What law trends will shape the legal industry in 2012? A competitive business climate, economic pressures and client cost-cutting will continue to transform the legal landscape in the coming year. The recent economic downturn has resulted in a fundamental shift in the way legal services are delivered and many long-standing practices and procedures are being retooled to fit the realities of today’s legal marketplace. Below are ten law trends for 2012.
Banking, health care, energy and intellectual property will be hot in 2012, according to Bob Denney’s annual legal industry trend report. White collar crime, regulatory, financial services, cyber crime, labor and employment and commercial litigation will also continue to grow. These seven practice areas are also in demand.
Another law trend to watch in 2012 is telecommuting. Telecommuting among lawyers and legal employees will increase in the coming year. Mobile technology, cloud computing, video conferencing, computer-based legal research and hosted desktop and network solutions allow legal employees to work remotely from anywhere on the globe. Attorneys, paralegals and other legal workers who are disciplined and self-motivated and whose job tasks are conducive to remote work do not need to be in the office from 9:00 to 5:00. As law firms and legal employers begin to realize that telecommuting increases productivity, job satisfaction and work/life balance, more lawyers and legal employees will work outside the office in 2012.
The LPO trend will expand in 2012 as law firms and corporate legal departments continue to outsource legal work such as document review, due diligence, legal research and other tasks. “The broad adoption of LPO techniques in 2012 comes as a supreme validation of the LPO approach and will more than ever reshape the practice of law,” LPO consultancy Fronterion reports. In 2012, Fronterion projects “a definitive shift as law firms and legal professionals across the board act more like LPO vendors. That means replicating LPO‐like approaches based on process, reporting and rigorous project management.”
4. Non-Lawyer Competition
Competition from non-lawyer service providers is another law trend shaking up the legal profession. “Non-lawyers and corporate entities not owned by lawyers are actively delivering almost $2,500,000 in legal services through LPOs and Internet providers of legal services,” according to the Kowalski and Associates blog. Non-lawyer competition in the legal market from LPO’s, online legal websites, legal technicians and others will increase in 2012. Moreover, the regulation debate continues: a new book, First Thing We Do, Let’s Deregulate All the Lawyers, argues that non-lawyers can do the same job as lawyers only faster, cheaper and sometimes better. It also purports that the legal profession’s monopoly gives rise to higher costs and poorer service.
Legal employers’ use of contract and temporary employees will continue to grow in 2012 as the legal industry struggles to contain costs in a recessionary business climate. “To manage rising caseloads while still adhering to tighter budgets, law firms and corporate legal departments are utilizing project teams as an alternative to or to augment the contributions of full-time staff,” Robert Half Legal reports. These project teams allow firms to remain flexible, quickly scale up operations and manage costs without the expense of full-time staff.
Law firms will continue to expand their geographic footprints and serve new global markets in 2012. While historically, this global growth was limited to BigLaw, in 2012, “liaisons, affiliations and networks offer opportunities for MidLaw and even SmallLaw firms to grow internationally,” Denny says. In addition, the ABA Commission on Ethics 20/20 has posted draft proposals to make it easier for U.S. lawyers to engage in cross-border practice.
Almost two billion people use the Internet globally and nearly one-fifth of Internet user’s time is spent on social media sites like Facebook, LinkedIn and Twitter, according to social media experts. Law firms are tapping into the power of social media as a marketing tool and strategic business driver. New social media platforms such as Google Plus and Pinterest have joined the social media landscape, offering law firms new ways to reach clients and create a competitive advantage. As the social media landscape continues to heat up, new social media apps and innovations are likely to emerge in 2012.
8. Law Firm Staff Reductions
Law firms will trim partners and entry level associates in 2012, according to Denney. BigLaw firms in particular are promoting fewer associates to partner. They are also making the partnership track longer and the requirements tougher,” Denny says. Firms are also trimming their entry level associate ranks. “Although summer associate hiring has generally increased for 2012, some BigLaw and also MidLaw firms plan to hire fewer first-year associates than they did before the recession. Instead, in addition to recruiting lateral partners, they are recruiting two- and three-year associates who don’t need several years of development before they are profitable,” he reports.
9. Alternative Billing
New and innovative billing practices will continue to emerge in 2012 as law firms seek to remain competitive. Law firms are increasingly offering clients alternatives to the traditional billable hour. More than half (56 percent) of lawyers surveyed said their clients request flat or fixed fees the most, according to a Robert Half Legal survey. Volume discounts ranked second at 43 percent. More corporate counsel are hiring law firms willing to work on flat fees, success fees or hybrid arrangements that involve minimum or maximum fee caps.
10. In-House Hiring
General counsels will bring more legal work in-house, leading to a growth in in-house hiring in 2012, according to Lateral Link. While in-house hiring may increase by as much as 40%, the bad news is that the majority of the hires will not be full-time attorneys, the Inhouse Insider predicts. “Corporate legal departments are dealing with a heavier workload in part by using more paralegals and contract lawyers. About 67 per cent of corporate legal departments are comprised of lawyers with the rest made up of paralegals and other support staff. Legal departments are still operating with flat or decreasing budgets, and therefore, they are seeking the highest level of competency at the lowest cost.”
Top challenges facing legal departments include compliance and regulation issues, controlling litigation and outside counsel costs and increased workloads, according to Robert Half Legal.