16.09.2014 Berliner Zeitung: path and change

Weg und Wandel Wirtschaftskanzleien

Commercial law firms are facing great challenges today. On the one hand, the competition for promising young lawyers is becoming increasingly tougher, while on the other hand, the demands on lawyers are changing. In addition, commercial law firms have to face new competition from consultants and so-called project lawyers. The competition is enormous, since the relaxation in the admission to legal advice means that various consulting firms, especially banks and insurance companies, are increasingly providing legal advice. Specialization is the future. This is also shown by new approaches in legal education. Today, the path to becoming a commercial lawyer does not start after the state examination. More and more universities are offering specialist knowledge in economics alongside legal training.

Three questions to Christoph H. Vaagt, consultant for commercial law firms at the Munich-based Law Firm Change Consultants

Keyword technology: Can you describe the consequences of technological change for the work of lawyers and commercial law firms?

There are currently investors in Silicon Valley who are investing more than 400 million USD in over 600 companies, all of whom are working on the question of how existing markets can be broken up in the field of law and legal advice through digitization and new business models. This is already successful in the “underserved market”, i.e. where simple legal advice and forms or contracts for simpler legal matters are needed. In Germany, for example, there is janolaw.de, which already offers this. Business lawyers will also be affected by this. Everything that can be standardised will be standardised. For example, statements about the patentability of an innovation, statements about the probability of success of a process. Processes will become cheaper, and more radically so, for example in the area of dispute resolution. The Dutch Ministry of Justice, for example, has made all divorces that have to be paid for by the state under the law for the poor extremely cheap by means of a compulsory electronic mediation procedure. The software and the procedure are also suitable for more complex, larger cases. This can already be seen, for example, in the offers of juripax.com. We can assume that business lawyers will shift their focus away from case handling and towards questions and procedures that are not yet standardized on the one hand, and on the other hand towards project management and process design.

Keyword “project lawyers”: Is this a format that will compete with traditional commercial law firms in the future? How far has the market in Germany already grown?

For project lawyers, digitization opens up a wide field, as they are better trained for this than traditional lawyers. At present, they are increasingly being used in companies and law firms for routine work or project management, because on the one hand they are cheaper workers, but on the other hand they are unable to move up into partnership (at least as things stand at present). They take over tasks that were previously performed by fully qualified lawyers and are therefore not competitors but substitutes. Here, too, the following applies: what can be produced more cheaply will be produced more cheaply. For this reason, commercial lawyers are probably at least temporarily the salvation of the partnership-based business model of law firms, in which fewer and fewer partners with more and more employees work on the mandates entrusted to them according to increasingly differentiated roles and tasks.

What is to be advised to prospective commercial lawyers regarding their education? What steps should they take?

Business lawyers should prepare themselves for the digital revolution. If I were young today, I would go to California and learn about the innovations there. The ability to use software that is used to handle legal issues better, easier, faster is the core competence of the business lawyer of the future. In addition, students today must be able to adapt as quickly as possible to the demands of the law firm or corporate world. Individual specializations such as finance and financing law, corporate law and tax law, but also niches such as shipping law, for example, increase the chances of a career and success. In addition, in a globalised economy, no lawyer can be active who does not speak very good English: therefore, it is also true for commercial lawyers that they have at least partly acquired their education in English-speaking countries.

(Tanja von Unger)

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