Eduardo Vidal | Sunny South Florida
Hello readers! This is my first column for High Performance Counsel, and I hope to write monthly on the general topic of “Law in the Tropics.” I am a business lawyer with over 30 years of experience in New York and Chicago firms. Since 2012 I have been General Counsel of an online media business, which has matured from a startup into two self-sustaining companies, first in Houston and since 2016 in Miami.
I have experience doing cross-border transactions worldwide, and I am fluent in Spanish and have a working knowledge of Portuguese and French. I am a 1981 graduate of the University of Chicago Law School, and a member of the bar in the States of New York and Illinois.
The legal industry is being fundamentally transformed, and the financial crisis of 2007-09accelerated trends that were already under way. After that crisis, there was less work, especially corporate transactions and related litigation, and instead there has been a lot more of regulatory compliance, which is not necessarily legal work. Since 2017, the Trump administration’s policies of tax cuts and reform, reasonable deregulation, and restoring the rule-of-law have increased the deal flow, but the long-term trends continue.
Another trend has been digitalization, which means that legal work can be done in less than one-third of the time required before, reducing the need for a big staff, especially requiring fewer junior lawyers. In my case as a solo General Counsel, I have sometimes relied on Practical Lawyer, which provides me with access to top-notch forms of agreements, commentary and checklists, all produced by around 300 highly-experienced and dedicated lawyers located in midtown Manhattan. When I graduated from law school, one reason to go to the big law firms was that they were the only ones with the forms for complicated transactions, like leveraged leases, leveraged buyouts and leveraged recapitalizations, but not any longer.
In addition, Artificial Intelligence is here, it is effective, and it will replace much of the analytical grunt work traditionally performed by junior lawyers, putting a premium on the experienced consigliere who can apply the legal answer to provide business solutions. AI is consistently more accurate than most lawyers in reaching the correct legal conclusion, butcomputers are still working on fitting in to a legal and business team to provide advice. However, I wonder where the experienced senior lawyers of 20-30 years from now will receive their training?
Finally outsourcing, not only to less-expensive cities in the USA, but also overseas and especially to India, including to non-lawyer vendors like Pangea, Aerenlpo and Driven, has revolutionized document review, due diligence, contract management and similar tasks, again reducing the role of junior lawyers in law firms and undermining the leverage model of large-law firm profitability.
The profession is being disintermediated, with new virtual law firms put together by legal aggregators like K-Lawyers, Priori Legal and Axiom. Legal technology has also become a growing industry, with suppliers like Practice Panther and Vortex establishing themselves.
The overall result is a pulling apart of the profession, so that: (1) top law firms with stronger brand-identities are pulling away from the next level; (2) retail customers are being served directly by online providers like Legal Zoom, Rocket Lawyer and Court Buddy; and (3) General Counsel and other corporate counsel are becoming more capable, more experienced and more powerful in the profession.
Law firm leadership needs to be business-minded and technologically-accomplished, not only because of new technology, but also because of the new business relationship between law firms and corporate counsel, who have acquired more power throughout all this process. Technology is making deep inroads in the legal industry, because as Professor McGinnis of Northwestern University has observed, the practice of law is essentially an exercise of Artificial Intelligence, and machines will learn to do much of what constitutes the practice of law today. Then lawyers will be needed who can take this information supplied by AI and apply it to provide business solutions.
In ten years we will see a legal industry with stronger corporate law departments, fewer and more focused law firms, and many people with law degrees doing jobs that do not require them. You will also see not only consultants, but also accountants and other professional experts practicing under the same umbrella as lawyers, subject to safeguards against conflicts of interests. Convergence with non-lawyers is coming, so that there will be fee-sharing with other professions. We are already seeing that in litigation financing.
What we are seeing is the business rationalization of our legal profession, and that is not a bad thing. Law is becoming a more business-like profession, organized more efficiently to serve its various consumers, and relying on the latest technology. The greatest opportunity for the legal industry looking forward is providing knowledgable and wise advice to business executives and entrepreneurs. Lawyers, firms and corporate law departments focused on professional excellence first will surge ahead.
The regulatory structure of the legal profession probably will be liberalized in the near future in response to the pressures and opportunities confronting the profession from business and technological change. The greatest influencers on the industry these days are the leading General Counsel at multinational corporations that are experimenting with new ways to do billing, hiring and delivery of legal services to their corporate clients.