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How NewLaw is changing around the world
The NewLaw market enters its next stage of growth, at a much quicker pace than previously estimated, writes Matthew Kay.
Matthew Kay
There was a boom in alternative legal services providers (ALSP) in the 2010s. The challenges faced by businesses during the global recession laid the groundwork for a new innovative way of doing law. But as we start the new decade during the coronavirus pandemic, could we see a new phase of NewLaw too?
In response to this demand, traditional law firms are having to diversify their offering, and smaller providers are adapting to a highly competitive NewLaw market they helped create.
And attitudes to flexible working have changed around the world growing the NewLaw market at a faster pace. Britta Spachtholz, at Xenion by Vario from Pinsent Masons, said that working from home wasn’t even considered an option in the German workplace until the COVID-19 pandemic meant everyone had to work from home. The unexpected benefit for firms was that they realised their employees could work just as productively remotely. It moved drastically from its position as a very “conservative” legal market afraid of trusting employees to work remotely.
Having to abandon the office and work from home for an extended period, (with a few initially hesitant) some lawyers in private practice have been encouraged to not only push for more flexible working at their firm on a permanent basis, but leave it altogether to embark on a freelance lawyer career.
At Vario, we saw a 200 per cent increase in the number of lawyers applying to be contract lawyers in June this year. We read this uptick as a sign that lawyers had gained confidence during the lockdown and wanted to enjoy the benefits of working remotely for the long-term. In the UK, more lawyers have joined virtual law firms, too, with a 7 per cent increase according to business-advisory firm Hazlewoods.
In Australia, the number of freelancers has grown by 86 per cent due to pandemic, according to Forbes. And with a staggered approach to the office to ensure employee safety, many law firms are making working from home and flexible working a permanent fixture, so once restrictions are removed lawyers will still be able to enjoy the advantages of working on an agile basis.
All these rapid changes could see the NewLaw market enter its next stage of growth, at a much quicker pace than previously estimated.
Across Europe, law firms are learning from the private-equity backed start-ups and how they disrupted the legal market. Being a larger entity and having lots of different revenue streams, law firms are in a more stable position to use these innovative ideas to serve their clients with alternative legal services, and are growing to become stronger, more diversified practices. The NewLaw market isn’t shrinking, but rather it’s expanding so bigger players can utilise their brand name, their expertise and existing relationships with general counsel to offer more bespoke services.
Matthew Kay is the managing director of Vario by Pinsent Masons.
