31 March 2012 at 13:52 BST

Farewell to the oil age

Law firms can no longer hope to survive on providing legal advice alone, warns Chrissie Lightfoot. If they are to thrive in an increasingly technology-driven era, they must add value in the data field - as well as being generally more human

Gerd Leonhard – described as one of the world’s ‘leading media futurists’ by the Wall Street Journal – confidently suggests that ‘data is now the new oil’.
He proclaims passionately that the legal profession is in the content business, the marketing business and, ultimately, the data business.
Why? Because the world is headed towards systems of peer-to-peer collaboration, unbundling and fragmentation. Mr Leonhard says: ‘We’re living in a digital society where there is a different world view on control, ownership and authority’.

Hyper-collaboration


The abbreviation RoI once stood for ‘return on investment’; it is now superseded by return on involvement. We are moving from hypercompetition to hyper-collaboration. We’re living and working in the networked society and law firms themselves must be networked.
And to be successful in a networked world, the human factor of adding value is essential to how we use information and data. Other sectors – such as finance, insurance, banking and music – are examples of the shift.
Mr Leonhard suggests adding value means focusing on elements such as ‘time and attention, influence and reputation’, in other words, intangibles such as high-end intellectual capital and emotional intelligence.
Ultimately, he suggests, the key is being a human brand, where trust is the new currency, and where the focus is on humanity and being social. Interestingly, he predicts lawyers will be paid by virtual currencies in the future – for example, Facebook credits, as the public rating of lawyers becomes increasingly important in a world where we value interaction before transaction.
UK-based fellow futurist Dr Patrick Dixon agrees. He maintains that while there are current frustrations – for example, the modern world is already digital with digital clients, yet lawyers operate with ‘dinosaur interfaces’ – the future of law will be driven by emotion. He says, ‘what clients want in the future is advice based on emotion’. Evidence of this can be seen in the fact that lawyers themselves have already ‘become rated. If you post a tweet about law, Google will take it seriously’.

Barriers to entry

Nonetheless, concern remains in the legal profession that big branding is still prevalent and causing problems. The managing partner of a midtier UK law firm recently told me: ‘We must not forget that corporate brands provide barriers to entry’. For example, the ‘nobody got fired for buying IBM’ mantra is as applicable to the legal market as it is to any other, and can be seen in operation daily at every level of the legal services market.
But personal – or human – and corporate brands are not mutually exclusive. It is important to view corporate brands simply as the umbrella for multiple human brands in a networked, collaborative world.
Data-focused companies are building, exploiting and nurturing personal brands now in a smart way. This relates to how they use their personal brands and the customer experience within social networks (and social media streams) to leverage and build awareness of the firm’s brand.
It is a networked world and will continue to be. Trust and being human are – and will remain – the reasons clients are attracted to law firm brands. And all firms are going to have to look at new ways of adding value on the periphery of their core propositions if they are to remain competitive.
Law firms may not realise it yet, but, to re-iterate Mr Leonhard’s belief, they are in the content business. In addition, they are in the marketing business and their value will be in becoming data businesses.

Shifting positions

We are shifting – and arguably have already shifted – from the oil age to the data age. The early 20thcentury world, in which the American industrialist John Rockefeller dominated, has been superseded by the 21st-century digital data age where the shots are called by the likes of Facebook’s Mark Zuckerberg. Law firms and their lawyers need to shift their positions too.
Just as man cannot live on bread alone, no longer can law firms live on providing legal advice.
If they attempt to do so, the oilwell riches of the past and present will surely run dry. Could the end of oil be the end of the traditional law firm as we know it? Conversely, could the rise of data value and focus be the beginning of the true business of law?

Chrissie Lightfoot is the chief executive of legal consultancy The Entrepreneur Lawyer and author of the book ‘The Naked Lawyer: RIP to XXX – How to Market, Brand and Sell YOU!’
 
   
 
 
 

Also read...

Shareholders in US litigating fewer M&A deals

Fewer M&A deals are being litigated by shareholders, while merger objection cases have shifted from state to federal courts.