continue — and, unfortunately, we’ll see more firms fail. That said, such sad fates are not preordained; firms who assess their situation in a clear-eyed fashion with the intestinal fortitude to make significant changes can survive – heck – even thrive.”
“2016 will see people scratching their heads at a large number of abrupt law firm mergers (takeovers, more accurately) where the target firm was not in any obvious, public, or long-running distress. What this will reveal as never before is the underlying fragility of many firms that find themselves overly reliant on a relative handful of key internal players. If those few anchors look like they’re coming loose, a shotgun merger may be the wisest, and only, course.”
Adam Smith, Esq recently published the results of a survey on law firm collaboration worth reviewing.
“I think 2016 might finally be the year that lawyers who take tech competence seriously overtake the Luddites who are holding back the profession.”
Mr. Glover has contributed here: Legal Industry Predictions for 2014 and Beyond.
11. Brian Kennel | CEO and Lead Consultant | PerformLaw
“2016 Will see significant advances in litigation management metrics and 3rd party lawyer rating services. Clients have been managing lawyer performance mostly as a billing concept. This year will see big data approaches to win/loss rates, lawyer performance by jurisdiction, case type, cost and just about any other measurable factor. Smart firms will recognize these trends and add value to the change process. Self-analysis of case handling performance including length of time files remain active, average total cost of cases including legal fees and indemnity, lawyer efficiency comparisons for similar assignments and competitive comparisons are great places to start. Data-driven approaches to the practice of law will be terrifying for some and an incredible opportunity for others.”
Mr. Kennel pens the PerformLaw blog and has contributed here: Law Firm Branding: Communicating the Client Experience.
“As the legal consumer becomes more educated because of the internet, the “general practice” lawyer in small firms is being squeezed out of existence by individuals who concentrate on unique areas of the law. Clients want the peace of mind of knowing their chosen attorney focuses on their exact problem. Lawyers who succeed in the new paradigm will seek to create niche practices to serve in consumer based legal services and expand their geographic footprint to serve a larger geographic area to make up for the decline of a “general” practice of law.”
“Lawyers, particularly those in smaller firms, who have embraced improved incorporation of technology into their day-to-day practices will increasingly separate themselves from those who continue to resist change. Clients, corporate and individual, notice (and judge) when their lawyers cannot encrypt email when needed, cannot answer questions quickly because they have to go dig the answer out of paper files and do not seem to appreciate or even understand the role of technology-based information sharing today. The use of portals and online document repositories so clients can have secure, on-demand access to information will grow. Law firms will be fired by clients, not for lack of substantive knowledge and skills, but because clients are frustrated with antiquated processes like leaving messages with staff (hoping they get it right) instead of having the option of voice mail. If you want to talk to your lawyer about some issues with the corporate Instagram account and your lawyer asks “What’s Instagram?” you may decide you don’t have the right lawyer.”
“The traditional notion of the ‘of counsel’ role will continued to be expanded, especially by young lawyers, who will use the affiliation to serve a number of needs, including to test potential partnerships.”
“21st-century clients will drive a revolution in the delivery of legal services. Clients will demand transparency, innovative problem solving and client teams that can deliver timely results at appropriate pricing. 21st-century lawyers will rely on a more modern skill set that includes cultural competency, leadership, project management, business acumen, high-risk tolerance, technology, social networking, communication, presentation, effective team building and problem-solving. Today’s law students and new lawyers expect alternatives to the traditional workplace and traditional work style. This collision of forces will result in clients and lawyers who are allies rather than adversaries and creative solutions will abound.”
“While law firm efficiency initiatives like LPM are here to stay, there is a vastly underrated driver of client value whose time has come (especially in the US and UK). A growing number of law firms will fully embrace labor arbitrage by maintaining offices in lower-cost cities within the same country. Given the tremendous gap in hourly rates across geographies, and the increasing dispersion of top talent, this is arguably the #1 way for clients to achieve dramatic cost savings without sacrificing quality.”
“On 2016’s horizon: more and better collaborations along the Rocket Lawyer/American Bar Association ilk, legal education becoming increasingly multidisciplinary, innovative, and tech-focused, and a realistic rightsizing in a downward way of BigLaw associates’ salaries. Law firms more than ever have to adapt to this new exciting market, or they will tank in the same way that print newspapers have. Who gets news or legal help the same way they did 10 years ago?”
Ms. Tripoli also writes on law practice management section of About.com.
“In 2016, effective experience management is a mission-critical and vital business investment for a law firm. The most committed and aggressive firms have a mandate around experience collection and organization that starts with their firm chairs and executive committees. We have learned that top-down engagements have greater success than bottom-up. 100 percent of law firms want to manage this better. The firms that do it well give access to the lawyers – with a link to the experience database on their intranets, access to reporting features, even the ability to enter in details about a new matter. And lawyers who want to win more are accountable to keep their matter records current. Relevant, at-your-fingertips experience is critical to winning more practice-defining work.
In the very best systems (judged by the amount, quality, and relevance of data), lawyers are involved in the data-capture process. To win more, this cannot be a marketing department initiative – it must have full support of and engagement by lawyers in the firm. And it must have active support from the firm’s C-suite.
Important laterals are enticed by the promise of integrating their matters into the firm’s database within 30 days or less. This is a sure-fire way for key lawyers around the globe to trust the strength and qualifications of each new lateral, and for them to feel embedded.”
“The 2016 ‘pie’ will not grow substantially and, thus, will keep the legal marketplace quite a competitive place. Competition will constrain hourly rate growth, so the pressure will remain on partners to keep clients, grow current clients, and to harvest new clients. Significantly, the profitability of legal work will become more important as there are fewer levers for firms to pull to attain increased revenues. And, sadly, law firms will not see significant increases in the number of women partners or women managing partners.”
Ms. Woldow pens the blog At the Intersection.
“In 2016, smart law firms will focus on one of their most strategically important assets: their knowledge. This means more than merely an intranet upgrade. Rather, it means action in three specific areas: 1) Identifying and exploiting any knowledge within the firm that can create a competitive advantage. 2) Moving beyond traditional professional development and training to ensure that the entire firm becomes a more effective learning organization. 3) Using increasingly sophisticated data analytics to operate the business efficiently and effectively.”
Ms. Abraham authored the book Optimizing Law Firm Support Functions.
Legal Technology Predictions
“‘Computational law’ will continue to grow exponentially, as start-ups world-wide are creating technology that frees up lawyers to focus on serving as advisors and “concierges” to their clients. This will dramatically improve the delivery of effective legal services to everyone, from the most sophisticated companies to the poorest individuals. Meanwhile, the 2015 Federal Rules of Civil Procedure amendments will push Baby Boomer lawyers to embrace tech—or retire. Be not afraid!”
Ms. Bay is also a lawyer and freelance journalist; she pens the Codex blog.
“Matter management and workflow will follow the path of legal spend management and analytics. More law departments will begin to use technology to manage workflows for their internal matters. As a result, the Office of General Counsel will have access to a new and expanded set of rich data to track trends and to demonstrate value through metrics. In 2016, legal departments have the opportunity to apply the same rigor it already applied to legal spend, and develop process efficiencies, manage resources and ensure the legal department is focused on the matters that matter.”
“In 2016, in the name of risk management and data leakage prevention, a large financial industry corporation will challenge their outside counsel’s BYOD/COPE program. In order to remain on the preferred service providers list, the firms will issue firm-only devices that are locked down to just a few functions. Older attorneys will liken this to the first BlackBerrys they were issued. A client security audit will top 200 pages.”
Mr. Brandt pulls double duty as the editor of the PinHawk Law Technology Daily Digest.
“2016 will be the year that Law Firm as a Service (LFaaS) becomes commonplace. Firms large and small will begin delivering entire suites of automation and advisory tools built around specific legislation or for industry specific clients. They will sell unlimited access to these tools at flat subscription rates, or they will give them away to their largest clients as value-add services. ‘Commoditization’ will no longer be a dirty word, but will open up a virtually untapped and underserved legal market previously ceded to LegalZoom and other form providers.”
Mr. McClean is a bona fide geek and blogs at 3 Geeks and Law Blog.
“In 2016 Outsell predicts that a tipping point will be reached where the innovator law firms will be joined by early adopters in pursuing the ‘information-as-a-legal-service’ model. Low-level work will be significantly more profitable if delivered as commoditized legal information to clients via online, subscription based platforms. This model allows law firms to answer some of their clients’ legal questions for a fraction of the cost of using in-person services, while still remaining profitable. It also enables law firms to use analytics and visualization tools to deliver new deeper legal analysis to their clients.”
“We expect two contradictory trends come to a head for 2016: (1) increasing availability and adoption of Cloud and SaaS solution and (2) increased sensitivity to cyber-threats and data security. Both trends are reaching threshold points in attention and activity, without a clear path for firms to take advantage of cloud solutions while navigating risk. Don’t expect a resolution in 2016, with increased embedded security capabilities within solutions as well as continuing uncertainty and sporadic action and adoption among firms and law departments. With any luck, we’ll see meaningful steps towards an industry-wide cloud computing and data security standard as well.”
LexisNexis has licensed reports Mr. Houlihan completed for Blue Hill Research including, The Business Case for Law Firm Practice Management ROI. He contributes to the Blue Hill Blog.
“Continued venture capital investment in legal technologies will bring an increased pressure by clients for firms to utilize those tools to reduce cost. Firms not keeping current with the advances in technology may lose clients who see a value to be gained from their use. Firms will have to weigh the costs of these new services against the risk of clients going to a firm that does have the capabilities. However, failure to properly use the technologies may open a firm up to claims of legal malpractice if items are missed and not caught.”
“Customized secure communication platforms will finally see widespread adoption in the industry – contributing to less email clutter and more questions than answers regarding e-discovery.”
Mr. Maine is an active member of the Legal Marketing Association has also contributed here: The Best Kept Secret to Getting More Work: Stuff Envelopes.
“I get frequent emails from newly minted lawyers asking for advice on transitioning into LegalTech. Their concern is always whether they’ll make enough, fast enough, to cover their student loan payments. My advice? There’s never been a better time to make the leap into LegalTech. If software is eating the legal world, perhaps it will begin eating (read: absorbing) lawyers as well in 2016.”
Mr. Clark is a prolific writer.
“2016 feels like the year we’ll finally have our first high-profile law firm cybersecurity catastrophe, revealing many firms’ substandard approach to protecting client data from criminals. This will trigger a crisis of client trust in outside counsel’s reliability and prompt clients to administer make-or-break security audits that quite a few firms will fail. It will also lead regulators to either toughen the measures firms must take to ensure their ethical commitments or risk consequences to their own independence through intervention by state actors.”
Mr. Furlong blogs at Law21.
“In 2016, security will continue to become a firm focus. Regardless of shape, size or location law firm cybersecurity threats are going to continue to expand in both force and origin. Reports of big firms next year being hacked are going to be prevalent in security reports while small firms continue to run into everyday malware and phishing attempts. Next year’s budgets will continue to include data protection, training and security assessments designed to protect the legal office.”
“We predict that in 2016 at least one of the AmLaw 100 firms suffers a very large and very public data breach which compromises confidential client and employee information. As a result, the legal industry will be forced to take stock of its security, insurance and communications preparedness – clients across the board will demand firms demonstrate they’re prepared for all shapes and sizes of cybersecurity breaches.”
“In 2016, the percentage of solo and small firm attorneys maintaining virtual law offices will increase substantially. As the concept becomes increasingly understood and accepted, attorneys will embrace the virtual model in greater numbers due to its cost savings and flexibility.”
Ms. Romberg is a LexisNexis Time Matters® customer has contributed here: 5 Reasons Virtual Law Firms Needs to Invest in Case Management.
“The Apple Watch will continue to gain traction as attorneys learn new and varied ways to integrate them into their practices. For instance, have you considered the ability to have your associate subtly send messages to your watch from counsel table while you’re examining a witness? The built-in health app should also be a great reminder of how active (or inactive) you’ve been during the day, and the included reminders to “get up and move” are also a great idea.”
“Sentiment in the media has turned against Dropbox in recent months. However, I believe law firms and other small businesses will increasingly replace their aging, mobile-challenged file servers with Dropbox. Given Dropbox’s edge in user experience and integrations, Box and others in the cloud file server game will find it tough to compete. Meanwhile, products such as LegalWorks, MetaJure, NetDocuments, and Worldox will continue to succeed in the smaller market of law firms with document management needs beyond core file sharing.”
The TL NewsWire, a free email newsletter that reports on new technology products for law firms, and which is home of the annual TL NewsWire Top 25 Products Awards.
Legal Marketing Predictions
“The line between business development offline and business development online will begin to disappear. Understanding how to use the Internet for building relationships and a word of mouth reputation will be as important as knowing how to take someone to lunch or networking at a cocktail party.”
“Law firms have struggle to understand the effectiveness of their large marketing and business development budgets. In 2016 the pressure to drive top line revenue will increase their need to better track business development activities not only to understand what has driven past successes but to better predict which individuals at specific clients should be targeted for the best return on their time and budget investments.”
“Modern sales methodologies make the point that connecting prospects’ pain points with solutions is often no longer sufficient to deliver a sale. I expect CRM solutions to start to catch up with the broader trend of sales methodologies identifying teaching your prospects as a critical factor in today’s buying climate. Integrations of CRM with social media platforms and content marketing will deliver suggestions of what thought leadership content sales people should share based on the system’s tracking of a prospect’s demographics, areas of interest, and recent interactions.”
“More blogs = more business. Law firms that don’t adopt content marketing with a frequently-updated blog will gradually fade away, as other web-savvy law firms nip away 2-3 good files per month – like being nibbled to death by ducks. Smart law firms already know that more frequent blogging equals more leads and clients, according to HubSpot.”
Mr. Bodine contributes to a number of legal sites including The National Trial Lawyers and LawMarketing.com. He has a full list of marketing predictions that can be viewed here: 6 Bold Predictions for Legal Marketing in 2016.
“I believe that law firm succession will become an increasing issue in 2016 as more baby boomers retire, slow down or are forced to continue practicing law because they have not saved enough to retire. The problem is that law firms have not planned for succession. Many of their senior lawyers are not ready to phase down their practice and many of the junior lawyers are not prepared to become the next generation of rainmakers.”
Mr. Parvin has contributed here: 5 Critical Questions for Building a Law Practice.
“Live streaming becomes the medium of choice for progressive, leading edge law firms seeking to quickly build relationships with prospective and existing clients. Periscope, Blab, Facebook Live, Snapchat, etc. become the most efficient, effective way to take relationships to the next level. Old content gets a facelift and is suddenly new again when transformed into live streaming programs. You’ve got to go where the audience goes. They’re watching live streams and that’ll be increasingly true in 2016.”
A Law Graduate Prediction
“The legal-services will see the job market will continue to improve, but slowly, and certainly not to where it was a decade ago. Perhaps one-third of my classmates have jobs lined up, based on my conversations with them. Most of those are judicial clerkships or at relatively large firms.
Most of us went in pretty clear-eyed about the state of the job market when we started, in 2013, and few blithely assumed we would walk right into jobs after taking the bar exam in July 2016.
An editor of a law journal, who is also on a top moot-court team and is looking in the public sector, told me yesterday that she’s starting to wonder what she’ll do with her furniture when her lease expires next summer. I’m feeling this, too, even with the benefit of several years of career experience from before law school.
On the upside, I’ve seen the same green shoots that you’ve probably seen if you read about this with any frequency. UNC’s assistant dean for career-development told me that the number of big firms conducting on-campus interviews has been growing for the last couple of years. That’s a bellwether. And several North Carolina law schools have restricted the size of incoming classes, which we can hope means less daunting competition for graduates.
So we’re keeping our heads down, moving forward, hoping for the best, and feeling grateful that there’s more reason for hope than there was three, and four, and five years ago.”
Mr. Bagley is an online editor for the North Carolina Journal of International Law and was a veteran reporter with the Triangle Business Journal before leaving to become a full-time law student.
Legal Predictions around the Web
Here are a few of the posts we’ve spotted to date. We will continue to update this as we see new posts or articles published.
- American Lawyer: Top 10 Predictions for Big Law in 2016 | Vivia Chen
- American Lawyer: 2016 Citi Client Advisory Sees Slow, Uneven Law Firm Growth | MP McQueen
- Legaltech News: Experts Make Predictions for the Future | Mike Susong
- Legaltech News: 5 Musings in the Minds of Legal Tech Leaders: December 2015 | Chris DiMarco
- LinkedIn: The legal IT challenge for 2016: Risk vs Innovation | Joanna Goodman
- Above the Law: 4 Legal Tech Trends To Watch For In 2016 | Zach Abramowitz
- Disrupt Legal: 7 Legal Tech Predictions for 2016 | Mary Redzic
- Legal Intelligencer: Predictions on What Is Ahead for Cyberrisk in 2016 | Christopher M. Brubaker
- Business of Law Blog: 6 Bold Predictions for Legal Marketing in 2016 | Larry Bodine
- SeytLines: My Predictions for 2016 and Beyond | Kenneth Grady
- Thoughtful Legal Management: 2016 Predictions – Part 1 | David Bilinsky
- Thoughtful Legal Management: 2016 Predictions – Part II | David Bilinsky
- Thoughtful Legal Management: 2016 Predictions – Part III | David Bilinsky
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You’re turn – what predictions would you delete, edit or add?
Also see predictions from the last two years:
25-Plus Predictions for the Legal Industry in 2015
21 Expert Predictions for the Legal Industry in 2014