I RECOMMEND TO FILIPINO LAWYERS AND JURISTS THAT THEY READ THIS U.S. ARTICLE ON THE FUTURE OF THE LEGAL PROFESSION.
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My first driver of change is growing cost pressures on lawyers. I call this the “more for less” challenge—how can we deliver more legal service at a lower cost? This challenge is relevant for all clients, from general counsel in the world’s largest corporations to individual consumers. In these dismal economic times, the drive toward lower-cost service is relentless. The second pressure will flow from the liberalization of legal services and, in particular, from allowing nonlawyers to compete in the legal marketplace. Although this liberalization is restricted today to a small number of countries, I predict that its global impact will be profound and many other jurisdictions will follow suit before too long. The third is information technology, and especially the Internet. Technology is transforming the social and economic lives of us all. I see no reason that lawyers and courts should be immune from its reach. Crucially, though, the systems that are likely to exert greatest impact are “disruptive” technologies. This means that they will not support, sustain and enhance the way that lawyers and law firms have worked in the past. Instead, these technologies—such as online dispute resolution and intelligent search—will fundamentally challenge and change legal work.
In combination, then, the “more for less” challenge, liberalization and disruptive technologies are set to bring greater change in law over the next two decades than we have seen in the last two centuries. Or so I claim. Accordingly, I think it important that young people who are planning to enter our profession are exposed to some thinking about the ways in which their careers might unfold. The future of law, I say, will be neither Grisham nor Rumpole. Rather, it will be virtual courts, diagnostic expert systems, commoditization, alternative sourcing, Internet-based global legal businesses, Web-based simulated practice and much more.
What I try to do in the book, therefore, is to explain how and why there will be radical changes in the legal market, and what this means for law firms, for in-house counsel, for the courts and judges, and for consumers of legal services. I also try to offer practical guidance for young lawyers—on what new legal jobs there are likely to be, who will be employers of lawyers in the future and what our law schools should be thinking and doing about the future.
Although the book was conceived as an introduction to the future for tomorrow’s lawyers, when I asked various clients and colleagues to read early drafts, many said that it is also a useful primer for more-seasoned practitioners. Which, I presume, is why I was invited to write this article!
In the words that follow, to give ABA members a flavor of Tomorrow’s Lawyers, I discuss three topics that are central to the book and, I hope, of interest to the members of the ABA: decomposing and alternative sourcing, liberalization and legal education.
DECOMPOSING AND ALTERNATIVE SOURCING
Over 10 years ago, I came up with an idea that has gradually gained traction in the legal world—that we can look at the delivery of legal work as a form of production process, and one to which we can bring all manner of new efficiencies. Legal matters such as deals and disputes, I claim, are not indivisible professional engagements that must all be sourced and delivered in one way (conventionally by an attorney in a law firm). Instead, we can decompose legal work into sets of tasks and, consistent with meeting the “more for less” challenge, we should undertake each task as efficiently as possible. As an example, take litigation, which can be divided into these nine tasks: document review, legal research, project management, litigation support, disclosure, strategy, tactics, negotiation and advocacy. I am not saying that this is the only way of breaking down litigation, but it should give a sense of my approach.
I often ask litigators from the world’s finest law firms how many of these nine tasks they feel they are now uniquely qualified to undertake. In the U.K., the answer tends to be “two” (strategy and tactics) and in the U.S. the answer is usually “three” (strategy, tactics and advocacy). I accept that, for these two or three tasks, clients will want to benefit from the counsel of skilled attorneys. But I frequently hear from major clients that alternative providers can now undertake the other tasks at lower cost and often with higher quality than traditional firms.
Document review provides a useful illustration of the point. Historically, junior lawyers were employed by law firms, at formidable hourly rates, to plow through vast bodies of documents, often just to index or classify them. This document review work can now be outsourced to third-party providers, in low-cost countries such as India, and delivered to a higher quality for about one-seventh of the cost. And emerging intelligent search systems allow review to be undertaken at much lower costs still. We can apply similar analysis to each of the other tasks in dispute resolution for which law firms are no longer uniquely qualified. Many of these jobs are repetitive and routine, essentially administrative, and it is possible now to source them in different ways. This approach can extend beyond litigation to most other areas of legal work. In my book, for example, I chunk up transaction work into a similar list of tasks.
And so the basic idea here is that we can break legal work down into components and source each part at much lower cost than in the past. Traditionally, when faced with a legal job, a client had a straightforward choice—perform it internally or hand it out to an external law firm (or perhaps a mixture of the two). The world is moving on, so that new alternative sources of legal service are now available. I am always at pains to stress that outsourcing to India is but one of a whole range of alternative ways of sourcing legal work. In Tomorrow’s Lawyers, I identify 15 ways of sourcing legal work, including offshoring, subcontracting, leasing, nearshoring and relocating. The choice available to clients is remarkable, but the emergence of these alternative models of sourcing present both a challenge and an opportunity for traditional lawyers. If attorneys insist on working as they always have done and reject alternative sourcing, then they are likely to find themselves unable to compete on price with other providers. But if they themselves choose to be the providers of these alternative services, then there are exciting new commercial possibilities. However, one potential obstacle to this diversification is operating in a market that has not yet been liberalized.
LIBERALIZATION
The main justification for granting exclusivity to members of the legal profession over certain areas of activity—for example, appearing in a courtroom on behalf of another—is that it is in clients’ interests that those who advise them on the law are suitably trained, knowledgeable and experienced. In the same way as we would not want just anyone performing brain surgery on us, then, likewise, we should not wish just anyone representing us in the courtroom. However, a major problem here, according to skeptics, is that this closed body of legal specialists may not offer sufficient choice to the consumer. For many years, this has led critics and reformers to claim that the legal profession is a monopoly that cannot be justified and that its practices are anticompetitive. Accordingly, many have argued for a change in the laws governing who is permitted to offer legal services and from what types of business vehicles. This is a call for liberalization.
In England and Wales, campaigners’ calls were answered in 2004 with the publication of an independent review, generally referred to as the Clementi Report. Recognizing and responding to accusations of restrictive practice in the legal marketplace, considerable liberalization was recommended. This led to the passing of the Legal Services Act 2007, which, for example, allows the establishment of new kinds of legal businesses called alternative business structures (ABSs), so that nonlawyers can run and own legal businesses; it permits external investment, such as private equity, to be directed into legal businesses; and it makes it possible for nonlawyers to become partners in law firms.
In October 2011, the new rules came into force, so we are still in the early days. Nonetheless, there has been much activity. As of mid-February, 90 ABSs had been granted licenses and many law firms are competing in talks with private equity houses for the £1 billion that the Royal Bank of Scotland has suggested is available for external investment in law firms when they become ABSs. Meanwhile, the first household brand to be granted ABS status was the Co-operative Legal Services; it has announced its intention to offer legal services from its 330 bank branches in the U.K. and, in so doing, to create 3,000 new jobs in the legal sector.
These developments are of immense significance for the legal profession around the world and constitute a very notable departure from traditional legal services. It is important for U.S. lawyers to recognize that not all of the changes have resulted directly from the Legal Services Act, but this legislation—and here is the central point rather than the particulars of each initiative—is giving rise to a remarkable, entrepreneurial and exciting spirit in the legal market in the U.K. that is without precedent. Crucially, even where there is not liberalization, we are witnessing what I regard as a liberation from the limitations of narrow thinking about the way in which legal services can and should be delivered. No one can know where this might lead. But we can be sure that major change is upon us. Entrepreneurs, investors, major accounting firms and Main Street brands recognize that the £25 billion legal market in the U.K. is not efficient and that there are massive opportunities for the provision of legal services in new, less expensive and more client-friendly ways.
These new participants are not wedded to traditional ways of working in law. They do not hold, for instance, that legal work of any kind is best delivered by costly lawyers working in costly buildings in costly city centers. They do not maintain, as so many traditional lawyers still insist, that hourly billing is the best charging model for legal work. They are
not inhibited by yesterday’s ways of working. They are enthused about the new possibilities, and they are offering clients choices that they simply did not have in the past.
These new participants are not wedded to traditional ways of working in law. They do not hold, for instance, that legal work of any kind is best delivered by costly lawyers working in costly buildings in costly city centers. They do not maintain, as so many traditional lawyers still insist, that hourly billing is the best charging model for legal work. They are
not inhibited by yesterday’s ways of working. They are enthused about the new possibilities, and they are offering clients choices that they simply did not have in the past.
Many U.S. attorneys dismiss liber-alization as the idiosyncrasy of a small number of misguided jurisdictions. However, I predict that when liberalization leads directly to the development of new legal services that more fully meet the growing “more for less” challenge of clients, this will have an international ripple effect. I think it inevitable that when general counsel of major global businesses benefit from or even hear about new forms of far less costly service in liberalized regimes, they will surely demand similar service in their own countries. Law firms in traditional markets, such as the U.S., may find themselves at a competitive disadvantage, unable to raise funds required for ambitious new ventures, for instance. To pick one idea that I have canvassed for some years—that of setting up a shared services center to undertake regulatory compliance work for a consortium of the world’s largest banks. An English firm could undertake this as a joint venture or could seek external investment in a way that firms in nonliberalized jurisdictions could not.
There is a bigger point here, and it is probably not for a Brit to make—but I will anyway. When I hear of local bar associations in the U.S. taking legal action against the providers of reputable online legal services on the ground of their unauthorized practice of law, or when I hear that senior general counsel in the U.S. have said that nonlawyers should not be permitted to deliver legal services because only lawyers can achieve the requisite ethics standards required of a legal adviser, or when I hear of opposition to various forms of liberalization on the part of members of the ABA Commission on Ethics 20/20, I want to challenge whether this is about protecting clients or protecting lawyers. I distinguish between professions that behave as jealous guards and those that act like benevolent custodians. From this side of the Atlantic, I fear that many professional legal bodies and some lawyers in the U.S. are veering worryingly toward the first category. We should survive as lawyers because we have the knowledge and experience to bring value in legal affairs that others cannot, and not because we regulate so that competitors are not allowed in the arena.
In any event, I predict that within a decade or so, after intense self-scrutiny, debate and various shifts in direction, most advanced jurisdictions, and many emerging jurisdictions as well, will have liberalized in the manner of England. And even if this does not come about, liberalization in some countries will give rise to liberation in most others.
LEGAL EDUCATION
Law schools everywhere, and certainly in the U.S., are currently under fire for taking on many more law students than there are likely to be law jobs. While this is a worrying issue, my interest in law schools is not in whether they are overselling and contributing to indebtedness and unemployment, but with the relevance and suitability of what these educational organizations actually teach. One key focus of Tomorrow’s Lawyers is on whether law schools are preparing law students sufficiently for the legal marketplace of the future.
The key question, I submit, is this: What are we training young lawyers to become? Are we teaching the next generation of lawyers to become conventional one-on-one, face-to-face, bespoke, consultative specialist advisers who are expert in the substantive law of particular jurisdictions and charge on an hourly basis? Or are we schooling tomorrow’s lawyers to be more adaptable, team players, professionals who can transcend traditional legal boundaries, converse naturally in the language of the boardroom and find it natural to embrace techniques of management and technology? My most basic worry is that most law schools and professional training are currently devoted to the former, with no acknowledgement of the latter. A more profound worry is that many law professors and educational policymakers are not even aware that there is a second option. My concern, in summary, is that we are training young lawyers to become 20th-century, and not 21st-century, lawyers.
I accept that we must carry on equipping tomorrow’s lawyers with the knowledge and skills that will enable them to perform to the highest of standards as expert trusted advisers and in-house counsel. But we are neglectful of our students and of tomorrow’s clients if we do not extend our training to encompass new disciplines that I argue in the book will be central to the delivery of legal services in the future—such as legal risk management, legal project management, legal knowledge engineering and legal process analysis. These may sound alien to most attorneys today, but I believe I make a strong case for their likely importance in years to come.
In many, if not most law schools, the teaching of law has changed little since the 1970s, and law professors have little understanding of or interest in the changes that are disrupting the legal market. Little attention is paid in law school to phenomena such as globalization, commoditization, information technology, business management, risk management, decomposing and alternative sourcing. I am not recommending that we jettison core legal subjects such as tort, contract and constitutional law. Nor am I suggesting that we stop teaching law students about legal method and how to think and work like a lawyer. But we surely must give more thought to how we can better prepare aspiring lawyers for legal work in decades to come. My practical suggestion is that we should offer students in law schools (and at all stages in their education) at least two optional modules or courses. The first would be devoted to the study of current and future trends in legal services, and the second would provide some key 21st-century legal skills that will support law jobs of the future. I do not believe this would be excessively burdensome for law schools. But I do contend that law students can reasonably demand these options of those to whom they are paying substantial fees for what is held out as sufficient and relevant legal education. There is growing evidence of the market for and desirability of a legal profession that extends its boundaries beyond conventional service to new fields such as legal risk management. I am arguing the case, at this stage, simply for this: That at all stages in their legal education, law students have the option and the opportunity to learn about their future, and of being trained in relevant new skills and disciplines.
I do not expect that all members of the ABA will agree with these recommendations or, indeed, with much else that I say in Tomorrow’s Lawyers. But if the book encourages more serious analysis and debate about the future of lawyers and the law, then I will have done my job.
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