Are Changes Coming to the Legal Industry? Don’t Hold Your Breath.
The Coronavirus pandemic has brought the United States economy to a screeching halt. Unemployment has jumped to Great Depression-era levels and a prolonged recession appears inevitable. Uncertainty reigns; we know only that there will be continued disruption followed eventually by a tentative, slow crawl toward some semblance of normality. Businesses now find themselves struggling to survive in a completely restructured market where personal interaction has been replaced by social distancing.
Political realities have only added to the chaos. The federal government has abdicated any responsibility for coordinating a comprehensive response to a national emergency. Much of the world perceives an ebbing tide of American exceptionalism. This could be a watershed moment in world history. Just as Great Britain entered World War II the master of a global empire and emerged a vassal state reliant on a superpower for its protection, so American political and economic primacy in the post-pandemic world is in serious question. Crises unmask both the powerful and the pretenders. The United States looks like a shell of its former self.
Perched at this marriage of economic catastrophe and political impotence, with the possible birth of a new world order in process, American businesses are scrambling to find new ways to monetize their products and services, stay afloat, and compete in a global market. This is a time to be bold: Industries are making wholesale structural changes on the fly to accommodate current realities and an uncertain future — schools and universities switching to online curricula; sports leagues reconsidering economic models in the absence of fan attendance revenues; medical students obtaining permission to practice prior to graduating to ease the burden on exhausted doctors; bankers, actuaries, and other previously office-bound workers trading conference rooms for Zoom calls. The restaurant, travel, and hospitality industries have the particularly difficult challenge of inventing new service paradigms that keep people physically separated. How do they repeatedly sanitize and allow for greater personal space, serve a lower volume of customers, and not price themselves out of the market? In the middle of a deep recession?
And then there’s the legal industry, whose response to massive economic upheaval has been to do what it’s decision-makers do best: Protect themselves. Lawyers are on the same unsteady ground as everyone else, but state bar associations, bureaucrats, and “thought-leaders” have managed only to increase their output of hand-wringing commentary covering the same topics they’ve been droning on about for years. It is a thin veneer barely hiding the real goal: Maintaining their own importance and positions in a sea of wholesale change. The self-appointed elite feigns concern by stating and restating problems but offers little in the way of meaningful reform when doing so threatens their own perches.
For example, after much wrangling, California recently announced the creation of a “sandbox” to consider how technological advances should be incorporated into the practice of law. Agreeing even to formally discuss such issues was no mean feat. Big firms were opposed for fear that regulators might open the door to allowing attorneys to be in business with laymen — established accounting and consulting companies would then be able to partner with lawyers and potentially gain a competitive edge for clients in what white shoe outfits consider their exclusive fiefdom — and the sandbox almost didn’t happen. Industry regulators and commentators frequently descry that so many Americans can’t afford legal services. But because for them enacting meaningful reform is only palatable so long as it doesn’t threaten big firm profits, they rarely do more than make a lot of noise.
The farcical idea that the creation of a “sandbox” is progress toward real reform, and that it nonetheless took great effort just to reach that point, evinces the inertia plaguing the legal industry. The metaphor, however, is on target. In sandboxes, children use toy construction equipment and pretend to build. In reality, they aren’t making anything, and the sand is exactly the same when playtime ends. Likewise, because state bars and regulators’ claimed focus on furthering the public interest is belied by an unwillingness to embrace innovations that threaten bureaucrat’s control and Biglaw revenues, it’s difficult to see how California’s “sandbox” will look any different when legal industry muckety-mucks are done playing in it.
Attorneys’ sell knowledge — of codes, regulations, and precedents — and its proper application in given situations. When this information was only available in vast tomes amassed on the shelves of law libraries, it had a certain value. But with the internet putting much of this knowledge in the hands of anyone with a smartphone, lawyers have precipitously less to offer than ever before. Moreover, the legal industry has few clearly defined borders. Accountants, human resources professionals, and many others can access and use information that was once the exclusive purview of the bar. For years, it has been becoming increasingly clear that to survive financially lawyers need something else to sell.
Unfortunately, even as many Americans who need legal services are priced out of the market, attorneys who could meet that demand often hesitate to offer innovative solutions that have not been blessed by industry regulators. But who needs their blessing? There is no ethical prohibition on innovation. If enough new service models that effectively provide the kinds of solutions demanded by under-served sectors are brought to the market, industry decision-makers who for years have paid lip service to greater access to justice will be hard-pressed to oppose them. Let the regulators play in their sandbox. Real reform will naturally come from those bold lawyers who have an incentive to find other means of monetizing their training.
The current crisis has once again underscored the need for a more dynamic legal industry model and the unfortunate reality that its current regulatory scheme is designed and used primarily to protect entrenched bureaucrats and big firm profits. If change is going to come, it will have to start with laymen, sole practitioners, and small firm lawyers who understand that knowledge and application of the law are no longer prized commodities and who have the skill sets and the chops to find other ways to meet the needs of a growing base of under-served potential customers.
Steven Fried is an entrepreneur, attorney, and the founder of Olyver, a web-based platform that helps entrepreneurs manage their businesses. Visit at www.olyverapp.com.
