With the release of our publication Social Networking for the Legal Profession, I will be introducing in a series of blogs some of the topics and themes outlined in more detail in the report.  I will start the series with posts outlining the context in which online social networking and social computing asks us to rethink the way legal practices operate and emerge as more effective businesses. In this first post I consider how turbulent conditions are forcing change, with later posts discussing the rapid rise of social software, the business role for social networking and shaping new ways of working.

The impact of the recession looks set to have a profound and long-term effect on the legal profession, especially at the top end of the market. As companies do fewer deals and cut back on their legal spend, business is drying up in certain practice areas and revenues are falling for most firms, as evidenced by regular media reports of law firm lay-offs. Many firms are restructuring and paring-back costs, whilst others are seeking new avenues to exploit.

In such times, client retention is of prime importance, and winning new business in the downturn has become an even greater challenge.  Hence, lawyers are constantly seeking ways to get closer to their clients and provide greater value, whilst market forces are pushing them to be leaner, more efficient and innovative in their service delivery.  There is also an ongoing struggle to capitalise on the skills, experience and talent to improve firms' agility, overall effectiveness and competitiveness, which are more visible now the market is no longer growing as it has in recent years.

Such acute conditions have brought into sharp relief a number of other challenging trends facing the legal profession, namely:

• Market pull towards commoditisation:  Commoditisation has been at the heart of Richard Susskind's contention that lawyers must adapt to the concept of legal services as commodities and "embrace better, quicker, less costly, more convenient, and publicly valued ways of working".   This trend towards commoditisation is being driven from a number of quarters including technology advances  (e.g. online and document assembly technologies), standardisation and packaging of lower risk transactional work and client demand for smarter, more cost-effective legal services. The pull towards commoditisation means that price and quality are no longer the only differentiators or drivers of competitive advantage. Instead, advantage is derived from leveraging intangible assets and capabilities, which most obviously surround the capture, sharing and innovative delivery of knowledge.

• The rise of the knowledge economy and knowledge markets: In today's service-based economy, social and professional networks circulate valuable information, ideas, skills and opportunities, quickly and effectively.  As a result, what and who you know determines where and how far you go.  As legal and support staff continue to be laid-off, so too does thousands of years of knowledge and expertise - largely untapped.  That knowledge can sit in various places, including email exchanges, memos, meeting notes, hard and shared drives, not to mention in the heads of the departees and their networks.

• Technological advances:  Information and communication technology continues to evolve and have a pervasive impact on our personal and professional lives.  Since its inception, the web has fundamentally changed the way users interact, connect and communicate.  Technology's continued and rapid evolution is offering increasing opportunities for re-engineering of business. Unlike previous generations of technology, which essentially offered the opportunity of 'substitution innovation' (doing what had always been done a little better), new social technologies offer possibilities for radical change in the way things are done.

• Generation shifts and expectations: The 'Net' generation has grown up on the internet, communicating with instant messaging, text messaging, social networking and (perhaps less commonly) via email.  They are always online and are used to constant real-time contact, multitasking, communicating, sharing and networking.  As a result, the expectation of younger or more Internet-savvy lawyers is that they can have the same freedom, flexibility and power inside and beyond the firm as they can using social tools for their personal affairs.

In my next post I will discuss the rapid rise of social software on the web and within businesses.