By Thomas D. Begley, Jr., CELA A Virginia State Bar Association appointed a study committee on the future of the practice of law. Perhaps New Jersey should do the same. A draft copy of the final report is interesting reading. The committee identified a number of external forces affecting the practice of law:
• Advances in technology;
• Increasing competition from non-lawyers;
• Generational pressures as Baby Boomers begin to transition to Millennials;
• Client dissatisfaction with the billable hour;
• Increased in-sourcing of legal services by corporate clients; and
• Accelerated globalization of legal services.
Serious efforts are now underway to develop artificial intelligence for computers. IBM’s Watson, a computer with artificial intelligence, is a well-known example. Any information-intensive industry, including the legal profession, is ripe for Watson’s talents. IBM began moving into the legal marketplace in 2015. The son of Watson was called “Ross, the super intelligent attorney.” Ross can predict the outcome of court cases, assess legal precedents, and suggest readings to prepare for cases. Baker Hostetler has agreed to license Ross for use as a “legal assistant” in its bankruptcy, restructuring, and creditors’ rights practice. Ross will replace many lawyers. Lawyers will not need to do legal research when they can just ask Ross. Some lawyers will be irreplaceable because of who or what they know, their expertise and “custom” law including negotiating, strategic planning, litigation skills, etc. Forty seven percent of lawyers polled by Altman & Weil agreed that within five to ten years paralegals could be replaced by artificial intelligence, 35% said first-year associate work would be replaced, and 19.5% indicated that intelligent systems would be able to handle work done by third-year associates in that timeframe.
Hackers have breached systems in government and private industry at an alarming rate and downloaded significant amounts of confidential data. Law firms now realize that a skilled hacker can succeed in attacking their data. The new mantra is to identify assets that need to be protected. Protect, Detect, Respond, and Recover. Large law firms have the resources to spend on very sophisticated cybersecurity. For smaller firms, the de facto standard is the National Institute of Standards and Technology (NIST) Cybersecurity Framework. Law firms may self-certify that they are compliant or, if desired or required by a third party, engage an independent third-party auditor. Larger firms usually choose to be certified under ISO 27001 from the International Organization for Standardization (ISO).
Non-Lawyer Legal Service Providers
Today there are a multitude of non-lawyer service providers. The best known are Avvo, RocketLawyer, and LegaIZoom. In the last two years, 1,094 non-lawyer firms have started up. LegalZoom claims that in the next four to five years it will have 30,000 to 50,000 lawyers working for it. They work the same way as Uber drivers. Avvo offers a 15-minute consultation with a laV1,yer for $39. Avvo has the Avvo Legal Services program utilizing a network of private lawyers from which a consumer may select a participating lawyer. The consumer selects the lawyer and receives services for a fixed fee. Their lawyers will review legal documents including business contracts, uncontested divorces, and citizenship applications. Avvo collects a flat fee, which it retains until the lawyer completes the work, then deposits the lawyer’s share in the lawyer’s trust account, retaining a portion of the fee for itself. Avvo also has a “Frequently Asked Legal Questions” archive containing over 10,000 questions that have been answered by lawyers. Access is free. Companies like Avvo and LegalZoom operate much the same as Uber in that they rely on a network of independent providers who are available “on call.” The online company links the provider and the consumer and takes a fee for making the connection. It would seem that participating lawyers violate Rules of Professional Ethics prohibiting sharing fees with non-lawyers and on paying referral fees to non-lawyers.
While lawyers used to rely on word-of-mouth and services such as Martindale Hubble to build reputations, Google and Avvo now allow clients and former clients to post online reviews of their lawyers. Should rules prohibiting sharing of legal fees with non-lawyers and paying non-lawyers for referrals be modified in the Internet age? A number of states have challenged LegalZoom without success. If nonlegal companies are providing legal services, then the legal profession must adapt by convincing consumers that they add value over the non-legal providers, must learn how to market that value, must demonstrate that they can provide high quality and faster services in an affordable manner, and the Supreme Courts of the various states must exam how the Bar regulates ownership of practices and what practices will look like in the future.
The Internet and social media are becoming more important means of lawyer advertising. Most law firms have a presence on Facebook, Twitter and Linkedln. How will this new form of advertising affect lawyers who want to advertise certifications or case results? Disclaimers are often required, but how is this done on Twitter, which only allows 140 characters per tweet? This issue must be addressed by our Supreme Court.
Access to Justice
Studies show that up to 80% of civil legal needs of the poor and up to 60% of the needs of middle income persons remain unmet. Funding for legal aid for the indigent has been substantially reduced, IOLTA revenue has decreased, and the cost of private legal representation has increased. Over 50% of potential clients who request legal assistance from legal aid are turned away due to lack of resources.
Pro bono representation is also declining significantly. Can access to justice be improved by accessing better use of technology and unbundling lawyer services?
Some jurisdictions are initiating programs for delivery of limited legal services by persons who are not attorneys. These include legal document preparers, selecting and completing real estate closing documents, family law, and document preparation in such areas as uncontested divorces, bankruptcies and wills. Utah has created a paralegal practitioner steering committee to study whether paralegals should be permitted to independently represent clients in matters involving family law, residential evictions, and debt collection without being supervised by a lawyer. An argument can be made that permitting non-lawyer limited legal service providers will adversely affect solo and small firm practices.
Alternative Business Structures
The American Bar Association has been considering multidisciplinary practices (MDPs) for almost 20 years. Under an MDP a firm could be owned by lawyers and non-lawyers, and non-lawyers could participate in the delivery of law-related services or simply be passive investors in firms that deliver legal services. In the United Kingdom and Australia, these firms are held to the same ethical requirements as law firms. Both the lawyer and the firm can be subject to discipline. By contrast, in the United States, in most states, the lawyer can be disciplined for unprofessional conduct but the firm cannot. The District of Columbia has permitted MDPs since 1991; however, very few firms have adopted this form of practice. There is little evidence in DC as to the effect of these firms on the issues facing the future of the practice of law.