The South African legal profession is undergoing significant and permanent change - and much of it is driven by the consumer and business experience of the Internet, says ICT lawyer Reinhardt Buys.
Buys says the current debate in law chambers focuses on the Legal Services Charter and the pending Legal Practice Bill that will replace the current laws that regulate the conduct of attorneys and advocates. But these are not the main drivers of change. Buys notes that aspects fundamentally impacting on law firms are increased competition, changing client expectations and technology.
"Clients are getting more sophisticated and more demanding in what they require from lawyers," says the Buys Incorporated lawyer.
"Clients do not want to pay huge legal fees for the drafting of a contract, if they can buy a template online for a fraction of the price. And if they indeed decide to instruct a lawyer to draft a contract, they expect tangible added value they cannot get from template-shops on the Internet.
"Also, the market for proactive risk avoidance is growing significantly. Traditionally, clients approached lawyers only when they were in trouble or required something specific. Now, clients expect lawyers to provide services and solutions that keep them out of trouble in the first place. Examples of such services are risk mitigation, compliance and governance solutions."
Buys says a publication that tracks the globe`s top 100 law firms (Top 100 Law Firms) notes that all have implemented technology solutions that allow clients to benefit from personalised portals, extranets and law firm resource - irrespective of time and distance.
"In stark contrast, local law firms has done very little and don`t seem to realise how new technology could be employed to increase productivity, automate tasks, increase service value and bring down costs.
"Changes like these only occur every three to four generations and the profession should rather embrace it and ensure that a better, more affordable and more representative profession emerges."
Looking ahead
Buys` 10 predictions for the legal profession in 2008 are:
1 The hourly billing system used by most law firms is under strain. Consumers argue that per hourly billing discourages faster and more effective work by lawyers and prefer a billing system based on value or prior quotations. In 2008, the hourly billing system will come under continued scrutiny and many law firms will investigate and implement alternatives.
2 The increased competition from non-lawyers who provide legal services electronically (like www.houseofcontracts.co.za and www.legalcity.net) will continue in 2008, forcing law firms to allocate bigger budget amounts to marketing and related expenses. More law firms will investigate and start to use electronic tools such as e-newsletters, podcasts, and even YouTube videos for marketing purposes.
3 Legal services are increasingly being delivered electronically and this trend will continue in 2008. Law firms will investigate (or outsource the investigation) on how new technology can be used to increase productivity and lower costs.
4 Law firms will increasingly develop and provide new and unique legal services aimed at proactive/dispute avoidance. The legal profession might even win back some of the services it lost to the auditing profession such as risk management, legal compliance and corporate governance.
5 Mega law firm mergers, such as the merger between Sonnenberg and Edward Nathan and the recent merger between Mallinicks and Webber Wentzel, will continue in 2008. Expect at least four more of these mergers.
6 The commoditisation of legal services will increase. Law firms will offer so-called unbundled legal solutions or DIY services to a growing market for proactive solutions. Examples of such services include compliance audit tools and legal risk evaluation tools. The number of free or give-away services will also increase as law firms attempt to gain penetration into new markets previously exploited only by audit firms and non-lawyers.
7 In 2008, technology budgets will increase significantly as law firms allocate a bigger part of their profits to the acquisition, implementation, and use of new technologies, such as Office 2007 and knowledge management / document management solutions.
8 As 2007 will be remembered as the year of SharePoint in the US, the SharePoint wave will strike local law firms in 2008. Law firms will not only start to automate their processes, but will also build centralised portals for in-house use and experiment with external portals for clients. There will be a big market for IT companies that provide SharePoint-related services to the legal profession.
9 Law firms will become more decentralised in 2008 and lawyers will work from non-traditional locations such as their homes or client sites. Lawyers will also be allowed more flexible working hours.
10 The Legal Services Charter will be accepted and the Legal Practice Bill will be promulgated, formally starting a new age for the legal profession in SA. It is expected that the consumer of legal services will be the ultimate winner.
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