While legal practice-what lawyers do-may not have changed much over the past few decades, the delivery of legal service-how and by what structure they are delivered- certainly has. Disaggregation of legal tasks has disrupted the longstanding hegemony law firms have had over the delivery of legal services.
New Elements of Legal Delivery
Technology, as well as business processes and metrics, have become key elements of legal delivery. Increasingly, the traditional law firm partnership model is surrendering ground-and revenue-to in-house legal departments, service providers, and legal technology companies converting legal services into legal products. The new service providers do not operate under the partnership model that characterized law firms for so many years. Instead, they have a corporate structure that tends to be more client-centric, efficient, and transparent than law firms. Plus, they can and often do tap into institutional funding sources that enable them to invest in technology, lure top management and IT talent, and engage in an inter-disciplinary model. Technicians, process and project managers, and financial experts work side-by-side with lawyers to deliver “legal” services.
Lawyers are like hammers: everything is a nail. To most lawyers, every business challenge is a legal one. But in today’s world, clients often view them as business issues that might require some degree of legal involvement but do not require lawyers to take the lead. Translation: how and when lawyers are engaged is changing.
And so we return to the question of what is a lawyer in today’s marketplace?
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).”
Disruption in Legal Delivery
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 are now frequently performed outside of law firms. Legal service companies, the “law firm alternative,” have followed Clayton Christensen’s theory of disruptive innovation, initially providing staffing, legal process outsourcing, and other low value/high volume low-end work. But now, with growing market acceptance and customer confidence in their work, these providers also engage in higher-end consulting, risk management, cyber-security, regulatory compliance, and other sophisticated functions once within the exclusive purview of law firms.
The Big Four have emerged as large-scale players in the delivery of legal services, although they do not engage in the “practice of law” (law firms retain ultimate responsibility and risk for all work performed and, so, are deemed to “engage in the practice of law”). Every Big Four firm employs thousands of lawyers, most of whom perform “legal” tasks but who, paradoxically, are not deemed to be functioning as lawyers because they work in concert with in-house legal departments or law firms.
If one were to put the service offerings of the Big Four and other legal service providers side-by-side with practice areas of large law firms, the similarities would be striking. Risk retention-who bears ultimate responsibility in a principal/agent paradigm, separates the practice of law from the delivery of legal services. Sound like a fuzzy line? It is. But it underscores how and why “legal” tasks are subject to being performed by others who are not licensed lawyers.
New Managers and Providers
Lawyers and law firms are experiencing what physicians and medical groups did years before: other service professionals and para-professionals, managed by business executives, are performing what were once “bespoke” tasks undertaken by attorneys. And just as health care Goliaths are typically run by MBA’s, not MD’s, so too are legal service providers often managed by business executives, not attorneys.
While “legal service providers” serve as agents for law firms as well as in-house legal departments, they are not subject to the regulatory and Bar Rules that govern law firms. This confers an enormous potential advantage on service providers that can accept outside investment (some would argue that law firms are funded by banks); go public; and expand into new jurisdictions and international markets more freely than law firms can. And, as noted, while legal service providers have many lawyers, those 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 deemed to be engaged in the practice of law while doing the identical task(s). This brings up another element of the definition of a lawyer: one functions as an attorney when the risk is assumed either by the attorney or by the law firm for whom s/he is working.
The Lawyer in a Changed Landscape
Which brings us back to “what’s a lawyer?” In a legal landscape where process managers, technologists, data analysts, cyber-security experts, and metric consultants are playing increasingly seminal roles in the delivery 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 work product, ceding ground to other service professionals and para-professionals who do the rest.
This underscores the need for lawyers to learn new skills—project management, rudiments of technology and its impact on legal services, business process and project management, as well as better collaborative skills to cite a few. Because “just being a lawyer” does not cut it for most lawyers anymore, except those few who have such specialized expertise and trusted judgment.
The long-standing urban myth-perpetuated by attorneys- that all tasks they perform are “bespoke” has been debunked. Not all “legal” tasks-as lawyers might characterize them-require attorneys. Many are more efficiently, cost-effectively, and more competently performed by other service professionals or by paraprofessionals. Clients, not lawyers, determine what is a “legal” issue and when and for what tasks an attorney is needed.
A lawyer is a licensed professional who helps clients solve challenges. How those challenges are best resolved often involves collaboration between lawyers and other professionals. This is something new for attorneys and not something taught-even contemplated-in law school. It is something lawyers had better get used to lest their role be further marginalized.
This was originally published on the December/January edition of Today’s General Counsel.