Is NewLaw the Future of the Legal Industry?
NewLaw is a term coined in 2013 by consultant Eric Chin, defined as, “Any model, process, or tool that represents a significantly different approach to the creation or provision of legal services than what the legal profession traditionally has employed.”
Within any industry, change is inevitable. Yet within the legal industry, it seems as though such change to adapt to the new technologies introduced in the professional services sector has been much slower to occur. Concepts of work-life balance, payment structures, and long-term investment in people and companies has generally remained the same over the decades in traditional firm models. NewLaw is an attempt to transform the legal industry and move it forward.
So, what exactly is NewLaw?
NewLaw is a broad concept that is applied by firms in various ways. In general, a firm takes the traditional method or process of delivering legal services and introduces a new process or technology into the workplace. This can include automation, cloud computing, using AI, increasing firm flexibility, creating a considerably better work-life balance, and/or changing payment structures.
What are some of the characteristics of NewLaw firms and companies?
One of the main features of a NewLaw firm or company is the use of ‘disruptive’ legal technologies. This allows for lawyers to focus more on providing better services through increasing efficiencies by using cloud services to automate processes and centralize documents. Through the use of these technologies, lawyers who are part of NewLaw often are able to work from home and streamline communications through live chat and video conferencing. This allows for clients to have easy contact with lawyers and receive on-demand assistance.
A major difference seen in NewLaw compared to traditional law firms is the implementation of moving away from traditional billable hours. The use of alternative pricing strategies, such as blended rates, fixed pricing, monthly subscriptions, or value-based billing, allows more transparency in the industry and ensures greater certainty and understanding of the value a client is receiving.
With the influx of legal technologies, no longer does an assignment get passed down from a partner to an associate then to a paralegal, allowing the firm to bill a client for multiple people working on the same assignment racking up hours. Instead, there are incentives to increase efficiency, making the work process faster and better for the clients, leading to sustainable value.
Traditional firms are set up for profit generating processes by billing more hours or increasing hourly rates or paying lower ranked associates and staff less. With a changed profit generating structure, a firm can be further incentivized to reinvest in the company, its people, and how it runs. This demonstrates a “client first” approach and a long-term investment in the firm and people.
Key Takeaways
Each of the above elements are all factors that can be applied to any traditional law firm setting. With the changes being seen during this novel pandemic, BigLaw firms just may have to adopt some of the features of NewLaw and rethink the way business is done. Nonetheless, in order to see long-term changes in addition to the implementation and adoption of NewLaw, each of the firms part of NewLaw must focus on scalability, use of technology, systems and processes, and raising significant amounts of capital to make NewLaw the future of the legal industry.
