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 andthemes outlined in more detail in the report.  I will start the serieswith posts outlining the context in which online social networking andsocial computing asks us to rethink the way legal practicesoperate and emerge as more effective businesses. In this first post Iconsider how turbulent conditions are forcing change, with later postsdiscussing the rapid rise of social software, the business role forsocial networking and shaping new ways of working.

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

In such times, clientretention is of prime importance, and winning new business in thedownturn has become an even greater challenge.  Hence, lawyers areconstantly seeking ways to get closer to their clients and providegreater value, whilst market forces are pushing them to be leaner, moreefficient and innovative in their service delivery.  There is also anongoing struggle to capitalise on the skills, experience and talent toimprove firms’ agility, overall effectiveness and competitiveness,which are more visible now the market is no longer growing as it has inrecent years.

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

• Market pull towards commoditisation:  Commoditisationhas been at the heart of Richard Susskind’s contention that lawyersmust adapt to the concept of legal services as commodities and “embracebetter, quicker, less costly, more convenient, and publicly valued waysof working”.   This trend towards commoditisation is being driven froma number of quarters including technology advances  (e.g. online anddocument assembly technologies), standardisation and packaging of lowerrisk transactional work and client demand for smarter, morecost-effective legal services. The pull towards commoditisation meansthat price and quality are no longer the only differentiators ordrivers of competitive advantage. Instead, advantage is derived fromleveraging intangible assets and capabilities, which most obviouslysurround 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 networkscirculate valuable information, ideas, skills and opportunities,quickly and effectively.  As a result, what and who you know determineswhere and how far you go.  As legal and support staff continue to belaid-off, so too does thousands of years of knowledge and expertise -largely untapped.  That knowledge can sit in various places, includingemail exchanges, memos, meeting notes, hard and shared drives, not tomention in the heads of the departees and their networks.

• Technological advances:  Information and communication technologycontinues to evolve and have a pervasive impact on our personal andprofessional lives.  Since its inception, the web has fundamentallychanged the way users interact, connect and communicate.  Technology’scontinued and rapid evolution is offering increasing opportunities forre-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 socialtechnologies offer possibilities for radical change in the way thingsare done.

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

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