What I'm watching for in 2024
What I'm watching for in 2024
My view of the legal ecosystem, and why I'm going to pay close attention to generative AI, new Biglaw offerings, and the rise of "independent" attorneys
Today, instead of sharing my predictions about what’s coming to the legal industry, I’ll share where I think the most action will take place next year. In short, it’s (1) generative AI; (2) Biglaw firms adding low-cost capabilities; and (3) strong bench talent among independent attorneys. Before I get into why, I’ll share some observations on the past, and the trends I’m seeing take place right now.
Everything in this article is based on personal observations and off the record conversations from various players in the legal ecosystem. I’m sure I’ve gotten more than a few details wrong, but hopefully they don’t change my overall conclusions. If you have a different perspective I’d love to hear from you!
The Past: The Legal Value Chain
Historically, the legal value chain was relatively straightforward. Law firms would hire associates and staff, rent out office space, and provide a place where everyone could “process” legal work. The work would be originated by the partners, who had relationships with General Counsels who lead legal departments at big corporations.
To be sure law firms didn’t *always* work this way. But some time in the mid 20th century, law firms realized that they could benefit from economies of scale, so they started to get bigger and bigger. At some point, these large firms diverged into two separate, and very different groups: the Maroons and Grays (shout out to Bruce MacEwen).
Maroons
Truly distinctive “destination” capability
Price no (real) object
Rarer events in corporate lifecycle with boardroom visibility
Grays
Efficient, predictable, reliable, transparent
Price-sensitive, from mildly so to least-cost wins
Mostly “run the company”—less “bet the company:” Legal services that are a cost of doing business
Today I’m going to focus exclusively on the Grays because that’s where most changes are taking place. I’m aware that many firms are actually Maroon, and are *not* feeling pressure, because they operate in practice areas that are price inelastic or have differentiated moats (e.g. Wachtell) Maroon firms are a much smaller group though, and have less potential for change.1