Solo and small firms are poised for a significant opportunity to help more consumers get access to legal services by changing how these services are delivered. The solo and small firm demographic of lawyers is entrepreneurial and is typically nimble and quick to try new ways to better serve clients. I know some folks will disagree with this concept. So, let’s dive in.
The narrative that lawyers are “slow to evolve” is getting stale. It seems as if those who still use it are scared of change or are pushing a product or otherwise want lawyers to buy into something by using fear as a tactic. I believe most lawyers are evolving. Of course, some are moving faster than others, but most are moving in the right direction. Even self-labeled “mature” lawyers who have established practices are moving the needle.
If we are being real, we must admit that lawyers who complain how technology is too difficult to deal with are just whining. There are so many practice management resources out there, legal professionals need to take the time to learn or adopt a new model. In other words, running a small business (the average law firm) is hard—but doable. Still, if you don’t put in the effort, you won’t succeed.
With that, the following encapsulates how we need to push for change to solve the access-to-legal-services gap, as well as how solo and small firm lawyers can and should play a role in this process—and, quite frankly, how they would benefit from a business perspective. I will hit on two solutions and then some practical ways these lawyers can make a practical impact on advancing the law firm business model to get more consumers access to legal services.
The Big Vision
Prediction: If we (the royal “we”—not just lawyers) fix the law firm business model, then we also solve the access-to-justice gap. Okay, maybe not the entire gap, but a large chunk of it.
This is a big statement, I know. Let’s back up a minute and tie this to the solo and small firm world.
Think about recent articles/tweets/rants you have read about the business of law: Robots are taking lawyers’ jobs, artificial intelligence is coming for us, lawyers should learn to code, lawyers should know how to use Excel better, LinkedIn is cool (even if it is not), lawyers should know about blockchain, etc., etc.
Now, think about recent access-to-justice stuff you have read: Legal Services Corporation (LSC) needs more money (it does), the access gap is growing, we need more pro bono from lawyers, we should use tech to connect consumers to services, etc., etc.
All these discussions are important and needed. But most of the time the discussions about the business of law and access to justice tend to exist in their own vacuums. I would like to see the conversation shift so that the overlap between the two is constant.
What if we could perfect the law firm business model so that lawyers truly focus on practicing law and less on the nuts and bolts of getting clients in the door and operating the firm? What if perfecting that model allowed lawyers to do as much of the public good work as they want to do and not have to worry about billing enough time to keep the lights on? Or at least be able to take on more work where the client cannot pay what is currently considered market rate?
Sounds Pollyanna-ish, huh? It is not. We just have to try harder. To achieve this, it is not good enough for lawyers to “use the cloud,” adopt Kanban, get a chatbot, track time more easily, or get more involved in bar association(s) to serve as a baseline for a modern practice. None of these things is bad, but none is good enough on its own. We need to fundamentally change how lawyers operate a law firm and deliver legal services.
How do we get there? There are two options.
Modernize the Rules
My opinion (which is shared by many others who care about the future): The rules governing the legal profession need to evolve if we are going to allow lawyers to provide consumers with more meaningful access to legal services. Of course, every time we raise the concept of altering the ethics rules related to outside (non-lawyer) ownership and fee splitting, many folks act as if it is the third rail of bar association work (overly charged and politically deadly).
However, this is not a new issue. Everyone should read (or re-read) the ABA’s 2016 Report on the Future of Legal Services in the United States (abafuturesreport.com) to take a look at the data that is out there from other jurisdictions related to alternative business structure models. These models are working in other jurisdictions (outside the United States), and they can work here. The Report really is an overview for evolving the law firm model while getting consumers better access to legal services.
Despite this, states are actively working against modernizing legal services. For example, in states such as Ohio and New York, ethics advisory opinions have been published to prevent companies (e.g., Avvo) from helping consumers connect to lawyers. Under these ethics opinions, the position has been that if an Avvo-like company refers a case to a lawyer, then the lawyer cannot pay a marketing fee for that case (even though that same lawyer may be paying through the nose for Google AdWords for a similar result).
In other words, there are consumers who want to be connected with lawyers, there are companies that can help connect those consumers to lawyers, there are lawyers who want that work and are willing to pay a reasonable marketing fee to get that work, but states are prohibiting these results.
Quite frankly, I am surprised that there has not been a solo/small firm insurrection in the various states blocking these efforts because, if nothing else, lawyers are losing opportunities for revenue. Paging the William Wallace of the solo/small firm world. . . .
ABA Model Rule of Professional Conduct 5.4 needs to evolve. As the Report indicates, we need to gather data to inform states on these forward-looking business models so that they will be permitted. This is not an easy task, but it needs to be done. Otherwise, law firms will be stuck in their existing ways until a radical shift can occur, changing the way lawyers interact with consumers of legal services.
In the Alternative: A Standardized Approach
While rule changes are being discussed and debated, we need action in the interim. It is possible to work within the rules to create new models of law firms that are more focused on client service. This really applies to the solo/small firm world (the vast majority of active lawyers). One way to do this is to standardize the model of what it means to be a solo or small law firm—including characteristic technology offerings, processes, and procedures—and how law firms can get work in the door (i.e., find better ways for consumers to get access to more traditional legal services).
The firms that have positioned themselves to standardize and run lean, consumer-focused practices will also be better positioned once the rules discussed above evolve and firms have fewer barriers to capital and clients.
Although the evidence is anecdotal, I have not talked to a single lawyer in the United States who indicated that they would be averse to splitting profits with an outside non-lawyer-owned company if that company could provide capital to run their firm both operationally and to grow their client base. Lawyers know that there are roadblocks in place, but they are open to change. They want to be able to focus on practicing law and not worry about the business aspects as much as they do now.
We can solve these problems. It is a big conversation well beyond the space allocated for this article, and it needs to continue.
If we can modernize the way lawyers function, then more consumers get help. Let’s make sure that any conversation related to how lawyers practice is married with getting consumers access to legal services. That’s where the magic will happen to meaningfully address the access gap.
Good Stuff, Huh? Let’s Do something!
Now, some of you are all fired up ready to shake things up. Others are probably thinking: I get it, but what can I do to move these issues along or play a role, regardless of the size of my contribution?
Here are some ways to roll up your sleeves to modernize the business of law:
- I repeat, read the Report on the Future of Legal Services in the United States. Really, all of you. Again, it can be accessed at abafuturesreport.com. Not hard to remember. Why should you read it? It is the road map to the future of the profession as it comes to getting more Americans access to legal services. It calls for modernizing law firm models, advancing legal tech, and focusing on gathering data to explore issues such as outside ownership of law firms and the regulation of non-lawyer-owned legal service providers.
- Speaking of data . . . you need to focus on data in your practice. Choose key performance indicators (KPIs) that you religiously monitor to make sure you are running a profitable, healthy practice. Every firm will put different weight on different KPIs. Examples include hours billed/collected per month/year, number of new clients per month, conversion rate for new clients, average spend per client, etc. You get the point. You can measure all kinds of KPIs to track the progress of your firm. This is important because once you have a grasp on the performance of your firm, you can experiment more. Also, when regulations evolve and you can consider things such as taking outside investment capital to fund your firm, you already will have your head around your business model to understand what resources you need to grow.
- How do you get the data? Adopt more technology and/or use it better. You probably have some tech in your firm beyond e-mail and Microsoft Word (at least I hope so). Adopting practice management, customer relationship management, and accounting software will give you a treasure trove of data if you use it to its full potential. All of us have implemented some software in our business and then used 10 percent of its potential. This is not ideal. Get to know the software or find someone who can help you. Uniform and complete use of software is critical to measures KPIs.
- Raise some hell. I am serious. It is troublesome that regulators are blocking the ability of consumers to hire solo and small firm lawyers through private referral services that charge a marketing fee (a la Avvo’s old model). Above, I mentioned that small firms need a William Wallace. That is a little dramatic, but only a little. Change is going to happen. If we don’t do it, other governing bodies will force it—courts, legislatures, robots that are taking over the world through AI. Look at the ruling in North Carolina State Board of Dental Examiners v. Federal Trade Commission, 574 U.S. ___ (2015), and hold your breath. Often when futures committees or ethics groups raise the idea of modernizing rules to allow outside (non-lawyer) ownership, we go into self-preservation mode. If people want to change the rules (or vice versa), ask for data on how it will affect your clients. Ask, will it harm them? If not, why not try new rule structures? If data shows that more people can get help, why not go for it? What are we frightened of?
- If nothing else, intentionally focus on running a strong law practice. There are so many changes you can make to help you play even the smallest role in the ideas described above. Attend ABA TECHSHOW to learn about and implement the latest and greatest in legal tech. Use ABA Blueprint (abablueprint.com) to find solutions to run a more efficient firm. The point is: act. Complacency will get you left behind.
Do some or all of this, and you will be contributing to modernizing the delivery model. The more intentional we are about pushing for regulatory or practical evolution for delivering legal services, the quicker we will see it happen. Be a part of that evolution.