Lawyers – Part of the problem or part of the solution?

Jan 26, 2017

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It occurred to me recently that when someone has a legal issue, the first thing they think isn’t, ‘oh no I have a legal issue’, it’s ‘oh no I need to use a Lawyer, and thats the issue many law firms don’t yet fully grasp – They’re not solving problems, they are the problem.

The process of using lawyers to solve legal issues has been so painful, slow, expensive, and confusing for so long that it’s almost like these experiences have become part of the human genome. In this new age of disruption where technology is used to create simple solutions to massive problems, is there hope for a profession that relies on a client base that so unanimously resents its existence?
I see two powerful forces conspiring against the legal profession. On one side you have mankind’s endemic distaste for the profession of law (Up to 80% of legal issues aren’t addressed because of a mainstream fear of lawyers). On the other there is a billion dollar #legaltech industry, that’s getting closer every day to figuring out the recipe for a revolution that helps people deal with their legal issues and obligations on their own terms.

2013 was the year of legaltech v1.0. There were hundreds of millions invested in a wave of #legaltech that was in my opinion too focused on DIY law and solving non-existent problems for law firms.

However there is a new wave of tech that is identifying real issues within law firms, along the lines of marketing, CRM, mobility and improved analytics. These are all what I call ‘enabling technologies’ – Tech that augments current strategies within law firms, in the hope of being richly rewarded by delighted law firm partners. There is the potential for #legaltech startups to win big in this space and I suspect that over the coming 12-18 months we’ll see a growing number of players emerge as #legaltech v2.0 heats up. The problem is that this form of legaltech doesn’t offer much long term hope because it doesn’t address the fundamental issues all traditional law firms face. Namely the fact that they aren’t businesses, they’re partnerships. As we’ve seen with the liberalisation of law firm ownership and the meteoric rise of firms like Axiom, and Riverview Law in the UK, there is a much better way. Unfortunately law firms are as capable of restructuring to compete, as a moving steam train is of transforming into a jet plane to avoid steaming off a cliff and plunging to its doom.

But there is a much more exciting branch of legaltech that’s happening on the client side of the transaction. In the words of Richard Susskind, ‘The law does not exist to provide a livelihood for lawyers’, and it’s this reality that (with the help ofA.I and other innovations) many legaltech startups are exploiting. Less than 5% of tasks that a lawyer does in any given day actually require a practising certificate. The same could be said in most professions, the thing is, most professions aren’t law and most professionals aren’t as passionately avoided. This client-side innovation is where true disruption will occur, where a seismic shift in the way people address legal issues will emerge, and a future that involves a more streamlined subset of legal service providers will begin to take form.

DIY law from the likes of Legalzoom is the most obvious example but it’s not for everyone. I don’t trust myself to fill out an authority form for my kids museum trip, let alone cross the t’s and dot the i’s in a more serious legal document. Innovations that helps people avoid issues in the first place, or that offer alternative methods of reaching a solution, bypassing the need to engage a lawyer are examples of true disruption. If forced to engage a lawyer, there is still the fact that over 95% of ‘legal work’ can be outsourced. Research, document review, drafting, planning, discovery, customer service are all examples of work types that could disappear as time recording codes for law firms over the coming years.

Lets not kid ourselves -as ‘hyped’ as this space may be, there’s nothing out there yet that looks like truly disrupting the global behemoth that is the almost 1 Trillion/annum legal services market. The reality is that the industry as we know it likely has many years of relevance ahead (and part of my job is to ensure it does!) but as we’ve seen with the introduction of the iPhone, Uber’s attack on the Taxi industry, and Whatsapp/Snapchats destruction of SMS messaging, when you find product-market fit in 2015, change can happen, very quickly. If partnership driven firms don’t soon begin establishing a foothold in the new value chain, their end could come mercifully soon.

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