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Beginning of the end for ‘big law’

It is easy to forget that the concept of “big law” in the UK has only been around since the late 1980s, when Coward Chance merged with Clifford Turner to create the Clifford Chance behemoth. And today commentators fall into the trap of granting the big law model a degree of inevitability and permanence that is not justified.

At the height of their hegemony, the dinosaurs must have seemed destined to rule the Earth for ever. Power and dominance in business can also be fleeting, especially for less nimble creatures whose ability to adapt to a changing environment is hampered by sheer size and bulk.

Could today’s kings of the primordial legal swamp become tomorrow’s fossils?

The signs of impending demise exist already. The collapse of King & Wood Mallesons and the raft of recent merger announcements – with accompanying redundancies – are some of the symptoms. A rapidly shifting competitive environment and changes in client expectations are the causes.

Deutsche Bank’s recent refusal to pay for juniors or trainees is only another early sign. A significant and growing number of clients argue that the traditional big law model, with its pyramid structure,

overblown City of London offices and exorbitant charge-out rates, is built to fleece clients, not service their needs.

Increasingly turned off by the incumbents, law firm clients are seeking alternatives, including the next generation law firms. This new breed emphasizes senior-lawyer-only advice and paring fixed overheads to the minimum.

Paying lawyers only for client work allows these firms instantly to flex their staffing costs in line with workload. And the use of agile working practices not only keeps office space costs to a minimum, but also gives their lawyers a better working environment.

Big law’s natural advantages have rapidly been eroded in recent years. An increasingly comprehensive and sophisticated library of precedents and knowhow is now available to all – including clients – at low cost. Who needs to employ ranks of professional support lawyers when you can tap into the work of thousands of them for next to nothing?

Cloud computing has allowed the next generation law firms to catch up and pass their bigger cousins with levels of speed, data storage and security undreamt of only a few years ago and, again, at minimal cost.

And now the final advantage of the big players – the ability to throw large teams of juniors, trainees and paralegals at stacks of data – is also fading. It started with litigation support specialists and the scanning and processing of huge volumes of documents for disclosure.

It will end with artificial intelligence and the ability of a small number of senior lawyers to review the output of AI systems capable of processing large volumes of due diligence disclosures and lease portfolios, or producing drafts of sophisticated suites of documents.

Just as the dinosaurs were eventually replaced by more nimble creatures, big law will not be ruling the Earth for much longer.

First published in The Times Brief, article by Richard Beresford.