Professor Richard Susskind caused a stir at the ABA TechShow in Chicago in April with his thoughts on the way the future looks for the legal profession. The context was the launch of his latest book, The End of Lawyers?, that comforting question mark flagging the possibility that the profession may survive in some form if it adapts.
I wrote about Susskind’s book when parts of it were trailed in the Times (see Richard Susskind and the End of Lawyers) and I will not repeat what I said there about the potential for change in the litigation support market. Nor will I attempt an overview of Susskind’s wider propositions, which are readily available elsewhere.
I have been listening to a webcast of a discussion between Richard Susskind and Mark Harding, Group General Counsel of Barclays, and focusing on a couple of points which seem to me to both imminent as opposed to speculative (although Susskind’s speculations tend to become the norm rather quickly), and relevant to the management of litigation and other areas which involve the handling of electronic documents. Litigation is the one area which (as I noted in my earlier article) has defied Susskind’s original predictions because (he told me when I asked him three years ago) the clients had not put pressure on the lawyers to adopt technology.
That may be true – may have been true, at least – in the specific sense that law firms have not been confronted by clients demanding to know about their use of technology. What they have seen instead is resistance to costs generally and the drying up of litigation. A few big firms handle electronic documents electronically and the big clients use them, in part because of that skill. The rest print off the e-mails and Word files, read them by eye, photocopy them and type up lists of them. Some, no doubt, have billed for their time doing this, won their cases, been paid, and made a profit. Most fail to achieve at least one of these fairly basic objectives, most usually the first – they do not record or recover what it actually costs them to work like this.
The opening section of the webcast predicts that recession will alter for ever the way in which law firms plan ahead – the traditional ambition of aiming to do much the same as last year but a bit more profitably is simply inadequate. The issue is not just that there is less work around and greater client pressure to reduce fees but that the old way of working and of charging for work does not add up any more to a viable business model.
I give in summary form the points which struck me as having relevance to those who practice litigation and who would hope to carry on doing so:
Research and Development
Lawyers are one of the few businesses which do not invest in R&D, that is, in laying out time and resources to find better ways of delivering what the clients need (I use “need” deliberately, as opposed to “want”, because if you merely react to what clients demand you are inevitably always one step behind).
Just accept for the moment that bringing or defending litigation or handling regulatory demands involves the retrieval and review of masses of electronic documents. When will you find out how to do this? On the hoof, as it were, when the case is on your desk? Is that when you will start to find out how to handle and manage electronic disclosure? Perhaps you will be “lucky” and never get such a case, or “lucky” and get through it without mishap. The alternative is to invest in the skills and develop the knowledge so that you can actually compete proactively for the work.
Clients taking the lead
Mark Harding put forward the idea that clients – he meant big ones like Barclays but the idea scales downwards – have a kind of duty to drive change derived from their power to influence how the law firms work for them. There is nothing idealistic about this. Litigation (to stick to my own field) is a vital part of the commercial armoury. A company which cannot bring or defend claims economically is failing in its duties to its shareholders, and its strategy is being driven by external forces which it ought to be able to control – there are plenty of other forces which it cannot control, but this should not be one of them.
At the moment, a handful of law firms have a virtual monopoly of the cases which are document-heavy. The obverse of a firm’s ability to make itself fit to compete for big work (my previous point) is the ability of clients to broaden the range of firms who might work for them by making their expectations clear.
Taking work in-house and client combines
Another area explored in the webcast is the scope for corporations to help themselves either by simply taking more of the lawyers’ work in house or by combining with other companies to provide shared resources in areas where they do not compete. One such area might be a litigation support facility with skills and technology pooled between companies. One model might simply be a knowledge and project management resource which in turn outsources to litigation support suppliers the actual grunt work – the collection, data import, hosting etc – so that what goes to the lawyers is a review-ready database. A more sophisticated model might actually employ the staff and own the equipment itself.
Private equity investment in legal services
If that sounds fanciful (and I do not think it is), Richard Susskind talked of private equity investment in new forms of legal services providers – he is, he says, actually involved with one (which releases me from my vow of silence on the subject, which I had heard of from another source). This might involve something recognisable as a law firm – not, Susskind said, taking the form of a buy-out enabling partners to take early retirement but perhaps the use of a strong brand to front an organisation whose structure would be entirely different – or a completely new model which encompasses much more than the traditional imparting of advice on a one-to-one basis and which could extend to a wide range of business services.
If we have not yet seen new mixed practices of the kind authorised by the Legal Services Act 2007, then the recession is very likely to be a driver towards it. There is more potential here than merely cherry-picking lawyers whose firms sink under them.
If it is impossible to predict the form which legal services will take over the next decade, it is certainly possible to predict that the businesses which provide those services will not look like the traditional partnership. There are opportunities here, and not just for those with legal skills and qualifications. That does not undermine the value of a legal training, as Susskind is careful to point out, but the needs of businesses, quite apart from the liberating effect of the Legal Services Act, will need a new breed of player.
There is much more in the webcast which warrants your attention. Mark Harding brings more to it than merely a careful selection of prepared questions – his role at Barclays gives him an insight into what corporations need which complements Richard Susskind’s own input. Those whose firms presently offer legal services to companies of all sizes will find plenty here to chew on.