A retired management consultant has been tracking emerging trends in the legal profession for more than 25 years. The fact that he wound down his practice has not dimmed his enthusiasm for checking in with law firms and networks, non-traditional providers of legal services, legal departments, surveys and media that track the business of law to uncover what’s hot, what’s cold, and what is in flux in firms of various sizes.
Here is what the latest survey, which projects into 2018, reveals are hot, getting hot, cooling off and downright cold for both practice areas and marketing tactics.
Hot And Getting Hotter
Perhaps the hottest issue confronting businesses, consumers and law firms alike is the cybersecurity. Law firms are particularly juicy targets because their computers hold vast amounts of their client’s confidential business information.
Indeed, in 2017 The Toronto Star reported that Hackers linked to computers in China engaged in cyber attacks on major Bay Street law in an apparent effort to seek inside information on last year’s abortive takeover of Potash Corp.
As hackers breach the oft-times lackluster firewalls companies and lawyers alike built to protect their data, it is becoming a growing problem that needs to be confronted. An attorney in Manhattan told us before the holidays, “Every time we enhance our data security, some smart boots in China or Eastern Europe figures out a way to crack it. Those of us who do tech law are so busy advising our clients on how to protect themselves but, too often, we don‘t follow our own advice.”
A Dallas attorney in a firm with fewer than 40 lawyers is outright alarmed: “It’s only a matter of time before we get hacked and client information is compromised, no matter how tough our firewall. And we don’t have the resources like BigLaw firms to just throw money at the problem. I’m not sure if we, or our clients, are really prepared.”
Indeed, the general counsel of a fast-growing tech firm is scared stiff at the potential threat, which looms large in her mind on almost a daily basis. Despite going to Herculean lengths to protect the company and its high-profile customers – mostly the U.S. government – from a data breach, she says it’s a matter of when and not if it happens.
“No matter how many security patches our wizards send out, there are people in Russia and China who do nothing every day but probe Western computers for vulnerabilities,” the woman states knowingly. “
Solo practitioners are somewhat less worried, one saying to me, “We don’t have the kind of business clients that would justify the time to break into my computers. What’s to steal from a small hardware store?”
Actually, quite a bit including customer’s credit card information.
Right behind cybersecurity, financial services as broadly defined is emerging as a hot practice area. As the Canadian economy runs at full-tilt boogie and the U.S. economy continues to build on the momentum gained in the last year of the Obama presidency, the survey reveals that practices focusing on IPOs, banking, mergers, and acquisitions are busy.
In the U.S., healthcare law is hot, regardless of what happens to the Affordable Healthcare Act, as is immigration despite the Trump travel ban and attempts to limit how many people are allowed into the country. Immigration law is strong in Canada, as well.
Making an unusual appearance on the list is restaurants, food and beverage owing to tougher regulations on labeling, ingredients, and testing. Finally, for firms that have developed the expertise, cyber-currency is a fast-emerging practice area although many people – especially economists, who study this stuff – suspect that, in the end, the only lawyers that will be kept busy by Bitcoins will be prosecutors unraveling a giant Ponzi scheme and the attorneys defending its promoters.
One far-sighted lawyer claims, “The smart attorneys are figuring out how to represent clients suckered into Bitcoin investments, not how to be involved with what’s happening now.”
There are hints that white-collar criminal defense is heating up, as well, especially in the healthcare sector. Despite the Trump administration seeming willingness to give wide berth to executives who work along the edges of the law, investigations into Medicare, Medicaid, and healthcare fraud appear to be accelerating.
Not Hot And Uncertain
As opposed to practice areas that are heating up, several are cooling off or simply too hard to read just now.
Commercial litigation is in the cooling off column, in part because businesses are looking for less-costly ways of settling disputes than going to court and because more contracts call for arbitration. Labor and Employment lawyers are reporting that their work is slowing down, as well.
Except for California, Oregon, Washington and New York in the U.S., which have adopted their own tough laws and regulations, there’s a big question mark over environmental practices across the country. But in Canada, the federal government is adopting tough new regulations to meet its Paris climate change accord requirements. Meanwhile, beyond Ottawa’s requirements, Ontario and Québec have signed separate climate change agreements with California and the ensuing regulations are expected to keep environment practices busy.
The new tax law in the U.S. is expected to keep attorneys in this area busy well into 2018.
There are several hot trends for 2018 in business development and marketing among smarter firms including formal business development coaching and training for attorneys in the face of stagnant demand for outside law firms; greater pressure on bar associations and law societies to allow fee-sharing; non-lawyers being given the authority – as well as the responsibility – for managing larger firms; a greater outsourcing of management functions in midsized and smaller firm, and a renewed interest by firms in creating non-law subsidiaries.
- Formal coaching and business development training – In midsized firms where the effort is supported by the managing partner, coaching, and training are starting to have resulted in making more attorneys more effective at generating more work. For solo’s, one-on-one coaching is becoming a necessity for their survival.
- Outsourcing management functions – Smaller firms without the desire or resources to build up an entire staff department are coming to view outsourcing as a way to have the equivalent of a full-time, in-house department without adding to the payroll or headcount. For less than the annual cost of one or two fairly junior people outsourcing gives a firm access to experienced, senior executives.
- Website Development and Design – The Dept. of Justice is expected to begin enforcing the website accessibility issue in 2018. Law firms will be expected to comply, and if they do not they will suffer not just fines but public embarrassment. So look for many firms redoing older sites, and newer sites being updated to comply with the law,
- Greater authority for firm managers – Savvy firms are finally recognizing that giving “non-lawyers” the authority for their area of management expertise drives fee revenue and profits. This is especially good news for marketing directors and IT managers because it’s a marked change from the restrictions and second-guessing many of them have had to live with for several decades.
- Non-Law Subsidiaries – Some 15 years ago, a few firms toyed with creating business subsidiaries that had nothing to do with practicing law. Although the concept sort of disappeared from view, they have become popular again as non-traditional competitors have created law practices. Properly managed, they can relieve some of the fee and profit pressure midsized and other non-BigLaw firms are facing.
From this survey, it appears as if 2018 will continue to bring significant practice and management challenges to law firms of all sizes, from solo practitioners and small or midsized firms right up to the BigLaw behemoths. We’ll continue to track developments in the business of law and keep attorneys informed.