So what happens next?

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As the year winds down and alternative fee arrangements become more widespread among lawyers, I’m finding myself doing something curious: I’m being nice to the billable hour. Not defending it, exactly — others are happy to do that — but being more nuanced in my criticism and even citing examples of billing relationships where it makes sense to price by time. This from someone who, in his days as a magazine editor, once published a cover story titled “Time’s up: counting down the billable hour.” There’s a lot more evidence of hourly billing’s demise today than there was five years ago when I ran that story, yet apparently I’m now the soul of caution.

And I’m not the only one: at a time when those of us who champion innovation in law practice management should be leaping and shouting that the long-expected day of liberation is at hand, I’m getting a palpable sense out there that, you know, maybe this isn’t the actual revolution quite yet. Part of this might be the fear we experience (felt as hope by many inside the profession) that the tsunami of change we’ve been announcing for the last 12 to 18 months is, in fact, simply a rogue wave or two. Part of it might be that quiet terror experienced by anyone at the threshold of a long-awaited goal that something is going to jump out of nowhere and take away all the gains you’ve made. And who knows, part of it might be that realization, just as you’re about to vanquish a longstanding but suddenly diminished enemy, that your foe really wasn’t as terrible as you thought it was.

But there’s a further possibility, one that occurred to me after reading an article by Jonah Lehrer in a recent New Yorker titled “The truth wears off” (subscription required; summary here). The article documents a baffling and disturbing recent trend in science: scientific results decline over time, both in magnitude and frequency, in everything from drug trials to particle physics. Many explanations were advanced in the article, but one of the most persuasive is the pernicious effect of publishing. Everyone wants to see their hypothesis proved and thereby receive a career-making publication in a respected scientific journal, so researchers (even honest ones) allow their judgment to be clouded and “see” results that aren’t there or aren’t as strong as they’d like to believe. It’s not that “the truth wears off” — it’s that the “truth” was never as true as it was first believed to be.

I wonder whether we’re not a little guilty of this ourselves in the legal innovation community. 2010 was the year that the mainstream legal media and even the wider business press caught up to what the blawgosphere had been saying (especially since the financial crisis): the watershed event that we’d long anticipated has finally happened, and nothing will ever be the same in this marketplace again. But the truth behind the shift was always more complicated than just “the recession” — the emergence of LPOs, the advance of technology, the rise of sophisticated pricing options, the continuing decline of lawyers’ aura of expertise, and the effect of generational evolution among both lawyers and clients figured into the mix too. And the last time I checked, the AmLaw 200 had not been reduced to piles of rubble in downtown cores — and anyway, the AmLaw 200 and its equivalents elsewhere in the common-law world represent a tiny fraction of a legal marketplace that is still far more consumer- than corporate-focused.

The buying and selling of legal services has always been a vastly complicated marketplace that only appeared simple from inside the protective shell of the legal profession. If there’s one thing we can say with certainty about what happened in 201o, it’s that that shell has cracked. Lawyers in law firms are no longer the sole option for legal service purchasers and they never will be again. But that is almost the only thing we can say with certainty. The legal marketplace is in immense flux, and it would be foolish to make table-pounding predictions about what will happen next: there are too many variables, too many players, too many elements in motion. Law firm lawyers could storm a comeback and assert themselves as the dominant providers in a new, fragmented, online-delivery market; they could also disappear beneath the waves.

What I want to remind everyone in this market — what I want to remind myself — is that we’re at the start of this voyage, not the end of it, and nobody owns a reliable map. I know where I think we’re headed: multiple service providers, including law firms, virtual lawyer networks, LPOs, and automated systems; a few gigantic global firms and legions of smaller, streamlined, regional niche firms; the long-term resurgence of the sole practitioner; the end of lawyer regulation of the legal services market; variable quality of and lower prices for those services; and lower incomes for all but a handful of lawyers. I have good reason to think all these things, which I’ll happily expound upon for you over a drink or at a lectern. But things changed fast this year, and I’m betting they’ll change even faster through this second decade of the 21st century.

This time last year, I wrote: “Years from now, we’ll look back on 2009 as the year the legal market began to change; but we’ll look back on 2010 as the year lawyers began to respond.” By and large, I’d say lawyers did a pretty decent job responding, from AFAs to outsourcing to rethinking legal talent; but the marketplace’s rate of change accelerated, leaving us relatively farther behind. I think we’ll look back on 2011 as the year the profession’s walls really came tumbling down and new competitors began to assert themselves, aggressively, in multiple sectors at once. But I emphasize again: these are still very early days, and there are developments coming that no one can foresee. Amazon buying Lexis-Nexis? Google buying LegalZoom? Goldman Sachs buying equity in a global law firm? You can’t dismiss any black swan scenario anymore.

No matter how you feel about change in the profession — whether you hope for it or fear it — watch what’s going on, listen to other points of view, accept information that might not fit your hypothesis, and be ready to adapt your beliefs and your approach. And above all, be ready to move on very short notice. If you think the last few years have been crazy, I really think you ain’t see nothing yet.

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2 Responses to “So what happens next?”

  1. John Gillies

    Jordan, your reflections remind me of the quote attributed to Bill Gates (http://www.great-quotes.com/quote/867565, for example) that “We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten.”

    Ten years from now, we’re perhaps not going to be analyzing these changes on a year-by-year basis; it’s clear, however, that after the events of September 2008, a lot of things started to change at a far more rapid rate than was the case before. But a lot of those changes were the result of seeds that had been planted previously. So, not a sharp break from the past but an acceleration of trends that may have been discernible before.

    I am, nonetheless, eager to see what the landscape will look like two years hence!

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