I don’t think it’s in dispute that the last few years have not been the brightest and friendliest for Big Law around the world. Structural changes to the world economy have been sending ripples across the business community, resulting in what must feel like a tsunami of forced changes for many professional services firms, including big law.
Arguably, Western economies are undergoing the biggest ‘industrial’ revolution since the late 18th and early 19th centuries, with a painful and far-reaching realignment of the global economy as a consequence of the digital revolution taking hold.
Information and digital technology are becoming the leading forces of the new world order and one can foresee a world where ‘manufacturing’, as we know it today, will be largely defunct, with many consumer products created through 3D printers (or some other yet to be invented and even more advanced technology) at home, with all of us becoming ‘manufacturers’ and the ‘manufacturing industry’ becoming concentrated and focusing only on items that are not practical to produce at home.
… in the long-run an overwhelming majority of the population will become knowledge and service workers …
This means that in the long-run an overwhelming majority of the population will become knowledge and service workers (with a significant overlap between those two categories) and in order to fit into this new world order we will all have to make big adjustments to our expectations in respect of education, career-trajectory and the global economic structure.
Big Law and the global ‘apocalypse’
Costs, efficiency and productivity pressures are likely to increase further …
The predictions for another dire year for Big Law have already started appearing and based on recent trends these forecasts will not come as a shock to anyone in the legal services industry. Costs, efficiency and productivity pressures are likely to increase further with clients demanding faster and more cost-effective service delivery from firms while expecting that high professional standards are maintained. In some respect these demands are admittedly contradictory and therein lies the most complex organisational and professional challenge.
… evolution, given it’s an inherently gradual and time-consuming process, may prove to be too slow and insufficient to save some firms.
Many law firms have been taking steps to evolve to meet the challenges of this new global business landscape although, arguably, the pace of global change has been so fast that evolution, given it’s an inherently gradual and time-consuming process, may prove to be too slow and insufficient to save some firms. In such cases a ‘revolution’ may be the only answer to survive the whirlpool of the changing global economy. Unfortunately, revolutions do not come easy to a profession steeped in centuries of tradition and resistant to change and, admittedly, change and innovation in a profession such as law represents many new challenges, both ethical and commercial.
Perhaps that’s why revolution seems mostly limited to legal startups rather than the existing giants of the legal services industry and it’s anyone’s guess who will still be standing once the dust settles from the global realignment. Many prestigious old firms will no doubt survive by adapting to the new order, but I predict they will be subject to significant changes and many of the new-model startups that were seen as an aberration by purists just a few years ago (such as Axiom or Clearspire), will likely develop into leading legal services providers.
… 2014 may hold some ‘horrors’ … it will also be replete with new opportunities and offers the promise of new beginnings.
While 2014 may hold some ‘horrors’, or at least further major adjustment to business practices, for Big Law, it will also be replete with new opportunities and offers the promise of new beginnings. Provided that firms can genuinely shake of the shackles of the comforts and trappings of a golden age gone by, 2014 can be the beginning of their Phoenix rising from the ashes …
The fate of knowledge professionals
… knowledge professionals will face some short-term pain over the coming years …
I have no doubt that knowledge professionals will face some short-term pain over the coming years, but overall I predict a very bright future.
The short-term pain will be a result of expectations on knowledge professionals that will grow exponentially over the next few years as organisations focus on project management, costs reduction, speed of service delivery and business development. These goals can only be achieved economically and in a timely fashion through the genuine incorporation of competent and efficient knowledge management practices into the core of service delivery.
… the importance of knowledge management will be recognised increasingly …
At the same time, many knowledge professionals will be under significant pressure to achieve these goals with very limited resources. I predict that while the importance of knowledge management will be recognised increasingly, due to the nature of old-school economies where knowledge is still seen as a mere ‘overhead’ despite its increasing strategic significance, there will be a significant lag between the increasing expectations placed on the knowledge function and the resources made available.
Knowledge professionals will also need to be prepared to deal with laggards within their organisations who will be slow to come on board and provide cooperation and support to the knowledge function. Knowledge professional will have to work hard on getting that cooperation and support, which will be essential to the delivery of competent and efficient knowledge function.
… knowledge professionals will become a sought-after and appreciated resource …
However, as I noted above the future of the global economy is ‘knowledge-work’ and in this respect knowledge professionals have a head-start on the global business world. I believe this means a very bright future for knowledge professionals given their skills and experiences are the perfect fit for a knowledge and information-centred economy. As the wider economy realigns to this new business reality, knowledge professionals will become a sought-after and appreciated resource and the knowledge function is primed for receiving more resources and becoming a strategic focus for organisations.
I think of the next few years of likely difficult business environment for knowledge professionals as vocational training for developing further practical skills in cost, information and project management and in strategic planning and business development as the profession emerges to become a core component of business planning and strategy.
It is also clear that in this new, fast-moving global business environment an effective knowledge professional must also become a competent ‘futurist‘ and must have a full understanding of developing technologies, future directions and the possibilities that lie ahead in taking advantage of coming trends. This is a natural fit for knowledge professionals who are tracking and collating organisational knowledge and understanding internal processes and at the same time are on the cutting edge of external information flows and developing technologies.
In turn, in the long-run organisations will need to learn to respect their knowledge function and lend an ear to their knowledge professionals and ensure that their ideas, inputs and suggestions are given due consideration in setting strategic direction. This will require a significant cultural change in how the knowledge management function is viewed in many organisations.
Postscript – 24 January 2014:
In January 2014 McKinsey & Company hosted a discussion among business leaders, policy makers and researchers at the meeting of the World Economic Forum, in Davos, Switzerland and published a video in which two participants preview the critical issues to be discussed at that session, including the impact of digitisation and automation on labor markets and how companies can adapt in a world of rapid technological change …