September 10, 201310 September 2013
Get ready to adapt: the legal marketplace is transforming as you read this.
Illustration by Victor Gad
If you are like most law or pre-law students reading this article, you decided to enter the legal profession based on only the vaguest notions of what the practice of law is actually like; a notion perhaps formed by TV shows, discussions with your cousin’s boyfriend’s aunt or the views of your parents.
No one told you that if you live in Ontario, you had better move to Saskatchewan or Alberta in order to get an articling position.
No one told you that setting up a solo practice straight out of law school could make your life nasty, brutish and short.
No one told you that your student debt would take longer to pay down than the national debt.
The future of law is not what it once was — or even what you were told it was before you wrote the LSAT.
You are, or will be, entering a profession in considerable flux; a profession evolving from Law 1.0 to Law 2.0, then to Law 3.0 — all during the span of your career.
What’s changed, besides everything?
Law 1.0 firms use an ancient and very quaint partnership model; one in which associates are asked to give up all they hold dear to compete for a partnership role that will hopefully create stable, lucrative cash-flow until retirement.
Law 1.0 firms are heavily labour-intensive and rightly so, since Law 1.0 lawyers bill by the hour and justify their fees with the mantra, “But I spent a lot of time on this file.” Law 1.0 lawyers believe that “time spent on a file” equals “value to clients.”
"Law 1.0 lawyers believe that 'time spent on a file' equals 'value to clients.'"
The heydays of Law 1.0 (read: pre-2008) was truly the golden age of being a lawyer. But all golden ages must come to an end because none of this could be sustained forever.
The partnership model has proved itself to be tragically unstable because partners tend to be more loyal to themselves than to the partnership. Long-term strategy is forgone at the expense of the short-term profits annually paid out to each partner — whereas good governance in large partnerships is but a pipe-dream. And now, associates are asked to work more and more years in competition for fewer partnership positions that provide no job security whatsoever.
Further, while billing by the hour increased revenue, it also inhibited innovation and efficiency. As a result, when lawyers were the only providers of legal services, revenue in Law 1.0 firms was more a function of monopoly than good business practices.
However, clients now demand and will only pay for, as U.S. law professor Silvia Hodges recently tweeted, “outcome rather than input — efficiency not waste” — things that Law 1.0 was not designed to achieve.
Illustration by Victor Gad
Because of Law 1.0’s flaws, competition has crept in to take legal work away from traditional lawyers.
New types of legal technology mean that fewer lawyers are needed to do the same amount of work. As Professor Dan Katz from Michigan State University Law School routinely says, if Google can make a driverless car, what makes you so sure that much of day-to-day lawyering can’t be done by a computer?
In fact, legal tech is one of the most interesting and growing areas of the legal services industry. Everyone is looking to create the “killer app” that will take even more work away from lawyers — or be used by resourceful lawyers to compliment their practices. Some of you may end up working with legal tech entrepreneurs.
"As Professor Dan Katz from Michigan State University Law School routinely says, if Google can make a driverless car, what makes you so sure that much of day-to-day lawyering can’t be done by a computer?"
Then there is the appearance of non-law firm legal providers such as legal process outsourcers in India, Philippines, or even Ireland which may further reduce the need for traditional Canadian lawyers. A reduced need for traditional Canadian lawyers means that there will be fewer opportunities for law graduates, which will create an oversupply of traditional lawyers and ultimately drive down salaries and prestige.
So, let’s take a look at your career options by 2020, a scant seven years from now.
You will notice that I previously used the term “traditional lawyer.” Over the next decade we will see the role of lawyers change to become more akin to consultants than technicians. Technical legal skills, while important, will need to be complimented with a host of new skills such as project management techniques to understand how to manage your teams and price your services; or lean sigma techniques to keep your practice profitable; and more than a passing knowledge of business principles.
"A reduced need for traditional Canadian lawyers means that there will be fewer opportunities for law graduates, which will create an oversupply of traditional lawyers and ultimately drive down salaries and prestige. "
Many of you will join the growing number of in-house counsel — a role that most law students completely overlook, yet it’s a role that will be one of the greatest drivers of change in the legal profession. In these roles you will be introduced to a number of different metrics by which you will be routinely measured in order to assess your performance, things such as teamwork; management skills; cost savings; efficiency and the like. Savvy in-house counsel are now imposing these measurements upon their outside law firms. According to Stephen Allen, Global Head of Legal Services Transformation at PwC, “most clients consider technical legal skills to be a given and not a key differentiator when buying services — lawyers in the near future will have to think about what, over and above the law, they can do to add value to their clients.”
Illustration by Victor Gad
You will also have the chance (through lawyers-on-demand models) to become gypsy lawyers — lawyers who don’t work full-time but rather, work on a project-by-project basis — giving greater flexibility for those who want a different work/life balance.
Should you decide to work for a Law 2.0 firm, you will be offered a wider range of career options beyond the old and rather dull, associate-to-partner career path; in fact the vast majority of you will never be partners — if that role even exists in 2020. You will choose among, being a pricing director, project manager, business development manager, client manager, technical lawyer, or innovation manager, to name just a few.
But the evolution of the legal services industry will not stop there.
At least one province, if not more, will follow the lead of Australia and the UK, and allow outside investment in law firms before 2020. This will touch off more evolutionary change for legal services providers — Law 3.0.
Is it scary to be starting a career in a profession that is in the throes of massive change? Sure, but only if you intend to be a traditional lawyer….
It has been brought to our attention that some individuals might be offended by use of the term “gypsy lawyers.” The author used the meaning set out in the Second Edition (2005) Oxford English Dictionary which defines a gypsy as “a nomadic or free-spirited person."
Mitch Kowalski is the author of the American Bar Association best seller, “Avoiding Extinction: Reimagining Legal Services for the 21st Century” and in 2012 he was selected as one of the Fastcase Top 50 Global Legal Innovators. He has taught legal services innovation at the University of Ottawa Law School and comments regularly on legal trends and innovation in law. He can be reached at www.kowalski.ca or follow him on twitter@mekowalski.