Recent events have confirmed that the legal industry has outgrown its age of innocence. Associate salary freezes (2008/9) have replaced associate salary wars (2007/8). Layoffs – and the number of websites that publish them – keep growing. Partners – and the business that follow them – keep lateraling. And, not to be morbid, but it seems like the BigLaw grim reapers may have the busiest practices (R.I.P. Heller, Thelen, Thacher, Wolf Block).

Some may argue – especially because this concerns lawyers and lawyers are professional arguers – that the legal industry outgrew its innocence long ago. Commentators may point to a “Hidden Transformation of the Legal Industry,” beginning with the evolution from solo practitioner to large, global law firm. Practitioners may point to the business reality that “Legal Services Have Transformed Into Legal Commodities.” Recent law school graduates may point to their billable hour requirement or the rewards of cog-like performance. Whether this is the “End of Lawyers” or simply the end of an era, one thing is certain: this ain’t the way your grandfather practiced law.

So, my question is this: Why are law firms still using (relatively) ancient business tactics rather than embracing “enterprise 2.0?”

Lack of Precedent?

Law firms are frequently called in to mitigate risks for clients, despite future uncertainty, based on their interpretation of the current law. It seems that law firms should be adequately prepared to do a similar analysis for implementing new tools and technology into the way they do business. Where are the industry reports? Where are the technology snafus on “Above the Law?” Rather than rejecting new tools and technology after a careful analysis, law firms seem to be reluctant to try anything behind their firewalls.

Moreover, Andrew McAfee (the originator of the term “enterprise 2.0″) remarked that this may be a territory where there may be a “Case Against the Business Case.” This complements well the idea that some of the outcomes of implementing these new tools will only emerge once these new tools are implemented.

Undetermined ROI?

First, I’d be surprised (but proud!) if law firms made any decision based on the return on investment. (Law firm recruiting practices, I’m looking at you!)

Second, to worry about whether it is possible for law firms to calculate a return on investment for enterprise 2.0 tools and technologies seems a little premature when law firms have hardly embraced the potentials of Web 2.0 tools and technologies, especially the free ones.

Reticence of Legal Marketers?

If legal marketers can convince law firms to shorten their names, they can persuade law firms to create a Facebook page to connect current employees, alumni, and future hires. Think this is crazy? 20 years ago, how many firms had a lateral partner integration program?

Confusion between the roles of marketing and IT?

This is no excuse. If mediation does not work, create a separate web/enterprise technology division.

Naturally, as an institution, the legal industry will endure growing pains as it replaces previously accepted norms with novel ideas and practices. Members of the industry, law firms and individuals, will make mistakes. That’s part of business performance and this is no time for stagnation.

Nevertheless, the reality is that legal services have transformed. Therefore, members of the legal industry must also transform their practices in order to meet the evolving demands. In other words, members of the legal industry must actively participate in this transformation. Thankfully, participation and collaboration are guiding principles in the worlds of enterprise 2.0, web 2.0, and knowledge management 2.0.