Future of the Law – Part 3: Meet LISA, the future of Law.

The term “Legal Intelligence Support Assistant” might sound like a fancy-pants way of referring to your paralegal, law library or perhaps secretary. When you shrink that term to the acronym LISA, you might be tempted to ask about LISA’s professional background or whether she’s a nice woman.

But this LISA is no woman, let alone a human.  “She” is an artificial intelligence solution who provides “expertise” in the automation of legal documents, reducing or replacing the need for human lawyers in representing either party to an agreement.    The National Law Journal sounded impressed with LISA, placing the technological innovation on its inaugural list of Legal AI Leaders, which highlighted 49 entrepreneurs and companies who the magazine believes represented the best available online AI tools and services.

Launched in April 2017, Robot Lawyer LISA has been used by students, academics, businesses of all varieties and sizes, general counsel and other legal users. The U.K.-based company and co-founder/CEO Chrissie Lightfoot have become part of the conversation about the future of legal services provision, particularly in the area of quality online legal advice and documents.

“I’ve always been driven to innovate and push the boundaries to make improvements related to new products and/or services with the focus on the customer or client at the center of everything,” Lightfoot told the online publication Womanthology. “No doubt this passion has been fueled by my interest in the future as I constantly question, “What’s next?”, “What’s possible?”, and “How are we going to get there?”

Based on the premise that 90 percent of the public cannot afford legal services, LISA brings together human and machine intelligence to enable to lay parties to put together a legally binding contract, making quality legal insight, guidance, support and advice both faster, more transparent, more affordable and more accessible—24/7/365 and around the world.    The LISA system first offered a non-disclosure/confidentiality agreement, and the company subsequently released a group of three property-related artificial intelligence tools: a commercial lease, a residential lease, and a lodger agreement. These have come in handy for everyone from professional service firms, to business associations, to property-related businesses as the letting or renting of property online continues to grow, Lightfoot says.

The AI system asks users a number of questions supported by information, know-how and experience from human lawyers who helped to create LISA. Users read and respond, and those answers lead the parties to a middle ground as quickly and cost-effectively as possible, while helping them navigate the nuances involved both legally and commercially, she says.

For example, a landlord might initiate a lease document using the LISA tool, and then the tenant can change the initial draft to make the lease 18 months instead of three years—or anything else two laypeople traditionally would negotiate, albeit traditionally with the help of two human lawyers. Instead, they get support, knowledge and intelligence from the system.

Ultimately, Lightfoot does not think AI will mean robots take over every task an attorney might handle. “AI and robots will continue to replace human jobs whilst augmenting others,” she told Womanthology. “If you do nothing, then you ought to be worried. However, as these human roles and skill-sets will variably shift, it is up to each and every one of us to reinvent ourselves and apply the skills that the machines cannot do, yet.”

 

Future of the Practice – Part 2: How Can Lawyers Better Serve the Public?

To survive and thrive in the 21st century, and to continue serving the public adequately, attorneys can no longer muddle through with business as usual.

Wide swaths of the public are unable to get their legal needs met. Innovations in technology and other changes in society continue to shift how legal services can be accessed and delivered. Bias, complexity, discrimination and lack of resources undermine the public’s trust and confidence in the justice system.

These were the top concerns raised a couple years ago by the American Bar Association’s Commission on the Future of Legal Services, which also made several recommendations on solving these conundrums that seem well worth considering. Doing so, the commission wrote, would bring about the “significant change … needed to serve the public’s legal needs in the 21st century.”

Although there have been sustained efforts to expand access, most of those in poverty and the majority of moderate-income people cannot afford representation, the commission found. This means the public fails to obtain effective assistance and litigants come to court unrepresented, which adversely impacts all parties involved. At the same time, many lawyers, especially younger ones, are unemployed or underemployed, hemmed in by the traditional practice business model and the profession’s resistance to change, the ABA noted.

Technological and other innovations to assist the public in meeting their legal needs include experimental projects on the part of courts, bar associations, law schools and some lawyers, in areas like artificial intelligence, alternative billing and unbundled legal services. Against this backdrop, new providers of legal services continue to proliferate and create different choices for consumers and lawyers, the commission pointed out.

Public trust and confidence is undermined by the facts that the profession fails to reflect the diversity of the public, conscious and unconscious bias stands in the way of fairness and justice, the system’s functioning remains opaque to the average person, the criminal justice system is overburdened by mass incarceration and inadequate resources, and inadequate funding of courts on behalf of federal and state governments, the commission wrote.

The ABA Commission put forth a series of a dozen recommendations to help solve these stubborn challenges. For lawyers and law firms, these include supporting the goal of providing some type of effective assistance for all “essential civil legal needs” regardless of a person’s ability to pay, keeping abreast of relevant technologies, partnering with those in other disciplines and the public to gain insights about innovations in service delivery, and working to advance diversity and inclusion through updated policies, standards and practices.

To reform the court system, the commission recommended considering regulatory innovations such as exploring how legal services are delivered by Internet-based platforms and through alternative business structures. Courts also should become more accessible physically and virtually, through streamlined processes, multilingual materials and alternative dispute resolution systems, the ABA recommended.

Elsewhere in the public sphere, the commission recommended reforming the criminal justice system by decriminalizing minor offenses and adequately funding public defender offices, among other changes; vastly expanding resources to support longstanding efforts to successfully address the public’s unmet needs through legal aid and pro bono efforts; and measuring the outcomes of any established or new models “to evaluate effectiveness in fulfilling regulatory objectives.”

As for the ABA itself, the commission recommended that it establish a Center for Innovation, create guidelines for state bar associations and others to develop and administer “legal checkups” for attorneys and law firms, and, along with other bar associations, to “make the examination of the future of legal services part of their ongoing strategic long-range planning.”

Which seems wise, because however thoughtful and well considered, one bar association report is not going to singlehandedly change legal services delivery in a way that solves the access and trust problem while assisting unemployed and underemployed attorneys. But a persistent, strategic effort just might stand a chance.

Future of the Practice – Part 1: Why So Much Non-Billable Time?

Clio’s “Legal Trends Report” tries to suss out what lawyers are doing, exactly

What happens to the nearly six hours per day that lawyers spend on non-billable tasks? Why can’t attorneys dedicate more of their time to billable work? How do they spend their time, anyway? The 2017 “Legal Trends Report” from Clio attempts to answer these questions and others that legal professionals are—or at least should be—asking themselves.

The report, based on a survey of nearly 3,000 legal professionals, finds that lawyers only spend 29 percent of an 8-hour work day, or about 2.3 hours, on billable tasks—and when factoring in realization and collection rates, firms reap only 1.6 hours of billable time.

Nearly half of their time, 48 percent, goes into office administration, billing, technology and collections. One-third of their non-billable time goes toward business development, which means they’re constantly making sure they develop new clients, and 41 percent would spend even more time on business development if they could, the Clio report says.

More than half of law firms (54 percent) actively advertise their services to earn new clients, yet the overwhelming majority can neither calculate their return on investment in advertising (91 percent), nor know how much it costs them to acquire a new client (94 percent).

How can law firms improve their client acquisition? Clio also surveyed more than 2,000 consumers to find out what they want in a lawyer, and what influences their decisions on which firm to hire for a given case or matter.

Personal referrals from friends and family were by far the most frequently used search method (62 percent), while referrals from other lawyers (31 percent), online searches (37 percent) and directory listings (28 percent) were also relatively common. Advertising has a much lower influence, whether television (13 percent), online (13 percent), radio (7 percent) or billboards (6 percent).

Communication and pricing were top of mind for consumers in deciding which attorney or firm to hire. Responding to phone or e-mail right away (67 percent) and free initial consultations (64 percent) were the most sought-after qualities, Clio found.

Fixed fees (47 percent), accepting credit cards (28 percent) and being willing to exchange text messages (27 percent) were other common desires. Although online search was common, the snazziness of the firm’s website influenced only 19 percent of respondents.

The “Legal Trends Report” also contained figures on average billable hour rates. The average law firm rate is $240 overall, $260 for lawyers and $149 for non-lawyers. The average Chicago firm charges $312 per hour, third-highest among the 10 largest U.S. metropolitan areas, behind only New York and Los Angeles.

Yet the survey data shows that many firms don’t have set targets for how much they plan to earn in a given year, nor case by case. Slightly more than half (54 percent) could estimate their annual billings, half can bill a case based on a set budget, and less than half (40 percent) of firms that track time have hourly billing budgets.

Clearly, many of these respondents need to get a better handle on what they need to make, how they plan to do it, and then how to rejigger their time to be able to bill for a higher percentage of their time … or their own personal trends won’t be headed in the right direction.

Michigan Bar Considers Ethics Resolution for Online Matching Services

Potential legal clients are increasingly turning to online matching services to find attorneys. In some cases, these services charge a fee based on a percentage of the attorney’s costs for their legal help, and the money is paid to and controlled by the third party.

A Michigan state bar committee is considering a resolution asserting that such fees constitute an impermissible sharing of fees with a non-lawyer, violating numerous ethical rules in the state codified in the Michigan Rules of Professional Conduct. Attorneys in other states, many of which have similar rules, would do well to be aware of the issues raised.

The Michigan ethical rules in question include provisions that prohibit a lawyer from participating in for-profit lawyer referral services, sharing fees with a non-lawyer or giving anything of value to recommend a lawyer’s services—aside from reasonable advertising fees, charges for a nonprofit lawyer referral service, or sale of a law practice.

Connecting to clients through such online matching services also would “subvert” compliance with another ethical rule that requires legal fees and expenses paid in advance be deposited into a client trust account until the fee is earned and expenses incurred, the resolution notes. It adds that this also “impedes” compliance with the requirement that unearned prepaid fees and unexpected advances on costs be refunded.

To whatever extent such an online service provider identifies itself as providing legal services, attorneys that partner with the online service assist in the unauthorized practice of law, the resolution states. Finally, to the extent the matching service provides administrative “back office” services usually done through a law firm, “this does not comport with the professional obligations of the lawyer.”

“The assessment requires a careful review of the business model to determine whether it constitutes a for-profit referral service and if compliance with the terms for participation requires a Michigan lawyer to violate the Michigan Rules of Professional Conduct,” the resolution reads. “Legal matching services are not new, but innovation in technology has spearheaded private entrepreneurial online matching services beyond the usual bar association non-profit lawyer referral services.”

The resolution considers two scenarios. In one case, a national website includes “legal services” in its business name, markets to consumers, brands participating lawyers with the business name, offers services for a fixed fee, asks the consumer to choose an attorney based on a review of profiles, and requires the consumer to pay a deposit into the website portal. The site markets to lawyers that it matches them with clients who already have paid, takes care of all administrative services, and deducts a percentage as a “marketing fee.”

The second scenario has the word “legal” in its name, targets businesses needing legal services, tasks them to fill out an attorney request form, provides a free half-hour consultations followed by a pricing proposal from the attorney, then asks the business client to pay through the website. The third party then collects and holds all fees and keeps about 7.5 percent of each. Lawyers must provide at least a 17.5 percent discount off their standard rates, and the service touts discounts of 60 percent to 75 percent because it offers administrative services normally handled by a law firm.

“Numerous ethical concerns are presented by both business models,” the proposed Michigan bar resolution concludes. “Although these online matching services do not call themselves lawyer referral services, the functional characteristics of a referral service are embedded in both business models.”

 

 

Should I become a Lawyer?

Should I become a lawyer? Or are lawyers themselves becoming extinct?

The first question is one that I have been struggling with.  The second question is one that George Bellas asked me when I began working for him this past summer.

I first met George a few years ago at a “business” lunch with my father and my grandfather. I usually work with my family during the summers and these one to two hour lunches were common.  There was business discussed but not for that entire time.  At the end of this  particular meal, George paid.  I was astounded.  Usually during these types of lunches, we would pay.  When I brought this up, my father laughed.  He explained to me that our lunch would show up on an invoice down the line anyhow.[1]  And that’s how I was introduced to the beauty of billable hours.

During this lunch, the conversation drifted to my plans after I finished school.  For background, I am an Economics and Drama major at a small liberal arts school in Ohio.  I have a passion for my Drama major but an even higher passion for living comfortably.  I didn’t love Economics but it was nice having some background in useful skills.  However, I made up my mind that I wasn’t going into banking.  My father, a lawyer who has no clients, suggested law school to me so I told George that maybe law School was the next step.

Without missing a beat, George told me, “No – don’t go to law school no matter what you do.  Don’t become a lawyer whatever you do.  Run the other way!”  George explained to me that he believes lawyers are an endangered species.  According to George, in 25 years 99% of Lawyers would be irrelevant.  What will happen is that two people would submit documents to a computer, the computer will run the data and spit out an answer on the ruling.  I brushed this off because obviously this man with over 40 years of legal experience couldn’t possibly know what he’s talking about.

And so this summer came, and instead of working with my dad, I decided that if I was serious about law school then I need to work in a law office.  George graciously offered me a position filling in for his legal assistant during the month that she was gone.  On my first day, George gave me the same spiel.

“I’m going to convince you to not become a lawyer this summer” George explained. He also asked me why I wanted to become a lawyer, a question to which I didn’t have a good answer.

He then reminded me that the world of law is becoming extinct, computers will take over etc. This time I didn’t brush him off. Instead, I put both of my majors to use this summer in tackling George’s question to me and his claims about the profession of law.

Now, with less than two weeks before I return to school and about month until I take the LSAT, I have answers to both George’s claims and his question.

So, is the profession of Lawyer extinct?  Short answer: no.  Long answer: well, as it currently exists, yes.  Putting on my economist cap, I looked at the effect that technology has had on certain professions.  Take, for example, people who work in transportation.  Before the invention of the engine, those who worked in transportation rode horses.  Then the car was invented. What happened to those in transportation? They still worked in transportation but they drove cars instead of riding horses. I believe the same will prove to for the legal profession.

I had to learn a hard lesson about lawyers my first week, one that I knew deep down but never wanted to admit: Law is boring. For every “Objection!” yelled in court, there are hours and hours of reading, filing, re-filing and re-reading. I learned this because George had me do all that boring stuff.  And this is where I got to thinking about how the profession will change, and if it will go away.  While writing and re-writing briefs and motions and then filing and re-filing those same motions, I thought about how hard it must have been before electronic filing. You must have had to go to the court to file something, wait to hear if it was rejected, and once it was, re-write and go back to the court. That sounds awful and inefficient.

The same holds true for the research phase of a case. Before there were computers and legal search engines, you had to go to a library and spend hours looking for one document that could help. Now, from the comfort of your desk, you can type in the keywords you’re looking for and the computer will give you a whole bunch of documents that could be relevant. This system is not perfected, I’m not sure it’s really that available in the first place, but I can foresee it happening in the future. The car in function was the horse, just more efficient. And the people driving it remained the same.

So do I think the profession is going extinct? No. I think it is going to become better, honestly. You can accomplish so much more in such shorter periods of time. There will be less lawyers required, but, a person still has to tell the computers what to do. The computers won’t do all the work of lawyering themselves.  Down the line, there will be self-driving cars but for many years people won’t trust a self-driving car to drive them just as people won’t trust a computer to handle their private and legal matters.

This brings me to the next question: why do I want to become a lawyer?  People may start trusting self-driving cars but there is something human about being a lawyer. It requires one on one time taken to understand how and why someone did something. A computer can do the what but not the why. And it never will.

It is the same reason why I didn’t want to become a banker, why I approached law in the first place. I didn’t want to be a faceless cog making someone somewhere else richer. I want to do something that I can feel like I did. If that means a small claims case over $200 (in which the filing fees ended up being more than the claim being sued for itself), then so be it. I can rest easier knowing that I helped someone I know make $200 than someone I don’t know make $10,000.

This summer, the thing that I loved most was talking to potential clients. It is a classic paralegal task, but I reveled in receiving an email about calling a new potential client. Most of the time, they wanted someone to talk to, and I was that someone. I remember one specific incident, a person was concerned about losing their job. I assured them that I couldn’t do anything for them, just pass along their situation to one of the attorneys, but this person still thanked me for helping them.  They explained that just having me listen, hearing their side of the story, was help alone. And after that phone call, I felt like I actually did something that morning. Even when a motion I filed got approved, I felt good knowing I was the one who got it approved.

I have friends with very impressive internships this summer with brand names you would recognize, and yet their work will never see the light of day.  Even though these internships look great on paper, I couldn’t help but think that they really didn’t accomplish anything this summer.  And I feel like I did.

Granted, years down the line I will probably advise a bright eyed kid like myself to run away, but for now I’m going to give this lawyering thing a try.

                                                                                                ~ Jacob Skolnik, Future Lawyer

[1] BTW – George did not bill for that meal.

5 Technology Trends That Will Impact Business, Practice of Law

How will emerging technology trends like artificial intelligence, virtual reality, data verification, “frictionless” technology designs and the skills and capabilities required for the “Internet of thinking” reshape the landscape for small businesses – and the practice of law?

A report from Accenture titled “Accenture Technology Vision 2018” lays out these trends and delves into how they will disrupt the business landscape generally over the next few years, and a Forbes magazine interview of Michael Biltz, managing director of Accenture Technology Vision and a co-author of the report, provided a nice summary of his insights.

The impact of artificial intelligence on businesses and their customers is one such potentially disruptive trend.  Biltz told Forbes contributor Steve Olenski, who conducted the Q-and-A, that AI systems will need to be “taught” societal norms like fairness and transparency, as well as the ability to learn from mistakes, a responsibility that needs to be shared by tech experts, marketers and others in business leadership.

The Accenture report and Forbes Q-and-A also discuss virtual and augmented reality, and how they remove distance among people, information and experiences, providing businesses the ability to tap expertise from anywhere in the world in any skill area.  The report mentions that BMW provides people the ability to get “inside” one of its cars through augmented reality, for example.

Businesses that have become more data-driven need to lock down the accuracy of that data and ensure that it doesn’t become manipulated and biased in a way that distorts insights and decision-making. Accenture’s report discusses how AI helps to detect fraud as well as inadvertent errors in areas like duplicate expenses and corporate policy violations.

 

Businesses also need to strike “frictionless” technology-based partnerships to continue growing, which means they need to replace their legacy systems and redesign themselves with new digital ecosystems based around “microservices architectures,” Accenture says. This is an approach using a “suite of tools like application programming interfaces (APIs), containers and cloud to break applications into simple, discrete services,” the report says.

Lastly, the Accenture report and Forbes Q-and-A note that businesses will need to add crucial skills and capabilities to their workforce to bring these changes about, which the report refers to as “the Internet of thinking.”  This leads to intelligent solutions like “improving traffic flows in smart cities, telemedicine that continuously analyzes a patient’s condition, and disaster analysis that prevents oil field catastrophes before they start,” the report says.

Moving forward in these five areas will require a fundamental shift in leadership approach and capabilities, Biltz told Forbes.  New leadership will need to ensure that companies not only have the right technology but are using it in the right way to embed the company, product or service in their customers’ lives. “It’s less about using technology to sell a product and more about using a suite of technologies that enables a company to partner with consumers on a daily basis to help them achieve their personal goals,” Biltz said.  “That could be about saving for college or feeding a family on a budget.”

The practice of law has always been the last industry to adapt to changes in business practices and technology.   Recently, law schools are only now beginning to understand the importance of technology to the practice and are finally training lawyers in tech skills that can translate to the changing tech climate.   Lawyers will have to get out of their comfort zone with technology and adapt their practices to the evolving business landscape.

 

Will Robots take over the Practice of Law?

Robots in the Practice of Law?

Nearly half of all jobs in the United States could be performed by robot employees within the next two decades, according to report by PwC, with the effects varying by industry and job category.  Artificial intelligence provides a rapid way to analyze data and identify trends, but AI currently offers little of the creative thinking or originality required in most areas of the law.

The use of AI in the law dates to 1999, when Jay Leib and Dan Roth created “Discovery Cracker,” a tool that helped lawyers manage electronic documents for litigation in an age when they increasingly were sifting through terabytes of data instead of mountains of paper. The pair later in 2013 created NexLP, which uses predictive coding—in which a computer searches documents for conceptual information (not just keyboards) to determine which ones are and are not useful to a case—to substantially reduce the time necessary for e-discovery.

Today, computers are processing information at about 10 times faster than the human brain and it is only a matter of time before computers are programmed to assess all of the other factors that go into a legal analysis.

Artificial intelligence in the legal realm has taken another step forward with the advent of IBM’s “ROSS,” touted as “the world’s first artificially intelligent attorney,” blending the voice technology of Apple’s Siri with the cognitive computer of its IBM sibling, Watson. ROSS can perform the preliminary document research needed for some cases in as little as 30 seconds.

“You ask your questions in plain English, as you would a colleague, and ROSS then reads through the entire body of law and returns a cited answer and topical readings for legislation, case law and secondary sources to get you up-to-speed quickly,” according to the website of Baker and Hostetler, which recently announced that ROSS has been “hired” to work alongside its 50 bankruptcy attorneys.

This has a number of both promising and cautionary implications for law firms and their small business clients:

  • Nearly 80 percent of Americans who currently need a lawyer cannot afford one, despite the massive number of attorneys in the U.S., but using ROSS should be able to lower costs since there will not be humans who bill hourly handling some preliminary research for cases and matters.
  • Attorneys who are currently out of work or under-employed could use AI to create a lower barrier of entry into the market by being able to offer more affordable options to their clients.
  • For now, ROSS is available only for bankruptcy and intellectual property law, and the price may be prohibitive for smaller to midsized firms.
  • The volume of work performed by AI could lead to job loss for some attorneys.
  • ROSS could level the playing field between firms of different sizes because it won’t matter as much whether a firm has one or 30 associates available to research a case.
  • Instead of leafing through dusty textbooks or clicking on hundreds of links looking for precedent or an obscure court ruling, human attorneys will be freed to focus specifically on a client’s needs and creative solutions to them as AI handles the grunt work.
  • ROSS keeps updating court rulings so that as a case is being worked on, attorneys will know about up-to-the-minute developments in the relevant area of law.
  • The technology not only narrows down results to the most relevant answers, but it translates those answers from legalese into something closer to plain English, making them more understandable for clients.

Given that artificial intelligence cannot at the present moment compete with humans in terms of creative thinking or originality, the effectiveness of a technology like ROSS in simply taking over an entire section of a law firm remains doubtful for now.

“We believe that emerging technologies like cognitive computing and other forms of machine learning can help enhance the services we deliver to our clients,” says the Chief Information Officer of the firm employing ROSS in its bankruptcy practice. “We have been using ROSS since the first days of its deployment, and we are proud to partner with a true leader in the industry as we continue to develop additional AI legal assistants.”

Artificial intelligence will continue to move forward in the legal world, although further implications going into the future remain unclear—including the impacts of robots on revelry and merriment at office holiday parties.

How should we plan to network or go to a Cubs game with ROSS?  Will ROSS ask to attend our office parties?

Is the Future of the Practice of Law in Jeopardy?

Is the Future of the Practice of Law in Jeopardy?

Technology is affecting every part of our lives and the legal world is not immune to the changing world.  The practice of law as we know it will be unrecognizable in the next decade.  Technology is the biggest threat to the legal paradigm as it currently exists.  The legal establishment is complacent and unwilling to accept its ebbing grip on the legal market.

The recent ISBA report regarding the future legal practice[1] world severely underestimates the cataclysmic, exponential changes technology will have on the paradigm of legal practice.  The legal community has turned a blind eye to technological tsunami hitting our society and affecting inside and outside the legal profession for years, even now disregarding its most potent threat staring it in the face.  In their current state, the framework of law firms and schools are sorely underprepared to deal with the tsunami of technological changes and the non-legal alternatives it has created.

Within the lifetime of this year’s newly sworn attorneys, automation will radically change the legal profession. This may sound extreme, but once the dots are connected, anyone can see the domino effect on the legal structure.  For instance, self-driving cars are a not-so-distant reality. The idea of not having to drive yourself to the office seems like a dream, but in reality it will dramatically change the practice.  If vehicles are completely controlled by a computer, human error will be removed from driving, resulting in near eradication of accidents.  Of course, accidents will occur, even with autonomous cars.  However, when these accidents occur, will lawyers have the technological competence to interpret the computers that drive the vehicles?  Accidents involving autonomous cars will create a plethora of new legal issues and standards lawyers must be prepared to address.

In 2005 alone, 35% of the 26,950 civil cases that reached disposition stemmed from motor vehicle collisions across the nation.[2]  This seems insignificant, until compared to the 7.4 million civil cases filed around the nation in the same year.[3]  If the claims filed are representative of the cases that reached disposition, roughly 2.5 million claims caused by motor vehicles reached an out of court resolution, settlement or otherwise.  The harsh reality is that accidents create work for attorneys. Although the shift to autonomous cars will be gradual, it is obvious the lawsuits arising from accidents will decrease towards non-existence.

Autonomous cars will cripple the existence of solo-practitioners and big law firms alike.  With lack of accidents, the need for auto insurance will become  obsolete. The purpose of auto insurance is to cover the driver from any damages they may cause while operating a vehicle. If vehicles are operated by computers, the driver has no liability, and no reason to purchase auto insurance. If auto insurance is no longer needed, auto insurance companies’ revenue will plummet.  These companies will either adapt to the change, providing coverage for self-driving vehicles at a highly-reduced rate, or cease to exist.  Regardless, there is one clear outcome for attorneys employed by insurance companies: their jobs are in jeopardy. With less income, insurance companies will be less willing to employ big law firms for representation. Insurance companies may not be able to afford in-house counsel, eliminating the position entirely.

A decrease in accidents will also cause a decrease of injuries requiring hospitalization. When there are less patients in the hospital, one can assume a proportional reduction of medical malpractice claims will occur. Just like the insurance industry, attorneys on either side of medical malpractice claims will suffer from technological advances.

The effect of automation is not limited to the civil arena.  Cars that are self-driving cannot violate traffic laws, notwithstanding maintenance issues such as a dead brake light.  A computer cannot be inebriated, which will virtually eliminate DUIs.  Additionally, if there are no traffic violations, there will be less arrest resulting from routine traffic stops, lowering the case load of public defenders, and in turn, reducing the amount of employed public defenders. Fewer accidents means less work for au
to body shops and a change in the auto insurance business.

Is technology really a threat?

Non-legal for-profit companies like LegalZoom and Avvo have been around for decades.  These businesses provide do-it-yourself guides for a variety of legal actions, easily accessible and competitively priced.  By paying a small fee, LegalZoom provides its customers with questionnaires, using the answer to fill out and file the required legal forms for the requested service.  Additionally, it provides a year of unlimited attorney consultations, with an option to keep these services for a monthly fee.  Recognizing consumers desire convenience and price transparency, LegalZoom assisted 1 million customers in the first 10 years of its creation in 2001.  Since then, LegalZoom has assisted another 2.5 million customers in 7 years, and that number will only continue to grow in the state of the current legal paradigm.  This flat-fee pricing is arguably the biggest draw to these types of technological services.

Unfortunately, these for-profit companies are not the only threat to the legal community.  In New York and London, DoNotPay.co.uk assists users with a “robot-lawyer” chatbot.  Through a series of questions, the chatbot determines if an appeal is possible, and if so, guides users through the appeal process.  In the 21 months from it’s creation, DoNotPay has taken on 250,000 cases, winning 160,000, giving the program a 64% success rate.  This sophisticated program, which provides a simple process for appeals, was created by 19-year-old college student.   An individual with no legal training created a simple step-by-step online guide to traffic tickets.  This traffic ticket “robot” gives a clear warning to the legal field:  Adapt or Die.  The reason these services are such a threat to the legal community is their pricing.  These easily accessible sites provide flat fees and a well-defined service.  Customers know the exact price for what they are paying.

The opposite is known for the legal field where the adage “a lawyer’s stock in trade is his time” has governed our fee structure since Abraham Lincoln rode the circuit in the 1850’s.  Lawyers need to bill hours to make money, and thus strive to have more hours at the expense of efficiency. This common knowledge, combined with a general public lawyer stigma, causes consumers to be uncomfortable not knowing the actual price of legal counsel until a matter is resolved.   The billable-hour mentality prevents law firms from adapting to the changes of technology.  Sacrificing efficiency for profit is hurting the legal field.  Lawyers have known that technology can threaten the practice since the early 2000’s.  It was possible for a firm to automate a 65 page lease template, which generated leases in a mere 15 minutes, as opposed to the 4 hours it would take to generate manually.  The project was scrapped because based on the billable-hour model, the revenue expectations would be cut in half.[4]  By refusing to incorporate this technology, lawyers are willingly losing clients to non-legal companies.

Technology is leading to the downfall of the billable hours framework and is establishing a flat-fee structure.  Technology will automate or replace many of the traditional, billable functions performed by lawyers.  Some technology has become accepted within the legal field, particularly with document review and e-discovery.  With globalization of work, work usually done by junior associate and paralegals is being outsourced to companies in different countries for a fraction of the cost.

Is the legal job market still stagnant?

The legal field has yet to recover from the Great Recession in 2008, nearly a decade later.  Due to the escalating need for sophisticated legal representation prior to 2008, legal firms structured themselves to handle prodigious amounts of work while simultaneously training sophisticate business lawyers.  Post 2008, the need for representation plummeted, and firms have attempted to adapt, “reducing the number or entry-level lawyers, turning the traditional pyramid structure into a diamond with many senior associates and nonequity partners composing the broad middle.”  Unfortunately, “the short-term needs of established law firms to generate higher revenue and profits to retain the firms’ biggest rainmakers are at odds with long-term needs to invest in a more sustainable business model tied to the changing demands of its clients.” [5]While the industry attempts to shed the training costs of entry-level lawyers, it will eventually produce as shortage of mid level attorneys and higher labor costs to stave off unwanted attrition.

Despite law school enrollment and graduate numbers falling, the available jobs for new attorneys has decreased.  Law school enrollment in 2016 has decreased from 5% from the class of 2015.  The graduating class of 2016 dropped 9.2% from the previous years numbers.  In addition, so did the number of entry level legal jobs, dropping 8.6%.  Although the ABA reports a climbing employment rate of 86.7% for the classes of 2014 and 2015, only 62.4% of 2015 graduates and 64.1% of 2014 graduates obtained employment that required Bar passage.[6] [7] For those 83,816 graduates, only 53,000 were employed in positions that requires passage of a bar exam.

The 2014 OOH predicted 74,800 new lawyer jobs through 2022. Between 2014 and 2024, the agency now estimates, the number of lawyer positions will grow from 778,700 to 822,500, adding just 43,800 jobs—a plunge of 41 percent.  [8]

Although the disproportionate number of entry level jobs to recent graduates has been known for years, the disproportionality will only increase with incorporation of technology into the legal practice.  New legal technology will equivalently decimate the work load of entry level associate positions, document drafting and reviewing used to hone their skills will be outsourced to third parties or technology.  Although this will bring down the cost to consumers and increase efficiency, it will lower total billable hours available and drive down profits.

Are law schools preparing lawyers for the future?

In addition to the radically changing legal field caused by technology, law schools are stifling the job market.  Law schools have become cash cows, churning out inexperienced lawyers with crippling student loans who are as effective as a paralegal after graduation.

Foremost is the weight of the student debt most law school graduates incur.  Ten years ago, law school cost half the amount it does now.[9]  Historically, law school tuition has doubled every 10 years, roughly three times the rate of inflation.  But this is not limited to law school, because newly admitted law school students are most likely carrying over debt from undergraduate colleges which are facing the same problem.  It is not unheard of for a law school student to graduate with $250,000 of debt, a great place to start in a struggling job market.

Further, law schools do not adequately train their students in a variety of aspects that are necessary to provide effective legal representation.  Law students are not required to take courses that teach marketing or business, nor are students required to learn about practical legal practice.  Most law students don’t know how to properly fill out and file motions in court, some have never even stepped foot in a court room.  In order to gain this legal experience through law school, a student must take specific courses, sacrificing opportunities to study other areas of law.  Unfortunately, most students don’t even realize they need this practical knowledge until they have graduated.  Additionally, courses on how to market yourself or run a business, which is essentially what an attorney does, are almost non-existent.

Of course, law students may be able to gain some practical knowledge through legal externships, but many times the work is limited to drafting, document review, and research.    However, many an externship can consist of busy work, filing papers in an office.  Although these externships can help students gain practical experience, they must seek out these positions themselves.  Law schools do little more than provide information on where these externships may be sought.  Compare this placement to other professional education.  Medical students must participate in residencies where they hone their skills before beginning practice on their own.  Speech-language pathologists, or SLP, are required to participate in at least 9 months of medical “placements,” working with patients under the supervision of licensed therapists.  Specifically, in the SLP field, the schools assign each each student placement facilities.  In these fields, this practical training is required before you can receive a license to practice.  Although relatively inexperienced, this practical knowledge allows these students to have a level of competency before receiving licensure.  In the legal field there is no such requirement, many young attorneys learn on a trial-by-fire basis.  These student’s laughable experience, combined with a dismal job market, does not bode well for those who seek to practice in the legal field.

Technology is changing the legal paradigm and there is nothing that can be done to stop it.  Throughout history, technology has been adapted to innumerable industries, changing them entirely.  In the not so distant past, vehicle manufacturing was entirely changed by automation.  Technology decreased the labor costs by replacing humans with technology, making cars more affordable to consumers.  Today, technology is threating threatening the legal market in the same way.  This is not speculation; todays business giants are warning of the effect of technology.  Bill Gates, Mark Cuban and Elon Musk have recently warned of the impending displacement of human jobs from automation.  But don’t take their word for it, just ask your travel agent how their business survived technological advances.

In Summary:

The ISBA Report recognizes some of these issues, but instead of helping lawyers deal with the changing landscape, the report focuses on providing legal services to the mass of people who do not have access to legal services.   We need to start taking care of our own.  We are a trade association with selfish interests. Lawyers must showcase the value of legal expertise, differentiating ourselves from do-it-yourself websites. As as the legal paradigm shifts towards speed and efficiency, we must address the inherent clash of the billable-hour framework with the forced efficiency of technology.  To insure the existence and profitability of the legal practice, we must adapt to survive.

~ George S. Bellas (www.attorneyscreativeroundtable.com)

 

[1] https://www.isba.org/ibj/2017/01/seeingandshapingthefuture

[2] https://www.bjs.gov/content/pub/ascii/cbjtsc05.txt

[3] https://www.bjs.gov/content/pub/ascii/cbjtsc05.txt

[4] http://www.americanbar.org/publications/gp_solo/2014/may_june/how_technology_changing_­practice_law.html

[5] http://www.americanbar.org/publications/gp_solo/2014/may_june/how_technology_changing_ practice_law.html

[6]http://www.americanbar.org/content/dam/aba/administrative/legal_education_and_admissions_to_the_bar/reports/2015_law_graduate_employment_data.authcheckdam.pdf

[7] http://www.nalp.org/1216research#table1

[8] http://taxprof.typepad.com/taxprof_blog/2016/01/government-cuts-projection-of-2014-2024-lawyer-jobs-by-41-16k-lawyer-jobs-for-37k-law-grads-each-yea.html

[9] http://www.americanbar.org/content/dam/aba/administrative/legal_education_and_admissions_to_the_bar/statistics/ls_tuition.authcheckdam.pdf