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A New Business Model for Law Firms

The U.S. economic meltdown has a silver lining after all: Businesses used to spendingmoney fueled by easy credit are now going to have to reconsider basic operationalquestions, with the view to reducing costs and increasing efficiency. Costs associated

with legal services should not escape their notice. s of this writing, it is not unusual fortraditional law firms to charge more than !"##.## per attorney hour, and tens ofthousands of dollars per month. $ust as these times invite the rethin%ing of our basiceconomic assumptions so too does it invite a consideration of alternatives to the way inwhich legal services are provided.

&n fairness to the traditional law firm model: there are firms that may be worth the moneybecause of their depth and e'pertise, but the plain fact of the matter is that few small tomidsi(ed businesses can afford their services and they need effective legal counsel too. &nfact, it is li%ely that the new economy, with its anticipated hyper)emphasis on hightechnology and entrepreneurship, will lead to the proliferation of small firms creating an

even greater need for less costly and effective legal services. *ne such model promotedby +oodman aw, and receiving increasing attention among small gauge practitioners, isthe -&nter)irm Collaboration /odel0 of law practice. This model promotescollaborations between and among solo)practitioners and small firms for the purpose ofproviding an array of services to clients comparable to the services provided by larger,traditional firms, but at a fraction of the cost.

1hat, of course, has made the &nter)irm Collaboration model of law practice possibleare the revolutionary advances in communications technology that have occurred over thelast 2" years. The internet and electronic mail have made it possible for lawyers, evenlocated in different parts of the world, to wor% efficiently with one another on common

pro3ects. iberated from the need to be in physical pro'imity to one another 4i.e in a lawoffice environment5, lawyers are freer now than ever to develop relationships with otherlawyers wherever they may be located. 6ot only has commmunications technology freedthe practice of law from time and place restrictions, but it has also made it possible forattorneys to operate without e'pensive legal staffs. &ndeed, the sole proprietorship of the72st Century is so technology driven and self)reliant that in combination with other suchpractices, it is now possible even for small)gauge practitioners to compete with larger lawfirms for the attentions of larger scale clients.

The &nter)irm Collaboration model of practice not only builds on the increasingefficiencies of solo)practices but also e'ploits the greater tendency of solo)practitioners to

en3oy collaborative pro3ects with similiarly situated attorneys. &n this model, one attorney4or small firm5, functions as a team leader, a, so)called, facilitator, and in that role ischiefly responsible for evaluating the needs and ob3ectives of the client. The facilitatorwould then build a legal team to service the client in a manner comparable to that of atraditional law firm.

s with any new type of organi(ational model, there is bound to be a period of resistance:&n the case of more established businesses, there doubtless e'ists a comfort factor in

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dealing with traditional law firms over a group of loosley connected attorneys, but, in thelong run, cost considerations, will li%ely cause many businesses to ta%e a second loo% atalternative service models. &s the &nter)irm Collaboration /odel destined to eclipsetraditional large firm practice8 The answer to this question is probably not in the shortrun, but it is li%ely that traditional law firms will find themselves under increasing

pressure to lower billable rates and reduce staff. t the same time, to secure the talent ofthe future traditional law firms will also come under increasing internal pressure fromalternative and cheaper servicing models to implement quality of life policies that e'pressa more humanistic, fle'ible and entrepreneurial)dynamic style of legal practice.

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