None of us are starved for Covid-driven content these days, but Jay Herrington’s article Reinventing Your Law Firm: If Not Now, When? tickled my fancy.
Jay evokes a great and powerful image of this troubled time as a positive time for reinvention, re-imagination and (eventually) rejuvenation in the law industry. Think Spencerian economics applied to economies.
For those who still consider themselves more than apes on this fragile planet of ours, Spencerian economics suggests a wake-up call. Who’d have thunk we’d be under global attack by a virus that could destroy major institutions and bring world powers to their knees? How simply primitive!
We can deal with the virus as best we can, but we cannot and should not ignore the long-term message of ever looming and unpredictable change lest it come to haunt us once again. There are reasons why the rather hidebound legal industry should take special note.
In his list of potential changes, Jay suggests that law firms be cognizant of the “Hollywood Model” of production, where a producer assembles a team to work on a project and the team works together for as long as necessary to complete the project. To accomplish this, Jay goes on, law firms should “accelerate their adaptation toward more nimble, flexible work arrangements.”
All of us could add to this list of law firm tasks that could be disaggregated, dismantled and re-assembled in a more rational future in the law firm models to come. Mine would have to do with litigation finance.
For those who don’t know me, my focus for the past decade or so has been the confluence of litigation and finance and how capital markets can inform, support, rationalize and improve the process of claim resolution around the world, whether through arbitration, litigation or whatever other new forms or media the virus may now suggest we adopt.
My own, err, petri dish was the phenomenon of claims against state-sponsors of terrorism. My affection for the law/finance disruption occurred to me in the first part of this millennium (I like that histrionic in the current circumstances) when I realized the only way capital came into law was through US lawyers trading with other lawyers to capitalize major claims, like asbestos, tobacco and their progeny. Huge claims, like Lockerbie and 9/11, were too big for any one law firm to handle. I thought to myself: “doesn’t outside capital have something to say about the systemic business, moral and health corrections these mega cases pursued?” (The litigations, themselves, were a form of “litigation virus” that swept out and corrected bio hazards and societal threats.) Money and markets were at stake, so why should lawyers monopolize the entire system, from investment to reward?
When I launched Juridica, I sought to turn over the trading tables in the temple of law. It was time for sunlight in the litigation system, I thought. But times have changed.
Third party funders are chortling over how their phones are ringing off the hook. Law firms are scrambling to calculate their next moves and deal with financial crisis. The economic atmosphere is starved of cash.
I suggest it’s time for a correction in litigation funding, a correction that puts more of litigation finance back into the hands of law firms. Yes, I am advocating a certain sort of back to the future, one where capitalized law firms are their own financiers rather where financiers are outside agents to the law. A world where capital and law are true partners in the drama unfolding before us. But think the West End, not Hollywood.