Building a Law Firm for the 21st Century

Opportunities but also major challenges ahead

Iberian Lawyer recently organised
discussion forums in Madrid and
Barcelona on the future of the legal
profession. The events, sponsored
by BlackBerry, attracted an impressive
line-up of key players in the profession,
not only senior partners but also those
rising stars who had previously been
identified by last year’s “40 under 40”
awards. Kenneth Bonavia, former
managing Partner of DLA Piper in Spain
chaired and moderated both events.

Participants considered what would
be the key issues facing law firms over
the next ten years and what a law firm at
the end of that period would look like.

Lawyer – Client relations

Always at the forefront of commercial
lawyer thinking is the relationship with
clients. David Arias, who leads dispute
resolution at Pérez-Llorca, gave his
vision of how these relations would
evolve, in particular, he sees clients
differentiating more between higher
value expertise work and more day-today
legal advice. Firms would tend to
respond to one or other demand, and so
the future structuring of individual firms
in terms of human resource and
technology needs will differ.

Participants suggest that this will
mean difficult strategic decisions for law
firms as well as an increasing
polarisation in the legal market. Firms
handling commoditised work will need
to adopt sophisticated techniques to
keep lawyer input down to the
minimum through making focused use
of technology, templates, paralegal and
secretarial support, all controlled by
hands-on management. Those opting for
tailor-made services would need to
recruit and retain the very best
practitioners in the market.

This means also that they would have
to turn away clients and work that did
not require their talents. Indeed, to
continue trying to serve both types of
client need is impractical. The
management model has to be different
and reputation would suffer if the right
resources were not in place.

Hugo Écija of Écija emphasises
however that clients will not pay for
what they perceive as high fees for
standard work. Firms opting to service
that style of business need to develop
specific solutions for know how.
Lawyers would add value to the client’s
business by adopting a multidisciplinary
approach, which could
mean a move away from current
partnership structures and could even
see the injection of external investment.
He adds: “Personalised services will
always exist and the big operations
require a made-to-measure service, but
clients are seeking to reduce legal costs
and to have rapid and practical solutions
and a commoditised service achieves
those needs.”

The input from in-house legal experts
was most valuable. Richard Munden, a
former Freshfields lawyer and Head of
Fleet at Vueling, describes how
businesses want external lawyers to
adapt going forward, eg by developing
and sharing know-how, virtual access to
know how and through electronic
billing. He also explains that the key
issues for clients are fees, especially
related to commoditised work,
providing quality, and adding value to
the corporation’s business.

Technology and Communication

Most participants agree that technology
and communications have a key role to
play in the law firm of the 21st century.
Speakers contrast the opportunities from
IT and communications with their latent
risks. Better communication, through
devices such as Blackberry, and
advanced document management
systems were allowing junior lawyers to
develop sophisticated work quickly and
more effectively.

Technology, participants said,
especially communication tools, already
greatly assist the work-life balance of
lawyers who can now check e-mails and
access documents while travelling or at
home. Jesús Aguirre at Telynet explained
how he has worked closely with law
firms to enhance lawyer mobility,
enabling them to complete time-sheets
and other administrative duties outside
their workplace.

However the risk is information
overload. The challenge is not to get
more information but smarter
information. As Joaquín Hervada, of Freshfields in
Spain, says: “The use of technology is
crucial for the modern office, but
you have to learn how to use it
well. It must not be a way to avoid
responsibility but a tool for fast and
clear communication. It is
important to match the information
to the audience you are sending it
to.”

Marcos Araujo, partner at
Garrigues, agrees, adding that the
challenge is then to produce quality
despite the quantity. Another risk is
that young lawyers might not
achieve the full insight into what
they are doing if they are driven by
model agreements alone.

The net result, according to
Romana Sadurska, Secretary
General at Uría Menéndez, is that
“the new generation has learnt to
use technological tools in an
intuitive way; they have a very
special relationship with the new
ways of communicating, but that
affects reflective and systematic
thinking, essential in our
profession. In recent years there has
been a different education model,
and the result is young people are
very confident, are open and
intelligent and are ready and
prepared to innovate.”

Organisational management
and globalisation

The options for restructuring law
firms to meet changing client needs
attracted close interest. Javier
Fernández-Samaniego at Bird &
Bird feels that the basic,
hierarchical, business model, in use
since the 19th century, is
increasingly out dated including
within the legal sector. An
innovative approach would mean
virtual office working by fee
earners when appropriate. Bottom
up contribution of ideas was to be
encouraged, so that everyone feels
that they are stakeholders in their
firm. This might strengthen the
current partnership structure at
most firms or indeed replace it with
a wider stakeholder model.

Charles Coward at Uría
Menéndez, considers also whether
the partnership model would have
to change, with firms becoming
more like corporations. That might
mean turning to external funding
and even a stock market listing.
However, investment targets would
be unattractive if the new
shareholders were not able to
participate in the running of the
law firm and if their maximum
participation were to be capped.
His conclusion is that there would
only be limited outside investment
in specialised offices of the elite,
although there might be wider
investment in technology or the
purchase of offices.

From the global law firm
perspective, Stephen Denyer, the
partner responsible for Allen &
Overy´s international offices,
explained why it was unlikely that
firms like his would seek external
funding, now possible under recent
reforms in the UK.

Fernando Rey, who leads
Garrigues in Barcelona, addressed
the likely impact of continuing
globalisation, both in terms of
delocalisation and outsourcing, as
well as responding to cross-border
advice and the issues of working
within networks of law firms. He
comments: “The
internationalisation of offices can
be approached using different
models: from a policy of best
friends to a true global firm with a
profit pool. Between these two
extremes are intermediate
situations such as strategic
alliances with firms in various
countries that have a similar
standing and strategy.”

Being passionate

Various commentators noted how
the new generation of lawyers –
commonly known as “Generation
Y” – has a different approach to
learning and work and is more
entrepreneurial and mentally
flexible than its predecessor, but at
the risk of appearing egocentric and
less committed to work. Young
lawyers of today have to be kept
interested, some say, and therefore
may avoid commoditised work,
even though their high level of IT
skills will help drive the
commoditisation of legal work.
Current ways of assessing,
promoting and remunerating
individuals would have to change
also if the commitment and
contribution of the new generation
is to be optimised. As young
lawyers have shorter time
perspectives, and partnership is less
appealing, no longer would “up or
out” or “survival of the fittest” be
an acceptable approach.

Law firms will have to adapt
their structure and culture to both
accommodate and get the best from
these young lawyers, said Romana
Sadurska.

For Emilio Coco, who leads the
Barcelona office of Cuatrecasas,
reconciling family life with
professional duties, especially for
female lawyers, is increasingly
important. HR strategies would
have to adapt and the
remuneration structure could
change too. “Young people
demand work-life balance: it is
important not only to involve
them in the big deals but also to
let them work flexibly.” Nielson
Sánchez-Stewart, of Sanchez
Stewart Abogados, is more
sceptical: “Hitherto, young
lawyers served their
apprenticeship with pride and in
an unconditional way. Now they
want to negotiate salaries and
their free time rather than invest
in their training.”

Miguel Roca, President of Roca
Junyent, with his many years of
experience, feels that for a long
time the young lawyer has been
taken advantage of, and there is
now concern about how to
improve conditions in the offices,
but the key is not to forget how to
convey to young lawyers from the
outset the passion for the law.

The route to success

Hugo Écija summed up the two
forum sessions with this
observation: “The successful law
firm in the 21st Century will be the
one that is able to innovate, to do
new and different things, thus
breaking with the practices of the
past.”

Judging by the contribution and
interest shown by participants at
these Iberian Lawyer conferences,
law firms in Spain are certainly
preparing themselves for the
challenges that lie ahead. The real
test, some suggest, will be whether
the managers with vision can
persuade their own partners to fall
into line with the initiatives and
changes that are needed.

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