Law Life: The next 25 years: Wave of change becomes a tsunami

David Donovan, The Daily Record Newswire

As our 25th anniversary series has shown, the legal industry has undergone a wave of change in the last quarter century. But many legal experts anticipate that in the next 25 years, that wave will become a tsunami – and the lawyers who thrive will be those who avoid getting swamped.

Here’s what our successors can expect to write about when they look back on the next quarter-century:

The demise of the billable hour. The billable hour has long been a scourge of attorneys who resent having to chronicle every six-minute interval of their day, but now it’s coming under pressure from frustrated clients as well. Particularly since the financial crisis, cost-conscious clients have scrutinized legal bills to cut costs and ensure they’re getting value for what they pay.

The billable hour probably won’t ever die completely, but many expect it to get phased out as the rise of alternative litigation financing shifts risk away from firms, giving them the flexibility to offer contingency fee-type arrangements. Pressure from clients will likely also increase the prevalence of flat-fee arrangements for legal services.

“The billable hour stands in the way of progress,” said Jim Calloway, the director of Oklahoma Bar Association’s management assistance program, and an expert on legal technology. “I think we’re going to see lawyers use a lot of alternative fee agreements where they charge for the task done.”

Back office in Bangalore. Increased competition and clients’ relentless push for value will bring down costs, forcing firms to shave costs to keep prices competitive. Particularly, firms will increasingly have to outsource mundane tasks to those who can do them more cheaply. Some of those tasks will likely go overseas, but others will be performed by independent contractors domestically. Some will soon be handled entirely by computers.

“A lot of in-house counsel and general counsels who turn to big law firms for legal services are looking at smaller law firms that are becoming more efficient with technology, and asking why big firms aren’t using more efficient, cost-effective methods and outsourcing things,” said Stephanie Kimbro, an attorney with Burton Law, a “virtual” law firm that delivers services online. “All of these changes are going to be client driven.”

Rise of the machines. Lawyers think of themselves as “knowledge workers” whose jobs could never be replaced by robots the way other jobs have. In most cases, that will still be true—for the near future. But artificial intelligence is advancing at a breathtaking pace, and tasks that used to be trusted to attorneys, like the drafting of contracts, will increasingly be given to computers that can “learn” from hundreds of previous cases how to draft the best contract for a particular client’s needs.

“People are still going to pay lawyers for the strategic advice and counseling, but paying a lawyer for six billable hours just to paper a deal after a deal is done, that’s going to go away,” Calloway said, urging attorneys to get acclimated to cutting edge technology early. “Lawyers need to make use of the current tools that are available today, because that positions us to make use of the future tools as they get better.”

A lot fewer attorneys. The Bureau of Labor Statistics expects that the legal profession will see low growth in the future, with the number of jobs increasing only 10 percent from 2006 to 2020—but that’s for the legal industry as whole. Many experts think the ranks of attorneys will be even more stagnant as attorneys face more competition from services like LegalZoom that perform work that was once the province of attorneys, but at a fraction of the cost.

“The number of jobs for lawyers is declining,” said Deborah Merritt, a law professor at Ohio State. “Technology has allowed a huge amount of outsourcing to lower cost providers. Law firms are finding they can hire temp workers. Services like criminal defense are declining, too. As states are facing budget crunches they’re cutting positions, and individuals can’t afford to hire lawyers to do those sorts of things.”

That sounds depressing, but Calloway says there’s a silver lining, as technology will not just create a better value for the client, but also free attorneys’ time from mundane drudgery and allow more time for the intellectually interesting work that is also more profitable.

Only the flexible survive. Outsourcing, artificial intelligence and increased competition will likely turn the industry on its head, but we can expect to see plenty of success stories for attorneys who are adept at the business side of the law and can use those trends to make their firms leaner.

“These are behavioral changes, and I think that it will be difficult to change the behavior,” Kimbro said. “I don’t think it will be difficult to change the technology, but we’ll have to change the behaviors that actually drive the use of the technology. If the partners in a firm are not willing after 30-some years to change their behavior, that’s where I see it stagnating until those partners decide to retire. Some firms seem to be more open than others.”

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