The legal profession in North America has been impervious to innovation. Now, finally, change is afoot
By Paul Paton
WHILE THERE HAVE always been creative legal minds, that creativity hasn't always been applied to the practice of law — or, when it has, regulatory structures and opponents of change have often stifled it. For more than a decade, resistance to multidisciplinary practice, alternative business structures and broader access to self-help has stymied innovation. While there have been tweaks – virtual practice, loosened advertising restrictions, billing reforms, even (egads) brand names – the fundamentals are pretty much the same.
But with the 2008 economic downturn, and increased pressure to respond to unmet legal needs, reform is slowly emerging in North America. In November, the legal sector in the US shed 1,100 jobs — the second month in a row that the sector had lost hundreds of jobs (and a stark contrast with the broader economy, where joblessness sits at a five-year low).
As New York City Bar President Carey Dunne noted recently, “... in New York State alone well over two million people per year go to court unrepresented in civil proceedings. We believe there are many in this cohort who could, and would, pay something for legal services if there were a business model that addressed their needs ...” His report urged a focus on the legal needs of the middle class, and recommended changes in career education for new lawyers.
The Canadian Bar Association has produced multiple reports on facilitating access to justice, though CBA efforts haven't traditionally had the same emphasis on the middle class or on transforming legal education. But at least they're focusing on innovation, as are the regulators. A preliminary report by the Law Society of Upper Canada Task Force on Alternative Business Structures suggested last year that Ontario may be more open to change than before. With final recommendations due this spring, we'll soon see.
The LSUC will also have to take into account what's happening across borders, both provincial and national. Even in the United States, change is afoot. The Washington State Bar is in the process of implementing a regime to introduce limited-licence legal technicians (LLLTs), authorized non-attorneys who meet certain educational and other requirements to advise clients in approved areas of law. In California, meanwhile, a recent financial filing by LegalZoom noted that, in 2011, more than 20 per cent of new limited-liability companies in the state were formed using its online legal platform.
These developments will have a big impact on small practitioners, but large firms aren't immune. In a paper to be published in the Fordham Law Review, Professor John Dzienkowski from Texas surveys six new types of firms formed expressly to offer corporate clients an alternative to “Big Law.” Clearspire, VLP Law Group, AxiomLaw, VistaLaw, LegalForce and Paragon may not be here a year from now, but each represents a threat to the traditional order by getting services to corporate clients in different ways.
And Stanford Professor George Triantis has noted that “available technology can now significantly reduce the cost of contract negotiation, drafting and implementation in more complex transactions with client-specific requirements. As the technology moves its way up-market, therefore, it raises an increasing serious challenge to the business model of corporate law firms.” That munching you hear is the sound of everyone's lunch being eaten.
The irony is that lawyers – so suffocated by regulation in traditional practices – are actually the key players behind most of the companies attempting to bring new legal services to market in different ways. With the Law Society of BC approving recommendations in December 2013 that institute “a regulatory framework by which other providers of legal services could provide credentialed and regulated legal services in the public interest,” maybe we'll finally put some of our creativity to better use. Here's hoping.
Paul Paton is a professor at the University of the Pacific's McGeorge School of Law in Sacramento, California. He can be reached at (916) 739-7284 or [email protected].
By Paul Paton
WHILE THERE HAVE always been creative legal minds, that creativity hasn't always been applied to the practice of law — or, when it has, regulatory structures and opponents of change have often stifled it. For more than a decade, resistance to multidisciplinary practice, alternative business structures and broader access to self-help has stymied innovation. While there have been tweaks – virtual practice, loosened advertising restrictions, billing reforms, even (egads) brand names – the fundamentals are pretty much the same.
But with the 2008 economic downturn, and increased pressure to respond to unmet legal needs, reform is slowly emerging in North America. In November, the legal sector in the US shed 1,100 jobs — the second month in a row that the sector had lost hundreds of jobs (and a stark contrast with the broader economy, where joblessness sits at a five-year low).
As New York City Bar President Carey Dunne noted recently, “... in New York State alone well over two million people per year go to court unrepresented in civil proceedings. We believe there are many in this cohort who could, and would, pay something for legal services if there were a business model that addressed their needs ...” His report urged a focus on the legal needs of the middle class, and recommended changes in career education for new lawyers.
The Canadian Bar Association has produced multiple reports on facilitating access to justice, though CBA efforts haven't traditionally had the same emphasis on the middle class or on transforming legal education. But at least they're focusing on innovation, as are the regulators. A preliminary report by the Law Society of Upper Canada Task Force on Alternative Business Structures suggested last year that Ontario may be more open to change than before. With final recommendations due this spring, we'll soon see.
The LSUC will also have to take into account what's happening across borders, both provincial and national. Even in the United States, change is afoot. The Washington State Bar is in the process of implementing a regime to introduce limited-licence legal technicians (LLLTs), authorized non-attorneys who meet certain educational and other requirements to advise clients in approved areas of law. In California, meanwhile, a recent financial filing by LegalZoom noted that, in 2011, more than 20 per cent of new limited-liability companies in the state were formed using its online legal platform.
These developments will have a big impact on small practitioners, but large firms aren't immune. In a paper to be published in the Fordham Law Review, Professor John Dzienkowski from Texas surveys six new types of firms formed expressly to offer corporate clients an alternative to “Big Law.” Clearspire, VLP Law Group, AxiomLaw, VistaLaw, LegalForce and Paragon may not be here a year from now, but each represents a threat to the traditional order by getting services to corporate clients in different ways.
And Stanford Professor George Triantis has noted that “available technology can now significantly reduce the cost of contract negotiation, drafting and implementation in more complex transactions with client-specific requirements. As the technology moves its way up-market, therefore, it raises an increasing serious challenge to the business model of corporate law firms.” That munching you hear is the sound of everyone's lunch being eaten.
The irony is that lawyers – so suffocated by regulation in traditional practices – are actually the key players behind most of the companies attempting to bring new legal services to market in different ways. With the Law Society of BC approving recommendations in December 2013 that institute “a regulatory framework by which other providers of legal services could provide credentialed and regulated legal services in the public interest,” maybe we'll finally put some of our creativity to better use. Here's hoping.
Paul Paton is a professor at the University of the Pacific's McGeorge School of Law in Sacramento, California. He can be reached at (916) 739-7284 or [email protected].
