Written by Dr George Beaton, Executive Chairman, Beaton Research + Consulting
Corporate law departments and clients generally are under a rising wave of pressure to do more with less. From their law firms they want faster, better, cheaper service with more efficient, predicable, cost-effective, agile delivery of legal services.
Research tells us that almost all law firms are finding innovating to meet these demands an uphill battle for the well understood reasons of reluctance to take risks because of a lack of real balance sheets and their compensation systems.
But there’s an even bigger problem. There are simply far too few effective managers and leaders in the legal profession. Take for example these comments by clients about law firms: ‘There is no one leading their charge, no co-ordination’, ‘They do not seem to have a sense of direction; this means we look around because we need long-term security of supply’, and ‘The firm lacks leadership and at times this demotivates their lawyers; I suspect we’d get more discretionary effort from them if it was different’. This commentary isn’t intended as a generalisation. And equally many complimentary words are spoken, but it is indicative of an elephant in the room: The future of the legal profession will be decided by business leaders, not lawyers.
And what of the law schools? Few, if any, have started to prepare students for the rapidly changing legal services world which is upon us. US research on lawyers with up to seven years post-qualification experience shows the most significant shortcoming of their legal education is lack of training in business skills. I have no doubt the same is true in Australia. Employers of law graduates still strongly favour those with strong academic performance. Combined with the fact that law schools are judged on academic standards, ths creates a self-perpetuating cycle with little incentive to change.
There are exceptions, pioneers like Professor Bill Henderson of the Indiana University Law School who says ‘Legal education and the legal profession are at an inflection point where traditional models of education and practice no longer fit the shifting needs of the market’. His Institute for the Future of Law Practice prepares graduates with a boot camp in accounting, finance, industry analysis, legal operations (data, process, technology, design), teamwork, communication, collaboration, feedback and leadership.
Australia, like the US, Germany and Spain, has a growing number of short courses and single subjects, e.g. Bond University offers The Digital Lawyer, QUT offers NewLaw, Technology and Innovation, the University of Melbourne offers New Technology Law, and UWA offers Legal APPtitude to build AI applications. Some law schools work with The Legal Forecast (TLF), a national not-for-profit run by creatively-minded law students and early career professionals seeking better ways to teach, practice and deliver law with a strong flavour of A2J. In effect TLF is taking things into their own hands to help fill the vacuum.
Significantly, the College of Law with its Australia and New Zealand-wide coverage has announced a 12 subject Master of Legal Business degree launching next early year and open to lawyers, general managers and functional specialists in private practice, corporate law departments, legal aid and the courts.
While law schools continue to focus on traditional legal knowledge, both transforming traditional firms and law departments and the new forms of legal services delivery require different skills. There are yawning gaps between demand and the supply of lawyers and functional specialists trained in management and leadership.
The challenge is how to attract, educate, train, and scale to fill the gaps. Law schools must play catch up.
Dr George Beaton
Dr George Beaton’s background in teaching strategy in business and law schools, combined with his work in public and private sectors, professional services, universities and governments, give him deep insights into the challenges and opportunities facing leaders and their organisations. He has guided clients through a wide variety of strategic decisions in his 30+ years as an advisor and consultant.
He is widely regarded as a leading independent authority on professional services industries and their firms. His work covers Australia, Asia, USA, Canada, and UK. He has a particular interest in the imperative for law firms to remake their business models. George’s books, NewLaw New Rules and Remaking Law Firms – Why and How, have established him as a global thought-leader.
Dr Beaton has been appointed chair of the College of Law Program Board for a suite of programs on management and leadership of law firms and law departments offered to lawyers, general managers and functional specialists – including knowledge management, digital, BD, HR, operations and finance.
This is the full text of the excerpt published in the Australian Financial Review – Comment on Friday 28 September 2018.
Read more about the Master of Legal Business.
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