This post was originally published on Forbes.com
Lawyers are taught to strive for perfection. That means crafting impeccable memoranda with more-than-ample precedent, syntactical precision, and just the right number of erudite footnotes. That’s great if one is submitting a brief to the Supreme Court, but it’s overkill if the forum is Small Claims Court and a pro se litigant is on the other side. Voltaire cast perfection this way: ‘The best is the enemy of the good.’ Not all matters merit the time—and cost—of perfection. Sometimes good is good enough. Lawyers only recently received the memo, and many have failed to read it. While attorneys have an ethical duty to provide competent and zealous representation, that does not mean that a ‘scorched earth’ approach is presumptively warranted or that lawyers are the default resource for all tasks they define as ‘legal.’
Legal Practice and Legal Delivery Are Two Different Things
Lawyers parse words and define terms. It’s ironic they so often use “legal practice” and “legal delivery” interchangeably when each has a different meaning. Legal practice—the core tasks that lawyers should perform–representation before tribunals, strategic decisions in large commercial transactions, and other tasks that require differentiated legal expertise and/or skills– is narrowing. Legal delivery—-the ‘business of law’—is expanding. That’s because law is shifting from a labor-intensive industry comprised of lawyers selling legal expertise to a tech and process enabled one that leverages and integrates legal expertise with the efficient delivery of legal services. A legal supply chain of providers and resources—human and technological– has emerged. This parallels the transformation of medical practice to healthcare delivery as well as structural changes experienced by other professional services. Law is a late arrival to the party.
Technology is not changing the ‘practice’ of law, but it is certainly altering the way legal services are delivered– including substituting products for services and deploying AI for a growing list of tasks including contract management, document review, and research. Technology is the principal accelerant for the legal industry’s metamorphosis from a labor-intensive model controlled and delivered exclusively by lawyers to a tech and process-enabled one often managed by business professionals. It is changing the structures and economic models from which legal services are delivered and consumed. Initially, the choice for corporate consumers was: insource/outsource/hybrid. Now, each of those choices has resources that can be mixed and matched to provide optimal business impact.
A Quick Look in Law’s Rearview Mirror: When Lawyers Were the Sole Providers
Lawyers had a long run controlling the delivery of legal services. Legal practice and delivery were synonymous—law was all about lawyers. The profession persuaded clients and the public that legal practice was inherently ‘bespoke;’ there was no such thing as ‘off-the-rack’ legal service. Lawyers also created a language, writing style, and culture intended to reinforce the myth of legal exceptionalism. The self-regulated legal industry constructed barriers to ensure that ‘non-lawyers’—anyone other than a licensed attorney—were barred from delivering legal services, participating in its management, or sharing fees. Lawyers controlled every aspect of legal delivery: its providers—lawyers; the structure from which services were delivered—firms; the economic model—billable hours; the resources required—lots of lawyers; the delivery timetable and cost—unpredictable; the novelty of the case— ‘every matter has unique aspects;’ and the value of the matter—from the lawyer’s perspective, not the client’s. Law was an island, and lawyers dictated the terms of the outside world’s engagement with it.
The Challenge and The Opportunity of Finding the ‘Right’ Resources
Legal delivery’s greatest opportunity is also its biggest challenge: to determine when good is good enough and to identify the appropriate resources required to accomplish the client’s/customer’s objective. Why is this something new to the legal industry? Short answer: clients, not lawyers, are now calling the shots, and they are demanding more accessible, cost-effective, efficient, metric and result-driven legal services. That means—among other changes in the legal buy-sell dynamic—that clients, not lawyers, decide what they need; the appropriate level of ‘lawyer touch’; how they value the matter; the appropriate provider source; the cost/risk calculus; and how output is determined. This is very different than the days when lawyers dictated the terms of engagement and clients had no options.
The Two Legal Markets and Their Common Challenge
Derek Bok, the former Harvard President and Dean of the law school, described the legal marketplace with ironic precision: ”There is far too much law for those who can afford it and far too little for those who cannot.” He was referring to the glut of lawyers vying for high-priced, highly remunerative corporate work and the dearth that deliver affordable legal services to the tens of millions of individuals and small businesses that cannot afford it at current lawyer rates. This is often referred to as ‘the access to justice crisis.’ The two market segments have one thing in common: the desire for more accessible, easy-to-interact with, transparent, efficient, cost-effective, responsive, value/ metric/ and result-driven service and a better customer experience.
Corporate consumers have taken the reins by migrating work from law firms in-house. Many are retooling—albeit incrementally—the legal delivery model to more closely align it with operating principles of the enterprise. That means ‘doing more with less’ by adapting technology, process, and a business mentality to the delivery of legal services. A byproduct of that mindset is legal operations teams that are now an integral part of many corporate legal departments. Elite service providers also serve this function externally. This is legal practice and legal delivery in operation.
Law firms have ceded significant market share to in-house departments and service providers. There are two principal reasons for this: (1) law firm failure to respond to macroeconomic factors that have disrupted multiple industries; and (2) hubris and the belief that ‘lawyer exceptionalism’ would protect firms from the tectonic buy-sell change affecting other industries. When the incumbent law firm providers failed to step up, legal consumers and new-model providers filled the void.
The reallocation of market share goes way beyond labor arbitrage; it is a transformational paradigm shift that is recasting the industry’s delivery and economic structures, culture, performance and reward systems as well as how, when, and from what structural model differentiated legal expertise is required and engaged. The legal guild and its traditional partnership model is being replaced by a digitized corporate delivery model that distinguishes between–and melds– legal practice and legal operations. That means that new skillsets are required for lawyers as well as others working in legal delivery. These are not solely ‘hard’ skills like technological competency and process/project management but also ‘soft’ ones like cultural awareness, collaboration, and building one’s personal brand.
Law has been big business for decades. Now, it is being run that way– not as the clubby guild it has been for generations. Innovation, new models, and a different consumer mindset about the role that law plays in tackling business challenges has created angst and opportunity in the legal marketplace. So far, resource and provider options outstrip integrated solutions, but that too is changing. Technology and process experts will identify solutions to the ‘right sourcing’ issue. This will take time and will not lead to a ‘one-size-fits-all’ solution. But the task of finding the appropriate resource will be streamlined.
Retail Law is Witnessing an Overhaul, Too
The retail segment of the market—individuals and small businesses– is also experiencing significant and much-needed change. An overwhelming majority of individuals and small businesses cannot afford the traditional ‘brute force’ and blank check approach taken by lawyers. Besides, many retail legal issues—though certainly not all—do not require legal interpretation; access to lawyer-vetted forms and documents can suffice. And sometimes, as in the case of DoNotPay and JustFix.nyc, two AI-enhanced sites, consumers can obtain help for everything from contesting parking tickets to filling out forms for Housing Court assistance. Formal legal representation is no longer a necessity in every instance. And while many lawyers maintain that ‘self-help’ and ‘being your own lawyer’ can be precarious, consider that those same lawyers are doing little to address the access to justice crisis and the imbalance of legal resources Derek Bok described. As JustFix’s founder, Georges Clement, recently commented, ‘We work at the intersection of access to justice, tenants’ rights, and technology. We want to build tools that help balance the scales for vulnerable, low-income people who are too often overlooked by traditional technology companies.’
A crop of well-capitalized, tech and process savvy providers and entrepreneurs offer affordable legal services to the tens of million Americans and small businesses that are otherwise priced out of the market. LegalZoom, Rocket Lawyer, and Avvo—among a growing list of companies in the U.S. and abroad– offer retail consumers different levels of lawyer ‘touch point’ to tackle challenges including immigration, landlord-tenant matters, Wills, and simple contracts. The services range from self-help documents to subscription plans (brief online/phone contact with lawyers) and full-blown-engagements (at discounted rates). LegalZoom now boasts over 3million customers with an approval rating in the 90% range—vastly superior to traditional lawyer/law firm levels. The tools, resources, and opportunity exist for legal services to be delivered to millions in need of them. And while this might not be ‘bespoke’ service, it is often sufficient and far better than no recourse at all.
The transition of law from guild to marketplace will inure to the benefit of legal consumers. And while some might lament the end of lawyer hegemony, clients will benefit from the competition, innovation, and expanded access to legal services that today’s legal marketplace provides. And consumers–not lawyers–will decide how much perfection they need and can afford.
About Mark A. Cohen
I have had a forty year career in the legal field. For thirty years, I was a civil trial lawyer and tried 57 major civil cases. My clients included the United States of America (while serving as an Assistant United States Attorney), four foreign sovereign governments, and approximately 60 Fortune 500 companies. I also served as outside general counsel to three insurance companies and as Receiver of an international aviation parts company overseeing operations on four continents. I then became an entrepreneur, focused on driving greater client focus, efficiency, and value in the delivery of legal services. I founded Qualitas, an early legal process outsourcing company, and later became a Co-Founder and Managing Director of Clearspire, an internationally recognized law firm and legal service provider. Teaching—especially skills necessary in today’s marketplace—is another passion. I am a Distinguished Lecturer in Law at Georgetown where I devise and teach professional competency courses and mentor students. I have spoken widely at educational institutions, global legal conferences, and private companies including: Harvard Law School Speaker Series, Reinvent Law, and 3M’s Global Legal Alignment Summit. My writing focuses on changes in the legal ecosystem and, more particularly, on the melding of legal, technological, and business process expertise in legal delivery.