Lawyers, Technology and Money

Many lawyers do not like the title of my latest book, “The End of Lawyers?” And yet I am at pains to point out that my message is a mixed and not a negative one. I claim that the future for lawyers could be prosperous or disastrous. Admittedly, I do predict that lawyers who are unwilling to change will struggle to survive, but I also say that lawyers who embrace emerging technologies and novel ways of sourcing legal work will trade successfully for many years.

Many of my conclusions follow research among Corporate Counsel. Invariably, they tell me that they are currently under three pressures: to reduce the size of their in-house legal teams; to spend less on external law firms; and to find ways of coping with more and riskier legal and compliance work than they have had in the past. Both internally and externally, clients are requiring more for less. From 2004-2007, I found this to be a running, background theme in my research and discussions with in-house lawyers. In 2008-2009, in the slipstream of the economic downturn, it has become not so much a theme as an overriding imperative.

Disconcerting Implications

For law firms, these pressures on clients and the imperative that follows have disconcerting implications. Increasingly, for example, firms are being called upon to reduce their fees, to undertake work on a fixed fee rather than an hourly billing basis, to be far more transparent in their dealings with clients, and they are coming to be selected, more than occasionally, on the advice of hard-nosed, in-house procurement specialists in client organizations rather than by old friends and colleagues. The legal market, in other words, has become a buyers' market and is set to be so, I argue, for the foreseeable future.

At the same time, new competitors are emerging, such as outsourcers and entrepreneurial publishers, while liberalization of the legal market (in England and elsewhere) will bring external capital and a new wave of professional managers and investors who have no nostalgic commitment to traditional business models for law firms, including hourly billing and gearing obtained through the deployment of armies of hard-working young lawyers. And liberalization in a few jurisdictions will create a ripple across all jurisdictions, as new ways of delivering legal services are developed and capture the market's attention.

Disruptive Legal Technologies

To cap it all, a number of disruptive legal technologies are emerging (such as document assembly and closed legal communities) which will directly challenge and sometimes even replace the traditional work of lawyers in firms. For many law firms, therefore, it looks like the party may soon be over.

I anticipate that the market is likely to respond in two ways to the changes just noted. First, new methods, systems, and processes will emerge to reduce the cost of undertaking routine legal work. This will extend well beyond the back office of legal businesses into the very heart of legal work. I expect there to be a strong pull by the market away from the delivery of legal advice on a basis that I call 'bespoke' (a term used in the UK and meaning highly customized). To achieve the efficiencies needed, I say that legal services will evolve from bespoke services at one end of a spectrum along an evolutionary path, passing through the following stages: standardization, systematization, packaging, and commoditization. Many new ways of sourcing will emerge and these will often be combined in the conduct of individual pieces of legal work. I call this multi-sourcing. These changes will affect not just high volume, low value work but also ' and vitally ' the routine elements of high-value work.

The second response by the market will be for clients, in various ways, to share the costs of legal services. Again, this will affect the entire market. In-house lawyers, I suggest, will frequently work together, often as part of online closed communities, and find ways of recycling legal work amongst themselves. In areas where their duplication of effort and expense is considerable, such as regulatory compliance, they will collaborate intensively and so spread the legal expense amongst their number. At the other end of the spectrum, citizens will have ready access to online legal guidance and to growing bodies of legal materials that are available on an open source basis. More, they will be able to share legal experiences with one another.

Predictions for Lawyers

With clients cutting costs and finding alternative ways of sourcing work or sharing costs and collaborating regularly with another, what does this mean for lawyers? On the strength of the arguments and findings of my book, The End of Lawyers?, I predict that there will be five types of lawyers in the future.

The first will be the “expert trusted adviser.” This is the provider of bespoke legal service. The arguments of my book suggest that market pressures will generally discourage lawyers from handling matters in a bespoke manner wherever this is possible. Instead, standardized or computerized service will be preferred. However, on some occasions bespoke work will be unavoidable. For the foreseeable future, intelligent creative lawyers will be needed in certain circumstances ' to fashion new solutions for clients who have novel, complex, or high value challenges (the expert element) and to communicate guidance in a highly personalized way (the trusted component) where this is wanted. The end of the expert trusted adviser is not therefore in sight. The danger facing many lawyers, however, is to assume that their clients' work always requires this expert or trusted treatment. Lawyers who handcraft while their competitors introduce new efficiencies (computerizing or outsourcing, for example) will not be practicing in ten years' time, because bespoke service is a luxury that clients will not generally be able to afford.

My second category of lawyer for the future is the “enhanced practitioner.” This is the individual whose legal skills and knowledge are required not to deliver a bespoke service but, enhanced by modern techniques, to support the delivery of standardized, systematized and (when in-house) packaged legal service. The crucial point here, though, is that the market will only tolerate this lawyer's involvement where legal experience is genuinely needed. Otherwise, other less costly sources of support will be favored, such as paralegals, legal executives and legal process outsourcing service providers. Today, clients frequently pay lawyers to do work that intelligent and trained non-lawyers could undertake. This will stop in years to come and the need for lawyers who perform routine work will diminish accordingly.

In contrast, there will be a much greater need for my third category of lawyer ' the “legal knowledge engineer.” If I am right and legal service will increasingly be standardized and (in various ways) computerized, then people with great talent are going to be needed, in droves, to organize the large quantities of complex legal content and processes that will need to be analyzed, distilled, and then embodied in standard working practices and computer systems. This new line of work will need highly skilled lawyers. The development of standard documents or procedures and the organization and representation of legal knowledge in computer systems is, fundamentally, a job of legal research and analysis; and often this knowledge engineering will be more intellectually demanding than conventional work (working out a system that can solve many problems is generally more taxing than finding an answer to one problem). It is entirely misconceived to think, as many lawyers do, that work on standards and systems can be delegated to junior research or support lawyers. If a legal business is going to trade on the strength of outstanding standards and systems, then it will need outstanding lawyers involved in their design and development. These legal knowledge engineers will also be needed to undertake another central task ' the basic analysis and decomposition of legal work that I claim will be required if legal work is to be multi-sourced effectively and responsibly. Legal knowledge engineering, in the 21st century will not be a fringe show at the edge of the legal market. It will be a central occupation for tomorrow's lawyers.

Fourth will be the “legal risk manager.” This category of lawyer is sorely needed and is long overdue. Senior in-house lawyers around the world insist that they are in the business of legal risk management ' clients prefer to avoid legal problems than resolve them. And yet, my research suggests that hardly a lawyer or law firm on the planet has chosen to develop methods, tools, techniques or systems to help their clients review, identify, quantify, and control the legal risks that they face. I expect this to change. Urgent demand from the market will lead lawyers (where possible, perhaps bolstered and emboldened by external funding) to offering a wide range of proactive legal services whose focus will be on anticipating and pre-empting legal problems. This will be quite different from legal work that concentrates on addressing specific deals or disputes. In some ways more like a form of strategy consulting, this legal work will be wider ranging and more generic, helping clients prepare more responsibly for the future. Again, this is not a peripheral job for the legal fraternity. This could fundamentally change the way in which the law is practiced and administered.

My final category of future lawyer is the “legal hybrid.” My premise here is that successful lawyers of the future, wherever they sit on my evolutionary path, will be increasingly multi-disciplinary. Many already claim that they are deeply steeped in neighboring disciplines, as project managers, strategy and management consultants, market experts, deal-brokers, and more. In truth, though, most of these forays into other fields are not strategically conceived, formally planned, or supported by rigorous training. They are rather ad hoc and piecemeal initiatives. In contrast, legal hybrids of the future will be superbly schooled and genuinely expert in these related disciplines and will be able to extend the range of the services they provide in a way that adds value to their clients.

Conclusion

Taking these five categories together, it is clear that there will be work for lawyers to do in the future. What is much less obvious is whether today's lawyers will be equipped to take on the jobs I envisage. While the expert trusted adviser and the enhanced practitioner look much like contemporary lawyers, I predict that their number will be greatly reduced. The range of work of the expert trusted adviser will be reduced by standardization and computerization, while the enhanced practitioner's domain will be diminished by the emergence of alternative, lower cost individuals who can work responsibly with standards and systems. In some areas of law, lawyers will be less dominant, while in others (where there are, for example, online legal services or there is legal open-sourcing); they will no longer have a role. If the demand for conventional lawyers is reduced, I wonder how easily those whose jobs are threatened will be able to re-skill and become legal knowledge engineers, legal risk managers, or legal hybrids. The transition may not be easy.

In broad terms, and to answer the question posed in the title of my book, I do not therefore anticipate (in the next 20 or 30 years at least) that there will be no lawyers. I expect instead that there will be significantly fewer lawyers providing traditional consultative advisory service; and I predict the emergence of new legal professionals with quite different roles in society. We will witness the end of many lawyers as we know and recognize them today and the birth of a new streamlined and technology based generation of practicing lawyers who are fit for purpose in the 21st century.

Richard Susskind, an independent adviser to international law firms, is a UK author.

Many lawyers do not like the title of my latest book, “The End of Lawyers?” And yet I am at pains to point out that my message is a mixed and not a negative one. I claim that the future for lawyers could be prosperous or disastrous. Admittedly, I do predict that lawyers who are unwilling to change will struggle to survive, but I also say that lawyers who embrace emerging technologies and novel ways of sourcing legal work will trade successfully for many years.

Many of my conclusions follow research among Corporate Counsel. Invariably, they tell me that they are currently under three pressures: to reduce the size of their in-house legal teams; to spend less on external law firms; and to find ways of coping with more and riskier legal and compliance work than they have had in the past. Both internally and externally, clients are requiring more for less. From 2004-2007, I found this to be a running, background theme in my research and discussions with in-house lawyers. In 2008-2009, in the slipstream of the economic downturn, it has become not so much a theme as an overriding imperative.

Disconcerting Implications

For law firms, these pressures on clients and the imperative that follows have disconcerting implications. Increasingly, for example, firms are being called upon to reduce their fees, to undertake work on a fixed fee rather than an hourly billing basis, to be far more transparent in their dealings with clients, and they are coming to be selected, more than occasionally, on the advice of hard-nosed, in-house procurement specialists in client organizations rather than by old friends and colleagues. The legal market, in other words, has become a buyers' market and is set to be so, I argue, for the foreseeable future.

At the same time, new competitors are emerging, such as outsourcers and entrepreneurial publishers, while liberalization of the legal market (in England and elsewhere) will bring external capital and a new wave of professional managers and investors who have no nostalgic commitment to traditional business models for law firms, including hourly billing and gearing obtained through the deployment of armies of hard-working young lawyers. And liberalization in a few jurisdictions will create a ripple across all jurisdictions, as new ways of delivering legal services are developed and capture the market's attention.

Disruptive Legal Technologies

To cap it all, a number of disruptive legal technologies are emerging (such as document assembly and closed legal communities) which will directly challenge and sometimes even replace the traditional work of lawyers in firms. For many law firms, therefore, it looks like the party may soon be over.

I anticipate that the market is likely to respond in two ways to the changes just noted. First, new methods, systems, and processes will emerge to reduce the cost of undertaking routine legal work. This will extend well beyond the back office of legal businesses into the very heart of legal work. I expect there to be a strong pull by the market away from the delivery of legal advice on a basis that I call 'bespoke' (a term used in the UK and meaning highly customized). To achieve the efficiencies needed, I say that legal services will evolve from bespoke services at one end of a spectrum along an evolutionary path, passing through the following stages: standardization, systematization, packaging, and commoditization. Many new ways of sourcing will emerge and these will often be combined in the conduct of individual pieces of legal work. I call this multi-sourcing. These changes will affect not just high volume, low value work but also ' and vitally ' the routine elements of high-value work.

The second response by the market will be for clients, in various ways, to share the costs of legal services. Again, this will affect the entire market. In-house lawyers, I suggest, will frequently work together, often as part of online closed communities, and find ways of recycling legal work amongst themselves. In areas where their duplication of effort and expense is considerable, such as regulatory compliance, they will collaborate intensively and so spread the legal expense amongst their number. At the other end of the spectrum, citizens will have ready access to online legal guidance and to growing bodies of legal materials that are available on an open source basis. More, they will be able to share legal experiences with one another.

Predictions for Lawyers

With clients cutting costs and finding alternative ways of sourcing work or sharing costs and collaborating regularly with another, what does this mean for lawyers? On the strength of the arguments and findings of my book, The End of Lawyers?, I predict that there will be five types of lawyers in the future.

The first will be the “expert trusted adviser.” This is the provider of bespoke legal service. The arguments of my book suggest that market pressures will generally discourage lawyers from handling matters in a bespoke manner wherever this is possible. Instead, standardized or computerized service will be preferred. However, on some occasions bespoke work will be unavoidable. For the foreseeable future, intelligent creative lawyers will be needed in certain circumstances ' to fashion new solutions for clients who have novel, complex, or high value challenges (the expert element) and to communicate guidance in a highly personalized way (the trusted component) where this is wanted. The end of the expert trusted adviser is not therefore in sight. The danger facing many lawyers, however, is to assume that their clients' work always requires this expert or trusted treatment. Lawyers who handcraft while their competitors introduce new efficiencies (computerizing or outsourcing, for example) will not be practicing in ten years' time, because bespoke service is a luxury that clients will not generally be able to afford.

My second category of lawyer for the future is the “enhanced practitioner.” This is the individual whose legal skills and knowledge are required not to deliver a bespoke service but, enhanced by modern techniques, to support the delivery of standardized, systematized and (when in-house) packaged legal service. The crucial point here, though, is that the market will only tolerate this lawyer's involvement where legal experience is genuinely needed. Otherwise, other less costly sources of support will be favored, such as paralegals, legal executives and legal process outsourcing service providers. Today, clients frequently pay lawyers to do work that intelligent and trained non-lawyers could undertake. This will stop in years to come and the need for lawyers who perform routine work will diminish accordingly.

In contrast, there will be a much greater need for my third category of lawyer ' the “legal knowledge engineer.” If I am right and legal service will increasingly be standardized and (in various ways) computerized, then people with great talent are going to be needed, in droves, to organize the large quantities of complex legal content and processes that will need to be analyzed, distilled, and then embodied in standard working practices and computer systems. This new line of work will need highly skilled lawyers. The development of standard documents or procedures and the organization and representation of legal knowledge in computer systems is, fundamentally, a job of legal research and analysis; and often this knowledge engineering will be more intellectually demanding than conventional work (working out a system that can solve many problems is generally more taxing than finding an answer to one problem). It is entirely misconceived to think, as many lawyers do, that work on standards and systems can be delegated to junior research or support lawyers. If a legal business is going to trade on the strength of outstanding standards and systems, then it will need outstanding lawyers involved in their design and development. These legal knowledge engineers will also be needed to undertake another central task ' the basic analysis and decomposition of legal work that I claim will be required if legal work is to be multi-sourced effectively and responsibly. Legal knowledge engineering, in the 21st century will not be a fringe show at the edge of the legal market. It will be a central occupation for tomorrow's lawyers.

Fourth will be the “legal risk manager.” This category of lawyer is sorely needed and is long overdue. Senior in-house lawyers around the world insist that they are in the business of legal risk management ' clients prefer to avoid legal problems than resolve them. And yet, my research suggests that hardly a lawyer or law firm on the planet has chosen to develop methods, tools, techniques or systems to help their clients review, identify, quantify, and control the legal risks that they face. I expect this to change. Urgent demand from the market will lead lawyers (where possible, perhaps bolstered and emboldened by external funding) to offering a wide range of proactive legal services whose focus will be on anticipating and pre-empting legal problems. This will be quite different from legal work that concentrates on addressing specific deals or disputes. In some ways more like a form of strategy consulting, this legal work will be wider ranging and more generic, helping clients prepare more responsibly for the future. Again, this is not a peripheral job for the legal fraternity. This could fundamentally change the way in which the law is practiced and administered.

My final category of future lawyer is the “legal hybrid.” My premise here is that successful lawyers of the future, wherever they sit on my evolutionary path, will be increasingly multi-disciplinary. Many already claim that they are deeply steeped in neighboring disciplines, as project managers, strategy and management consultants, market experts, deal-brokers, and more. In truth, though, most of these forays into other fields are not strategically conceived, formally planned, or supported by rigorous training. They are rather ad hoc and piecemeal initiatives. In contrast, legal hybrids of the future will be superbly schooled and genuinely expert in these related disciplines and will be able to extend the range of the services they provide in a way that adds value to their clients.

Conclusion

Taking these five categories together, it is clear that there will be work for lawyers to do in the future. What is much less obvious is whether today's lawyers will be equipped to take on the jobs I envisage. While the expert trusted adviser and the enhanced practitioner look much like contemporary lawyers, I predict that their number will be greatly reduced. The range of work of the expert trusted adviser will be reduced by standardization and computerization, while the enhanced practitioner's domain will be diminished by the emergence of alternative, lower cost individuals who can work responsibly with standards and systems. In some areas of law, lawyers will be less dominant, while in others (where there are, for example, online legal services or there is legal open-sourcing); they will no longer have a role. If the demand for conventional lawyers is reduced, I wonder how easily those whose jobs are threatened will be able to re-skill and become legal knowledge engineers, legal risk managers, or legal hybrids. The transition may not be easy.

In broad terms, and to answer the question posed in the title of my book, I do not therefore anticipate (in the next 20 or 30 years at least) that there will be no lawyers. I expect instead that there will be significantly fewer lawyers providing traditional consultative advisory service; and I predict the emergence of new legal professionals with quite different roles in society. We will witness the end of many lawyers as we know and recognize them today and the birth of a new streamlined and technology based generation of practicing lawyers who are fit for purpose in the 21st century.

Richard Susskind, an independent adviser to international law firms, is a UK author.