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TikTok marketer, drone operator, esports coach—these are among the many careers that didn’t exist ten years ago. In that time, new law business models have also emerged to offer novel ways of working for lawyers.

Whether they’re called consultancy firms, platform law firms, fee-share alternative law firms, or something else—a central focus of today’s newly arising law business models is avoiding the traditional law firm partnership structure with its conflict-ridden hierarchies, in-office politics, and billing targets that create so much stress for associates and partners alike. 

Let’s look at what’s driving lawyers toward these models and in the process, discover why they are here to stay.

Commonalities in new law business models

New legal company structures have emerged in many permutations. Most rely heavily on technology tools that allow lawyers to work from anywhere more efficiently and cost-effectively. These technology platforms may: 

  • Connect groups of lawyers with clients, collect payments, and provide an online space to manage legal matters.
  • Allow self-employed lawyers to work as if they were employees.
  • Provide support services that enable lawyers to create and run their legal business from anywhere independently.

AI, machine learning, and automation are critical tools that increase lawyer productivity and success rates in these new models. Lawyers pay a recurring fee or a revenue percentage, typically 10 to 30%, in exchange for the use of the technology and additional services, which may or may not include:

  • support in handling administrative tasks
  • paying for health and malpractice insurance
  • marketing, branding, and business development activities
  • paying referral fees to lawyers who bring in work for others 

Whatever the specifics, lawyers are flocking to new models where they can deliver service on their terms rather than those of old-school law firms—where the billable hour is king and associates face eight to ten years of grueling “training” to become partners—at which time they’ll stress over pulling in several million in revenue every year or face expulsion.

Alternative legal business models are popular.

In the UK, consultancy firms grew organically at “a significantly faster rate by headcount” than traditional law firms – 15% against -1% for the top five hirers in each group – and also had better retention rates, according to research from Codex Edge. Up to a quarter of lawyers could work at fee-share alternative law firms within the next three years.

Corporate legal departments now seek a wider variety of service providers, particularly as new challenges around DEI and ESG and regulations concerning AI and data privacy increase. More than half (55%) of the CLOs surveyed by the Association of Corporate Counsel planned to turn to third-party consultants to support regulatory compliance. Meanwhile, a Wolters Kluwer survey found that 93% of legal departments already rely on a network of legal and compliance service providers to handle a broad range of activities. 

What drives lawyers to new law models? 

While associates in traditional law firms say they’re mainly concerned about compensation, research shows that flexible work schedules, better communication and engagement, and support for mental well-being also increase retention.

These factors likely drive lawyers toward new law business models where they gain control over their careers with the freedom to pursue the clients and types of work they prefer. Enjoying a balanced lifestyle with the flexibility to set your hours beats late-night in-office work sessions every day of the week—while also giving you the freedom to work from home or travel.

Lawyers don’t have to wait for law firms to modernize. They master their own destinies, even finding success serving more and larger clients by automating legal services—and offering online self-service access to automated legal services—such as business formation, real estate, contract review, real estate, and other transactional legal work.

A beneficial move forward for the legal industry

Making it easier and more rewarding for lawyers to practice law could open the legal justice door to small businesses and underserved communities that cannot afford or don’t have access to traditional law firms. 

New law business models can also lower the barrier to entry to help make the legal profession more inclusive and equitable. More lawyers with diverse backgrounds can practice law, offering fresh perspectives to advance their preferred fields and using their skills to open the legal system to more people. 

With fewer lawyers stressed and burned out, more lawyers should be available to increase the public’s understanding of their legal rights, resulting in more people making informed decisions and holding governments and corporations accountable.

There’s no doubt that business models will evolve as lawyers use the latest technologies to expand their legal practice options, ultimately making the profession more enjoyable, accessible, and affordable for everyone. 

Amicus has been dedicated to Transforming the Business of Law™ for more than 25 years. Reach out to us at 877-926-4287 and discover ways your firm can modernize to maximize efficiency and serve more clients.

Author: Bill Tilley, Practi Pulse TM. Read on LinkedIn.