Read extracts from The End of Lawyers?, and related articles

If any manager among the City’s top law firms was to embrace automation and standardisation in order to do more work, quicker, with fewer lawyers at lower cost, one could imagine it would be Nigel Knowles, the co-chief executive of DLA Piper. After all, you don’t in two decades grow from a clutch of small firms in the north of England to having 3,600 lawyers in 25 countries without buckets of imagination and a ruthless lack of conventionality.

But on this issue, Knowles is sceptical. He doesn’t believe the role of lawyers at business-focused firms such as his will change radically over the next decade. “In a way, but not in a dramatic way, [standardisation] has already been happening,” he says. “But I’m not sure in relation to the majority of work we do those fears apply.

“Lawyers can, through technology and knowledge management, become more efficient," he adds, the traces of a Nothern accent still evident. "And I hope there’ll always be a drift toward clients getting better value for money.”

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But he rejects the notion that the work his lawyers do could be streamlined, automated or outsourced much more than it already has.

“The first time any assets were securitised, the whole process was regarded as rocket science and no doubt charged at a huge premium,” he says. “Now securitisation is regarded as a commodity item that is fairly competitively priced. But it’s still not a service that you can send to India or give to a paralegal.”

Knowles admits the legal services market is changing in other ways. Law firms are becoming more corporate in the way they are managed (DLA Piper is unashamedly among the leaders in this regard). The hourly billing model is losing favour. Clients have become more aggressive about driving down costs since the establishment of panels gave them a stick with which to entice firms to lower their fees in return for the promise of ongoing work.

On this point, he is philosophical: “General counsel have got to do what’s right for their business.”

In February, DLA Piper announced a “partnership” with Linde, the German gas and engineering group, that has seen them replace 150 law firms in return for around eighty per cent of the company's legal budget.

This sort of single-firm, fixed-fee tie-up is likely to become more popular, but Knowles is not wholly unsympathetic to counterparts at other firms who consider such arrangements a “rip off” that unfairly favours clients and forces law firms to shoulder too much financial risk.

The clamour for lower costs undervalues the traditional relationship between a law firm and their clients, Knowles argues, again sticking up for the system as it exists. “If a firm charges too much, the relationship is out of balance. If a client wants to pay too little, it’s out of balance. There’s a middle ground.”

The biggest change Knowles predicts in the legal market is that it will be dominated by fewer firms with greater international reach, a conviction that has propelled the firm's rapid expansion.

“I think consolidation has taken place, is taking place, will continue to take place,” he says.

Evidence of this: a few years ago, DLA Piper identified the accountancy firms as the greatest threat to their global ambitions, but they have since all but disappeared from the market. Then there is the batch of second-tier law firms who, ten years ago, appeared poised to compete with the “magic circle” but have since stagnated.

“They haven’t had momentum, they haven’t had financial strength and as a result of that they have lost ground,” Knowles says. “Their dropping behind is an act of consolidation.” (He refuses to name names, but it isn't hard to figure out he's thinking of the likes of Denton Wilde Sapte and Richards Butler.)

DLA Piper first identified a trend toward consolidation in 1999, when the partners of Dibb Lupton Alsop, as it was then known, set out their first three-year plan: to become dominant outside London and a top-ten presence within the City.

In 2002, after achieving that goal, Knowles and his partners set out another ambitious three-year objective: to become a “top-five European full-service firm”.

In 2005, their appetites whetted, their expansion went into overdrive as they merged with US firms Piper Rudnick and Gray Cary and embarked upon becoming the world’s “leading global business firm”.

“We believed that the provision of legal services on a full-service or business basis would become global, ultimately in a way not dissimilar to the way in which the Big Four accountancy firms evolved,” Knowles says. “We wanted to lead that change rather than to follow it.”

As they saw it, American corporations, led by the investment banks, were looking more and more beyond their own borders. General counsel were finding it harder to juggle panels in an ever-growing number of jurisdictions. The need for a law firm with truly global reach became obvious.

“Clients are getting bigger, they want uniform high standards of support wherever they might be in the world and whatever they might be doing,” Knowles says. “Some of the pieces of work they have are significant and complex and high-value. You need to be able to throw in some cases literally hundreds of lawyers onto it. You can’t do that if you’re not big.”

But DLA Piper’s expansion has been criticised. One former lawyer described it in a national newspaper as a “supermarket dash”.

Knowles rejects any suggestion that the firm has tried to expand too quickly. “Some people say to me, ‘Are you just trying to be the biggest firm in numbers of people?’ The answer is no. We don’t want to be measured by the number of offices and people but by the quality of our clients, the quality of our work, the quality of our people and the quality of our earnings.

"But the reality is, you can’t be global and full-service without having offices in lots of places. And you can’t act for the largest global clients in all those places unless you’ve got some reasonable critical mass.”

Indeed, Knowles contends other firms would follow DLA Piper if they could.

“I think there’s a lot of firms that would like to have 1,000 lawyers either side of the Atlantic or either side of the Pacific,” he says. “[But] they can’t galvanise their partners into agreeing that’s the right thing to do or can’t necessarily find the right merger partner.”

Knowles predicts the “magic circle” will continue to dominate the market, but he also cites US firms Baker & McKenzie, Latham & Watkins and Jones Day as well placed to compete internationally.

“This is not a space that we occupy or will occupy on our own,” he says. “But who knows who’ll merge, who’ll lose it and fade away? Who knows who’ll come through on the rails — a firm you haven’t thought about who might get lucky, merge, or get some great client wins and appear from nowhere? It’s still a very dynamic world out there and the game’s not over.”

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