Richard Susskind: Disaster Ahead for Lawyers Unwilling to Change
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Richard Susskind
In my book, The End of Lawyers?, I claim that the future for lawyers could be prosperous or disastrous. I predict that those who are unwilling to change their working practices and extend their services will struggle to survive.
In contrast, lawyers who embrace emerging technologies and novel ways of sourcing legal work will trade successfully for many years, even if they are not engaged in jobs that most law schools anticipate for their graduates.
Many of my conclusions follow from research amongst in-house lawyers. Invariably, general counsel tell me they are now under three pressures: to reduce the size of their in-house teams; to spend less on external law firms; and to find ways of coping with more and riskier legal and compliance work than in the past.
Both internally and externally, clients are requiring more for less. From 2004-2007, this was a background theme of in-house lawyers. In 2008, in the economic downturn, it has become an overriding imperative.
As a consequence, law firms will increasingly be asked to reduce their fees, to undertake work on a fixed fee basis, and they will often being selected by hard-nosed, in-house procurement specialists and not solely by in-house lawyers. The legal market looks set to be a buyer’s market for the foreseeable future.
At the same time, new competitors are emerging, such as outsourcers and entrepreneurial publishers; while liberalization of the legal market will bring external funding and a new wave of professional managers and investors who have no nostalgic commitment to traditional business models for law firms, including hourly billing and gearing obtained through the deployment of armies of hard-working young lawyers.
To cap it all, a number of disruptive legal technologies are emerging (such as document assembly, closed communities, legal open-sourcing, and embedded legal knowledge) which will directly challenge and sometimes even replace the traditional work of lawyers.
For many lawyers, therefore, it looks like the party may soon be over.
I anticipate that the market is likely to respond in two ways to these changes. First, new methods, systems, and processes will emerge to reduce the cost of undertaking routine legal work. This will extend well beyond the back office of legal businesses into the very heart of legal practice.
To achieve the efficiencies needed, I say that legal services will evolve from bespoke service at one end of a spectrum along a path, passing through the following stages: standardization, systematization, packaging, and commoditization. Many new ways of sourcing will emerge (outsourcing, off-shoring, sub-contracting, co-sourcing, and more) and these will often be combined in the conduct of individual pieces of legal work. I call this multi-sourcing.
These changes will affect not just high volume, low value work but also, and vitally, the routine elements of high value work.
The second response by the market will be for clients, in various ways, to share the costs of legal services. In-house lawyers, I suggest, will frequently work together, often as part of online closed communities and find ways of recycling legal work amongst themselves. In areas where their duplication of effort and expense is considerable, such as regulatory compliance, they will collaborate intensively and so spread the legal expense amongst their number. At the other end of the spectrum, citizens will have ready access to online legal guidance and to growing bodies of legal materials that will be available on an open source basis.
Law firms face two challenges in these difficult times. The first is to steer their businesses through the short-term difficulties of the next 18 months or so.
There are no magic answers here. The best will control costs without incapacitating their practices and will invest in determined and focused marketing.
The bigger challenge, however, is the long term, when the recession recedes. I advise that, looking across a 3-5 year time frame, each business unit within a firm should currently be subjected to stress testing – a formal evaluation of how it can face the pressures the market will bring. Some may not withstand the scrutiny and may be seen as terminally threatened by new developments. Others will find opportunities for new and exciting lines of legal business. Either way, it is as well to know now.
Richard Susskind is a professor at the Oxford Internet Institute. He's specialized in legal technology, as an adviser and lecturer, for more than 25 years. His most recent book, The End of Lawyers? Rethinking the Nature of Legal Services, published by Oxford University Press, follows an earlier work, The Future of Law.
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Posted by Fred Krebs - 4 months, 4 weeks, 2 hours, 15 minutes ago
Richard accurately reflects the concerns and pressures that we hear from our members in the Association of Corporate Counsel. We all must look beyond surviving the next 12 to 18 months as the economy slowly rebounds and recognize/accept that the legal services world will be vastly different. Those slow to change whether at law firms or in-house will have a difficult time.
Posted by Jose Maria Cafferata - 4 months, 4 weeks, 2 hours, 4 minutes ago
How do you see the problem in developing countries like Argentina? Do you plan to come to Buenos Aires??
Very interesting
Jose Maria Cafferata
.(JavaScript must be enabled to view this email address)
Cafferata International Consultants
Posted by Soji Elias - 4 months, 4 weeks, 1 hour, 45 minutes ago
This is all very well. Indeed, the supposedly more conservative core of legal practice is changing its habits in noticeable - often remarkable ways. But a quality lawyer is, in my view, still reasonably well protected from these so-called buyer-led shifts and so forth. While this may not mean much in terms of a response to the much wider generality of the profession, it does say that even with the very best new-fangled ideas about practice and where and how it should go, there is no substitute for a recognisable, thriving legal profession than to ientify it with high quality work, rather than with large quantity work.
Posted by Peter Carino - 4 months, 4 weeks, 15 minutes ago
Richard - Thank you for your overall cautionary view. Are you counterposing “bespoke” with “multi-sourcing?”
Just to clarify, if you are asserting that what is “bespoke” to be at the core of the profession and our legal system, this makes me consider that multi-sourcing has always been part legal affairs in general; that now all parties to a legal matter are faced with the problem of managing the increased volume of this particular phenomena. As a “hard-nosed procurement professional,” I am having trouble envisioning lower cost as matters become engulfed by increased numbers of specialized parts and parties. The overall cost of a matter may actually increase in this scenario.
Your view reinforces my worry about the limits of supervisory legal control on such aspects of ethics, representation/influence and the solidity of facts/arguments. I really like that a proposal for stress testing the units within a firm is stated here.
(Do I detect a subtext analogy from “liberal” economic policy/practice in your view here? If so like that and think it is effective.)
Posted by Kelly Spradley - 4 months, 3 weeks, 5 days, 2 hours, 4 minutes ago
I agree that lawyers who “invest in determined and focused marketing” will have the best chance of making it through the next year. Lawyers are needed now, as much as they ever have been. The public just needs to be educated as to why they need lawyers. This is done through marketing. People have to be informed about the consequences of not getting legal help. Even today, people will pay to relieve pain or prevent pain - and pain has certainly been generated during the recession. I think you are also correct to say that some lawyers will capitalize on this and find “opportunities for new lines of business.”
Posted by Stephanie Kimbro - 4 months, 3 weeks, 2 days, 1 hour, 28 minutes ago
The changes are going to be consumer-driven. As the owner of a web-based virtual law office for going on almost four years, I have gotten significant feedback from the public indicating that they expect more affordable and accessible legal services from attorneys. The technology is available to allow legal professionals to step up and meet this consumer demand in a way that is ethical, avoids malpractice risks and provides quality legal services similar to what has been provided in a traditional brick & mortar practice.
I agree that in order to remain competitive attorneys will need to find ways to provide services to the public that acknowledges that most clients now have access to a wealth of legal information online. We have to find responsible methods of educating the public that our services are important and that cutting and pasting sample online legal forms or going with cheap online forms without attorney review is not in their best interest.
Attorneys should seize these changes as a great opportunity to revive the respect for the profession through innovation and entrepreneurship that serves the public as well as the legal professional.
Posted by Kina - 4 months, 3 weeks, 1 day, 2 hours, 27 minutes ago
Richard Susskind kindly met with us at ILTA ‘09 and shared his thoughts on the Challenges of Law Firms at (Video) - http://www.pivotaldiscovery.com/p/index.php?option=com_seyret&task=videodirectlink&Itemid=96&id=268
Posted by Iain Jacobs - 4 months, 2 weeks, 6 days, 3 hours ago
Richard is 100% right. When I was General Counsel of Alstom’s Service Sector, I introduced an automated contract generation system (DocRite, from Interactive Dialogues) precisely because we needed to standardise much more our approach on routine contract matters, to free up the lawyers for the more “bespoke” issues. We chose our top lawyers to develop the standard solutions.
I am so convinced of the logic of outsourcing that I left to set up my own company to do it: thecontractcentre.com
Posted by ADAM SMITH - 2 months, 3 weeks, 3 days, 23 hours, 50 minutes ago
I want say that I agree that in order to remain competitive attorneys will need to find ways to provide services to the public that acknowledges that most clients now have access to a wealth of legal information online. We have to find responsible methods of educating the public that our services are important and that cutting and pasting sample online legal forms or going with cheap online forms without attorney review is not in their best interest. and also recommended this site for attorney.
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Adam.Smith