Business of Law

The Business of Law

After a full year in the legal field, I have observed both constants and changes. The constants include the billable hour, the partner track, and the reliance on precedent and tradition within firms. These elements have shaped the legal industry as we know it and have stood the test of time.  The changes driven by technology are shaping the way law firms operate. Does this mean the legal industry will need to move away from the solid structure it has been built upon? Through conversations and research, I have found that the business of law is evolving, and those who succeed are the ones who think like a Fortune 500 company.

The Cracks in the Traditional Model

Through conversations, it appears that some individuals aren’t recognizing the warning signs, while others have mentioned that they have been visible for years. A Brookings analysis titled "The Law Firm Business Model Is Dying" noted that even long-established firms have collapsed under their own weight, unable to adapt to shifting economics and changing client behavior. We saw this in the internet bubble, and will we see it again with the new era of AI?

Many firms continue to rely on a structure where growth means adding lawyers and hours, rather than necessarily prioritizing profitability or value. As LawClerk’s co-founder explained in The Law Firm Business Model Is Dying (Again), the cost structure of large firms has moved in the wrong direction. More lawyers don’t automatically mean more efficiency; often, it’s the opposite.

So, how do you operate like a Fortune 500 company?

It begins with strategy. The Wisconsin Lawyer article "Reinventing the Law Firm Business Model" urges firms to differentiate themselves and rethink their business structure—from the services they offer to the clients they serve. The traditional approach of being "full service" for everyone is becoming obsolete. Firms must identify their ideal client segment and focus deeply on serving that specific group.

Rethinking pricing is also essential. As Forbes contributor Mark Cohen noted, “new business models are the key to innovation, not new technology.” Clients are no longer willing to pay for inefficiencies, and the billable hour often promotes the wrong incentives. Firms that are finding success today are experimenting with fixed-fee, subscription, and value-based pricing models that align the firm’s success with that of the client.

Operations and technology play a crucial role as well. A 2025 Business of Law Survey indicated that leading firms are heavily investing in process improvement, automation, and analytics, treating their operations with the same level of attention as other professional services businesses. Firms that thrive in the next decade will view operational excellence as a competitive advantage rather than merely a back-office function.

And what I believe to be most important, data. Business-minded firms measure success not just by hours worked or collections but also by metrics such as client lifetime value, matter margin, and utilization. They create dashboards, monitor leading indicators, and manage performance like any high-performing enterprise would.

Adapt or Be Left Behind

From what I can see, the legal market has undergone significant changes recently, and firms that do not adapt risk being left behind. According to Reuters, alternative legal service providers have become a $28 billion global market, reshaping expectations around speed, transparency, and efficiency. Corporate legal departments are also evolving, often matching or exceeding the technology and processes of their outside counsel.

In this evolving landscape, the firms that excel are those that recognize culture, leadership, and talent strategy as key differentiators. They prioritize collaboration, empower business professionals, and view innovation as a catalyst for growth rather than a threat to billable hours. The message is clear: law firms that operate like businesses, grounded in data, strategy, and modern management practices, will be the ones that lead the future of the profession. This can all be achieved through coercive technology solutions available on the market today.  Because, as Harvard Law School’s Center on the Legal Profession put it in its study on law-firm collapses, “law firms die with extreme ease and astonishing speed.”

“It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.” - Charles Darwin