Yogi Berra said, “Baseball is ninety percent mental and the other half physical.” His numbers are off, but his on-field stats, glove, and immense popularity landed him in Cooperstown, a place that enshrines baseball greats based upon metrics. Ever wonder why law—a trillion dollar global industry purportedly grounded in evidence, proof, and fact—is so remarkably devoid of meaningful metrics for performance and results?
Lawyers in the retail segment of the legal market have priced themselves beyond the reach of most clients, individuals and small businesses. This is commonly referred to as “the access to justice crisis. ” There are fixes to the problem: competition (the glut of lawyers should yield price reduction); technology which enables lawyers to connect as never before and to create new and more efficient ways to deliver legal services; legal products, especially legal forms delivered online (formerly services provided by lawyers/law firms); and regulatory changes that would encourage new market entrants, stimulate competition, reduce prices, and provide consumers (clients) with much-needed access and options. Another key element must be added to this list: many tasks that lawyers routinely handled need not be performed by an attorney. In fact—and this is routinely occurring in the corporate market segment–service providers often perform these tasks better, faster, and cheaper than law firms do. Why, then, is this not happening in the retail segment where demand for legal services outstrips supply and price is the problem?
The Numbers Are Daunting
Just how big a crisis is the lack of “access to justice”? Let’s start with some basics. Lawyers nationwide charge an average of $200 to $300 per hour. And we all know about “hour creep” and lawyers’ abhorrence of budgets, especially when dealing with less sophisticated legal consumers who tend not to ask for them. The average annual legal spend for small business has been pegged at $7,600, a crippling sum for mom and pop shops and even more so for individuals. That is why it is estimated that approximately 60% of all U.S. small businesses go unrepresented when they have a significant legal issue (even a “bet the company” case). The number of unrepresented individuals is significantly higher. I was recently told by a Bar President that over 90% of divorce cases in his jurisdiction had at least one pro se party. He estimated that well over 75% of those in need of legal representation are unrepresented. [Read more…]
Law is derived from logic and experience. It has rules to govern its application, penalties for its violation, and remedies for those aggrieved. Yet it tends to be slow, unpredictable, unnecessarily complicated at times, and selectively enforced at others. And then there are the paradoxes that make law even more enigmatic. Here are a few:
- The rapidly expanding number of unemployed/under-employed lawyers and the access to justice crisis;
- The “broken” BigLaw model and the hegemony BigLaw retains over the outsourced work of the nation’s largest corporate legal consumers;
- The explosion of “legal” work created by e-discovery when IT is intended to promote efficiency and reduce work;
- The dramatic rise in the cost of legal education and the decline in legal jobs;
- New lawyers (burdened with unprecedented debt levels) and the harsh reality that most are not “market ready” upon graduation;
- The proliferation of career placement personnel and their characteristic lack of practice experience;
- Law schools’ emphasis on “legal scholarship” and the admission by the Chief Justice that he rarely reads Law Review articles;
- The push for better value among corporate legal consumers and their resistance to fixed-price billing and legal service providers with new economic models;
- The value drumbeat (reprised) and the steady rise of hourly rates (notwithstanding negotiated rack rates);
- The recognition of globalization and the Balkanized regulations that inhibit global practice;
And the biggest paradox of them all: the commodization of legal task and lawyers’ persistence that what they do is bespoke.
It is time to address these paradoxes so that the lawyers can be happier engaging in practice; clients achieve the value they are seeking; and the underserved can engage legal representation—appropriately supervised and priced—by those capable young lawyers in need of practice experience. As for legal education, as I noted in “Teach Your Children Well”, it is time for meaningful curriculum change that addresses the needs and identifies the opportunities of the current legal landscape.
“Alternative Provider” is a term that has become common parlance in the legal world. I eschew it because it connotes a substitute for a known quantity and generally not something particularly good. Just because a provider has a new economic model and/or a different way of delivering a service (in this context legal service), why cast it that way? But all that aside, we all know about alternative providers and how they are beginning to reshape the legal landscape, so here are some tips for them derived from trying cases.
- You are in the persuasion business
The burden of persuasion—or burden of proof—is embedded in human interaction. That burden is not monolithic; sometimes it is steep (trying to talk your way out of a parking ticket); others not (convincing your spouse to go to another restaurant). For alternative providers, the burden of persuasion remains steep, because they must first establish their credibility in the marketplace, especially when compared to entrenched law firms. So be ready to meet that burden by anticipating and preemptively extinguishing concerns about credibility.
- It’s Story Telling
Top trial lawyers are great story tellers. They weave together the disparate threads of a trial and make sense of it for their audience (and, in the process, meet their burden of proof). Likewise, describing an “alternative provider”, one with a new model and a different way of doing things, requires telling a good story.
Before trying a case, I would go up to a stranger and offer them $20 in exchange for 5 minutes of their time listening to me tell a story for the first 2 minutes, then telling me what it was about in the remaining 3. If they understood the story, I was ready to try the case. I suggest this strategy for alternative providers.
- Sum It Up in One Word
I memorized one sentence in each trial, and it was the first one of the opening statement. It would always be the same: “This is a case about ——-. If you can distill a complex matter to one word (greed, fraud, jealousy), then it establishes the theme for the story. And when you close– reminding the trier that the evidence has demonstrated the applicability of that word– you are in good shape. But it’s not easy to characterize a case—or a new business model—in one word. That’s the trick. But try finding it and the likelihood of a successful outcome is increased dramatically.
- “Look Like a Lawyer” and The Brand
I would always ask to poll a jury and was frequently told that “You look like a lawyer and we believed what you had to say?” I took that to mean that “brand” is a factor. Applying this to alternative providers, it is important to look and sound professional and, most of all, to be credible. The temptation to overstate one’s capabilities or to over-promise can be great, but it usually comes at the price of undermining credibility. Alternative providers do not usually have the brand recognition that established law firms do, but they often have a better story to tell. Stick to the story and don’t try to expand the brand beyond that which it can deliver.
- Opposition Bashing Rarely Plays Well
Many lawyers believe that law is a zero sum game; there is a winner and a loser. Look no farther than the statistics on cases settling vs. tried to know that this is not so. And in those cases that do get tried, I have never seen a lawyer get ahead by engaging in a personal attack upon opposing counsel. And so it is with alternative providers and BigLaw; the former does not benefit from bashing the latter. Rather, the former can benefit from concisely distinguishing its model and value proposition from its opposition. Remember: most corporate legal departments are staffed by alumnae/i of BigLaw and have friends there. Don’t bash; distinguish.
- Closing Thought
The legal marketplace is ripe for change. Alternative providers are beginning to establish breadth and depth in prying away work formerly done by BigLaw. There is no reason to think this cannot continue. It will take new economic models, greater efficiency and transparency, technology, and new skills—such as project management—to turn the tide in the alternative providers’ favor. Lessons learned from trying cases can help move that process along.
The Oxford dictionary defines a lawyer as: “A person who practices or studies law; an attorney or a counselor.” That definition might be expanded to include: (1) licensure; (2) engages in the practice of law; (3) exercises professional judgment; and (4) acts on behalf of client(s). So, let’s go with: “A lawyer is a licensed legal professional who engages in the practice of law, exercising professional judgment on behalf of the client(s).”
This definition fit well when lawyers handled legal matters from start to finish. But in the past 20 years or so, an ever-expanding list of “legal” tasks have been “unbundled” and have been increasingly handled not by law firms but, rather, by legal service providers. These companies provide staffing, legal process outsourcing, consulting, risk management, technology, e-Discovery, legal research, and a host of other legal tasks. And just as legal tasks have been parsed out to these businesses—not law firms—so too have certain legal services morphed into products. For example, LegalZoom and Rocket Lawyer have utilized technology to deliver legal documents as products to consumers. Regulatory updates once provided by law firms are now subscription services offered by companies not engaged in the practice of law. A wide array of legal consultancies are performing work once done exclusively by law firms—everything from tax to risk mitigation and compliance. The largest legal employer in the private sector is not a Swiss Verein law firm but one of the Big Four accounting behemoths.
Lawyers and law firms are experiencing what physicians did years before: an ever-expanding array of para-professionals and business types are performing what were once their “bespoke” tasks. And just as health care Goliaths are typically run by MBA’s, not MD’s, so too are legal service providers often guided by business executives, not attorneys. While “legal service providers” serve as agents for law firms as well as in-house legal departments, they are unfettered by the regulatory and Bar rules that law firms must adhere to. This confers an enormous potential advantage. For example, legal service providers can be capitalized by outside investors (some would argue that law firms are funded by banks); can go public; and can expand into new jurisdictions and countries more freely than law firms can. And while legal service providers are often comprised mostly of lawyers, their attorneys are not deemed to be “engaged in the practice of law” –at least not while they are working for the service provider. Paradoxically, were the same attorney to be “on loan” to a law firm, s/he would be engaged in the practice of law. This brings up another element of the definition of a lawyer: one functions as a lawyer when the risk is assumed either by the attorney or by the law firm for whom the attorney is working.
Which brings us back to “what’s a lawyer?” In a legal landscape where process managers, technologists, data analysts, cyber-security experts, and metrics consultants are playing increasingly seminal roles in the delivery and measurement of legal services, a lawyer’s role is changing, if not narrowing. We appear to be moving to a legal system where—like medicine—the lawyer provides a small piece of the process and others do the rest. Perhaps it is time for lawyers to learn new skills—such as project management, better collaborative skills, and a keener understanding of how technology drives the legal delivery system—so that they can expand their role in the process and remain the central players in the legal delivery system.