Why Lawyers Need to Rethink How They Work

With the rapid growth of technology in the last decade, we came somewhat accustomed to a certain level of speed and efficiency across all services.

 

Now you click on a button on your smartphone and a taxi will appear in minutes. Soon there will be no driver at all.

 

Studies say that our attention span has reduced to eight second (goldfish is nine second) due to the effect of an increasingly digitalized lifestyle.

 

This has a tremendous effect on the way we consume product and services. We have more control over the supplier and expect more from them. Our definition of efficiency has reached a new threshold and it translates into today’s marketplace.

 

But when it comes to the legal system, the level of efficiency falls far below that threshold. Apart from the fact that lawyers are now using laptop and electronic documents, the legal system is still the same as it were more than a hundred years ago.

 

The gap between the innovation others sectors are undergoing and the legal system is too great that people forgo to use the latter.

 

Because of the lack of innovation, there is a decrease in the consumption of legal services. (Yes, providing legal services is a business even if the system’s decorum is throwing dust to your eyes)

 

The problem is not that people complain about Justice. It is more a matter of access and delivery of it. When looking at the legal system framework, research shows that [consumer] complaints arise as much from poor business service as from poor legal advice.

 

Statistics clearly confirm the phenomenon of decrease (especially in the litigation sector). Take a look at the next chart.

Source: Center for the study of legal profession

 

As we can see, demand growth in the market has remained slightly flat since the recession of 2008-2009.

 

The crisis is even more apparent when you compare by law sector. The demand for litigation (which represent one-third of all practice activities across the legal market) remains negative.

 

In the State of California, there were 7.5 million cases filed in 2014 — a decline of 35% since 2010. It’s the lowest number in a decade.

 

It is not that people have less legal issues nowadays. In fact, nearly two-thirds of adults reported experiencing a “civil justice situation,” in 2013 with the most common issues revolving around employment, finances, insurance, and housing.

 

Again, numbers show that more people are forgoing legal action altogether or use others method of mediation or arbitration.

 

The trend responds to increased client demands for efficiency and cost-effectiveness in the delivery of legal services and reflects the growing willingness of clients to disaggregate services among a variety of different firms and providers.

 

In an era where Uber, Airbnb or Facebook dominate, it’s obvious that the legal system is obliged to adopt innovation for client’s sake.

 

Of course, lawyers know that. But to change the way law firms works is no easy tasks. Like the Titanic changing course.


Change in the landscape

 

More and more experimented lawyers are leaving traditional law firm to freelancing or smaller firms where they can cut on overhead and focus on client satisfaction.

 

This is a normal reaction. After all, people did try to jump off the Titanic when it began to sink.

 

When you think about it, in a normal law firm, only 36% of your money goes to the lawyer’s work. The rest: 30% goes to the staff and the remaining 34% to marketing, equipment, occupancy, and reference.

 

Approximatively, 1/3 of your money is for the services, another 1/3 is for the assistants and the last third for the infrastructure. Classic business structure.

 

Today’s biggest company: Uber (doesn’t own car), Airbnb (doesn’t own real estate), Expedia (doesn’t own hotel). Their model, powered by technology, allows customers to benefit by providing the supplier outsourced assistant and infrastructure for a fraction of the cost.

 

That trend is spreading. A study conducted by software company Intuit showed that 40% of US workforce would be freelancers by 2020.

 

The internet allows them to leverage their skills in a more efficient way. Lawyers are no exception to this.

 

Every tool and legal resources are accessible on the internet at no cost; a lawyer on his kitchen table can easily do the same job as any.

 

I’m not saying that big law firm is to disappear. National/multinational cases where a big workforce of lawyers is needed would always be best served by those. It just a simple fact that the way law will be delivered will follow the industry change.

 

The law is the backbone of every society by ensuring the stability of property rights and facilitate efficient levels of investment.

 

Indeed, a central reason why developed countries are wealthy lies in the way courts insures that stability and investment.

 

I see more job for lawyers in the future. We’re just traversing a change.

Dominic

I worked a bit in a boutique law doing interesting work. I left to make peace with my nerdy past and founded a tech company changing how legal services are provided.

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2 Comments on "Why Lawyers Need to Rethink How They Work"

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Kevin
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Well written! I like your new blog. Definitely agree with your interpretation of those trends.

An article about business models, retainers and transparency might be nice.