“I do not see much of a future (beyond 2020) for most small firms ….”
— Richard Susskind, Tomorrow’s Lawyers
Will the next 5–10 years really see the end of solos and small law firms? I’ve heard Susskind talk before, but today, I sat down with him at the William Mitchell College of Law to find out more about his predictions as they pertain to small law firms.
The future according to Susskind
Susskind’s most-recent book, Tomorrow’s Lawyers, is short and worth a read, but I will try to do it justice in brief. Basically, the future according to Susskind will come about due to three drivers of change:
- Clients, who are demanding more work for less money;
- Liberalization, or the spread of non-lawyer ownership; and
More for less
In the near future, cost will be the biggest driver of change. On the big-corporations-and-big-firms end of the spectrum, Susskind says in-house counsel are being pressured to reduce their legal “spend” by 30–50%. I recently covered the other end of the spectrum, at which lots of people cannot afford the legal help they need. The bottom line is that people and corporations cannot or will not pay the same prices today or going forward that they have been paying — or at least, were paying up until 2006 or so.
Downward pressure on legal fees, Susskind believes, must drive sweeping changes to the way firms and clients operate. The end result is that few clients will tolerate lawyers who bill time for doing work that does not require a law degree, and the amount of “bespoke” legal work performed by lawyers will shrink as far as possible. Some of the things lawyers do now (document review, legal research, project management, negotiation) do not require a law degree. Lawyers will not be doing those things. Some of the things that require a law degree (everything LegalZoom does) do not require a human being. Lawyers will not be doing those things, either.
What’s left? Litigators will still be around for strategy, tactics, and advocacy. Transactional lawyers will still be around for bespoke drafting and legal advice. The rest of the lawyers will be performing non-traditional roles, which Susskind describes in Chapter 11 of Tomorrow’s Lawyers. Here they are, as he names them:
- legal knowledge engineer
- legal technologist
- legal hybrid
- legal process analyst
- legal project manager
- online dispute resolution (ODR) practitioner
- legal management consultant
- legal risk manager
If those sound more like supporting roles than what you went to law school for, then you are on the right track. None of them require a law degree, and all of them require skills not currently taught in law schools. Those are tomorrow’s lawyers, according to Susskind, with the exception of the few (“expert trusted advisors” and “enhanced practitioners”) who manage to find a traditional role to play.
“[i]t is our collective arrogance as lawyers that we feel we can take on a neighboring discipline over a weekend.”
I recently wrote about whether it is time for non-lawyer ownership. Susskind, like Andy Daws, unequivocally says yes. I asked Susskind the question left over from my previous article: can corporate structures really be so much more efficient than law firms?
Yes, he says. Alternative Business Structures (ABS) in Europe are showing cost savings of 30–40% and higher client satisfaction. He tells a joke about litigators, who frequently tell him their job is more project management than anything else. When he asks what training they have, some answer that they took a two-day course. He says “[i]t is our collective arrogance as lawyers that we feel we can take on a neighboring discipline over a weekend.” That rings true. (It probably explains all the lawyers-turned-marketers, too.)
Putting real project managers in charge of litigation makes more sense, says Susskind, but law firms are unwilling or unable to do so. That kind of specialization — and the efficiency that comes with it — will only come with non-lawyer owners.
Non-lawyer ownership is off the table in the U.S., at the moment. But Susskind thinks the U.S. will eventually allow non-lawyer ownership because U.S.-based international firms will push for it. Without non-lawyer investment and ownership, U.S.-based firms may find themselves at a competitive disadvantage, but in any case their clients will demand the same sort of service they are used to at home. This pressure will build until big law firms themselves become the ones lobbying for non-lawyer ownership in the U.S.
Liberalization boils down to lawyers giving up the non-lawyering parts of running a firm, and focusing on lawyering while other tasks are handled by people more competent to handle those tasks.
After describing Moore’s Law for those who still aren’t aware of it (i.e., most of an audience of lawyers), Susskind writes:
You can call me radical, but it seems to me that if we can see the day when the average desktop machine will have more processing power than all of humanity combined, then it might be time for lawyers to rethink some of their working practices. It is simply inconceivable that information technology will radically alter all corners of our economy and society and yet somehow legal work will be exempt from any change.
When is that day? 2050, give or take a year or two. Susskind is obviously not radical. Assuming there is any way for human lawyers to compete with an artificial brain the size of a planet (much less one on every desktop), legal work will likely be different.
What form this will take, exactly, is hard to predict, though. Susskind talks about the potential for teleconferencing to change the way we meet with clients and attend court, and he thinks online dispute resolution could offer substantial advantages over litigation. Plus, that sort of processing power should be able to make serious inroads on actual legal work (estate planning lawyers, your days are numbered) by online legal services, which may be increasingly free.
But those are all fairly routine changes. When lawyers — along with everyone else — have all the processing power of humankind on an iPad, it seems like science fiction may be a better guide. But however this technological revolution comes to law, smart and experienced lawyers — or perhaps their AI replacements — will still need to do most of the programming.
Is this really the future of law practice?
Nothing Susskind says seems particularly far-fetched. He’s not the only one who sees such changes coming down the pike, either, as this infographic shows:
Susskind is surely right that clients want more for less, and that technology has the potential to drive massive change in the legal industry, over time. Alternative business structures (non-lawyer ownership) seem less inevitable in the U.S., but their eventual existence does not seem like an unreasonable prediction.
The small firm of the future
You will notice that, so far, Susskind’s descriptions and predictions are mostly for big firms. He really does not see much of a future for small firms, at least not as currently run. He added as currently run when I interviewed him in order to clarify his point. Small firms may not disappear, but just as large firms will have to fundamentally alter their business models, so will solo and small-firm lawyers, and Susskind believes it will be harder for them to do so.
Big firms and alternative business structures can scale to the point where they will be able to offer superior legal help at lower prices (even access-to-justice prices). This will leave little room for inefficient solos and small firms that cannot take advantage of the same economies of scale. To compete, small firms will have to figure out a way to take advantage of some of those same economies of scale, or else materially differentiate themselves.
The big firms and ABSes will be able to take on investment, use the skills of non-lawyers for work that is not strictly legal, and collaborate with one another on big-idea solutions, software, resources, etc. “Solosmalls” would be hard-pressed to do the same, which will put them at a serious competitive disadvantage. Think Wal-Mart running all the small businesses out of town. In short, solosmalls may have to surrender their lunches.
If Susskind is right about the future of law practice, solos should be worried enough to start exploring alternative ways to practice law.
Susskind did concede that his predictions may not apply to all solos and small firms. It is hard to imagine criminal defense lawyers being replaced any time soon, for example. Not unless the criminal justice system undergoes sweeping changes. And to the extent there is still a need for litigation with all the online dispute resolution Susskind predicts will be going on, there will be a need for skilled and experienced lawyers to do it. But in the main, Susskind sees different roles for solos of the future. While he does not think solos and small firms will be competitive with big corporate legal service providers, he does think innovative small firms may be able to prosper other ways.
Solos and small firms of the future might work with those ABSes to handle bespoke work, for example. Maybe by officing in the same location or entering into a referral or independent-contractor agreement. Or they may be able to carve out a niche as a trusted advisor in smaller communities. There are also broad categories of law where consumers do not know or appreciate their rights and remedies — or even realize that a lawyer can help them. Perhaps a WebMD-like service for legal problems will be able to help in place of a lawyer, but based on my own experience, many people will still want a lawyer to guide them through the process, even if the process looks much different than it does now. And what about contingent-fee practices, where the client is not actually paying for the legal representation up-front. That would seem to take price considerations out of the picture.
But while Susskind seems pessimistic about the survival of solosmall, I don’t think it has to be that way. Solo and small-firms can be much more nimble. Change is relatively easy when you do not have to overhaul a massive, ponderous business organization. As a solo, adopting a new technology is easy. Want to go paperless? Buy a scanner and start scanning. Want to teleconference? Get a camera and a nice backdrop. Want to distribute online forms? Sign up for a service and paste a few lines of code into your website.
On the other hand, the collective arrogance Susskind describes is in full effect in solo practices and small firms. Solosmall lawyers not only do the legal work, they send the invoices, cut the checks, and manage the accounts. They answer the phones, do the marketing, and (try to) fix the computers. They review the documents and manage the staff. And they probably cannot afford to cut rates much more. In order to compete at lower rates, solosmalls will have to find ways to take advantages of economies of scale — without the scale.
That is a tall order. There may not be a need to panic, but if Susskind is right about the future of law practice, solos should be worried enough to start exploring alternative ways to practice law, from business structures to value propositions.
Then again, maybe he’s not right. Predicting the future is a messy business, and law has been remarkably resistant to change for decades, if not centuries. Maybe the next generation of lawyers really will still be banging out briefs and contracts, in Microsoft Word, on a computer than can simulate the mental capacity of the entire human race.