A New Business Model for Law Firms

The U.S. economic meltdown has a silver lining after all: Businesses used to spending
money fueled by easy credit are now going to have to reconsider basic operational
questions, with the view to reducing costs and increasing efficiency. Costs associated
with legal services should not escape their notice. s of this writing, it is not unusual for
traditional law firms to charge more than !"##.## per attorney hour, and tens of
thousands of dollars per month. $ust as these times invite the rethin%ing of our basic
economic assumptions so too does it invite a consideration of alternatives to the way in
which legal services are provided.
&n fairness to the traditional law firm model: there are firms that may be worth the money
because of their depth and e'pertise, but the plain fact of the matter is that few small to
midsi(ed businesses can afford their services and they need effective legal counsel too. &n
fact, it is li%ely that the new economy, with its anticipated hyper)emphasis on high
technology and entrepreneurship, will lead to the proliferation of small firms creating an
even greater need for less costly and effective legal services. *ne such model promoted
by +oodman ,aw, and receiving increasing attention among small gauge practitioners, is
the -&nter).irm Collaboration /odel0 of law practice. This model promotes
collaborations between and among solo)practitioners and small firms for the purpose of
providing an array of services to clients comparable to the services provided by larger,
traditional firms, but at a fraction of the cost.
1hat, of course, has made the &nter).irm Collaboration model of law practice possible
are the revolutionary advances in communications technology that have occurred over the
last 2" years. The internet and electronic mail have made it possible for lawyers, even
located in different parts of the world, to wor% efficiently with one another on common
pro3ects. ,iberated from the need to be in physical pro'imity to one another 4i.e in a law
office environment5, lawyers are freer now than ever to develop relationships with other
lawyers wherever they may be located. 6ot only has commmunications technology freed
the practice of law from time and place restrictions, but it has also made it possible for
attorneys to operate without e'pensive legal staffs. &ndeed, the sole proprietorship of the
72st Century is so technology driven and self)reliant that in combination with other such
practices, it is now possible even for small)gauge practitioners to compete with larger law
firms for the attentions of larger scale clients.
The &nter).irm Collaboration model of practice not only builds on the increasing
efficiencies of solo)practices but also e'ploits the greater tendency of solo)practitioners to
en3oy collaborative pro3ects with similiarly situated attorneys. &n this model, one attorney
4or small firm5, functions as a team leader, a, so)called, facilitator, and in that role is
chiefly responsible for evaluating the needs and ob3ectives of the client. The facilitator
would then build a legal team to service the client in a manner comparable to that of a
traditional law firm.
s with any new type of organi(ational model, there is bound to be a period of resistance:
&n the case of more established businesses, there doubtless e'ists a comfort factor in
dealing with traditional law firms over a group of loosley connected attorneys, but, in the
long run, cost considerations, will li%ely cause many businesses to ta%e a second loo% at
alternative service models. &s the &nter).irm Collaboration /odel destined to eclipse
traditional large firm practice8 The answer to this question is probably not in the short
run, but it is li%ely that traditional law firms will find themselves under increasing
pressure to lower billable rates and reduce staff. t the same time, to secure the talent of
the future traditional law firms will also come under increasing internal pressure from
alternative and cheaper servicing models to implement quality of life policies that e'press
a more humanistic, fle'ible and entrepreneurial)dynamic style of legal practice.
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