Lawyers no longer only purveyors of legal services

NEW CENTURY: Edge International founder Gerry Riskin says there are people in the process of starting franchise operations similar to Century 21 for law. / COURTESY GERRY RISKIN
NEW CENTURY: Edge International founder Gerry Riskin says there are people in the process of starting franchise operations similar to Century 21 for law. / COURTESY GERRY RISKIN

Most industries experience periods of disruptive change – so why not law?
Historically sheltered – by custom, regulation and steady demand – from the market dynamics that undercut giants in other industries, the legal profession could now be on the brink of its own era of evolution.
At least that’s what some legal experts see in the growing prominence of law-related Internet startups, deregulation proposals, outsourcing and law school graduates unable to land traditional, full-time attorney jobs.
“In 15 years, the legal landscape will be different, but in 50 years it will be unrecognizable,” said Jordan Furlong, a principal with Edge International and a legal-industry consultant. “We are re-examinining who can offer what to whom and whether we could improve access to legal services. Whether this benefits lawyers is not the concern. It has to be a question of how it benefits the public generally and whether is it good for democracy.”
Acutely aware of the changes afoot, Roger Williams University Law School made legal-industry disruption the subject of its third annual Anthony J. Santoro Business Law Lecture. Held at the Omni Hotel in Providence Sept. 18, the event featured Furlong’s colleague, Edge founder Gerry Riskin, often described as a “legal futurist” for predictions of radical change in the years ahead.
Few would argue that information technology, corporate cost-cutting and globalization will leave the legal world entirely untouched. At some level, those forces are already in evidence.
The question is how wide-ranging the changes caused by these and other factors will be and how much they will disrupt the traditional way of doing business.
Perhaps the most visible change agents in the current marketplace are Internet companies like Legal Zoom, which offers downloadable legal documents, such as wills, incorporation papers and trademark forms, at low prices.
In addition to documents, Legal Zoom now connects customers to lawyers for consultations and is building a referral network. It is joined by competitors that include Rocket Lawyer. Like digital newcomers in other industries, these sites have the potential to take clients from traditional firms in a pattern called “disruption theory,” in which an unconventional, inferior, cheap, new product gradually improves and undermines market incumbents.
Although lawyers are trained and equipped to deal with much more complicated tasks than helping clients with paperwork or navigating routine procedures, for years they’ve billed for this work.
In conjunction with the Internet, international outsourcing could allow some basic functions now handled by law firms to be handled by nonlawyers. Even if a task is too complicated for a computer program to handle, it might not be for teams of lawyers in, say, India, where wages are much lower than the United States.
“The highly specialized transactions and premiere firms whose name causes other parties to show respect isn’t going to change anytime soon,” Riskin said. “But those who self-deceive, thinking that their work is brain surgery when it isn’t, are going to suffer.”
On the plus side of globalization, the United States could take advantage of the size of its legal industry and export legal services to other countries.
Historically, nonlawyers have been prevented from providing legal services or even having an ownership stake in firms that provide them.
In other countries, Australia in particular, those rules have been loosened in recent years and Riskin said he expects ownership rules in the United States will eventually be relaxed somewhat, clearing a path for investors and corporations to enter the legal space.
“We know people who are in the process of starting franchise operations like in real estate, Century 21s for law,” Riskin said. “We also know there are venture capitalists thinking of buying out practices to facilitate to younger lawyers while providing global back-end help to reduce costs.”
Even before technology and outsourcing started exerting downward price pressure on lawyers, the large corporations that have become major consumers of legal services have also been filling more work in-house and squeezing firms on billing, As a result, traditional hourly billing, already on the decline, could become increasingly rare in the future, replaced by set fees for services that shift risk and efficiency incentives to the firms.
Along with firms, these changes pose major consequences for law schools, which grew through the second half of last century until just before the recession, churning out more graduates than the current market demands.
Thomas W. Lyons III, a partner in Strauss, Factor, Laing & Lyons in Providence, said this has created a tension between the traditional law school model – three years, with much of it spent on theory – and the realities faced by graduates entering the marketplace.
“The big issues are it is too expensive and the education you get is not sufficiently practical,” Lyons said about law school. “Many schools take the approach that students are there to learn to think like a lawyer, while practical skills are learned in practice. But companies have said they won’t pay for anything a first-year associate does, because it is too likely to be filled with mistakes.”
In this landscape, law schools are now facing some of the difficult decisions being wrestled with by other education institutions around balancing practical and theoretical learning.
Another suggestion is to break up legal education into smaller chunks, so not every graduate emerges into the market with six-figure debt.
Ultimately, the changes coming to the legal world should benefit consumers with better access to services, Riskin said, but the disruption will not be easy for many firms to navigate. Smaller retail firms in particular could decline in profitability and number, with specialization becoming more important.
“I think it is a positive for the consumer,” Riskin said. “There will be a curve in the road and lawyers will lose out to providers who are not lawyers. The progressive firms will be figuring out how to prove value to the client.” •

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