Clients or lawyers?
Who is driving the changes to business models in the legal sector?
by Brian Noon
Picture the scene – it’s 20 years from now, I’m A Celebrity is in its 39th year, 75% of the country is vegan, and your lawyer is now a collection of microchips and processors providing services whenever needed, 24 hours a day. Whilst not all of this may sound realistic (and I will leave you to make the decision on that), the recent birth of the legal tech movement brings with it a sense of uncertainty which hangs over every lawyer in the land. Will computers at some stage be able to make legal judgements and negotiate like humans? Will clients trust them? And will computers ultimately be given free rein to operate without any human operator watching over them?
Legal tech is only one facet of the changes taking place in the legal market today. While the potential of technology driving efficiencies in both time taken and cost is certainly an attractive and exciting proposition, clients and in-house legal team are also increasingly demanding that their external lawyers themselves evolve and provide alternative methods of providing legal services. The boom in the numbers of in-house lawyers over the last ten years illustrates how clients will vote with their feet when they see an opportunity to source legal advice more efficiently, and the recent growth in technology and alternative legal provider structures as well as lawyers operating as independent contractors is a sign of how clients are once again demanding improvements to the way they procure legal services in both quality and cost, potentially as an alternative not only to their external law firms but also their own in-house resource.
So at first glance, it may appear like the traditional profession is under siege from both the emerging AI robots on one hand and clients who are less willing to give the law firms the paydays they have been accustomed to. However, there is no smoke without fire.
The move away from the traditional solicitor career model
Any lawyer that has at some point during their career carried out a disclosure exercise in litigation, a due diligence process in corporate, had the joys of proofreading hundred page documents or processed multiple agreements from simple templates, would have jumped for joy if there had been a software tool which could have cut the job in half. As such, technology can almost certainly make a lawyer’s job easier, quicker and their time more productive, and so is likely to be welcomed with open arms by those on the ground. Similarly, the route to partnership at seven years qualified is at most (if not all) firms a distant memory, leaving many lawyers in the middle of their careers wondering if the hard slog to partnership and the sacrifices required are really worth it, and whether there is an enjoyable alternative to the high-pressure, high-stakes of private legal practice. Whilst the carrot of high pay is appealing for some, there are others for whom a cut in wages or partnership prospects for a job and wage that satisfies them and their work life balance and makes them happy overall in the long term is more attractive. It is the drive in lawyers like these that have enabled both ABS and alternative legal providers to come into being, as they are able to provide quality legal services with lower costs resulting in lower fees to the clients whilst also being able to offer lawyers a different way to manage their career, and resulted in individual lawyers offering their services directly under temporary contracts, which allows individuals to have more control on how much they work in any given year and how much pay they want to take home.
The training contract bottleneck and growth in paralegals
This change is not only fuelled by lawyers at post qualification level however. The popularity of the profession has seen law schools producing thousands of students year on year ready to train as solicitors who are without a training contract, leaving a pool of highly capable and willing young lawyers seeking some way to enter into the profession in an unqualified capacity. The number of paralegal roles in existence now as opposed to 10 to 15 years ago is testament to this, and this supply has enabled alternative providers to grow and offer solutions to clients using such junior staff to carry out the right level of legal work following in-depth training and under qualified supervision at high quality and at the right price, below that of the traditional solicitor/trainee law firm model. Coupled with technology, which many alternative providers attempt to build themselves around or at least due to their recent creation incorporate into their work processes by design, alternative providers are creating a compelling offering to clients enabling them not only to instruct a different type of external legal adviser, but also to outsource many processes which in-house legal teams have in the past felt were more cost-effectively carried out in-house, or to provide them with an outsourced legal team under a fee arrangements and that the client can afford.
It is clear the market is demanding a new way of legal services to be provided, and it is also clear that this provides an opportunity both for lawyers both qualified and unqualified to manage their careers in a way that suits them best and for work to be delivered in ways that the profession didn’t offer before. One thing for sure is that traditional hourly rate charging for law firms is no longer a sure thing, and it is those law firms that embrace technology and new models of working and charging for legal work that will be here to stay, 20 years from now.
This article was quoted in BCL Legal’s November issue of The Brief online magazine which can be found at https://www.bcllegal.com/the-brief/opinion/clients-or-lawyers-who-is-driving-business-model-changes-in-the-legal-sector.