No Time/Place Restrictions are Advantages of the Inter-Firm Collaboration Model
On 12/28/08, we posted our first installment about a new law firm practice model called the Inter-Firm Collaboration Model, or IFC Model for short, which purports to be a more efficient and less costly model of organization than the traditional law firm.
As described in that post, the object of the IFC Model is to harness the efficiencies, and low-overhead characteristics, of modern solo-practices, to create a more flexible and dynamic type of law practice capable of servicing larger scale clients. The core of the new model is to create teams of solo-practitioners and small firms that can implement a coordinated legal strategy. Key to the effectiveness of the IFC Model is the use of modern technology to reduce labor costs.
Another key aspect of the model is that it liberates law practice from traditional time /place restrictions. This means that law can be practiced from any location, where there exists a computer terminal with access to the internet and email. Practically speaking, what this allows is for lawyers to practice law out of home offices rather than to have to travel to, and work from, central locations, reducing substantially overhead costs. The internet has precipitated an explosion of home-based businesses and, by all accounts, this trend is going to accelerate over the next several decades as the business model changes to accommodate a more restricted credit and higher cost environment.
Indeed, the main deterrent to the establishment of more home-based legal practices is not economics, but the perception, cultivated by law schools and traditional law firms, that home-based law offices are inferior to the more established law firm. But perceptions are not immutable: changing economic, demographic and cultural conditions are already in the process of breaking down the “bigger is better” bias against smaller gauge law practices.
Many factors have been and continue to be at work: (1) the limited credit environment, which will impose downward pressure on billable rates, is likely to make clients, over the long run, more receptive to home-based office models; (2) the inability of traditional law firms to accommodate the family based needs of women-lawyers (who make up at least 50% of the legal talent currently graduating from the law schools ) is likely to make home-based legal practice, along the lines of the IFC model, more appealing to larger segments of the legal community; (3) this latter trend is likely to become more pronounced as standards of living decrease, making it more likely that women lawyers will opt to remain in the work force even during their child-rearing years; (4) likewise, even among men, the hierarchical and competitive character of traditional law firms is becoming less attractive as the prospects for equity partnership become more remote and law firm salaries decrease as billable rates are forced to decline.
Finally, as business clients, themselves, become more decentralized and technology driven, they will begin to search out law firms that are familiar with, and, indeed, base their operations on the same decentralized, “virtual” business model.
