And the walls came down.docx
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Andthewallscamedown
Andthewallscamedown
ByJordanFurlong•Published:
October17th,2012
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Lastweek,IhadthepleasureofdeliveringaspeechtotheInstitutefortheAdvancementoftheAmericanLegalSystem(IAALS),aninnovativeprogramheadquarteredattheUniversityofDenverthataddressesreformstolegaleducation,accesstojustice,andjudicialselection.Theyhadaskedmeforapresentationthatwouldexplainthechallengesfacingthelegalprofessiontodayandoutlinethecontoursofthelegalmarketoftomorrow.
Ithoughtyoumightliketoreadacondensedversionofmyremarks,whichtoucheduponmanyissuesthatI’vecanvassedhereatLaw21overthepastfewyears.Consideringthatthisisalsomy400thposthere,itseemedappropriatetosharewhatamountstoasummaryofmyviewsonthelegalprofession,thelegalmarket,andthelegalsystem.
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Wefaceenormouschangeinthelegalmarketplace:
primarily,theemergenceofnewcompetitiveanddisruptiveforcesthataremountingincreasinglyformidablechallengestoourtraditionalassumptionsandunderstandingsaboutlegalwork.Atthesametime,wearegrapplingwithalegalandjusticesystemthatisnotgivinganyonemuchsatisfaction,andisinfactgivingmanypeopleagreatdealofheartache.Therearenumerousdisconnectsamonghowthingsusedtobeinthelaw,whatthey’reliketoday,andwhatwewishtheywouldbe.
Sowhatcanwedo?
Perhapsnotsurprisingly,Isayweadapt.Weneedtoseethelegalworldasitisandasitsurelywillbecome,andthenweimaginewhatitmightbeanddoeverythingwecantomakethatvisionreal.Ourmemories,ournarratives,ourassumptionsandexpectationsaboutthelaw—bothindividualandcollective—thesearethewallswe’vebuiltaroundthelegalmarketandaroundourselves,andtheyarelimitingourvision.It’stimetolowerthewallsandletilluminationcomein.
Let’sbeginbyseeingthelegalworldasitis.Whatareweupagainst?
Whatarewedealingwith?
Herearefivepointstogetusstarted.
1Growthinlawyers’businesshasstalled.Withafewexceptions,lawfirmsofallsizeshaveseenbusinessslowdown,revenuesflatlineordecrease,andnewbusinessbecomeincreasinglydifficulttofind.
2Lawyers’pricingisundertremendouspressurefromclients.Imean“pricing”inbothadollaramountsense—ratediscountsaremultiplying—andasamethodology—flatfeesareproliferating.
3Low-costalternativestolawyersarepickingupbusiness.Largefirmshaveseentheriseoflawdepartmentinsourcingandlegalbusinessoutsourcing.SmallerfirmshaveseenLegalZoom,RocketLawyerandtheliketargettheirmarkets.
4Ahugeglutofunemployednewlawyersisbuildingup.EmploymentratesfornewlawyersintheUnitedStateshavefallensharplyinthewakeofthefinancialcrisis.Atlargelawfirms,they’vefallenoffacliff—down40%inthelastfiveyears.
5Andfinally,althoughyoumaynothavefeltit,anearthquakestruckthelegalprofessionearlierthisyear.ItsepicenterwasLondon:
itwastheissuanceofthefirstlicensestooperatewhat’scalledAlternativeBusinessStructures,lawfirmsownedbynon-lawyers.
These,atleast,arenotpredictionsorsuppositions.Thisisreallyhappening,rightnow.Andit’shappeningbecauseofaseriesofchangestothelegalmarketplace,bothhereintheUSandworldwide.Onceagain,I’llgiveyoufivetoconsider.
6Alengthyperiodofstrongeconomicgrowthpoweredbyheavyborrowing,interspersedwithoccasionalhyper-growthbubblesandbusts,hascometoanend.Wearenotina“recession,”intheusualsenseoftheword.Weareinalengthyperiodofslowdeleveragingandweak,fitfulgrowth.Itshouldlastatleastanotherfiveyears,andmaybelonger,giveortakeafiscalcliff,aEurocollapse,orahardlandingforChina’shousingboom.
7Clientshaveacquiredapotentcombinationofknowledge,powerandurgency.Basiclegalinformationismorewidelyavailabletodaythaneverbefore.Basiclegaltoolsareeasilyaccessibleatlowcostornocostacrosstheinternet.Andclientscannotandwillnotspendadollarmorethantheyabsolutelymustonanything,andmostespeciallyonlawyers.
8Newprovidersandnewtechnologyarestartingtoenterthemarket.ImentionedcompanieslikeLegalZoomandlegalprocessoutsourcersamomentago,companiesintheirinfancythathavealreadygeneratedasurprisingamountofbusiness.Butthere’salsonew,disruptivetechnologythatcanreplicatebasiclawyerfunctionsand,insomecases,morecomplexlawyerfunctions.
9Generationalchangecontinues.Wetendtoforgetaboutthis—partly,Ithink,becauseeveryonewastalkingabouttheriseofthemillennialsandtheretirementoftheboomers,rightupuntilthefinancialcrisis.Andthensuddenly,wedidn’thearmuchaboutwork-lifebalanceanymore.Butgenerationalturnovercontinues,anditaffectslegalorganizationsofeverykind.Andlet’snotforget:
italsoaffectsclients.Theculturalvaluesofbothlegalbuyersandlegalsellersareslowlytransforming.
10Finally,theregulatoryenvironmentforlegalservicesischanging.Lawyerself-regulationisgoneinAustraliaandit’sgoneinEnglandandWales.InmyhomeprovinceofOntario,paralegalsaremembersinfullstandingoftheLawSocietyofUpperCanada,lawyers’governingbody.TheUnitedStateswillholdoutagainstthistrendlongerthananyoneelse—exceptpossiblyIndia—butitsarrivalhereisstillonlyamatteroftime.Lawyerswillbesharingthemarketwithnon-lawyers,andIcannotoverstatehowimportantthatwillprovetobe.
Sowherewillthisleadus?
Whatdoesthe“futureofthelegalprofession”looklike?
HerearesomeofthekeyfeaturesIthinkwecanexpectinthelegalmarketplaceofthefuture.
1.Systemsandtechnologywillmakesubstantialinroadsintothelegalmarket.
Today,ifsomeoneasksme,“Canmachinesreplacelawyers?
”I’minclinedtosay,“Well,onlyifthelawyerinquestionisn’tverygood.”Now,that’salittleharsh,andit’snotentirelyfair—toeitherthelawyerorthemachine.Ifyouweretoaskmeinstead,“Canamachinereplaceaspectsofwhatlawyerscurrentlydo?
”—well,that’sadifferentquestion,andtheanswerinmanycasesisyes.
Automatedcontractcreation,data-crunchinganalysissystems,expertapplicationsthatanswerregulatoryandcompliancequestions,onlinedisputesystemspoweredbygametheory—alltheseprogramsareavailablerightnow.Theyaresolidlybuilt,theyareattractinginvestorinterest,andtheyareonlygoingtogetbetterastheygrow.Theydotheirjobsinminutes,notinbillablehours,andtheyaremorereliableandsophisticatedthanmanylawyerswouldbepreparedtocredit.
We’reatleast10yearsaway,probablymore,frommachinesthatcancompletelyreplacelawyers.Butwe’realreadyintheerawhenmachinescandisplacelawyers—takeonsomeaspectsoftheirwork,somepercentageoftheirtasks,bumpthemaside,jostleintotheirseats,forcethemtogodosomethingelse.Andthatpercentageisgoingtogrow.Ican’ttellyouatwhatrate,orhowquickly.Itwillbedifferentfordifferentmarketsanddifferenttypesofwork.
Butthefactisthatagreatdealofwhatmostlawyersdoisnotthatcomplicated.Atleastsomeofitcanbedonebynon-lawyers—andinsomefirms,italreadyis,bysecretaries,paralegalsandclerks;infuture,itwillbedonebymachines,processesandsystems.Butinmanylawfirmstoday,it’sbeingdonebylawyers.It’swhatmanyofthehoursbilledinthelegalprofessiontodayconsistof—andthatisnotsustainable.That’sahardtruth.Butweneedtohearitsaid.
2.Non-lawyerswillhaveproliferatedthroughoutthemarket.
Idislikethattermintensely,bytheway:
“non-lawyers.”WearetheonlyprofessionIknowthatdividestheworldinto“us”and“notus.”Weusethattermallthetime,andwerarelyappreciatehowinsultingitistothepeoplethusdescribed.
Butnon-lawyersarecoming.Wearegoingtosharethismarketwiththem.Thesoonerweacceptthatandstartworkingtoaccommodateitsimpact,thebetter.They’recomingbecausetheyareprovingtheirabilitiesandreliabilityeveryday.They’recomingbecauselawyershaveclaimedtoomuchterritoryundertheall-powerfuldescription“thepracticeoflaw,”toomanyactivitiesthatdonotrequirealawyer’srareandvaluableskillandjudgment.
Andtheyarecomingbecausewehavedonealousyjobofservingtheentirelegalmarket.Clients,bothindividualandcorporate,arespendingmoreandmoreandwaitinglongerandlongerforoutcomesthatleavethemlessandlesssatisfied.Andthat’sjustthepeoplewhocanaffordlawyersandthelegalsysteminthefirstplace.Manypeoplearenoteveninthegameatall.
Andthatisonus.Theseproblemsdevelopedonourwatch,underouradministrationandstewardshipofthelegalsystem.Theyareourresponsibility.Wehavehadampleopportunitytorectifythem,andaseveryonehereknows,wehavenotmovedfastenoughorfarenough.Sogovernmentsandcitizensaregoingtostartsaying,“Timetoletsomeoneelsetry.”Timetostartputtingthe“UnauthorizedPracticeofLaw”inthehistorybooks.Lookatwhat’shappeninginEnglandandWales,andrecognizethateventually,inevitably,itwillhappenhere.
3.Thelegalprofessionwillbesmaller,butalsomorespecializedandsuccessful,thanitistoday.
Idon’treallyseeawayaroundasmallerbar.Gradually,yearbyyear,innovationswillcontinuetodisruptthelegalprofession.Thecapabilitiesofprovidersoutsideourprofessionwillexpand,fromlawyersinIndiatopara-professionalsinNorthAmericatosoftwarepackagesinthecloud.Lawyerssimplywillnotbenecessaryto