Bar Leader: What kind of interconnection do you see between legal tech development and “regulatory sandboxes” and other recent tests of new models?
Jordan Furlong: There’s been an explosion in the number of new companies that are sprouting up and the number of large companies that are ramping up and getting involved in this area. So, in terms of the demand for new opportunities by which legal technology can find a market, just the sheer volume of it has been a force pushing us forward.
The second piece of it is, many of these legal tech providers have backers from the venture capital world, or they are heavily involved in scouting around looking for funding to drive them forward. And what they’ve been hearing from funders is, “Not really interested in plowing a million dollars into a business that’s not even permitted by regulation in your industry.” This is where you see the importance of the sandbox, from my perspective: It gives a certain degree of assurance or confidence, to say, “Look, we’re gonna be here for a while, and you can count on this safe environment for us to try this stuff out.”
BL: What are some long-term trends that you see developing now?
JF: I think we’ve probably entered, now, the first real inflection point in an important period of change. The pandemic has ushered that in.
I've been thinking and writing about this idea of fundamental, basic legal services as a public utility that you can access online, either from your home or from a library or from some source—because we also need to make universal bandwidth a priority in our communities as well—so that people can ask questions about basic legal issues, they can get information about things that matter to them, and they can access some of the most basic remedies. That’s not going to happen on this side of a social tsunami. That’s got to happen on the other side, where we have decided that we will do things differently.
The legal profession and the legal services market today are basically synonymous. That’s going to diverge. It’s already diverging now; we’re going to see it diverge much more widely in the coming years.
BL: Are you concerned about cybersecurity in this era of increased use of legal tech?
JF: I don’t know what’s going to happen to client confidentiality, to be honest with you. Privacy is becoming something almost of the past. I’m concerned about the ease and carelessness with which we give away information about ourselves to companies and to other entities, and the comfort levels we have with sticking our nose into other people’s business, which would have been unfathomable a few decades ago.
Also, anything can be hacked into, taken for ransom. Countless law firms have been hacked, have been ransomwared, and have had to pay a ransom in bitcoin to companies. Law firm security is better than it used to be, but it used to be just laughably bad. You could break into five law firms before breakfast, I expect.
There’s a reasonable question, to a certain extent: “Can we protect anything that is in our computer database, and if we can’t, what does that mean in practical terms?” I think the duty of confidentiality will stay in place, insofar as, as a lawyer yourself, you are still bound by the duty not to reveal what has been said to you by your client in that relationship. But I wonder if the duty to safeguard information or data provided to you by your client is even practical anymore, or will be in the future—even though it’s really important. There may be a use for blockchain in protecting information, in terms of true encryption.
BL: You mentioned the pandemic. What role do you think it has played in hastening the pace of change?
JF: Among the less terrible aspects of the pandemic, one fundamentally positive thing for the legal sector and the legal profession generally is that it was a massive, 16-month-long proof of concept for this idea that you could practice law differently than you used to.
If you had said to me before this happened, “Do you think lawyers and law firms could adapt to work from home within a space of weeks after shutdown?” I would have said, “No, I would imagine that the profession would just be paralyzed.” But we figured it out because we as individuals are actually a lot more dynamic and a lot more responsive than I think our institutions and our habits and our entities have become.
It all comes down to mindset. The tech has been there for decades, to a greater or lesser extent. The business case has been there. It has never really been about, "Does it make all kinds of sense for us to make better use of technology in law?" Of course it does. It’s not a tech issue; it’s a cultural issue, it’s a psychological issue, it’s a developmental issue, starting in law school and going all the way through our broken lawyer development system, and it’s human resistance: “I don’t want to do things differently than we have.” Then we did do things differently, and it turned out, it wasn’t terrible. In some ways, it turned out to be better.
You’re seeing this now in the fascinating stories of lawyers saying, “I’m not coming back into the office, I’m sorry. If you try to force me to do this, I’m gonna leave and I’m gonna go somewhere else.” And many Am Law 100 firms, these massive, incredibly wealthy and successful institutions, are saying, “OK. That’s fine. We’ll do hybrid work.” I think the “everybody in the office five days, six days, seven days” model is gone.
All of a sudden we’re seeing, and I think increasingly over the next year or so will see, a massive uptake of legal technology. And again, it’s not going to be because the tech suddenly got better; it’s not going to be because the business case suddenly got more sensible. It’s going to be because lawyers finally dropped their defenses, dropped their barriers and said, “OK. I’ve seen that this can work now. What else have you got? What else can we try?” I think that’s the change that’s coming.
BL: If work remains hybrid indefinitely, what do you think that will mean for office buildings as we know them?
JF: That’s the one thing that has really seemed to please law firm partners. Law firms are being flexible with work arrangements partly because they don’t want to lose their people, but also because they’ve realized, “If these people are working from home for a while, we can chop off an entire floor of our six-floor law firm here and our costs drop by one sixth, and that goes straight to the bottom line, to profit.”
What I’m reading about the commercial real property world is that it’s like October 1929 there. There is just absolute terror within this industry, because it ain’t just law firms saying, “We don’t need as much space.” It’s everybody.
I think one of the things you’re probably going to see, which I think is probably going to be permanent, is a readjustment of commercial lease space pricing because people simply won’t pay as much as they used to.
BL: Are you seeing a decrease in the idea that legal technology is a threat to lawyers’ ability to make a living?
JF: I think there’s been a slight lessening of that kind of resistance within the profession. But I’ve been working with some regulators recently, and lawyers who have regulatory power, and I still get a lot of sense of turf protection and “No. I’m not going to do this because if I use this technology, then I can bill fewer hours. If I authorize this technology, it’s going to take work away from me.”
I think the change that’s coming is that we’re not being consulted on this. Our opinions aren’t going to matter anymore nearly as much as they did in the past, maybe not at all, when it comes to these sorts of issues. You can see what the supreme courts in various U.S. states have already been doing. Utah and Arizona are pushing the bar very hard. I was listening to a conference where chief justices in Michigan and Texas were being very straightforward about their goal being to get more people access to legal services.
This is the heart of the whole problem: We have been viewing all of these things through the lens of, “Will lawyers allow it? Will lawyers permit it? Will lawyers do it?” But that cannot last.
You cannot have one provider of legal services standing and holding back everybody else trying to get in, saying, “But this makes things less convenient and profitable for us.” That’s scandalous, to be honest with you, and shouldn’t be allowed and it’s not going to be allowed. In terms of on-the-ground reality, that choice, that power is slowly being taken away from us as a legal profession, and from my point of view, not a moment too soon.
BL: What is your advice for bars, law societies, and other organizations, in helping lawyers through some of these changes?
JF: If I’m in a Canadian law society or an American state supreme court or regulatory authority, and lawyers come to me to say, “You’ve got to hold back all this change, you’ve got to protect my business,” if I’m doing my job properly, I’m saying, “You completely misunderstand my role. I’m not here to protect you. I’m not here to serve you. My job is to govern the legal profession, to regulate the provision of legal services, to protect the public in all aspects of legal services provision, and to expand and improve access to that justice. That’s it. It doesn’t include making sure lawyers survive.”
For a voluntary bar association, if the lawyers go to them and say, “You’ve got to stop all this,” I think these organizations can say, “You vastly overestimate our power and our influence on all these things.” Rather than spending money to hire lobbyists to hang out in state capitols and buttonhole people to vote against this stuff, the far better thing for voluntary bars to do is to help members understand that the way in which they made money in the past as a lawyer is not the way they’re going to make it in the future. That is a simple statement of fact.
I think it’s the job of associations, it’s the job of lawyer advocates and lawyer groups to say to lawyers, “Look, there are opportunities here for you, if you want to grab them. You can grow your business. You can actually bring as much money in as you used to, but you’re going to have more free time for yourself. You can do all these things differently, and there are many advantages.”
The hardest thing to do sometimes is speak truth to power. And if you’re in an association like this, power is the people who are paying the dues. But you’ve got to do that—and then create CLEs and other resources to help lawyers reform their business.
BL: When it comes to regulatory changes, what jurisdictions are you currently watching?
JF: The boulder we’re waiting to see which way it rolls is California, because California was talking about a sandbox long before anyone else unveiled one. The task force that’s working on this has a lot of really, really smart people. And they’re grappling with real issues. I’m not a believer in just saying, “Deregulate legal services and let anybody do it.” That’s madness.
It really matters in California, in terms of volume, but also symbolically because California has historically been the vanguard of regulatory change across the U.S. And what starts there, with some help from Utah and Arizona, could very well roll eastward over the course of time.
A tipping point will come, the point at which the rest of the profession looks around and says, “OK. This is real now. This is actually happening. And if it’s actually happening, I need to be, I want to be, I have to be part of it.” I think that’s what’s going to happen. I think California will accelerate things, absolutely. But we don’t know when the tipping point is or where it will be.
BL: What do you think is next, and how can we all get ready for it?
JF: I think how the legal sector operates is going to change fundamentally. We have had bits and pieces and hints of that over the last several years. But I think that’s been the overture to what’s coming. We’re going to see the widespread authorization of legal services options without regard to whether or not lawyers will approve of it and more with regard to, "Will they solve more problems than they create?"
To regulators, I’ve said, “Look, every kind of legal services provision carries risk.” Lawyers carry risk of all kinds. In fact, some of the risks of lawyers are terrible. You can minimize some of those risks and you can build up defenses against them, such as through liability insurance and so forth, but there’s inherent risk to using a lawyer. The rewards of using a lawyer far outstrip those risks, which is why we have a legal profession. There is absolutely no reason why the same can’t and shouldn’t apply to every other kind of legal provider.
Of course, lawyers should be able to say, “I won’t take that on because I can’t make enough money off of it.” But somebody else should be allowed to—someone whose fees aren’t as high, someone whose entry costs aren’t nearly as high, someone who doesn’t have any kind of restrictions or issues around using technology to scale up services. I think we’re going to see a lot more providers, more sellers, more sophisticated buyers.
We’re going to see technology become so widespread, we don’t even notice it—similar to how technology is all over your house, but you don’t think of it. We’re going to see systematization; we can do so many more things at scale than we do. The landscape is going to change fundamentally over the next couple of decades in the law.
The challenge, the problem for those of us who care about the profession, who care about this sector, is not "How can we stop it from changing?" It isn’t even "How can we make it as amazing as we want?" The question is going to be "Are we going to be able to not just safeguard but improve the fundamentals of what legal services are supposed to be about, through this period of change?" Because there’s no guarantee that we will.
This gives us an opportunity or a mandate to say, "A lot of stuff that we thought was really important is passing away." And we’re coming to realize, that was just the wallpaper, that was just what the floor was made of. That was just stuff. What’s important are the things that lawyers hold at their core, that judges hold at their core, or that the justice system is supposed to protect.
It’s got a lot to do with integrity, it’s got a lot to do with trustworthiness, but it’s also got a lot to do—more than we have admitted to ourselves—with true accessibility to all of the tools of justice, to widespread understanding and education and awareness of the law that people ought to have. We need to not just safeguard these important things but improve them and build on them.
Because when this settles down and we’ve settled into our new place, with different wallpaper and new flooring, it’s a bigger place, hopefully, and we’ve got more windows and maybe a couple of skylights, and we’ve got all sorts of cool things going on in here and that’s great, the fundamentals have to stay the same.
But first, we have to understand what the fundamentals are. What can we give away, what can we give up, and then what should we be making sure no one takes away from us? That’s a really important question.
That’s where I wish the profession were spending more of its time and that regulators were spending more of their time and bar organizations were spending more of their time: thinking out, talking out, working out, getting ready. Not trying to preserve what’s gone already, or trying to preserve what’s going, but to get ready for what’s to come and where we’re going.
