I saw a television ad the other night plugging nurse practitioners. The message was clear: why see a doctor for routine health issues when a competent, less expensive option exists? I wondered: how long before similar ads touting “lawyer practitioners” would be popping up? After all, the State of Washington has already sanctioned “Limited licensed legal technicians” (“LLLT’s”),” and several respected law schools have launched one-year programs, offering “basics” of the traditional three-year curriculum tailored for HR, procurement, and other business professionals. And that is not to mention a legion of paralegal courses and certifications. These programs, of course, provide new revenue streams for cash-starved law schools which have morphed from revenue generators to drags on the budgets of their University parents.
What accounts for the proliferation of paraprofessionals in two of the most bespoke professions–medicine and law? The answer has several components: (1) the high price of professional services; (2) the realization that not all tasks professionals have traditionally performed need to be done by them; (3) professionals can be leveraged via maintaining oversight and risk retention for work performed by paraprofessionals; and (4) disaggregation (“unbundling”) has confirmed that the traditional functional definition of professionals can be more narrowly drawn. What is that definition? It is “The exercise of professional judgment.” This suggests that professionals are aggregators, synthesizers, and decision makers for others working under them in the delivery supply chain. Such a definition, of course, calls to question the traditional law firm model, one where “others” in the supply chain have been almost exclusively professionals themselves. It is clear that for law, as in medicine, the traditional model is no longer sustainable.
Medicine Provides Lawyers a Glimpse into Their Own Future
Just as physicians no longer conduct most facets of an annual physical–phlebotomists, EKG techs, nurse practitioners, and a host of others competently perform many tasks– so too do legal paraprofessionals (as well as attorneys working for service providers who are “not engaged in the practice of law”)– perform many functions once exclusively undertaken by law firms.
Lawyers would do well to look at medicine as a leading indicator of how things might shake out for their own profession. As “the practice of medicine” morphed into the “business of health care”, the role of doctors changed dramatically. Most physicians’ incomes declined–except those with highly specialized skills. Medicine was coopted by the healthcare industry, and doctors became a component in the delivery of medical services, not the sole drivers. An army of paraprofessionals entered the arena, demonstrating that many things once performed exclusively by physicians did not need to be done by them and could be more inexpensively and efficiently performed by others. So too did new entrants emerge, notably on the cost-containment side (this mirrors the early-stage emergence of project managers in law). Physicians maintained oversight and risk retention for medical services; however, they no longer performed many of the routine tasks traditionally associated with rendering patient care. Doctors were too expensive for those routine tasks which could be delegated to others. The C-Suite of the health care industry mandated changes in the delivery model. Lawyers: is this beginning to sound familiar?
Until recently, of course, lawyers–and large law firms –performed all functions in the life of a client matter. This practice went on for years because: (1) clients were willing to pay for it; (2) it had a pedagogical value: young lawyers “learned on the job” and were subsidized by clients who paid the firm for that training; (3) there was no technology that enabled labor arbitrage outside the firm; (4) the myth persisted that all tasks performed by lawyers were bespoke and, so, had to be done by lawyers; (5) there were no viable alternatives to the law firm; and (6) clients seldom objected to the cost of legal services.
Have Lawyers Strangled the Golden Goose?
Have lawyers priced themselves out of their own self-regulated market? The weight of the evidence suggests that is certainly the case in the retail segment of law. And that is rife with irony because there is a vast and growing number of unemployed/ under-employed attorneys at a time when most people can no longer afford to hire a lawyer (”access to justice crisis”) while technology and mentors exist to bridge this gap. One would imagine that there would be a market correction (read: reassessment of pricing and corresponding model change) by lawyers in this segment of the market. Not only has this not occurred but also, these same lawyers are usually the ones on the front line of stifling needed reform.
The corporate side of the legal market is, likewise, showing signs of chronic client fatigue from exorbitant, unpredictable bills for many tasks that no longer require law firms. There have been a range of client responses to overheated billing for non-bespoke work: (1) taking more work in-house; (2) aggressive negotiation leading to significant discounts of law firm rack rates; (3) substitution of incumbent law firms with lower-priced alternatives; (4) RFP’s; (5) greater reliance on legal service providers; and (6) investment in technology that leverages existing resources. That does not even take into account legal “products” such as form libraries, legal surveys, and legal research to cite but a few. The cost: value divide has reached a tipping point, causing corporate legal consumers not only to manage law firms more aggressively but also to utilize “alternative providers.” The options include law firms with new economic models as well as a plethora of legal service companies, a handful of which engage in sophisticated work including cyber-security, IP, data privacy, investigations, etc.
A Quick Glimpse into the Future
The traditional BigLaw model is no longer sustainable, and the data suggests that all but a handful of the AmLaw 200 firms lack brand differentiation. Their leading rainmakers are more peripatetic than ever, and “merger mania” can be seen both as an attempt to become “too big to fail” as well as an effort to forestall extinction. A small number of brand-differentiated, “bespoke” law firms remain, and they will continue to handle “bet the company cases” under the traditional delivery model. They are the legal equivalents of that rarefied cadre of doctors who perform highly specialized procedures or who are “celebrity physicians.” But for everyone else, the traditional law firm model–like most medical practices–will change. Not only will the law firm structure be altered beyond recognition, but also, most lawyers will practice in a very different way than they had previously. Like the doctors who are now “health synthesizers”, lawyers will, increasingly, be assessing data collected by others–paraprofessionals as well as accountants, technologists, and others now engrafted into the legal delivery service process. “What’s a lawyer?” is a question that will have a very different answer five years from now.
Law Schools Have an Opportunity
Law schools have an opportunity to get out in front of the wave and to reclaim relevance. Significant curriculum change will positively affect students, recent graduates, providers, and consumers. The Academy must accept that only a minute fraction of their graduates will enter the ranks of the legal one-percent (the “bespoke”, brand-differentiated law firms). This recognition should yield updated curricula that have changed little during the past half-century or more. Law schools must be more sensitive to and knowledgeable about the current legal marketplace. They must train students for where the new opportunities are in the changing legal market: cyber-security, data management, IP, project management, and legal technology to cite but a few. They should imbue students with the importance of collaboration, because this will be the way legal service is delivered going forward. They should make it abundantly clear to students that the role of lawyers is not what it was forty years ago or even, for that matter, what it was pre-2008. The legal marketplace is far from static, and law school curricula cannot remain so, either. Law schools have to maintain closer ties to all players in the new marketplace, not simply to Biglaw, many of whose members will soon be confronting a diaspora. All this will require Deans, Development Heads, and other law school senior administration to bring along generally conservative, change-resistant faculty. But the need for fundamental change is no longer an elective course.
The Lawyer Will See You Now
Lawyers will continue to play a key role in the delivery process, but they will be far more limited in the tasks they perform. This means that there will be fewer “traditional” law jobs available. Lawyers–like physicians–will be increasingly focused on the exercise of judgment and decision-making functions, not all the data-gathering tasks they were once handsomely paid for. Clients look to lawyers to provide solutions to problems. They do not care about nor will any longer pay for the “grunt work” that gets them there. The days of “The lawyer will see you now” are over. It is now a buyer’s market, and when the client says, “I will see you now”, the lawyer had better have answers.
