What does the future hold?

first_imgWhat does the future hold? August 15, 2011 Managing Editor Regular News Record number sit for bar exam ‘Wal-Mart efficiency with Neiman Marcus feel’Mark D. Killian Managing EditorThe practice of law is destined to become more commoditized and competitive in the years ahead, and a lawyer’s understanding of the nonlegal parts of a client’s problem will often be more critical than his or her legal understanding. “It’s what will set a given lawyer off as special,” Thomas Morgan, a law professor from George Washington University, told the Board of Governors and the Young Lawyers Division board at their recent joint Palm Beach meeting.There will also be fewer jobs for lawyers.Firms will still exist, and some will be big, but, Morgan said, more will stay — or become — small and will partner as needed with others throughout the state, the nation, and the world.Lawyers also will find themselves working on nonlegal as well as legal questions and will bill based more nearly on “value added,” which also will raise independence issues to new levels.The lawyers who succeed will combine “Wal-Mart efficiency with Neiman Marcus feel,” said Professor Morgan, who teaches antitrust law and professional responsibility at GWU and is the former law dean at Emory University.For a century or more, what it meant to be a lawyer seemed fairly stable, but in reality, the dynamics of the profession have been slowly changing for the past 40 years and have become increasingly more noticeable since the recession.“First is that lawyers no longer make the rules governing lawyers, or at least we don’t exclusively do it,” said Morgan, noting federal and state courts have assumed jurisdiction to annul traditional rules.As examples, he said for many years, it was unethical to engage in group legal services or for lawyers to advertise. But those prohibitions have all fallen by the wayside, as have minimum fee schedules, as courts have held that attorneys operate in the commercial world, which has been exacerbated by the quadrupling in the number of lawyers since 1970.There are now 1.2 million lawyers in the U.S., about 1 million of whom practice.“It makes it harder to know each other,” Morgan said.“The reason we didn’t see that growth and experience as a challenge up to now is the growth in legal business can be most readily tracked according to the amount of economic activity in the country,” said Morgan, noting if there was a 4 percent growth in GDP, a corresponding 4 percent increase in the number of lawyers could be absorbed.Not so when the economy tanks.In 2008, when the country saw a 4 percent increase in the number of lawyers and a 4 to 6 percent decline in GDP, “We automatically minted a group of lawyers who didn’t get jobs in any significant numbers, and a number of existing lawyers lost their jobs.”He said large firms laid off more than 9,500 lawyers in 2009 and 2010, and only 87.6 percent of the 2010 law school class had jobs nine months after graduation. More importantly, Morgan said, only 68.4 percent had a job for which bar passage is required.“That is the phenomenon we have been experiencing lately and which has unnerved so many people,” Morgan said.Globalization also has had a profound effect on the challenges facing U.S. lawyers.“It’s the idea that the world faced by our clients is getting more and more complex, what they’re doing is getting more and more complex, and the difficulty of any single lawyer being able to address all of the questions that their clients may have.”That leads to a narrowing of a lawyer’s individual spans of expertise.“If you’re really going to be good, you’ve got to be good at less and less,” Morgan said.U.S. lawyers are finding that they are subject to more competition from foreign lawyers and nonlawyers alike and technology is changing how law is practiced.“The idea that you will not only be competing with and working with a larger number of new American lawyers every year, but you also will be seeing competiton from lawyers all over the world. This is a reality in which we have to deal.”Morgan noted Thompson Reuters recently acquired Pangea3, one of the largest outsourcing firms in India, and document review technology — at least in one test — required only about 1 percent of the lawyer’s time that traditional review requires.Work once new for each client has become commoditized and subject to competition from free information on the Internet.“The ability to recreate documents or sets of documents that you would use before and make them applicable to new clients means that it is tending to move more and more in the direction of a commodized service.”Personal, low cost service will be the basis for client choice, and lawyers will have to compete against the LegalZooms of the world and other vendors of online legal documents and services.“There are people who are marketing programs that will take your electronic discoverable files and review them for privilege, for smoking guns, for relevance,” he said, noting those are the responsibilities entry-level lawyers used to perform.Then there is the idea of “virtual firms.”“I ran into a lawyer the other day who lives in Florida and practices out of an address in a mid-Atlantic state,” said Morgan, adding the lawyer primarily deals with his clients over the Internet.Is that lawyer violating UPL laws?“I don’t know, but the point is you can do this, apparently, quite effectively — particularly when you’re talking about computerized documents and other things that he’s preparing for his clients,” Morgan said.Morgan said all these changes add up to a shift from the traditional model of practicing for individuals to practicing for corporate clients.“The people driving the demand for lawyers are less lay clients; they are more and more professional lawyers who are in-house for corporate clients who need our expertise.”Outside lawyers tend to be hired by other lawyers and tend to lose direct access to a client’s lay decisionmakers.To survive and thrive, many lawyers are becoming more focused and specialized and working to market or “brand” themselves — through blogging and websites — as the “go-to person” in a particular field.“It’s what you know about the client; it’s what you know about a particular issue that makes you the go-to person,” Morgan said. “Lawyers are ultimately going to succeed to the extent they add value to their client’s experience that is going to become the basis of billability.” What does the future hold?last_img