Disruption in the Legal Profession
The centuries old legal profession is under pressure from a number of sources. Firstly, technology is radically changing the value proposition of lawyers. The global demand is also shifting as clients ask that the billing model change. Not only that, but regulation, oversight and management are changing as well. Dealing with disruption in the legal profession is a daunting task. However, nimble lawyers can change with the times and profit from the new requirements.
First of all, technology is creating an absolute revolution in the legal industry. The most prominent change is in the area of discovery. Countless entry level lawyers have spent late nights browsing through paper documents to fmd critical information. Today, eDiscovery is revolutionizing this service by allowing a computer to fmd the crucial information in seconds. Similarly, artificial intelligence (AI) tools are allowing lawyers to use algorithms to correct legal documents and identify key terms, rights and information. These tasks all used to be performed over many hours at high billing rates. Lastly, new productivity tools that use software to manage cases and analyze evidence is paving the way for more efficient service.
At the same time as these advances in technology, clients are asking for cut backs in hourly billing rates and unending fees. Today, clients know that lawyers are able to perform their work in much less time with tools like eDiscovery, so they cannot justify the enormous number of hours to pursue a case. They are demanding that their legal team optimize the number of hours by using the best technology, or they will choose a firm that does.
Clients are also just tired of retaining a lawyer without have a firm idea of what they will actually pay and have no way to verify that the work was actually done for as many hours as the lawyer says. For that reason, they are asking for pre-defined rates for the entire case or at least on a weekly or monthly basis. This is especially the case in growing global markets like Asia where there is no tradition of billing by the hour. Law firms that are expanding to these overseas locations cannot expect to bill in the same way that they bill in London or New York because clients will not accept it.
Lastly, some rules, regulations and industry standards are changing across the globe. In the US, the high cost of law school versus the mediocre legal job market has led to a massive drop in the number of applications. Bar associations are now experimenting with allowing two years instead of three to take the bar exam. Or they are allowing more, low-cost online courses to complete a degree. Some law schools that cannot keep up are closing down due to high fixed costs and lack of student applications.
In other parts of the world, the ownership regulations are changing. In Australia, law firms may be owned by outside stockholders and run by professional managers. There are even publicly listed law firms.
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