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What Risk-Aversion Really Means

I’ve heard many times, and I’m sure you have too, that lawyers are ”risk-averse.” That description alone isn’t very helpful — after all, most people are risk-averse, which is why much of the population lives safe and sedate lives while a very small number of people create billion-dollar companies or break their legs while cliff-diving.

What I think we mean is that lawyers are unusually risk-averse. And when we say this about ourselves, we usually say it in tone of self-mocking resignation or gentle exasperation: “Well, what are you gonna do? Lawyers are risk-averse, after all. We won’t try anything different, because something might go wrong.”

It’s important to note that we call ourselves “risk-averse” not to explain a barrier to action, or as a step on the road towards resolving a problem, but to excuse our reluctance to do anything different. We shrug, say “risk-averse,” and move on to the next (probably billable) thing.

But when we do this, we’re making a categorical error. Because ”avoiding risk” does not mean the same as “don’t do anything different.” If your car is careening towards a cliff, it would be very risky not to hit the brakes or swerve. Smart and experienced lawyers recognize that sometimes, the way to minimize risk is precisely to change what you’ve been doing up until now, because it’s no longer working as well as it did and is generating sub-optimal outcomes.

I submit that this would be the better way to analyze the state of the legal profession and the legal services market: to ask not whether there is risk in change, but whether there is risk in failing or refusing to change. Because then we could start asking ourselves — and hopefully, answering — a few hard questions:

  • Continuing to headquarter civil dispute resolution in a slow, expensive, centuries-old court system accessible to fewer people all the time: Risky or not?
  • Continuing to support an atrophied legal education system that hasn’t changed its mandatory first-year course requirements in 70 years: Risky or not?
  • Continuing to license new lawyers without a robust, methodical, and enforceable framework of competence certification: Risky or not?
  • Continuing to restrict law firm equity ownership to lawyers when every new competitor in the market has chosen to be multi-disciplinary: Risky or not?
  • Continuing to outlaw and demonize alternative legal suppliers at the height of an access to justice crisis and a populist movement in politics: Risky or not?

Sometimes, the risks inherent in trying something new outweigh the risks of continuing to do it the old way. Sometimes, using “risk aversion” as an excuse not to change is not only fatuous and self-serving, but also puts an entire profession and civil justice ecosystem in danger.

The other term that lawyers keep using to describe themselves is “problem solvers.” Based on the foregoing examples, which are busily metastasizing from chronic ills into a series of ongoing crises, I think I’ve got a more accurate term to describe the modern legal profession: “Problem avoiders.”

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