Features - A Reshuffling of the Legal ProfessionBy Jerry Lawson, Published on February 1, 2002
The “Dot-Com Bubble” is a good illustration of the first part of Scientist-Author-Futurist Arthur C. Clark’s observation that there’s an overwhelming tendency to overestimate how much can be accomplished in the short range, and underestimate how much can be accomplished over the long range. Thousands of entrepreneurs and investors overestimated the short term changes that the Internet would cause. Today the inverse error is in vogue. Most people underestimate the significance of the long range changes that the Internet will bring about. In the following excerpt from the new ABA Law Practice Management Section Publishing book Flying Solo: A Survival Guide for the Solo Lawyer (3rd Ed. 2001) Jerry Lawson explains why the Internet revolution is not over, it is merely begun - and how lawyers, solo and otherwise can position themselves to take advantage of it.
Stockbrokers, travel agents, insurance brokers and other professions have experienced disruptions due to the Internet. Some doctors have begun to complain about similar though so far lesser effects on their profession. The Internet has potential to cause disruption for the legal profession because lawyers are a classic type of middleman, subject to disintermediation by computers or competitors using computers. Sole practitioners, like other lawyers, need to consider the possibility of an Internet-induced restructuring in the legal profession over the next decade. Restructuring has been slower coming to the legal profession than some others, probably because our work is somewhat more complex than those that have so far been hit hardest, but the Internet revolution is in its infancy, not its maturity. There may be fewer lawyers in the future, and the lawyers who are left may not all be doing the same types of work that they are doing now. Several factors that make a shakeout more likely are:
- The concept known as “information wants to be free.”
- The coming development and widespread deployment of computerized “expert systems” dealing with legal subjects.
- Changes in the public’s attitude toward lawyers.
The phrase “information wants to be free” initially sounds like a hippie political manifesto, but it is actually a statement of economic principle, describing the way money flows on a computer network. While it can be expensive and difficult to produce high quality information initially, once this has been accomplished, the Internet makes it easy and inexpensive to distribute it. The marginal cost of making additional copies and distributing them to anyone who wants one is negligible. This means that once one person in the world with access to the Internet decides to distribute some information at no charge, the effective cost of that information then tends to approach zero.
Many law firms and law-related businesses are already taking advantage of the “information wants to be free” concept. They use their Web sites to draw potential clients by distributing at little or no cost information and services that conventional paper-based lawyers routinely sell. They give the information or services away in hope of attracting consumer attention (called “mindshare”). This will enable them to sell ancillary services or information. Performed intelligently, this strategy definitely works. However, a long-range side effect of this competitive strategy may be to reduce the size of the overall market for paid legal services. Why buy a cow if you can get all the milk you need for free?
Expert systems are sophisticated interactive computer databases that can give the appearance of using human intelligence to analyze problems, including legal problems. They are created by having human experts compile and structure their knowledge in a particular area in a way that it a complex decision tree. Computer programmers then structure the expert knowledge into an interactive computer system. One of the first examples is the Trusts and Estates section of the LawOnTheWeb.com Web site, http://www.lawontheweb.com. This is a web-based expansion and improvement of the highly successful desktop software, Wealth Transfer Planning.
Such systems can displace lawyers in two ways:
1. By reducing the number of lawyers needed to interview clients, research issues and draft routine documents.
Jnana Technologies Corporation, http://www.jnana.com, has developed two leading examples. Their “Virtual Ad Advisor” provides legal advice on advertising law to non-lawyer businessmen. General Electric uses Jnana’s “Virtual Patent Advisor” to reduce its legal expenses and improve the quality of legal opinions.
2. By being so sophisticated that clients can interact with them directly, possibly but not necessarily with a human lawyer monitoring the result and/or being available for additional help if needed.
MyLawyer.com, http://www.mylawyer.com is a good example. It features sophisticated consumer-law oriented expert systems that support online document assembly.
It would be tempting to assume that legal services provided by computers are inevitably of lower quality than legal services provided by human lawyers. That assumption would be a mistake. Computers do the things they do best better than human beings can. Human lawyers will provide what Richard Susskind, author of Transforming the Law: Essays on Technology, Justice and the Legal Marketplace (Oxford University Press 2000), calls “traditional high end consultative legal services,” and will frequently be used to supplement legal guidance delivered by computers, but deploying high quality expert systems will probably reduce the number of human lawyers needed in many areas of law. The Jnana Web site lists some advantages of the Virtual Patent Advisor (VPA):
First, it saves time. "What used to take a month or more is now reduced to less than an hour" reports Robert Lampe, Senior Patent Counsel at General Electric Power Systems. Second, products can move to market faster because less elapsed time is required for clearances. Third, the VPA lets patent counsel focus on higher value work, letting the lawyers spend more time on the truly difficult clearances. And fourth, it encourages early and frequent inquiries by inventors because it is easy to use and can be consulted without human legal assistance.
The legal profession is not going to disappear in the foreseeable future, but even if these trends reduced the need for lawyers by only 20% over the next decade, thousands of lawyers would face problems.
A New Environment
Would state bar disciplinary authorities be able to stop the deployment of online legal service providers and expert systems? In Texas, the Unauthorized Practice of Law Committee brought UPL proceedings against the manufacturers of the interactive Quicken Family Lawyer software in 1999. The UPL Committee won in court.
Did consumer advocates praise the bar’s success in protecting the public from the threat of shoddy legal advice delivered by computer? Quite the contrary. Consumer advocates and newspaper editorials bitterly attacked the bar for what they perceived as an abusive attempt to freeze out competitors who provided a worthy alternative to hiring a human lawyer. There was widespread public condemnation of the bar, and lawyers in general. The Texas legislature promptly amended the state’s unauthorized practice of law statute. In Texas, legal services delivered by computer are no longer considered to be the unauthorized practice of law.
Given the widespread public hostility toward lawyers, which certain politicians regularly reinforce through lawyer bashing, and the “Hands Off The Net” attitude that has become an article of faith in both major political parties, the Texas result is probably not an aberration. It is merely one of the first examples of a phenomenon I predicted in my book, The Complete Internet Handbook for Lawyers (ABA LPMS 1999): “[T]he promise of drastic reductions in the price of high-quality, reliable legal advice may make legislative or regulatory restrictions on the development of [Internet-based legal service providers] politically impractical.”
How Should Lawyers React?
Even if Internet-based competitors do have the effect anticipated, all is not gloom and doom. While a restructuring of the legal profession could cause problems for some lawyers, it would open up new opportunities for others. The Internet-induced efficiencies in the trucking industry described at the beginning of this chapter [not included in this excerpt] should eventually result in fewer truckers, but since the remaining truckers will be more productive, they will most likely be better paid. We will probably see a similar effect in the legal profession. The lawyers who survive as lawyers will be more efficient, and probably make more money.
How can lawyers prepare for these possible changes? This is new territory. No lawyers now alive have been through any changes like this before. There is no standard manual of time-tested wisdom to guide us. Keep this in mind as you review the following suggestions:
Try to position your practice so that you are providing value to your clients that can’t be easily replaced by a computer, or a competitor using a computer.
This may be the most important suggestion. It is general by necessity, because there are so many different types of clients and legal practice. Adapt the concept to your own practice.
Avoid the trap of telling yourself, “No problem. I already provide that type of value. I have nothing to worry about.” In many cases, this will not be true. For example, trial lawyers may think they are immune. It’s true that computers will not be trying cases in our courts any time soon, but as insurers and other large businesses that frequently get sued force lawyers who want to represent them to cut costs by using sophisticated intranet sites like TrialNet, http://www.trialnet.com to reduce research and other trial preparation expenses, the number of defense lawyers needed may drop. If many of the displaced lawyers try to move into plaintiff-oriented practices, the disruption may spread beyond the defense bar.
Take advantage of technology, especially the Internet, to reduce your overhead and provide a higher level of client service.
Here are a few of the many ways in which this can be done:
Learn to use free or inexpensive research sources on the Internet. Superior factual research can lead to winning cases more often. Online research may also let you reduce the money you spend on expensive online services or investigators. One San Francisco private investigations firm has already attributed a 40% reduction in revenue to former clients now using the Internet for much of their factual research.
Give clients the option to fill out intake forms at your Web site. This can reduce your expenses, as you no longer need to have your staff interview the clients or decipher their handwriting. To maximize the efficiencies, look for Web site software that interfaces with your case management and document assembly software. This technique is known as “outsourcing to the customer.” In addition to saving money, this can improve quality. The Direct Marketing Association reports that errors drop by 50% when customer orders are completed over the Internet, instead of by telephone. Finally, many clients prefer online forms, since this technique lets them fill out the form at the time that is most convenient for them, and in their home, where they are more likely to have ready access to their records, thus further improving the quality.
Use your Web site not just as a marketing tool, but as a way of providing clients with basic information at their convenience. This lets you devote more of your face to face meeting time to developing a rapport with the client and delivering high value customized advice that justifies a higher billing rate. As Greg Siskind has noted, “An educated client is the best client.”
Make yourself more attractive to clients by making yourself as convenient to do business with as possible.
In the Internet business, this is known as making yourself “sticky.” Make working with you so easy that clients are reluctant to leave you for someone else.
E-mail is an obvious example. More and more people are coming to prefer it to paper letters, faxes and the telephone for most communications. Clients who feel this way will consider your using e-mail to be an improvement in the quality of service provided.
E-mail is just the beginning, though. Use instant messaging, chat, voice over IP, Web sites with your contact information, maps, lawyer biographies, and FAQs or articles on basic legal questions, online calendars, conferencing software, intranet sites for particular clients and whatever else your clients will find makes it more convenient to do business with you.
Use the Internet to develop a reputation as a top expert in one or more niche markets, and help you attract new clients with problems in those areas.
Look for narrow legal markets and focus on them, positioning yourself as a leading expert. As pointed out by pioneering Internet lawyer Lance Rose, “Brand names create geography on the Internet.” Try to make yourself a brand name in one or more marketable legal specialties. On the Internet, reputation and “mindshare,” or public awareness, have significant value.
Static Web sites are far from being the be-all and end-all of Internet marketing, Look for chances to build and profit from virtual communities. Use e-mail mailing lists, or interactive Web-based discussion groups, or both to facilitate interactive communications with groups of human beings with common interests, and in the process develop or enhance your reputation as an expert.
Use technology, especially the Internet, to target the high end of the market.
At a CLE program in 1995, when the Internet was still very new to lawyers, I suggested to a fellow panelist that he establish a Web site to market his practice. He was skeptical, pointing out that he was a solo lawyer whose practice included a lot of court appointed criminal defense work, and that most of his target market did not use the Internet. The idea I gave him then is one that could be beneficially heeded by many lawyers today:
“Maybe you should be aiming for a higher class of criminal.”
A Web site with the right focus could facilitate a move from a largely indigent client base into the more lucrative white collar criminal defense market. Look for opportunities to reposition your own practice.
Greg Siskind uses his Web site (http://www.visalaw.com) for exactly this type of upscale approach. His Web site attracts so many prospective clients that it allows him to be selective. While he does more than his share of pro bono work, most of the paying clients he accepts are not members of the “huddled masses” class lyrically saluted on the Statue of Liberty, but well educated clients with high earning capacity.
Tap the latent market for legal services.
In his book Transforming the Law: Essays on Technology, Justice and the Legal Marketplace (Oxford University Press 2000), the respected British lawyer Richard Susskind points out that a great many people who could benefit by hiring lawyers and could afford to hire lawyers, fail to do so, for a variety of reasons, including fear of running up a big bill, dislike of hourly rates, inconvenience and fear of prolonging or intensifying a dispute. Susskind calls this group “the latent market for legal services.” Studies of consumers in the United States confirm Susskind’s hypothesis.
Many of the new online legal services delivery businesses like USLaw.com and MyLawyer.com are making this group a key part of their initial target market. These businesses are formidable competitors, but that doesn’t mean that solo lawyers should necessarily abandon this pool of potential clients without a fight. Ask yourself, what, if anything, can I do to make myself more attractive to this group? Here are a few possible approaches to get you started:
http://www.chicagotribune.com/news/nationworld/chi-0112270311dec27.story?coll=chi%2Dnewsnationworld%2Dhedortwo, the Internet and related technologies will make some people big winners and some people big losers–and lawyers will be found in both groups.
Solo lawyers, like the rest of the legal profession, face the prospect of technology-induced turbulence over the next decade and beyond. The lawyers who thrive will not be those who stubbornly try to cling to the old ways of doing business, but those who embrace the coming changes, using new technology, including the Internet, to provide a higher level of client service, benefit from the new efficiencies, and seize new opportunities.
Editor's Note:This article is Reproduced with Permission, All Rights Reserved. This information of any portion thereof may not be copied or disseminated in any form or by any means or downloaded or stored in an electronic database or retrieval system without the express written consent of the American Bar Association. This article was published as Chapter 48, "Solo Practitioners and the Net," by Jerry Lawson, in Flying Solo Lawyer (3rd edition).