Queen Elizabeth II has now sat on the throne for 70 years—a milestone celebrated across the United Kingdom and the Commonwealth this past weekend. Much has changed in those seven decades. And as the world now contends with war, inflation, a looming recession and lingering challenges from the global COVID-19 pandemic, it is perhaps worth asking, where will we be—and where will your law firm be—70 years from now?
Law firms are notoriously slow to change, but these days you’d be hard-pressed to find a firm that does not profess to embrace innovation. Some are more successful than others, but most understand that to guarantee longevity and be successful in a highly competitive industry like the law, innovation is key.
Of course, innovation does not follow a straight line and mistakes are more common than most like to admit. That’s what Jessica Seah discovered when reporting her fascinating story about the recent $40 billion crash of Terra Luna, the stablecoin that lost its peg to the dollar last month, causing investors to lose millions of dollars.
The crypto industry is angry and lawsuits are coming, Jess writes, although it’s unclear whether investors will have much recourse in what remains a largely unregulated industry. Cryptocurrency may be risky, but many argue that its benefits make the risk worthwhile. Even Singapore Deputy Prime Minister Heng Swee Keat, who used the stablecoin collapse to warn retail investors against investing in cryptocurrency, conceded that digital currency could transform finance.
Lawyers told Jess that this conundrum illustrates crypto’s growing pains but the collapse of Luna does not sound the death knell for all digital assets. “They had a unique product that failed, Benjamin Bai, chief legal officer at digital asset firm Amber Group, said of the creators of Luna. “But it still doesn’t change the fact that it was a great invention.”
Also on the innovation front, digital tokens are emerging as a third asset class in M&A deals, alongside cash and equity, Norton Rose Fulbright’s global co-leader of digital transformation, Nick Abrahams, told Christopher Niesche. And lawyers increasingly will need to know how to manage them, he said. The Sydney-based tech lawyer, who is also an innovator, entrepreneur and futurist, believes the use of digital tokens will in time become widespread. Young lawyers with the right expertise in NFTs and crypto have a “massive opportunity,” he says, as they will increasingly be needed.
But the love of innovation, at least in the legal world, may actually be taking firms down the wrong path. In fact, the chief innovation officer at one of Canada’s largest law firms is calling for a ban on the term “legal innovation.” This is not because she is anti-innovation, of course, but because she believes many have lost sight of what innovation means. Law.com International’s Gail Cohen writes that Judith McKay, chief client and innovation officer at McCarthy Tétrault, and her colleague, David Cohen who is the firm’s senior director of client service delivery, have found that the legal industry is “focusing on innovation for the sake of innovation,” rather than looking for creative ways to drive value for clients.
And McKay and Cohen are not alone. Chris Bentley, the managing director of the Toronto-based incubator Legal Innovation Zone, told Gail that often there is too much focus on technology—that sometimes all that is needed is a simple solution to help lawyers and their clients reach their goals faster and more affordably. True innovation, the three say, is not necessarily about new, ground-breaking technology but instead is about offering new products, services and approaches to clients in previously unforeseen ways, often with incremental improvements on existing products.
And as much as law firms may think they’re embracing innovation, most are hampered by their structure, Bentley said. Their traditional approach to profit-sharing means they are less likely to use revenue for research and development, he said. Hence, they don’t accomplish much. Firms that have created ancillary businesses that focus on legal solutions for clients are more likely to succeed, he said. That appears to be what Norton Rose Fulbright had in mind. The firm said last week it is launching a legal tech subsidiary designed to provide a dedicated home for the development of legal technology as well as collaborations with outside legal tech providers and alternative legal service providers.
Finally, even the much-feared and revered (depending on who you are) privacy advocate Max Schrems says he might not need to bring so many complaints against companies violating the General Data Protection Regulation, commonly known as GDPR—Europe’s trailblazing 2018 privacy law—if only local enforcers would employ already-available technology to do their job. Instead of automating their enforcement procedures, many do this manually, he told Linda Thompson in an illuminating interview.
Regulators should think like a startup, asking themselves how they can use technology to scale a procedure, he said, noting that instead, they run their procedures as if they were in the 18th century. Schrems, by the way, also told Linda what he thinks it will take to create a culture of compliance when it comes to privacy, not just in Europe but among Big Tech firms in the U.S. and all over the world. I highly recommend you read Linda’s interview with Schrems, which can be accessed here.
Sometimes in closely observing the legal industry, we come across lawyers are who considered true innovators. Often, this is highlighted in their obituaries—a fact I have been reminded of twice recently.
Last week, the legal community unexpectedly lost Skadden, Arps, Slate Meagher & Flom partner Scott Simpon, who was described by colleagues as “a real trailblazer.” The 65-year-old partner, the firm’s co-head of global transactions, is largely credited with getting U.S. law firms accepted as major players in European transactions. Slaughter and May’s former senior partner Christopher Saul called Simpson “a genuinely innovative legal thinker. Retired Gibson Dunn & Crutcher partner Charlie Geffen described him as “a true innovator.” You can read the many tributes that poured in for Simpson in Law.com International’s story here.
And two weeks ago, Law.com International’s Latin America correspondent Amy Guthrie reported that White and Case partner Vicente Corta had died suddenly from a heart attack at the age of 57. Corta, considered an integral partner at the firm, was widely credited with having rescued Mexico’s banking and pension systems from near-ruin. Former U.S. ambassador to Mexico Tony Garza, who is now counsel in the Mexico City office of White & Case, emphasized just how innovative Corta was by paraphrasing a quote attributed to hockey legend Wayne Gretzky that is considered a perfect innovation metaphor. “He knew how to skate to where the puck was headed, not where it’d been,” Garza said.
But we don’t need to read obituaries to be reminded of where we’ve been and where we are going. In a week when we have been reflecting on innovators, longevity and change, we learned that Nigel Boardman, a long-time M&A powerhouse, ended his 49-year career in law after finishing his consultancy at Slaughter and May. That news followed the report that storied tax partner Steve Edge had retired from the firm’s partnership, again after nearly 50 years at the firm.
And at Herbert Smith Freehills, former global CEO Mark Rigotti, who retired from the partnership a month ago, announced he is leaving leave the firm after 26 years to take up a leadership role with an Australian business group. Rigotti is credited with overseeing the successful post-merger integration of Herbert Smith and Freehills and a period of significant European, African, Asian and U.S. expansion.
Meanwhile, in Japan—a country where change historically occurs so incrementally it often goes unnoticed—an upstart law firm is aspiring to become a powerhouse in the legal community that has long been dominated by Japan’s “big four” firms.
Yes, the legal industry is changing.
Another notable change was illustrated this week with Herbert Smith Freehills’s announcement that it will be serving as the principal legal adviser for WorldPride 2023, the world’s largest celebration of gay pride. That the global firm would take on such a mandate is not, in itself, a sign of an industry—or even a law firm—being transformed, nor is it a sign of innovation. But the fact that the firm would proudly announce it, and that the announcement would come at the start of Pride Month—and from Justin D’Agostino, the firm’s openly gay CEO—says something about how the industry is changing.
Of course, the industry still needs to keep moving, keep changing, keep innovating—a fact underscored by two stories about women. Law.com International conducted new research which found that top U.K. law firms hire far more women lawyers than men at the trainee level, but there is a massive drop-off in female retention after the three-year post-qualification point. Read Varsha Patel’s story about the findings, which unfortunately are not all that surprising to most of the industry, here. Also, in Canada, a new report by a legal recruitment firm and the Canadian Corporate Counsel Association found that there is still a sizeable salary gap between male and female in-house lawyers in Canada.
So, as the Queen of England’s seven decade-reign is fêted with pomp and circumstance, it’s a good time to reflect on the changes the legal industry has seen since the middle of the 20th century and what further changes are to come—tomorrow, the next day and decades from now. Please tell me: Where do you imagine your law firm will be in 70 years?