For some time I have been troubled by the potential conflict of interest that hours-based billing causes between the lawyer and the client. The more I focus on it, the more profound the problem appears.

Let me start by saying that I have deep confidence in the dedication to ethical conduct of the members of our profession. My concern here is not with their fundamental professionalism. Instead, it is a concern that,

Georgetown Law Professor Jonathan T. Molot has written a thought-provoking article in the latest edition of the Southern California Law Review: “What’s Wrong with Law Firms? A Corporate Finance Solution to Law Firm Short-Termism.”

Molot blames the woes of the American law firm on “its outdated partnership model.” While recognizing that there are other issues at work, he calls the business model a “root cause” for the current state of affairs:

The law firm partnership is a poor institutional choice for the delivery of legal services in today’s legal market. Its structure fails to serve virtually all of its stakeholders.

This week, I want to share some suggestions on law firm leadership. I do so because I believe leadership, or the absence of it, will make a big difference in how law firms fare during these turbulent times.

Effective leadership is not easy, nor is it for everyone. It requires leadership skills and hard work. No two leaders lead in the same manner, but all successful leaders have a special “something” that their colleagues recognize, and all of them take their leadership responsibilities seriously.

Another important early report on law firm financial performance is out: The 2015 Report on the State of the Legal Market, produced by Georgetown Law and Peer Monitor. I encourage anyone who manages or depends on the delivery of legal service to read it.

David Curle made some excellent comments on the Report in his blog post last week. Today, I want to add a few more thoughts, focusing on three observations the Report makes, which I think identify powerful systemic factors affecting the evolution of the legal service marketplace.

A new year always provides a fresh perspective—a context for measuring progress or other movement. We are entering a new period that we all recognize has a beginning and an end, in which we can evaluate how competing and collaborating parties fare compared to each other and compared to our expectations.

I just read the most recent, and excellent, Client Advisory published by Hildebrandt Consulting LLC and Citibank. It contains several observations suggesting that the trends everyone keeps talking about are beginning to have measurable impact on the financial results of some of the largest law firms. If that is so, it may accelerate the pace of change.

As I wrote three weeks ago, new tools and new methods make possible a bright new world in law. Achieving that world will require change in the way legal service is delivered. We know the market wants the benefit of that change. We know that new entrants are entering the market intent on making it happen.

The progress of one of the great hopes for advancing legal service has been slower than I expected.

I’m referring to the “new entrants” to the legal ecosystem, businesses which offer new tools and methods to lawyers and clients that enable legal service to be delivered better, faster, and cheaper.

The market appetite for what they offer should be ravenous. Everyone knows the clients are demanding more for less. There is obviously great market opportunity for those who seize it and peril for those who don’t.

Modernization of legal service got an influential new ally last week with the launch of the Future of the Profession Initiative at the University of Pennsylvania Law School. To mark its launch the Initiative hosted Law 2030: A Global Conversation About the Future of the Profession, welcoming approximately 250 leaders from across the legal service community, last Thursday and Friday in Philadelphia. More than 600 others joined online.

More than 250 spirited participants assembled for the fourth convening of the annual CodeX FutureLaw 2016 conference. Organized by Stanford Law School’s CodeX center, the conference provided uniquely detailed and up-to-the-minute insights into the issues surrounding the impact of technology on the modernization of legal service.

I am delighted to be co-chairing the Legal Business Strategy Program at Legal Week this year, with Gina Passarella, Editor-in-Chief of the American Lawyer Magazine.

I have long been a believer in the value of convening people in the legal service ecosystem for informed discussion of the cutting edge issues they confront. That is why I created theLaw Firm Leaders Forum in 1995 and have produced it ever since.