Jordan Furlong has an excellent take of the future of the legal industry in his latest post, The Law Firm of the Future: Thompson Reuters. I think his analysis will prove prescient for large and mid-size law firms over the coming decade. Big firms that aren't on top of this trend (or small firms that try to emulate their business model) are in the process of pricing themselves out of the market.
More importantly, though, firms of ALL sizes simply can't ignore concepts like open-source development, flat networks, geoarbitrage, and process automation any longer. In my mind, one of the most interesting and promising areas for change in the legal profession (and economy in general) will be the rise of ad hoc, networked providers of legal services--I won't call them "firms" because they meet neither the legal ethics nor classical economic of such. In fact (perhaps this shows where my mind is, as I'm about to file a complaint along these lines), the most analogous legal structure is probably the RICO "enterprise-in-fact"--but I digress.
I've long found this area of thought fascinating. Many people who know about the full range of my personal interests have often wondered how my interest in organizational theory, self-sufficiency, networked economies, consciousness/emergence theory, etc. will come together into my legal practice. Here's my answer (which may also provide more insight into why I chose to start a solo litigation practice): we have reached a bifurcation point in the legal profession, with one path diverging to large corporate structures--much like in modern accounting--that will "optimize" the human element (i.e. pay as little as possible for as much work as possible where labor is cheapest), and the other path diverging to well-connected individuals who can leverage personal attention, innovation, and access to the large legal/LPO/professional services corporations of the other path to deliver exceptional service to clients. This second path is where I think humans (as opposed to stock markets) will find personal and professional fulfillment. This second path is also far more adaptable to the rapidly changing and multifaceted end needs of the legal consumer.
This, I believe, will define the structure of the legal industry in the coming few decades: agile, networked professionals--individuals capable of assembling into ad hoc firms, rather than firms composed of individuals--will leverage access to more rigid and powerful LPO structures to provide millions of tailored legal solutions to clients. Contrast this with present-day "firms" that will gradually fade, some begin absorbed into the large, corporate LPO-structures (with commensurate decline in the fulfillment of their component individual attorneys), and others that will voluntarily dissolve into networks nimble enough to prosper.
What path will your firm/career take? Or, if you're a client of legal services (and everyone is, they just often don't realize how important their consumption of legal services in one form or another is to their lives), how much longer will you put up with the bloated, inefficient, and overpriced services offered by traditional firm structures?