[2] Recommendation | The Legal Profession Won't Need "Big Firms" in Ten Years (Insightful Read)
[2] Liu Guiming’s Introduction:
[3] What needs to be told is that this is by no means a clickbait title, nor an exaggerated statement, but a living future reality. Because the internet has already changed us, and will continue to change us. Of course, whether large firms will still exist by then is two sides of the same coin. How to view and evaluate this depends on our careful consideration and focused research.
36 years ago today, on August 26, 1980, the first law concerning lawyers in New China, the "Interim Regulations on Lawyers," was officially enacted, marking the restoration and reconstruction of China's legal profession entering an institutional phase. Over the past 36 years, law firms in China have not only undergone transformations from state-owned, cooperative, and partnership firms to individual practices but have also seen the emergence of large firms with hundreds of lawyers.
Undoubtedly, large firms are a hallmark of the development of China's legal profession. However, in the internet era, whether large firms are still necessary or even viable is not a sensational topic but a question that demands collective reflection from the entire industry.
The legal profession will not need "large firms" in ten years.
Chen Wenwei, Wang Jia, Beijing Gaopeng Law Firm
With the rapid advancement of technology, humanity has entered a new era of the internet and information. On March 5, 2015, Premier Li Keqiang first proposed the "Internet+" action plan in his government work report, which aims to leverage internet platforms and information communication technologies to integrate the internet with various industries, including traditional ones, creating a new ecosystem in new fields. The world has thus become flatter and smaller, bringing people globally closer than ever before. Whether you can harness technological developments and global resources for your benefit is the standard for thriving in this flat world. Against this backdrop, if the legal profession can upgrade its services at minimal cost, significantly expanding the breadth, depth, and personalization of legal services, it will have a transformative impact on lawyers' practice models, the relationship between lawyers and firms, the organizational structure of law firms, and the landscape of the legal services market.
Historically, large law firms have been more favored in the legal services market, primarily for two reasons. First, in traditional information channels, users (recipients of legal services) had asymmetric access to information about lawyers. Faced with a myriad of law firms, users could not immediately determine which lawyer offered more specialized or higher-quality services. In such circumstances, users seeking good lawyers had to rely on the scale and brand of law firms for evaluation and judgment. This is because, in common perception, a larger and more renowned law firm instills greater trust in users compared to lesser-known or smaller firms, offering a sense of credit reliability. Second, many large law firms have superior financial strength, with branches nationwide or even globally, and enough lawyers to handle large-scale projects. This allows them to provide comprehensive, one-stop services to cross-regional or multinational enterprises and users, saving users the trouble of finding lawyers in different locations. Consequently, many law firms strive for scale to win market share and attract more users.
However, the characteristic of legal services lies in professional advice and efficient problem-solving. Lawyers rely on their professional competence in competition, and a lawyer's professional ability is not directly related to the size of the law firm.
First, a law firm is merely a platform, or even just a result of the current institutional arrangement requiring lawyers to practice through a law firm. For the legal service industry, whether the specific handling lawyer can provide professional legal advice is the core of the service. In other words, if the system were reformed so that lawyers could independently accept clients' mandates and the management model of the legal profession no longer required lawyers to practice through a law firm, the value of law firms would be greatly diminished. In fact, a large-scale law firm only reflects the number of employees, office facilities, total assets, turnover, and profit. It merely indicates the economic strength and operational capability of the firm, not the professional level of the specific lawyers handling cases. Some law firms even blindly pursue expansion and scale, leading to a continuous increase in personnel, even reaching a thousand-person scale. Under this model, the competitive advantage of the firm does not multiply with the expansion of scale; instead, the complexity of management and practice risks increase exponentially. Therefore, the size of a law firm is not proportional to its level of specialization. The quality of a law firm is not determined by its size or the number of lawyers, but most critically by whether it can provide high-quality legal services to clients. Even professional individuals can gain recognition from users through their own abilities. Hence, the size of a law firm is not the primary competitive factor.
Second, new technologies have brought disruptive changes to society. The most obvious feature is that information is no longer as closed and scarce as before, but can easily break through spatial limitations, achieving the integration, dissemination, and matching of information resources, allowing users to obtain more information than before. If choosing a lawyer is compared to buying a product, in the past, the only way to buy a product was to visit various stores to find a suitable one. Due to the lack of information and resources, the result often involved spending a lot of time and effort without actually finding the right product. In today's technological era, intermediaries are gradually disappearing. Buyers only need to search for relevant information online to complete the purchase without leaving home. This saves costs and precisely meets the buyer's needs. The future development of the legal profession is similar. The development of information technology and convenient online platforms allows truly professional lawyers to be quickly discovered and identified by people. Online information provides users with more and more convenient channels, enabling them to obtain information about professionals (such as the performance and data of a specific lawyer or professional team) from the internet without going through intermediaries. Based on the information obtained, users can find the most suitable professionals for their needs, precisely locate lawyers, and directly receive efficient and high-quality legal services from professionals. At this point, a large scale, numerous lawyers, and impressive premises not only fail to attract users but also lead to a disadvantage in price competition due to high costs. The advantages of law firms that once expanded to attract users will no longer exist. Ultimately, like many large physical retailers forced out of the market by e-commerce, large-scale law firms may eventually disappear due to excessive cost expenditures.
Third, further analysis shows that for a long time, most lawyers worked in a "solo" state, even taking on any business regardless of their expertise. In fact, not every lawyer is proficient in all areas. In the era of internet technology, when legal services cannot rely solely on individual lawyers working alone, a well-configured team providing the most efficient and professional legal services is more likely to gain user recognition. In the internet economy, openness and borderlessness are basic characteristics. Without openness, there is no internet; with borders, it cannot be called "connection," only a local network. Therefore, through future internet technology, communication and collaboration among lawyers become easy and possible. With the advancement of communication and network technologies, using online platforms, not only lawyers in the same region but also those in different regions can collaborate remotely, or even engage in large-scale cooperation among many lawyers from different law firms, all becoming effortless in the internet era. At that time, the allocation of resources and coordination of abilities among lawyers can be organized entirely through the network. For specific legal needs of users, lawyer teams can be formed in specialized business areas. Even when a project involves multiple issues such as finance, taxation, investment, intellectual property, securities, and litigation, specialized talents from various fields can be combined and coordinated through the network to complete the task together. By making the best use of everyone's talents and collaborating, a professional service advantage is formed, integrating lawyers with different strengths on the network to create more personalized and professional products and services for clients. At that point, the existence of law firms will no longer be the focus of users' attention. Users will pay more attention to teams and professional lawyers who can provide better services. When that time truly comes, through an internet platform, all lawyers can showcase their professional abilities and trade and cooperate with lawyers possessing other skills. There will be no need to build a "legal aircraft carrier" through law firms.
Finally, based on the above analysis, in the future, the legal profession may no longer need to rely on a fixed institution to work as in the traditional sense. The advantages of law firms as fixed operating institutions will gradually diminish. Even when technology develops to a certain stage and drives social progress, the lawyer system may have to be reformed to keep up with the times. As mentioned earlier, the restrictive system requiring lawyers to practice through a fixed law firm may be broken. Lawyers can directly and independently face users, providing professional legal services without being forced to conduct legal business through law firm institutions. Under the new system, lawyers can completely break the boundaries of law firms. Lawyers from different law firms and regions can collaborate across spatial limitations on the internet, achieving business cooperation. Many specialized lawyers will not be in one law firm but will form a lawyer alliance to carry out business in their areas of expertise. A convenient, transparent, and open network will also provide users with a comprehensive and multi-dimensional query system, ensuring the standardization and normalization of lawyer practice. Users can query lawyers' practice information, credit records, rewards and punishments, performance data, and user evaluations through systems like lawyer credit inquiry systems. In the near future, these may no longer be fantasies. With social progress, such reforms will be inevitable. Just as many of China's legal systems are constantly revised and innovated with reform and development, history moves forward. The systems of human society develop by continuously breaking old habits and innovating. If conservative and backward systems are clung to, even if they constrain the legal profession, more consulting firms will emerge in the tide of the times and replace law firms, ultimately achieving the goal of providing professional advice to users. Therefore, no matter what, backward systems cannot stop the tide of the times. This is determined by the laws of social development. When social technology reaches a certain stage, unreasonable or outdated systems will eventually be rewritten or eliminated.
The 21st century is the century of information. Under "Internet + Law," China's legal service market will inevitably undergo revolutionary changes. When the internet meets law, when legal services go online, and when the two are perfectly combined, it will greatly promote the process of socialist rule of law. The legal profession will use internet technology to upgrade legal services at the lowest cost, while greatly expanding the breadth and depth of legal services, providing users with more professional and personalized high-quality legal services. A new era of smart law is about to be born. [Reprinted from the author and WeChat public account: Gui Ke Liu Yan (agui1962)]
