By Melissa Lafsky

There’s no denying it: The legal industry has hit a period of unprecedented instability, necessitating radical changes in the way legal services are assigned, performed, and paid for. David Galbenski, president and CEO of Lumen Legal, has had a front-row seat to the change, and as a result has gained unique insight and knowledge into what needs to change, and how. He chronicles his findings in his new book, Unbound: How Entrepreneurship Is Dramatically Transforming Legal Services Today. He kindly agreed to speak to us about the book.

Q: When you started writing the book, the economic crisis had not yet hit. Have the events of the last few months changed the game entirely? Or simply accelerated what was already occurring?

A: When we began this book a couple years ago, we identified seven trends that dictated change in the industry. All those trends had been in place over time, but the economic crisis has brought them all front and center, and brought the big firm model to its knees quicker than we anticipated. In 2008, big firms were saying, “We don’t see these trends having any impact, so why change?” When the bottom of the economy fell out and law firms were hit with huge losses, including partner profits declining for perhaps the first time, firms then said, “Maybe we should tackle these trends that are changing our business model. It’s time to reassess.”

What’s interesting has been the moves made by the NLJ 250 in the last nine months. I haven’t yet seen any major changes that are meant to build law firm models of the future. Rather, I see more people saying, “Let’s make small changes to weather the crisis, then resume our current model when the economy upticks.” That’s what’s happening in the marketplace with moves like associate start dates being pushed back, reductions in associate compensation, and layoffs. But I haven’t seen the big changes.

So the economic crisis accelerated the rate at which people are examining pricing models, but the near-term response by those most impacted by the trend has been to tweak the model and wait it out until recovery. I think this is a mistake: Firms should make structural strategic changes to their business model, so when the economy improves, they are in a position to dramatically increase their profitability.

Q: The book analyzes the biggest changes in the legal industry, both in the way tasks are performed and in how services are billed. What are the biggest issues facing the industry today? What will their consequences be?

A: When we were writing, we found ourselves noticing that all the trends are interrelated. As you try to pull them apart it becomes difficult. We separated them into seven distinct trends, but we also wove portions of each one into discussions of the other. In fact, they are so interrelated that you could almost write about one big macro trend, which is the overall change in legal services. The more you try to tease them apart, the more they meld into each other.

For me, the issue that jumps out from a business perspective is the “bigger, faster, cheaper” trend. If you parse that, where the legal services industry is currently is the “faster, cheaper.” Figuring out how to deliver higher quality isn’t the issue--it’s how do we make services more efficient and faster, and deliver them at the lowest cost. I want everyone who reads the book to come out of it seeing that the Number One filter we need to put on delivery services is, “How do we do it better, faster, and cheaper, with faster and cheaper being the two biggest components?”

From that, I think the second biggest trend is the unbundling trend. Certain legal services across the whole spectrum were done by corporate in-house departments, with law firms handling all the necessary tasks. Now we need to look at every task being done in the legal service delivery model and unbundle them all. That examination delivers a very different service model from what we have now.

I think the key is not to look at how it used to be done, but rather focus on figuring out what is the best provider to plug in. This type of thinking leads to what we believe is critical to the next generation of lawyers: the project management skills that currently aren’t taught in law school. How do you manage all these labor units, and manage the process to be better, faster, and cheaper? Unbundling can bring efficiency and cost containment in the near term. It also requires important skills for the next generation, a greater focus on project management and value engineering, which you don’t see talked much about today.

Q: The book also includes a discussion of viral trends culled from legal experts. What is the biggest of these trends?

A: When you think about technology enabling and social networking, and you look at the self-help trend, one of the key aspects in the trend is leveraging technology. Consumers of every type of service-- a single individual looking for a lawyer all the way up to Fortune 500 general counsel seeking a firm to represent his or her company—have access to a new spectrum of data to assist them.

The best analogy for this is WebMD, and what it has brought to the medical profession. When you go to see your doctor now, you come in with possible diagnoses and treatments that you found online—a practice that is totally changing how health care is delivered. Patients are taking more control over their health care decisions. We have more sophisticated consumers who have done research to see what can be done out there.

This is the single biggest trend changing how law firms can deliver services. In effect, the practice of law is being demystified. People can go online and start a company themselves, pull a draft of an operating agreement off the Internet, and ask a lawyer to massage it, whereas before a lawyer would say, “I need to incorporate you, and here's the fee for that.” So as a result you see companies like LegalZoom springing up to provide these services to individuals. And legal providers are providing unbundled services to clients, but not representing them—they’ll say things like, “I'll do some research and writing for you, but you're a pro se litigant.”

Q: Your book has been featured in several blogs and other social media. As a result, you’ve been shipping the books across the world, because of the reach of online marketing. Is this marketing model a parallel to the legal industry as a whole (not to mention the publishing industry)?

A: Absolutely. We thought it would just be a neat opportunity to leverage how people find out about new products, how social media spurs things—a test case for how the industry is changing. So we're using all those strategies. For us, the question is, how do we leverage Twitter, Facebook, and other social media for distributing articles? It’s been fascinating building a social media strategy and then just seeing how it ripples across the world. We've sold books all throughout the U.S., Canada, the U.K., and Russia – it’s really neat to see how technology can spread the word around with the latest tools. And to see the power of a respected publication that reviews books. People still have trust in a major publication. The Financial Post of Canada wrote a favorable review of the book, and it was amazing how quickly, when people have trust, it can spur them into taking action (such as buying a book) online. Even as people are searching for information on their own, if they have trust in what certain publications are saying, then they take action.

We're seeing purchasers of the book who blog about it, Twitter about it, and post it on Facebook. Also, since people do still love the feel of a hard back book, there are people buying 20 copies at a time to either give to their friends, or some law firms have bought multiple copies and used it as part of a strategy session to facilitate ongoing discussions about what the changes mean for them. In the next 90 to 120 days, we will expand to more traditional distribution like Amazon. In the fall, we have several book signings scheduled. And of course, we shot a video and posted it on YouTube and promoted it through our publication, which goes out to 200,000 lawyers.

Q: How are people using the book to change their strategies for providing legal services?

A: What we've seen at the outset is that people are using the book to frame strategic discussions. What we haven’t yet seen is them actually implementing changes en masse. In early going, how we see the book being utilized is as a platform for strategic discussions where people say, “Ok where do we fit into this new structure, and how do we change our business models accordingly?” I don’t think we'll see an impact for a while. People are still in the strategic discussion phase drafting plans. In the next six months to a year, you'll see more of the big strategic changes being made. We've provided members of the legal industry a platform to facilitate the major discussions, which lead to change. That’s really our hope for the book: provide a discussion tool, and hopefully we'll start to see the dramatic changes at law firms being implemented very soon.