A transformation of the legal profession is happening globally, and its effects are also felt, slowly but surely, in the law firms of Southeast Europe. Due to the changing expectations concerning the quality, speed, and commerciality of services, we are seeing a move towards even more client-oriented solutions. Traditional sectors are being replaced with emerging industries, and where we previously had slow processes, with low profit margins, we see value being generated at lightning speeds. Also, a new generation that entered the workforce recently is slowly imposing their own values and approaches, necessitating changes in structure and the values of traditional legal practices.
Although there are signs of accelerated change, law and the legal profession are still lagging behind other sectors of the economy. Perhaps the reason for this lies in the lawyers themselves – we know the system and, more importantly, we know how to work it. We are used to slow-paced regulatory changes dictated from governmental and local administrative entities. However, the system has changed and is rapidly evolving. Instead of the government, the relevant industries are now dictating the tempo and requiring lawyers to acquire new skill sets, tailored for the next generation.
Perhaps the biggest change has been the evolution in client expectations. Now, clients expect swift service, delivered simply and clearly. They want advice customized to their unique circumstances and they recognize the value of high-quality service. Simply put, they want us to cut the chase and get straight to the point. We are expected to deliver commercial advice and to make business simpler when our clients need simplicity, and to put our expertise front and center when our clients need sophistication. We are expected to be reliable, adaptive, and fast, while maintaining the highest quality of service – and clients are willing to pay for that quality.
In adapting to these expectations, law firms are leveraging practice skills and delivering legal services more efficiently through new organizational structures, delivery options, tech-driven solutions, knowledge management systems, process management, and financing for customer-centric solutions.
In a nutshell, client and business standards now preponderantly influence the efficient provision of legal services. Legal expertise is no longer the sole element of legal delivery; adapting to new client expectations means that legal, as well as technological and project management expertise, is mandatory.
By adapting to this transformation, law firms are improving the way they serve our clients and communities. Speaking of Serbia in particular, the market is more mature than ever. Belgrade has been in the center of the regional spotlight in the last years, as many companies enter into multiple Balkan markets by using the Serbian Capital as a base or a point of entry.
Following global trends, we are seeing a special interest in the IT sector, especially with major players acquiring local start-ups. Last year was marked by Nutanix’s USD 165 million acquisition of Frame - a Serbian-American start-up. This was the biggest and most valuable start-up transaction involving Serbia, sparking further interest in the IT scene.
Considering this, law firms with an integrated approach to multi-jurisdictional coverage still hold a significant competitive advantage. However, not even these firms are exempt from the requests set by the emerging market – only those who religiously embrace the changes are going to come out on top.
The Millennial Workforce
But, for law firms to take up the role of business advisors with legal understanding, they must take a more holistic and less purely transactional approach to their clients.
To this end, law firms need to learn both from and together with their clients, and that means terminating their adherence to outdated norms, still tailored to older generations. According to a study from 2014, conducted by a top US university, millennials will make up more than 75% of the workforce by 2025. And contrary to the fears of millennial invaders hacking the law firm concept and the overall professional services culture, there is a young talent pool, in tune with the industry and technological trends, accepting the legal practice culture.
We now have a group of eager young lawyers who desperately want to contribute to their firms in meaningful ways, right away. But in order to take advantage of this opportunity, law firms must understand this next generation’s mindset and values. This means supporting knowledge-sharing, lectures, and new knowledge management systems.
We are currently enjoying the benefits of positive economic trends, but the memories of the past crisis remain fresh in our minds. To this end, we need long-term, forward-thinking solutions. We need to be thinking about what our clients will expect next and what we should do as lawyers.
A logical first step for law firms is to embrace the digital transformation in the legal industry, as well as embracing the business culture of the younger generation. So far, this transformation has mostly meant that lawyers have become more digital by using the latest tools, but the nature of the legal services has not changed.
Also, a possible step forward for law firms is diversifying their revenue streams. Firms around the world have already made their own forays into other markets, including those typically reserved for accountants or management consultancies, in order to complement their existing sector strengths.
In light of these transformations, it is my belief that only the most capable of adapting and embracing change will survive and thrive.
By Marjan Poljak, Senior Partner, Karanovic & Partners
This Article was originally published in Issue 6.1 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.