On the 15th anniversary of the practicePRO program, LAWPRO asked Dan Pinnington, vice president, claims prevention and stakeholder relations, to give us his personal views on the future of legal practice. This is a topic Dan monitors constantly: One of his main tasks for many years has been to predict where the Ontario bar is headed and what minefields may be encountered on that journey. Dan’s views will be exciting for many readers, although some may be daunted by the challenges ahead, including for the regulators of lawyers. Each day this week we’ll excerpt a portion of this article from the September 2013 issue of LAWPRO Magazine, which can be read in full here.
Big changes – positive and negative – have happened to the profession in the past. We have gone through economic cycles and seen both emerging and disappearing areas of law. Court rules and procedures have changed. There was the consolidation and growth of big firms and the general movement from general practitioners to specialists. Technology has – and will continue to – change the profession and the delivery of legal services in many, and sometimes very disruptive, ways.
No one can really predict for sure how fast change will come to the legal profession, nor with any certainty, the exact changes that will occur. There are many uncertainties. What will the global economy look like? Which purchase and delivery models will develop for legal services? What type of regulatory and compliance environment will exist? To what extent will non-lawyer legal service competition move upstream into areas traditionally served by lawyers? Will the legal profession face deregulation?
The one thing that is certain is that significant changes are coming to the profession in future years and decades. They will occur at different times and in different ways in different jurisdictions. While we are very progressive in Ontario in some ways (e.g., mobility and the regulation of paralegals), we have seen relatively little impact from some of the other big changes that have occurred or are occurring elsewhere (e.g., legal process outsourcing, which has taken off in the U.S. and Europe). Considered from a global perspective, Ontario is a small and relatively isolated jurisdiction which may delay some of the changes coming our way. Our comparatively healthy economy and isolation protected us from the financial stresses and changes U.S. law firms and their clients experienced in the downturn that happened there. But when change catches up to us, it will come quickly.
It will not be easy for many to face these changes. The status quo is coming unstuck. Based on a review of what has happened elsewhere, some lawyers will lose their jobs. Entire practice groups will become unprofitable and will have to be abandoned, and some law firms will fail. Not all law school graduates will be able to get jobs. Institutions and businesses associated with the legal industry that fail to evolve will also face hard times. For lawyer associations, CPD providers and publishers that may mean offering memberships or services to non-lawyers. Our systems of adjudication (whether courts or administrative tribunals) need to adapt and change as well. They need to be simpler, more accessible, easier to navigate and faster.
Adding more self-help options could help those without lawyers. Lawyers tend to be slow to change and it seems many lawyers don’t see or won’t acknowledge the changes that are coming. Some think they are different or they say that their matters are “unique” and require the services of a lawyer. Lawyers should not fool themselves: The basic market forces of supply, demand and pricing apply to them. There is an oversupply of traditional and high (some say over) priced legal services. The client demand for lower-priced legal services is being filled by the new types of non-lawyer legal services providers.
Lawyers and law firms need to recognize that changes to the legal services market are occurring and embrace them. People will always need lawyers, or something like them, for some types of matters. For “bet the company” work there will always be a solid and lucrative demand for services, but it is a very small part of the legal services market. In the middle comes relatively sophisticated or higher value work that is not rocket science but needs a firm that has specialized and competent people. This too is a market that won’t disappear, but it is not a huge one. At the bottom is the largest part of the market – the commodity work we have discussed above: people buying houses, preparing wills, settling estates, resisting eviction or prosecution, and so on.
Many people can’t afford the legal services or get the help they need in our current system. These unmet legal needs are an opportunity that lawyers and law firms must recognize. Lawyers need to innovate and think like business people and entrepreneurs – this is what their non-lawyer competitors are doing. That will mean looking at offering new services. It almost certainly means using technology to work better, faster, cheaper, and in new ways. To compete with legal service providers who are offering commodity services, lawyers must offer more affordable services. Options include going head-to-head by retrenching to offer commodity services to clients as well or by exploring alternative fee arrangements to make existing services more affordable.
Another option is to put more effort into showing clients the value add that having a lawyer brings to legal services. This involves thinking beyond just doing one matter for a client and thinking about what the client’s longer term needs are. In other words, when a new client walks in, don’t think of just doing an incorporation that will pay a few hundred dollars in fees. This is commodity work. Think about what a new business person will need for the short- and long term growth and success of his or her business. What information could be provided to the client to help them deal with issues they may come across? What related work can be recommended to them?
Think beyond one matter – aim to become the business lawyer for the client’s new company. This is where the longer term and more lucrative fees are. A client won’t get service like this from a $50 incorporation done on a forms site.
As a closing thought, we turn to a comment Richard Susskind made in his book, The Future of Lawyers? He suggests lawyers need to move from being reactive legal problem solvers (the ambulance at the bottom of the cliff) to proactive legal risk management advisors (the fence at the top of the cliff). Consider how prepared you and your firm are to face the changes that are coming to the legal profession. No doubt you have some work to do. Take proactive steps to face these challenges and the opportunities they present.