[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.
On this day 36 years ago, August 26, 1980, the first law concerning lawyers in New China, the Interim Regulations on Lawyers, was officially promulgated, marking that the restoration and reconstruction of lawyers' work in China had formally entered the institutional stage. Over the past 36 years, law firms in China have not only undergone transitions from state-owned firms to cooperative firms, partnership firms, and even sole proprietorship firms, but have also gradually seen the emergence of a number of firms with over 100 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.
Ten years from now, the legal profession will not need "big firms."
Chen Wenwei, Wang Jia, Beijing Gaopeng Law Firm
With the rapid advancement of technology, humanity has entered a brand-new era of internet information. On March 5, 2015, Premier Li Keqiang proposed the "Internet Plus" action plan for the first time in his government work report, which aims to leverage internet platforms and information and communication technologies to integrate the internet with all industries, including traditional ones, creating a new ecosystem in new fields. The world has thus become flat and smaller, with people around the globe able to connect with one another more closely than ever before. Whether you can make technology and global resources work for you is the standard by which you can establish yourself in this flat world. Against this backdrop, if the legal profession in the future can upgrade the legal services industry at the lowest cost, greatly expand the breadth and depth of legal services, and provide more personalized services, it will have a disruptive impact on lawyers' practice models, the relationship between lawyers and law firms, the organizational forms 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 reveals that for a considerably long period of time, most lawyers worked in a “lone wolf” mode, even taking on any business and handling any case regardless of their expertise. In reality, not every lawyer is proficient in all practice areas. In the era of internet technology, when legal services can no longer be fully delivered by individual lawyers working alone, a well-structured team that provides users with the most efficient and professional legal services is more likely to gain user recognition. In the internet economy, openness and boundarylessness are its fundamental characteristics. Without openness, there would be no internet; with boundaries, it would not be called a “network” but merely a local area network. Therefore, through future internet technologies, communication and collaboration among lawyers will become easy and feasible. With the advancement of communication and network technologies, and with the help of online platforms, not only lawyers in the same region but also lawyers in different regions will be able to collaborate remotely, and large-scale cooperation among numerous lawyers across different law firms will become effortless in the internet era. By then, the allocation of resources and synergy of capabilities among lawyers may be fully organized through the internet. In response to users’ specific legal needs, lawyer teams can be formed in specialized practice areas. Even when a project simultaneously involves multiple issues such as finance, taxation, investment, intellectual property, securities, and litigation, specialists from multiple fields can be assembled and coordinated through the internet to work together and accomplish the task jointly. By making the best use of everyone’s talents and collaborating with one another, a specialized service advantage is formed, enabling the integration of lawyers’ diverse strengths on the internet and building more personalized and professional products and services for clients. By then, the existence of law firms will no longer be the primary focus of users; instead, users will pay more attention to teams and professional lawyers that can provide superior services. When that time truly arrives, through a single internet platform, all lawyers can showcase their professional capabilities while trading and collaborating on capabilities with lawyers who possess expertise in other areas. There will be no need whatsoever to build an “aircraft carrier” of lawyers through the law firm model.
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 the “Internet + Law” model, China’s legal services market is bound to undergo revolutionary changes. When the Internet meets the law, when legal services go online, and when the two are perfectly integrated, the progress of the socialist rule of law will be greatly advanced. Through Internet technology, the legal profession will upgrade its services at the lowest possible cost, while greatly expanding the breadth and depth of legal services to provide users with more specialized, personalized, and high-quality legal services. A brand-new era of smart law is about to be born. [Reposted from the author and WeChat public account: Guike Liuyan (agui1962)]
