Looking back, it would appear that the latter part of the 20th century was the golden era of the traditional law firm. The economy grew steadily for several decades, and lawyers were the only game in town for legal advice and services. Leveraging the billable hour and an endless supply of junior lawyers, firms grew and were very profitable. Life was very good for lawyers and law firms.
But as we close out the second decade of the 21st century, this idyllic existence seems to be coming to an abrupt end. By many measures the legal system is not functioning as it should.
Many people, including the middle class, are unable to afford or access the legal services they need. Litigation is incredibly time-consuming and expensive, and the court system is bogged down by self-represented parties who struggle to handle their own matters. Many rural and smaller communities don’t have enough lawyers.
There is also a shrinking demand for traditional legal services. Clients want greater predictability and value for their legal spends, and they are demanding more affordable legal services and alternative fee arrangements. Many corporate clients are doing more work in-house. Some clients are bypassing lawyers to find help elsewhere.
Complacency In the Face of Change
In his landmark book The Innovator’s Dilemma, Clayton M. Christensen chronicles how innovation takes place and how incumbents fail to seize the future within their marketplace. As the title states, the innovator’s “dilemma” comes from the idea that businesses or organizations will reject or be slow to adopt technological innovations because current customers cannot use them. In short, why change the business when it is experiencing success?
This is what is happening in law firms across America, likely including your firm. What changes has your firm made in the way legal services are delivered? Are you using the same office and technologies that lawyers have used for 20 or more years? Do you recognize that the billable hour rewards unproductive behavior and does nothing to encourage greater efficiency?
It is this complacency among law firms that is encouraging nonlawyer entrepreneurs to enter into the legal market and deliver legal services to address the needs of consumers seeking affordable legal services.
Our ethics rules are also a barrier to change. They play an important role in the self-regulation of the legal profession and exist to promote and protect many worthy objectives, including consumer protection and meaningful access to justice. However, they have a huge impact on how lawyers deliver legal services, and lawyers face severe penalties for not following the rules. And, good intentions aside, enforcing the rules often makes them look very protectionist.
As lawyers, we are trained to question facts and hunt for the negative to protect our clients. We need to be skeptical of facts, look for fault and question what could go wrong. This negative mindset helps us to be good lawyers, but in times of change it causes us to focus on threats and in this manner resist change. This is another reason why many lawyers don’t see the opportunities created by the changing nature of legal services.
We are two and a half decades into the internet era and have witnessed the transformation of entire businesses and industries. Remember travel agents, AOL or video rental stores? Could you live without a smartphone, Amazon or Google?
We’ve also witnessed innovations that improve rather than replace businesses. Certified public accountants still do tax returns despite TurboTax, cabbies still drive taxis despite Uber and restaurants are expanding their business with the rise of meal delivery services.
Innovation isn’t always bad for those in business. Change is often for the better, especially if we participate in the evolution.
As a profession we’ve been alerted to the evolving future for at least a decade from a variety of commentators, including Richard Susskind and Jordan Furlong, as well as various bar association reports and, most recently, the ABA’s Report on the Future of Legal Services in the United States. Bar associations and governmental agencies are encouraging lawyers to innovate their delivery models to close the persistent gap in affordable and accessible legal services. In fact, the ABA, the Federal Trade Commission and some state supreme courts are encouraging nonlawyers to provide legal services too.
Seeing Opportunity in Change
While it may seem that the future for lawyers is troublesome, nothing could be further from the truth. Lawyers are among the brightest people on the planet who solve complex problems for other people every day. It’s now time to solve this one for ourselves. We have to put the same time, thought and energy into it that we do for our clients. Lawyers must understand their obstacles to change and develop solutions. It means engaging other lawyers to change regulatory barriers to delivering more affordable legal services to more people. It means seeking consumer input and understanding what they value in the panoply of legal services. It also means learning to understand the impact of our negative mindsets on business decisions so that we can evolve with the changing marketplace rather than be left behind.
Now is not the time to shrink back from our ethics rules, to be protectionist without offering solutions or to remain in our comfort zone while the marketplace is asking for expanded access to legal services. We need to open our eyes to the challenges and opportunities the changing nature of legal services present. That is the only way we are going to create our own future.
In upcoming columns we will discuss these issues in more depth, track evolutionary and revolutionary changes, interview innovators and share success stories so that all lawyers can future proof their practices. As the saying goes, “The best way to predict your future is to create it.” Are you up for the challenge of creating your future?