Thursday Thinkpiece: Furlong on the Open Market for Legal Services

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Evolutionary Road: A Strategic Guide to Your Law Firm’s Future
Jordan Furlong
Boulder Colorado: Attorney at Work, 2013

Excerpt chosen by author. Reprinted with permission from Attorney at Work,

Stage 3: The Fully Open Market, 2016-2024


(a) The Market

Multiple legitimate providers are now fully active the in legal market. Lawyers are battling many competitors for market share.

Regulatory reform eventually sweeps away most remaining barriers to competition; only a small, high-value portion of legal work is reserved exclusively to lawyers.

Legal knowledge and tools are almost universally available and adaptable through the Internet. First industry standards emerge in these areas.

Many consumer legal services shift from lawyers to non-lawyer providers; numerous solo and small law practices that cannot adapt close their doors.

Much corporate and institutional legal work shifts from law firms to non-firm providers; most midsize and large law firms downsize dramatically, quite a few close.

. . . .

(B) Lawyers

Growth of the legal profession stalls, then reverses for the first time in memory.

Traditional volume-based lawyer organizations (bar groups, publishers, CLE providers) either radically reinvent themselves or close.

A substantial number of law schools close or dramatically downsize; many adopt practical training offerings to compete for new students or serve practicing lawyers.

Lawyer self-governance survives, albeit with stricter standards for admission, discipline, and continuing competence.

Lawyer governance of the legal market comes to an end; governments or government agencies take over legal services regulation.

. . . .

Lawyers pay a steep price during this period of market evolution. Work that we had always assumed was within our exclusive bailiwick falls increasingly to providers outside our profession. Lawyers feel under siege on all sides, unable to rely on traditional defenses supplied by governing bodies (many of which no longer regulate the market) and bar associations (many of which lose critical masses of members and are too weak to carry out professional advocacy).

Many lawyers find themselves adrift in this market, in search of a purpose: What value do we provide? What tasks will pay the rent? Lawyers who graduated into the chaos of the 2010s are especially hard-pressed. This is one of the major factors that will drive an eventual widespread forgiveness of law school debt.

This is probably the nadir of lawyer employment, and there is much talk of a “lost generation” of lawyers who enrolled in law school just as Stage 1 was drawing to a close. In Stage 2, law firms downsized, but at least there were still opportunities for contract work or entry-level tasks with LPOs or other low-cost providers. During Stage 3, however, even many of those jobs disappear into algorithms, software packages, and artificially intelligent online programs. At the same time, for reasons of both advancing age and shrinking opportunities, the Boomer generation finally departs the scene. The result, over the course of several years, is a smaller legal profession.

By this point in the market’s evolution, the supply curve has responded to the drop in demand. Law school enrollment is a shadow of its former volume, and schools are forced either to severely reduce their class sizes, merge with other faculties, or, in many cases, simply close their doors. This period sees the emergence of “non-school” legal education providers: private corporations that buy struggling law schools from their universities and turn them into training centers for both pre- and post-call lawyers, absorbing many CLE providers along the way.

The news is not all grim for lawyers, however. Stage 3 also gives us the first signs of the new law firm world — mobile virtual solos and streamlined mega-firms, to name two of the first species to emerge.

“Sole practice” has long been virtually synonymous with “general practice,” but solos in this era develop niche practices and hone unique skills to serve very specific markets over a wide geographic area. Small law firms also collaborate extensively with other solo and small practices, often coordinated by a “general contractor” who assembles mix-and-match teams of solo specialists for specific one-off projects. What was once referred to as “general practice” work is more often the purview of large corporate entities that employ both lawyers and non-lawyers. Criminal defense work remains the exception: matters of life and liberty still belong to lawyers.

Large law firms also adapt to the new ecosystem. The generic national or international “one size fits all” full-service firm is largely a thing of the past. Successful mega-firms are now truly gargantuan, growing to levels that make even the Big 4 accounting firms take notice. They are certainly not partnerships, vulnerable to the whims of powerful individual lawyers; they are businesses, whose employees (many of whom are lawyers, but not all) support a defined culture of expectations and performance and adhere strictly to systems and management designed to maximize productivity and minimize waste. Super-boutiques also emerge to dominate particular practice or industry areas, also with a strong corporate infrastructure. Lawyers do not just lose control over the legal market; increasingly, they lose control within law firms themselves.

The end of lawyers’ monopoly over legal services comes as something of a shock to everyone. This is not an easy or a clean transition: regulatory oversight of non-lawyer providers struggles in its early years, and there are some notable scandals whereby clients are systematically abused by unscrupulous providers. Many lawyers cannot resist the temptation to say “I told you so” when industry standards are seen to slip.

Significantly, however, despite some high-profile incidents of malfeasance among non-lawyer providers and the predictable failures of some ABSs, the new market dynamics work well. Regulation of the legal market eventually hits its stride. Consumers of legal services, offered more choices, also become better informed and more sophisticated. Lawyers, freed from paperwork, focus on higher-value tasks that better engage their talents. More people have more access to legal services appropriately aligned to their circumstances than ever before.

Necessarily at this point, the dates suggested for this era are mostly guesswork. The real question is timing: How long will lawyers be able to maintain ring-fenced protection of the legal services market from outside intervention? The longer we can hold out, the longer this process will take, and it could be delayed for several years beyond this estimated timeline. But the end result will be the same. The “non-lawyer” genie is out of the bottle and it is not going back in.

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