Buckle up, it’s time for your monthly download of legal inspo.
On today’s wild ride:
- Beyond the AI glitz and glamour, practical implications
- The economics of superstars
- 3 reasons why general counsel are enterprise strategy assets
- How Will You Measure Your AI?
- Associates want work-life balance, partners aren’t so sure
But first:
Beyond the AI glitz and glamour, practical implication
Legal tech conferences like Legalweek promise AI will totally overhaul legal work. But peel back the hype and questions linger around cost. Tools that jazz up legal research or eDiscovery could run $150+ per user every month.
Smaller firms fret about profits crashing as billable hours drop but revenue flatlines. They already wrestle big firms boasting bigger budgets for flashy new tools. As clients demand value, midsize firms control costs. But pricey AI could sabotage that edge.
Will AI for law firms then possibly be a double whammy (increased cost correlated with decreased revenue)?
So while AI may shake up law practice, the benefits gotta clearly beat the burdens. With foggy costs, plenty have doubts. AI darling demos often gloss over the make-or-break bottom line deets that will decide if AI gets adopted.
Get the full scoop on AI’s real impact.
The economics of superstars
Another excellent article from Bruce at Adam Smith Esg. that we will see play out in 2024 and beyond. How much access will corporates have to those superstars vs the partners who are farmed out work? Is a superstar needed for most corporates? Will superstars spend the necessary time understanding their clients?
Equity partnerships now expect partners to go hustle up business, with a “perform or you’re out” attitude. Despite headwinds in demand, profits per partner climb as leverage scales up and equity tiers shrink.
For superstars…
This “winner takes all” frenzy has gone down across industries. A few legal superstars can rake in giant sums and dominate specialties. One killer performance beats a ton of mediocre ones.
So for complex, bet-the-company matters, firms pay to keep superstars. Expect the rich to keep getting richer in law firm partner paychecks.
Dive deeper into the superstar phenomenon.
3 reasons why general counsel are enterprise strategy assets
Today’s business challenges call for creative leaders and teammate synergy. General counsel can be key strategic advisors.
- GCs have a 30,000-foot view. They touch all areas and see risks.
- GCs encourage innovation, heart, and purpose. These magnetise diverse talent.
- GCs use tech thoughtfully. They ensure tools uplift ethics and humanity.
With expansive perspectives, GCs are ideal partners in strategy sessions. CEOs already know their wise counsel is a clutch advantage.
Learn more about GCs’ strategic value.
How Will You Measure Your AI?
Many of the most profitable law firms have embraced alternative fee arrangements. AI is unlikely to bring down the hourly rate model on its own.
Competitive tension ensures reasonable pricing and best value while efficiency in service delivery is preserving/increasing law firms’ margins.
This could be a win-win for both corporates and law firms with more cost control predictability for the former.
Coming up with productivity improvements may need to be measured from the perspective of staying competitive in a changing environment or for helping acquire new clients.
Associates want work-life balance, partners aren’t so sure
A new survey exposes huge gaps between what associates and partners wish they’d see at firms. Junior lawyers overwhelmingly want more focus on wellness and work-life flow. Partners less so.
There was a 28-point canyon between associates and partners prioritising this issue. Lawyers overall hoped to see more love for training, mentoring, and transparency too.
As younger lawyers push for balance, law firms will need to bridge this disconnect.
Get the survey details on lawyers’ work-life views.
This month’s quote
“We are not dealing here with a transitory, cyclical, or evanescent phenomenon. And “superstars” happens to be not just a catchy word to insert in the title, but profoundly descriptive. For starters, it connotes a market drastically unlike the standard Econ 101 model, where “products are assumed to be undifferentiated and one seller’s products are assumed to be as good as those of any other.” – Adam Smith Esg.
