How Laywers Can Thrive in the New Economy
From the consumer’s perspective, the Law has been a respected and feared pillar of society. Lawyers, judges and legal workers have stood as the gatekeepers to the Law’s exclusive domain, the purveyors of a mysterious and powerful knowledge. Big law firms and established institutions have ruled the legal industry, and clients have come, supplicant and with little leverage, to ask for help. Today, the New Economy is changing all of this.
The Law is becoming demystified as everyday people have the ability to google search “how to write a will,” or, “how to write a software license agreement”. Big firms lose business as clients pull up a list of competitors on their smart phone while sitting in the waiting room. Imposing desks made of fine wood are replaced with laptop computers, while gargantuan bookshelves give way to LexisNexis subscriptions. In their predictions for the year of 2016, nearly every major legal think tank, from LexisNexis to Bloomberg Law, mentioned the significant impact that technological innovation is having in the legal profession. Artificial intelligence programs are doing legal research for all comers. This is the New Economy, where information is cheap, communication is fast, and nothing is sacred. The legal industry is changing at its very core, and those who don’t learn to adapt will be left behind like so many physical encyclopedias left on the curb.
What is the New Economy?
Putting a finger on what exactly the New Economy is can be difficult when what’s new is always changing. In 1983, the personal desktop computer was revolutionary. By the 1990s the dot com bubble was inflating. Today it’s all about the “sharing” economy of Uber and Airbnb. But even these will be old news soon enough.
In fact, if there is some defining law of the New Economy it might be just this: fluidity. Everything moves, whether it’s your iPhone traveling across the ocean from China or the numbers in your bank account being transferred digitally through PayPal. What seemed set in stone yesterday is being casually deconstructed today by some twenty-year-old kid who writes code. Even though this fluidity begins and is most extreme in the technology and information sectors, its reverberations can be felt in every part of the economy. The legal industry is no exception.
How is the New Economy Changing the Legal Industry?
The New Economy doesn’t give a hoot about traditions or institutions. The large, prestigious law firm that has generations of goodwill in the community doesn’t have the same advantage that it used to have over the small boutique firm started by two wide eyed twenty-somethings who just passed the Bar. In fact, the smaller firms may have the advantage.
In Altman Weil Flash’s 2015 survey of law firms, entitled Law Firms in Transition, we see some disturbing trends for big firms. In over half of all law firms responding to the survey, partners were not “sufficiently” busy throughout 2015. This is even worse for bigger firms. 74% of firms with 250 or more lawyers reported that overcapacity is hurting firm profitability. Goliath, meet David.
The small, dynamic law practices are taking the market by storm. A full 83% of law firms in the report say that “they believe competition from nontraditional service providers is a permanent change in the legal market.” These nontraditional service providers are largely technology based. They include firms that have a fancy website but no physical office, and sites like LegalZoom, which aren’t law firms themselves but networks that connect clients with independent attorneys. This technology is finding a way to link the thousands of unemployed and underemployed attorneys with eager clients looking for a cheap way to put together a will or file for divorce. The age of the Uber attorneys is here.
But new technology is not just about connecting clients and attorneys. It’s also about eliminating the need for attorneys altogether. Nearly a quarter of law firms reported losing work to “client technology solutions,” while 42% reported fearing such a trend. These “technology solutions” are not fancy programs, but in many cases just cursory internet searches. The internet has made the coffers of an attorney’s mind obsolete. Many simple legal questions can be answered with a Google search, rather than a call to an attorney.
Everything is changing, and everything will continue to change. So, how can legal professionals make sure that they don’t go the way of the dial-up modem?
How to Survive the New Economy:
The New Economy is sometimes called the “Sharing Economy,” but don’t be duped into thinking that you should give up something for nothing. Airbnb, Uber, and other companies are not making a killing by sharing, but by linking together people with compatible interests. Take a tip from these companies.
Here are some pointers to get you started:
• Skill up. Learn about emergent fields of law, such as cooperation law, and software license agreements. Learn to speak your client’s language. The more you can speak the language of your clients, the more they will trust that you are a valuable asset. Don’t just be an attorney, be a geek too.
• Ditch the books and focus on personality. Lawyers are used to being the gatekeepers of very specialized information. Now, Google can provide a more diverse set of answers in a fraction of the time, for free. But remember, Google can’t file a motion, nor can it leverage its relationship with fellow attorneys and judges to get something expedited through the system. Some lawyers are no longer useful for their information, but there will always be a need for attorneys who can go to court and navigate its layers of social and institutional red tape. Remind your clients of this, and put your stellar personality at the forefront of your marketing.
• Become an entrepreneur. J. Mark Phillips, professor and founder of Eesquire.net, recently wrote about the need for lawyers to also become entrepreneurs. He writes, “the skill set required to navigate the current legal market is an entrepreneurial one—relying upon adaptability, opportunity assessment and execution, openness to change, and a more nuanced understanding of risk.” You don’t have to go back to school to get an MBA. But you might want to consider taking a class in entrepreneurship or hiring a business consultant. At the very least, realize that the more flexible and forward thinking your legal business is, the more you will thrive in the New Economy.
• Get famous. Join up not just with local businesses, but also with legal services websites. Update your website to include easy navigation, sleek design, and online features. Create a blog and get people to share your articles. All of the content that you produce online should redirect people to your web presence. Don’t be afraid to self-promote on Facebook and other platforms, and become proficient in online communication. (And, of course, get a state of the art case management system like Filevine.)
• Finally, make yourself invaluable. Find opportunities for additional services you can offer that your clients probably never even thought of. You can convince a tech startup that they should have a comprehensive user agreement, you can sell the necessity of having a real legal expert on staff to the new e-commerce company. You can educate your clients on how important trusts and LLCs are if they’re renting out rooms on Airbnb. In many ways, the law is struggling to catch up with technological innovation, and this means opportunity for the savvy attorney. Remind your clients that even if the law is not nipping at their coattails now, it likely will be next year and now is the time to help shape regulation through their proactive legal efforts.