Dragging the legal sector into the 21st century

Its costs are high and opaque. While other sectors have undergone huge changes, its essential structure looks much like it did a century ago. It’s one of the most paper-intensive activities in the world, largely bypassed by the technological revolution.

These were the starting points for the lawyer and author Richard Susskind, who - in an address earlier this month to the Burren Law School in Ballyvaughan, Co Clare, challenged the legal sector to dispense with some of its more anachronistic features and drag itself into the 21st century.

Not that lawyers necessarily have a choice. Susskind, who has advised governments and large professional services firms, predicted the next two decades would bring more changes to the legal profession than did the past two centuries. In trying to prepare for these changes, he believes, individuals and organisations need to ask themselves a basic question: what are lawyers for?

“Most lawyers, when they think about the future, tend to think, ‘what do we do today’ – one-to-one consultative advisory service, usually on an hourly billing basis – and ‘how can we make it a bit quicker, cheaper, better’. Not often enough are lawyers taking a step back and asking the question: what fundamental value is it that we bring to those we advise? Why is it that clients pay handsomely for our service?”

These questions are growing more acute given three major forces at work in the sector: what Susskind calls the "more for less challenge", liberalisation and technology. Most ordinary people struggle to afford lawyers. In many advanced jurisdictions, public legal funding is falling. Even large companies, under pressure to spend less on external law firms, are cutting back. This means law firms must bring down their costs by doing their work more efficiently. And to do that, Susskind argues, they must accept a truism that lawyers have long resisted: most of the work they do is routine, repetitive and administrative.

'Not demanding'

“As lawyers, we may know this in our heart, but we don’t reflect it in our business,” he told the law school. “As clients, we suspect it. Huge amounts of what goes on in law offices is actually very process-based. And the bigger point is this: we don’t actually need what is usually quite expensive young lawyers in quite expensive buildings in quite expensive cities doing what is essentially quite complicated paperwork. It’s not demanding of the legal mind.”

The idea that all legal work is bespoke and creative is a fiction, Susskind believes, a piece of self-deception that has sustained the current legal model. Technology has existed for decades that would allow lawyers to automatically generate letters by entering data into an on-screen form, but “if you charge by the hour, you can see why you’re disincentivised from using it”.

According to Susskind, some types of lawyers tell him none of this applies to them. Litigators, for instance, don’t see the relevance, as every case they handle is different. Susskind’s reply is to divide litigation into nine tasks, including project management, document review, strategy, tactics, negotiation, advocacy and disclosure. “The question I have been asking the best law firms around the world is, ‘which of these nine tasks are you uniquely qualified to undertake?’”

“The answer in the United Kingdom is two: strategy and tactics. In the US, it’s three, because they add advocacy. But on a list of nine, six or seven can now be provided by other legal service providers to a higher quality or a lower cost. Take document review. In large-scale litigation you might have millions of documents to review. That can now be done in India, by people called legal process outsourcers at a seventh of the price of law firms in England.

“These are not amateurs – they’re mostly people with doctorates from good universities in India, and they specialise in document review.”

All of these changes would be less significant were it not for the liberalisation of the legal services market, which Susskind argues has been in train for a number of years and will bring huge changes over the next two decades. In England and Wales, these changes were ushered in by the Legal Services Act 2007, which introduced alternative business structures and meant non-lawyers could share profits with lawyers in legal businesses.

"What it actually means in practice is that we have an entrepreneurial spirit in the legal world that we have never had before," he said. "You've got banks, building societies and insurance companies coming into the legal marketplace alongside publishers and accountants. You have got external funding, which is bringing new ideas, new ways of delivering services– far cheaper for citizens."

Technology

Alternative business structures were the most contentious part of Minister for Justice Alan Shatter's proposed Legal Services Regulation Bill. The Bar Council, which represents barristers, strenuously opposed the idea, arguing

it would hinder access to justice and have no cost benefit to clients. The proposal has been deferred in the latest draft of the Bill, which is still winding its way through the Oireachtas. In his speech, Susskind criticised the American Bar Association for arguing that such liberalisation would prejudice access to justice. "In fact it's exactly the reverse," he said. "In almost all jurisdictions that are liberalising, it's enabling access." He predicts by 2020 almost all jurisdictions will have followed the example of England and Wales.

The safest of all predictions, however, is that technology will develop rapidly over the same period, bringing even greater upheaval to the sector. Susskind told his audience that, when he published his book The Future of Law in 1996, he predicted that the dominant way lawyers and clients would communicate in the future would be by email. The Law Society of England and Wales responded that he didn't understand confidentiality and security, Susskind said, and that he was bringing the profession into disrepute.

“Call me radical, but I think when you can see the day that we’ll have desktop computers with more processing power than all of humanity put together, then it might be time for lawyers to rethink the way we draft documents,” he said.

“It just cannot be that in the most information- and document-intensive industry in the world, the internet and computing technology, which is transforming all corners of the economy and society, doesn’t apply to us.”

Social media, artificial intelligence and big data will require lawyers to fundamentally review how they dispense legal services. Susskind pointed to the example of auction site eBay, which uses online dispute resolution to resolve most of the 600 million disputes that arise on the site in a typical year. Such innovation offers huge potential for the wider legal system, where disputes can clog up the courts system for years, at huge expense.

“We have to open our minds to working in entirely new ways,” Susskind concluded.