A story about lions and gazelles
In his classic book, Born to Run, Chris MacDougall teaches us a profound lesson from the animal kingdom. He writes, “every morning in Africa, a gazelle wakes up, and it knows it must outrun the fastest lion or it will be killed.” He continues, “every morning in Africa, a lion also wakes up, and it knows that it must run faster than the slowest gazelle, or it will starve.” His conclusion, “it doesn't matter whether you are the lion or the gazelle, when the sun comes up, you better be running.”
“BigLaw” and “small law”
Looking at the practice of law in Africa, it’s a strange old tale of lions and gazelles. On the one hand, Africa is beaming with big law firms, the so-called “BigLaw” which is characterized by high powered armies of lawyers plying their trade from high rise buildings in cities like Lagos, Johannesburg and Nairobi. On the opposite end, Africa is also littered with smaller law firms, which are emerging relentlessly across Africa, from Kigali to Harare.
On both ends of this BigLaw/Small law spectrum, the managing partner’s first order of business is always to charm clients, and to make the practice more profitable. In all honesty, whether you are “BigLaw” or “small law”, you literally have to wake up running in pursuit of client happiness. As I will show here, "small law" appears to be having a better run in the jungle of client happiness.
These days, less is more
For centuries, the firepower of law firms in Africa has been measured by the number of lawyers that can be packed into one building. Largely, the more lawyers a law firm has, the more successful it is perceived to be. Law firm revenues and profits in Africa remain a huge mystery, so there really hasn't been any other objective standard to measure law firm success. For this reason, the view that more lawyers means more success has remained mainstream.
Aside from legendary sole practitioners whose names transcended any notion of size, we know that Africa’s “BigLaw” has been at the forefront of the legal marketplace in Africa for the greater part of the last century. From a time when the continent was less connected, having numerous offices in various cities or countries has also been considered as a huge plus. But times appear to be changing.
There is a siege on Africa’s “BigLaw”
With the advent of the internet and the swift pace of innovation, the notion of Africa’s “BigLaw” being at the forefront of law practice is now seriously under siege. This is partly because the idea that more lawyers in a building means more success has been debunked, with tech-enabled small and boutique law firms on the rise.
Liberalization of the market in many jurisdictions and the use of technology to get more work done by fewer people in way shorter time have also contributed to this new phenomenon. There is no doubt that there is a rising tide of disruption in the legal field which is emerging from innovation, ranging from alternative legal service providers, tech-enabled boutique law firms as well as AI-enabled analytics and case management tools for law firms.
The idea that more lawyers in a building means more success is being debunked
From Kigali to Lagos, "small law" is booming
In my travels across Africa, I have encountered and worked with many small law firms that are taking Africa’s “BigLaw” head-on by using technology to streamline processes and literally re-invent legal services delivery. These law firms are taking advantage of the fact that large law firms are often slow to spearhead change, and they are pouncing on technology to integrate new tools into their practice.
The look and feel of the law office is changing
Many small law firms have thrown away the Dictaphones, and they are reinventing the whole concept of a traditional law library. They are also giving clients a new interactive experience, going beyond email and introducing sleek and intuitive client portals. Almost unwittingly, most of these new law firms are going green, by cutting down on paper and facilitating for clients to sign documents securely and electronically. From data analytics in Lagos to smart contracts in Kigali, the gazelles are having a proper go at it.
One small law firm in Lagos is using data analytics to review an unimaginable volume of contracts, allowing them to act for large corporations and to deliver value at the same level as Africa’s “BigLaw”. For most large law firms, having to do manual review of contracts is resource consuming, yet this small law firm in Lagos is capitalizing on semantic algorithms and new machine learning capabilities which are aiding natural language processing systems to comprehend and deduce facts, entities, linkages and relationships from multifaceted contracts.
Small law firms are also making the law a commodity that can be accessed online through dedicated client portals
Another gazelle in Zimbabwe is using client relationship management tools that are allowing it's clients to monitor cases online, giving clients a cost-effective way to consume legal services by cutting down on physical engagement and avoiding the maze of law firm bureaucracy. A mid-sized law firm in Kigali is already building blockchain technology to execute smart contracts, which will allow execution of legal agreements to be done automatically.
Legal tech companies are taking innovation to a whole new level
Legal tech companies in Africa are also taking innovation to the next level, and are on course to introducing blockchain technology that enables smart contracts that can use real-time information, such as remote payments, to trigger a process or event such as a transfer of ownership.
For the first time, we are starting to see legal technology conferences in Africa, where billionaires are throwing their weight behind startups that are disrupting the legal profession. Law societies and bar associations across the continent are also starting to open the batting on matters of technology and it's use in the profession. Just a few months ago, the Law Society of Zimbabwe dedicated it's Winter School in Victoria Falls to discussing the role of technology as the future of law practice. At the 2018 East Africa Law Society Annual Law Firms Retreat in Zanzibar, technology was also laid out as a key tool in building the African law firm of the future.
Driven by their hunger to succeed, "small law" has adopted the startup mentality
The hunger for success in smaller law firms is also driving the tech revolution, with new law firms adopting a startup mentality to law practice. They are young and vibrant, and a close examination of the new brand of "small law" indicates that they have set out to offer clients an experience yet to be imagined by "BigLaw". Their model is simple, give the clients what they want, in the easiest and cheapest way possible. Far from the corridors of Africa’s “BigLaw”, the practice of law is changing. The founders of these new law firms are unclear about the future, but they appear determined to keep running.
"Small law" has cracked the glass ceiling of corporate thinking
From a business perspective, most small law firms with corporate clients are breaking the ceiling of corporate thinking, by accepting the reality that corporations are increasingly focused on their spending on legal fees and now demand more value from their external lawyers.
Small law firms are waking up to the reality that the times when bills were paid without questions are gone. For these law firms, providing value for money and understanding the budgetary constraints of their clients is gold, and now underpins their business models.
True to human instinct, clients want more for less
"Small law" is also increasingly cashing in on the natural human instinct that says humans will always want more for less. To them, it’s not touting, it’s simply leveraging on the ability to do more work in way less time. It's business. For instance, the small law firms that are using data analytics to review more contracts in less time are not only creating more billable hours for themselves, but are also creating happier corporate clients. Business is booming.
Like lean startups, small law firms are cracking the whip on overheads
Just like lean startups, small law firms are also cracking the whip on overheads, by unleashing technology on routine tasks such as document review, billing and filing. These are tasks that would have previously required associates or legal secretaries to complete. These are also tasks that recent global reports predict will be redundant with the growth in artificial intelligence and machine learning. By introducing central databases and the capability to telecommute, the new breed of lawyers probably won't need an office in the near future. They just might, not too long from now, be drafting contracts and making discovery from Lekki beach.
By using technology to offset market pressures and distinguishing themselves from Africa’s “BigLaw”, small law firms in Africa are improving their operational efficiency to change the way they interact with their clients. In this new landscape, it is safe to say that the small law firms embracing technology to provide more cost-effective services to clients will definitely have some form of competitive advantage.
A Thomson Reuters’ 2018 Report on the State of the Legal Market concluded that declining profit margins, weakening collections, falling productivity, and loss of market share to tech savvy alternative legal service providers are chipping away at the foundations of law firm profitability.
"Small law" is chipping away at the very foundations of law firm profitability
The general legal market is one large cake, and lawyers are in a constant battle to get the best paying clients. In the face of technology, the threats on profits for law firms that do not move ahead with technology have recently been confirmed. A Thomson Reuters’ 2018 Report on the State of the Legal Market concluded that declining profit margins, weakening collections, falling productivity, and loss of market share to tech savvy alternative legal service providers are chipping away at the foundations of law firm profitability. The impact may currently appear small, but the pace of innovation and the rise of startup-like "small law" has been tremendously fast. If the trend continues, Africa’s “BigLaw” will start to feel the squeeze.
The use of technology in small law firms can only increase, with many young lawyers being more tech-savvy when they start practicing law as a result of their acquaintance with consumer technology. It also seems probable that with time, the training of lawyers will have a legal tech aspect, as the study of law and technology becomes more mainstream.
It is also likely that in the near future, law firms will require some form of legal tech competence. As the lions start to feel the heat, I'm putting my money on the gazelles. They have had a good run, and their lean business models and less convoluted organisational structures will surely allow them to remain at the forefront of the legal tech revolution.