March 8, 2011
The Future of Law Practice (?)
I have been wondering about the effect of three trends on lawyers in the United States:
1. Outsourcing. United States clients are outsourcing to places like India and China some of their simpler legal tasks, work that young associates and paralegals would previously have done. The reason is clear: a lawyer in India is much cheaper than a lawyer in the United States.
2. Automation. As a recent New York Times article points out, some tasks that lawyers formerly performed, such as document review, can now be done more cheaply and more efficiently through automation.
3. Internet Resources. The Internet provides people many legal resources that didn’t exist twenty years ago—statutes and regulations; forms; answers to legal questions; summaries of legal concepts. Nolo is probably the best-known example of a site that offers forms and answers to legal questions. Even Wikipedia offers fairly accurate explanations of many legal concepts. Here, for example, is the Wikipedia explanation of the business judgment rule. My guess is that more and more people, for better or worse, are using these resources to do their own legal work and avoid the cost of a lawyer.
What do these three trends mean for the practice of law? First, routine legal work is likely to be responsible for a dwindling proportion of a lawyer’s fees. Wealthy, sophisticated clients will outsource their routine work and less wealthy, unsophisticated clients will turn to the Internet. Second, mere knowledge of the law is unlikely to command high fees, except perhaps in very technical, specialized areas. Lay people will no longer need lawyers to tell them what the basic legal rules are.
Then what value will transactional lawyers be able to offer clients? The answer is, I believe, exactly what the best lawyers are doing for their clients now—not just filling out forms or explaining the legal rules, but being creative problem-solvers. A good lawyer’s stock in trade is not just a knowledge of the law and a good form file, but the analytical abilities to see the ambiguities and possibilities in the law and the creativity to come up with a solution that achieves the client’s objectives.
Substantive knowledge of the law is still a prerequisite to being a good lawyer. Creativity without substance is dangerous at best. But substance without creativity will be less and less marketable as time passes.
Of course, my crystal ball could be wrong. If I really could predict the future, I’d be playing the futures markets instead teaching in a law school.
March 8, 2011 | Permalink
The problem solving lawyer will always be in demand for genuine problems. Substantive legal knowledge may reside on silicon chips. To date Watson has not been asked to accommodate the myriad demands of the principals negotiating a transaction, the regulatory environment, the political realities of the moment and the economics of the deal. This is not something we regularly teach. But the lawyers who can do this will be more in demand than Watsons for decades to come.
Posted by: Professor Bruce W Bean | Mar 9, 2011 5:25:17 AM
I'm reminded of a sign in the office of an auto mechanic where I used to bring my car for service.
$70/hour if you want to watch
$80/hour if you've already worked on it yourself
A couple came in for a consultation for estate planning last week. The wife wanted to utilize an on-line service for their wills, but the husband wanted to consult a professional.
The wife, in her research, had missed the need for a durable power of attorney. And, while they thought the estate tax wasn't a problem, they had missed that the NY exemption is only $1 million. My suggestion for a renunciation and disclaimer trust in each will would save them approximately $60,000 net in the second estate, even assuming zero growth.
I think self-directed legal work, for all but the simplest matters, is a bit like setting your own broken leg.
Posted by: David B | Mar 9, 2011 5:31:19 AM
Most people will not be able to understand and apply legal rules even if they find the right ones and read them. But that's not to say they won't act as if they can. So transactional lawyers may need to switch to litigation. There'll be lots of that resulting from people trying to do their own transactional work.
Posted by: KenB | Mar 9, 2011 7:44:37 AM
I've practiced law for 30 years, all of it in litigation. My estimate is that less than 1% of the services I provide to clients could be duplicated by outsourcing, automation, or internet resources.
The comment about automation would seem to apply only to litigation, not to office practice -- and even then only to the fairly small fraction of cases, handled by a small fraction of the bar, which involve genuinely massive document reviews and production.
Maybe things are so radically different for lawyers in non-adversary practices, but I really, really doubt it. This post stikes me very much like the Popular Mechanics articles in the 1960s about the flying cars we'd all own in the 1990s.
Posted by: Beldar | Mar 9, 2011 8:15:56 AM
My view of the tea leaves suggests a continuing need for the "routine legal work." In joly old england hundresds of years ago a town scribe (today's routine lawyer) was needed to read and write for the non and barely literate population to facililtate communication with relatives in another town. With today's high school graduates running between 30 and 50 per cent illiterate they do not have the skills to deal with even well run internet legal help sites. They will search for attorney help when faced with legal obstacles that they perceive as overwhelming.
Posted by: Brian | Mar 9, 2011 8:39:30 AM
Just a couple of responses to the comments. I agree with the comments that some of the Internet resources are not that great at present. I think they will get better, but I don't disagree that legal representation is preferable for non-routine work (and perhaps even some routine work). But they're better because of what I said lawyers can offer: creative problem-solving. I think David B's comment is a good illustration of that.
To respond to Beldar, I never read Popular Mechanics, but I am a big fan of science fiction, so I know what you're talking about. Some of the things people envisioned decades ago, such as flying cars, haven't happened. But what amazes me is how far technological reality in some areas has gone beyond what science fiction writers imagined even 20 years ago. I think we will be similarly amazed in another 20 years.
Brian, my suspicion is that most of the illiterate people (and you're clearly exaggerating the rates for effect) won't be using many legal services, except for criminal and divorce lawyers. And, to the extent they do need transactional legal help, my guess is most of them will turn to Internet sites, electronic forms, or something similar. (What will have replaced the Internet in 30 years?)
Posted by: Steve Bradford | Mar 9, 2011 10:32:30 AM
David B: You did add value. But, A lot of routine estate planning is just that, routine. A well designed program should have been able to gather the basic information and spit out a basic estate plan.
OTOH, where would be if the Walton family (not the TV family, the founders of Wal*Mart) came in to ask about estate planning. Jonathan Blatmacher knew what to do. Eventually he beat the IRS like a rented mule. That type of work will not be replaced by a web site.
Beldar: You will be OK. The kids who were hoping Big Law would hire them at $160K/yr to document work are SOL.
Posted by: Walter Sobchak | Mar 9, 2011 9:50:14 PM
I am a Chinese lawyer and was a legal assistant in Beijing office, a big international law firm based in US.
I am writing to comment for the first of the three trends. The situation is that the young associates and paralegals are doing more simpler legal task indeed, but the international trade are developing so quick, much faster and more than the first trend. So, there is a big space for the transactional lawyer, who has bilingual ability. Come here to study Chinese, or to be a visiting professor at Tsinghua/Temple LLM program. You will find a new trend.
Posted by: Victor | Mar 12, 2011 2:56:12 AM