Law practice in the 21st century

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This article was first posted at Slaw on September 29th, 2006.

Earlier this month, I visited San Francisco for the first time. I’d long been fascinated by the thought of a city built on a geological time bomb, and walking its streets was quite an experience.

Everyone knows there’ll be a massive seismic rupture underneath the city someday. But San Franciscans are neither hot nor bothered by it; they go about their lives in their historic city. Their chances of being engulfed in an earthquake remain extraordinarily small, and there’s nothing they can do to prevent it anyway, so why worry?

I think you could draw a few parallels between San Francisco and the legal profession. Great forces are in motion, seismic change is in the offing, and while prosperity reigns today, ripping upheaval is inevitable. I don’t pretend for a moment that lawyers are threatened with annihilation – so long as there’s law, there’ll be lawyers – but after the strike comes, we’ll have trouble recognizing the landscape.

You could trace the first tremor back to December 2004 in London. Thanks to the report of David Clementi, unprecedented changes are underway in the United Kingdom’s legal profession. In May, the UK government introduced a draft Legal Services Bill, and just this week, issued its response to amendments recommended in July by a parliamentary committee that consulted with lawyers.

In a nutshell, under the new legislation, complaints about lawyers will be overseen by a new Legal Services Board and Office for Legal Complaints; Alternative Business Structures (perhaps more familiar to us as MDPs) would allow lawyers to go into business with non-lawyers; and both non-lawyer ownership of law firms and public trading of shares in law firms would be permissible. (By the way, three Australian states have already taken lawyer discipline out of lawyers’ hands, and New Jersey now allows law firms to own other firms as subsidiaries.)

The Clementi Report was initially triggered by the Law Society of England & Wales’ perceived inability to investigate complaints against lawyers in a timely or effective manner. That has not been a problem in Canada, and I doubt it’ll become one. But the wide-ranging legal reform that followed had a far greater ambit — it was designed to render the delivery of legal services consumer-friendly. “[T]he rules governing the legal professions,” said the Fair Trade Office, “should be fully subject to competition law, and unjustified restrictions on competition should be removed.”

There’s no reason that similar sentiments wouldn’t fly here – and in fact, the Commissioner of Competition has already flown them. The Commissioner gave a speech in May 2006 that referenced, among other things, tests proposed in the European Commission’s February 2004 Report on Competition in the Professions to determine whether professions are governing themselves in the public interest. We’ll be examining this issue more closely in the January 2007 issue of National, but I would imagine the Commissioner might be interested that a governing body of lawyers would like to regulate other groups offering legal services. The US Federal Trade Commission and Department of Justice warned the ABA almost five years ago to be careful not to define “the practice of law” so restrictively that antitrust agencies become alarmed.

So: in England, wholesale and perhaps precedent-setting changes are being made to how law firms operate and how lawyers are governed. Governments elsewhere are taking a keen interest in lawyers’ efforts to decide what constitutes the practice of law. And in Canada, we have a demographic groundswell to deal with: the imminent decline in solo and small-firm lawyers practising in rural Canada.

As reports from both Ontario and B.C. make clear, lawyers outside Canada’s urban centers are older than average and are not being replaced by younger lawyers graduating from law school. As non-urban Canada empties of lawyers, the continuing demand for legal services will be met by a dwindling supply of lawyers to meet them. And a not-unlikely outcome of that combination could be a potential deregulation of legal services delivery — someone has to provide legal services to these people, governments might reason, and if lawyers can’t manage it, we’ll let someone else do it.

None of this takes into account the many other roiling forces that are affecting the profession: the growing commoditization of some legal services, the trend towards outsourcing and offshoring of legal services in a flat world, the rise of Generation Y and the gradual diminishment of Boomer power, and an increasingly dissatisfied client base. Take all this together, and you can see why some people think that the next ten or twenty years could see tremendous upheaval in how we practise law.

As I said earlier this week, predictions of great change are almost always premature – futurists are rarely asked back for encore performances. But invariably, the change does eventually arrive, usually when no one’s looking for it. It might be wise to keep one ear to the ground.

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