Aug 17, 2020
Bad News for the Legal Industry Elite: Your Days in Control Are Almost Over
The legal industry’s tumultuous summer of 2020 is most remarkable for what hasn’t happened. The brouhaha over the bar exam — widespread bureaucratic dereliction, in-person examinees exposed to CoVid, last-minute test cancellations, tampon bans, website crashes, a stunning if implicit ABA rebuke of the National Conference of Bar Examiners, a nationwide outcry from bar applicants and licensed attorneys — has changed nothing. The decision-makers are the same, the admissions process no different. Thanks to CoVid, millions of potential new clients need counsel for family law, debt collection, and insolvency matters, but there’s been no real effort to expand access to justice to accommodate them. Even small changes to the practice, from depositions via Zoom to online notaries, are considered temporary. If there was ever a catalyst for the wholesale restructuring of a clearly broken system, the pandemic and resulting economic fallout should have been it. But in this “learned profession” industry leaders are hunkering down, waiting for the dark times to pass and anticipating a return to a normal where they still exercise total control.
They are in for a rude awakening: The legal industry as currently constituted cannot endure. While need for services is soaring, demand is shrinking as more potential clients are priced out of the market. The result is a growing glut of lawyers competing for a shrinking pool of prospects. These economic inefficiencies are largely caused by the industry’s long-outdated regulatory scheme. Fearing their own loss of power and prestige, state supreme courts and bureaucracies have been excruciatingly slow to adapt to the internet era. Regulation remains hyper-local — state by state — and skewed to favor big firms. Technological advances and the globalization of commerce should have sparked competition and lowered fees. They haven’t. The economic crisis caused by the pandemic has brought the extent of these inefficiencies into full view. The vast majority of lawyers will not struggle financially so a handful of big firms, judges, and bureaucrats can continue to sidle up to the trough.
The industry’s bureaucratic class seems blissfully unaware of the strong incentives and myriad opportunities that exist for today’s attorneys to find innovative ways to use their training. The current poster-child of such obliviousness is National Conference of Bar Examiners president Judy Gundersen, whose incompetence in both management and public relations has been well-chronicled. She recently told one media outlet that she was giving state boards of law examiners an “A for effort” in the administration of this year’s exam. It takes a lack of self-awareness bordering on the delusional to make a statement so at odds with reality. That Gundersen committed yet another staggering public relations faux-pas this far into an abject disaster partly of her own creation evidences the extent to which she considers herself both immune from any real consequences and unaware of the economic realities that render her vulnerable. She’s not alone: Her continued insistence that applicants risk their lives and livelihoods so she can keep her job hasn’t exactly been widely rebuked by other industry leaders.
Unfortunately for Gundersen and other members of the profession’s ruling elite, economic realities mean rank-and-file lawyers can no longer afford a resigned acceptance of industry inefficiencies. The practice is going to change dramatically, led by a burgeoning class of innovators who fully appreciate the limited scope of regulators to prevent it. The only question is how quickly they will do so in sufficient numbers to foment real, meaningful reform.
Walter Isaacson, biographer of luminaries like Leonardo da Vinci, argues that true innovation occurs at the crossroads of disparate disciplines. Da Vinci became the original Renaissance Man by studying and understanding both art and science; his paintings were exceptional because his knowledge of anatomy and optics informed the scenes and characters he created on canvas. In the Nineteenth Century, Ada Lovelace conceived what would eventually become the modern computer by wedding an appreciation of language inherited from her father, Lord Byron, and mathematical skills gleaned from her mother. Lawyers can thus be innovators by combining their knowledge of the law and its application with other, wholly-unrelated disciplines. Many of these approaches offer the added benefit of creating solutions that exist outside the ambit of industry regulators, neutering their ability to disrupt the introduction of good solutions solely to protect entrenched interests.
The most obvious crossroads is law and technology. The pandemic has already forced reconsideration of the best means of delivering legal services. For example, some trials and depositions are now being conducted online. Technology is a tool, not a panacea (as failed and aborted attempts to administer the bar exam online have proven), but it is crucial to eliminating many existing inefficiencies that artificially inflate the cost of legal services. Lawyers are using the internet and artificial intelligence to develop methods of streamlining business management, contract drafting, and divorce. These are not legal services per se and therefore not subject to state bar regulation. Rather, they are technology concerns that allow users to handle basic tasks themselves and interact with counsel only in areas where an attorney truly adds value.
For example, it doesn’t take a professional with a law license to form a corporation. For many companies, the only truly legal service needed for company creation is the drafting of bylaws that comply with operative statutes. Otherwise, with a modicum of practical guidance business owners can get what help they need without wasting thousands of dollars on attorneys’ fees. A corporate lawyer with coding skills can develop a platform that lets entrepreneurs efficiently create their own companies while using legal services only where necessary. And unless state supreme courts are prepared to insist that the executive branches in their jurisdictions remove the online filing systems and comprehensive business management portals they already make available to the public, any claim that this constitutes or promotes the unauthorized practice of law is risible.
As onerous regulation continues to constrict demand, more enterprising lawyers will out of necessity find ways to translate their skill sets into valuable services outside the traditional definition of the practice of law. There is ample opportunity: Knowledge and use of legal principles is an important aspect of numerous disciplines like human resources, financial planning, health care, insurance, management, logistics, and academics. While current regulations prohibit attorneys from going into business with non-lawyers — the only purpose of which is to protect big firms from unwelcome competition — awareness of legal mandates hardly requires a law license. Thus, an unlicensed juris doctor could develop an automated compliance system that allows doctors and dentists to efficiently respond to subpoenas in compliance with HIPAA and expect no interference from industry bureaucrats.
The ambit of state courts, bar associations, and bureaucrats will continue to shrink because of economic conditions they helped create through over-regulation and aggressive protection of limited interests. Attorneys will find innovative solutions that help an increasingly under-served public and are not subject to scrutiny by self-dealing industry elites. For both consumers and providers, it cannot happen soon enough.
