by Gwynne A. Young
From the demise of buggy whips when the automobile was invented to the dramatic downsizing of newspapers when information was available for free online, businesses undergo dramatic change.
So it is absurd to think our legal businesses are immune to change.
The reality is that the delivery of legal services in the 21st century is already undergoing dramatic change. The challenge is to pay attention, make adjustments to thrive (or do nothing and wither), and tap into expertise at The Florida Bar to make the transformation easier.
Big changes impact you, whether you practice in small, medium, or large firms.
Clients may no longer want to pay a premium to sit across a desk from their lawyer for expensive face time to solve their legal problems. Just as clients can go online and compare costs for the best rate on car insurance, why not for legal services? Law firms used to make a lot of money reviewing documents, and now we see outsourcing of this work to overseas lawyers or to “virtual” law firms.
International lawyers come to Washington, D.C., to work on a transaction while sitting in a hotel room, posing questions about how they should be regulated in this country.
Instead of using one law firm, clients have created “virtual law firms” composed of lawyers from different firms in multiple locations to handle complex cases. My firm, Carlton Fields, was involved in multi-district litigation, in which the client pulled together lawyers from different firms across the country to handle the cases.
The globalization of the practice of law is a reality. We now see lawyers from not only other states but also other countries involved in matters in Florida. Florida currently is one of the only states that does not give reciprocity to members of other state bars. As globalization continues, the pressure to provide some form of reciprocity will continue to increase.
The huge law firm Jones Day began with two lawyers in Cleveland in 1893 and now boasts it is “one firm worldwide,” with 2,400 lawyers, including more than 400 in Europe and 200 in Asia.
Changes are dramatic because information technology allows lawyers to conduct business in ways we never imagined just 30 years ago: worldwide and 24/7. Indeed, when I started practicing law, I had no smartphone, email, computer, Skype, Facebook, Twitter, or the ability to Google on the Internet.
Look at The Florida Bar’s latest Economics and Law Office Management Survey, and we see that 44 percent of respondents said their practices have experienced a decrease in business and profitability over the last two years. Thirty-one percent of respondents adjusted their billing rates last year due to the economic climate, with 18 percent instituting a nonlawyer staff hiring freeze, 16 percent eliminating lawyer bonuses, and 14 percent reporting they did not hire any additional lawyers last year.
Hardest hit are new lawyers looking for entry-level jobs in firms. The bleak job market for new lawyers has contributed to a plunge in applications to law schools.
It’s easy to blame big changes to our profession on the Great Recession of 2007. But even with an improving economy, the old system is not going to return to the way it was before.
When the Bar’s Board of Governors Strategic Planning Committee held a workshop to discuss the future of the practice of law, it was noted by the year 2020, we will have at least 115,000 attorneys, increasing market saturation and competition for clients.
The committee discussed that savvy lawyers need to make adjustments to the new way of doing business. Alternate fee arrangements will increase, driven by client demands for more for less. There will be a greater demand for specialization and multi-disciplinary capabilities. Successful practitioners will seize the power of the latest technology. And attorneys will face a lot more competition from nonlegal groups.
Here’s a fact that made me say, “Wow!”
In California in 2011, 20 percent of new LLCs were generated using online forms from LegalZoom, rather than using the services of lawyers.
That eye-opening nugget was shared by University of Florida Levin College of Law Dean Bob Jerry, who read it in a scholarly paper titled “A Glass Half Full Look at the Changes in the American Legal Market,” written by Benjamin H. Barton, a professor at the University of Tennessee College of Law.
“That has profound implications for small- and medium-sized law firms and young lawyers,” Dean Jerry said. “If that is what the public is doing, that is what we need to understand. It doesn’t mean lawyers’ jobs will disappear. But conventional lawyering will evolve into new 21st century lawyering.”
Just as many people would rather pay $34.99 to go online and use do-it- yourself forms on TurboTax instead of hiring an accountant at three times the cost to do their income taxes, so too are clients looking for efficient, cost-saving ways to receive legal services.
Dean Jerry spends a lot of time thinking about the rapidly changing legal profession, so he can better prepare his law students for their evolving careers in a market where law firms are hiring fewer new lawyers.
Beyond the launch of e-discovery, he knows that future lawyers are going to need to figure out how to use technology to “bridge a mismatch between legal needs and the costs of services today.” He knows that clients are interested not just in dispute resolution, but dispute avoidance, and many clients know how to go online to seek answers to their questions.
His students, he says, are not afraid of technology. But the real question, he said, is this: Who is going to come up with the ideas for how technology is used to make the delivery of legal services more efficient?
He’s bringing “legal futurist” Richard Susskind from Great Britain — author of The End of Lawyers? Rethinking the Nature of Legal Services and his latest book, Tomorrow’s Lawyers — to Gainesville on September 12, as the featured speaker for the Marshall M. Criser Distinguished Lecture.
Susskind opened one lecture with a picture of a Black and Decker drill and a picture of a hole in the wall. He argues the hole in the wall is what the client wants, and whatever tool it takes to the job done doesn’t really matter to the client.
The commodity for lawyers is our knowledge and experience, and, as Susskind preaches, because clients want more for less, law firms must find less costly ways to deliver their knowledge and expertise.
When Susskind talks about new business models for delivering legal services to give more for less, he describes an “efficiency strategy” of cutting costs, multi-sourcing, and commoditization; or a “collaboration strategy” where clients share costs by using technology.
Imagine the general counsel of Fortune 500 companies sharing the cost of legal tasks for similar problems by harnessing the power of technology. And lawyers, rather than starting from scratch to hand-craft legal work for each client can package their law firm’s knowledge and license it for clients to use. Licensing knowledge, Susskind says, “makes money while you sleep,” and it’s quicker, easier, and cheaper for clients.
I heard a speech at a Bar Board of Governors meeting two years ago, when Thomas Morgan, a law professor from George Washington University, told us there would be fewer jobs for lawyers, and the practice of law is destined to become more commoditized and competitive. The lawyers who succeed, he told us, will combine “Wal-Mart efficiency with a Neiman Marcus feel.”
I recently purchased Mitchell Kowalski’s book: Avoiding Extinction: Reimaging Legal Services for the 21 Century, in which a big law firm with stressed-out lawyers and unhappy clients redefines itself with a new business model that still turns a profit, makes lawyers’ jobs more manageable, and serves clients better.
Gary Sasso, my friend and managing partner of my law firm, Carlton Fields, also thinks a lot about the forces changing the foundation of our profession. But Sasso says he welcomes change.
“We embrace change around here and see it as opportunity,” Sasso says.
He points out that the kinds of changes Susskind talks about are at the margins of the work that law firms are called upon to do. Some tasks may be performed better by accountants and computers. But Sasso says “the core of what we do depends on judgment and legal expertise, which will remain in demand.”
“Our economy and freedoms are built upon the rule of law,” he says. “We can’t relegate to other professionals, let alone to computers, the work of shaping, interpreting, and applying the rules to all or even many of the complex activities and relationships in a society like ours. We need judges and lawyers to do that.”
While we hone our core expertise, we do need to prepare for the changes in how legal services are delivered. At The Florida Bar, the conversation on how to help lawyers during times of great change is ongoing.
We are looking forward to reviewing the American Bar Association’s report on the future of the practice of law, which is expected to be released in August.
As I come to the end of my term as president, President-elect Eugene Pettis, President-elect Designate Greg Coleman, and I are in agreement that we should establish a commission to review and make recommendations as to how The Florida Bar should move forward to address these issues.
Because, as my managing partner likes to say: “Resisting change is rarely a successful strategy.”