The imaginary normal

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The joke goes like this: “The optimist says the glass is half-full. The pessimist says it’s half-empty. The engineer says it’s twice the required capacity.”

So what does the lawyer say when looking at the glass? In many cases, it’s: “Why hasn’t anyone refilled my drink yet?”

I speak to more lawyers and legal professionals every day who really get it — who understand how much is changing and who are preparing to adjust and respond. I can’t tell you how encouraging that is to me.

But I’m still taken aback by the number of lawyers and legal professionals who cannot or will not recognize what’s happening — who look at the market and see only what they want to see, interpreting a storm of the century as merely a passing squall.

For many such lawyers, I’ve come to conclude, the underlying cause of that delusion is a sense of entitlement. They’re entitled to respect for their position, steady work from clients, protection from unqualified competition, privilege at the top of the pyramid, stability in an unstable world.

And why should they think different? It’s all they’ve ever known and it’s rewarded them handsomely, so of course they believe it’s the natural order of things. They believe it’s normal, and they’re waiting impatiently for it to return.

Here’s what I want them to understand: It’s not normal. It never was.

The legal market hasn’t really been a “market,” in classical terms, at all. It’s been artificially constrained for decades by asymmetric knowledge, inadequate technology, limited competition, undifferentiated providers, seller-driven pricing, and most damaging of all, the absence of disinterested regulators. Accordingly, buyers have long suffered from weak bargaining positions and low self-confidence. Why, when you stop and think about it, would we ever have supposed that was normal?

The legal profession has been living inside a bubble for decades. And like all bubbles, those on the inside thrived disproportionate to the overall benefits they were delivering, while resentment and frustration continually grew on the outside. And we had no clue, because we figured that was how it was meant to be.

But now that’s changing. Consumers are gaining more knowledge and more choice, giving them more power. The bubble is leaking. The traditional mechanics of healthy markets, by which sellers truly compete with each other to gain the business of well-informed buyers on the buyers’ terms, are reasserting themselves. A legal marketplace that has always been tilted in lawyers’ favour is rebalancing itself.

This isn’t a market going crazy. It’s a market going normal. And it’s not going back.

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4 Responses to “The imaginary normal”

  1. Rob Harvie

    This blog is an amazing piece of advertising and promotion of your consulting business. Like how buying the right beer will turn your dull, sad life into something suddenly bright and amazing.

    But, at its core, this blog is just that. Selling us beer and potato chips. Making broad promises and predictions to either lure or scare customers into buying your wares.

    Yes – the law is changing, no doubt. Technology has become intricately connected to what we do – our clients come to our offices with basic knowledge of their legal issues long before meeting us, and have become (properly) quite more open about discussing their legal costs and their alternatives.

    But the “bubble” that you suggest has burst has started to create another bubble – a bubble of consumers who have been lead down the garden path that traditional legal counsel have become an anachronism.

    That we simply need to allow more paralegal corporate providers to provide quicker, cheaper service and lawyers will go the way of the dodo bird.

    And government has become complicit – with “Access to Justice” initiatives that allow more people to find their way into court on their own, or, perhaps, with an “agent” in hand, only to find once they get there that the cost of ignorance can be daunting.

    And the effort (and there is an effort) to minimize the reliance on lawyers is failing.

    Abysmally.

    Because, ironically enough, as the government expands the scope of their involvement in our lives, and expands the “entitlement” that citizens have between each other – the rules become more and more complex, convoluted, and that means…

    More need for legal assistance counsel. Not less.

    And, frankly, I’m shocked at your talk about “asymmetric knowledge” and “the absence of disinterested regulators”.

    Of course our market is based upon “asymmetric knowledge”.. just like when I hire a plumber to fix my sink, or a dentist to attend to my teeth.. they have knowledge that I don’t – and because of that, I’m willing to pay them. So pardon me for finding that concept more than a little amusing.

    And as for “the absence of disinterested regulators”, well, well…

    You are a former lawyer.

    You appear to do business with lawyers.

    And yet – you insult and frankly, betray an ignorance of the very profession that feeds you. Or at least you pretend such ignorance.

    Your derision of our profession would be less annoying if it came from a position of ignorance. But the fact that you are a lawyer yourself makes your implicit criticism grotesquely offensive. Point me to another profession where it’s members agree to dig into their own pockets to repay for the fraud or theft of fellow professionals.

    Accountants? Doctors? Hardly.

    Our profession is changing, as are all professions.. and the way we market our service and deliver our service will either adapt, or we will fail – but the implication that we’ve enjoyed some manufactured “market” based upon an implication that we have hood-winked the population into over-paying for what we do is insulting.

    And, really, not very impressive for someone who claims to be worthy of being paid by those same lawyers for advice.

  2. Jordan Furlong

    Well, okay. Thanks for that. I’ll save the response to the ad hominem portion of the comments to the end.

    Of course legal knowledge is asymmetric and has been since the dawn of the profession. But that’s my point: knowledge of the law is a rapidly diminishing asset for lawyers to sell to clients or to use as the basis for transactions of value. No group of customers has perfect market knowledge, of course, but the law has been especially notable for the low level of subject awareness of its customers.

    More to the point, however, I don’t go to my dentist or my plumber or my lawyer simply for information, I go to them to get a specific service rendered. But if my dentist or my plumber doesn’t do a good job, I’ll know it because my teeth will hurt or my pipes will leak. If my lawyer doesn’t do a good job, I may not find out about it for a long time, if at all. Of course lawyers haven’t deliberately set it up that way; but nonetheless, the effect at the end of the day is that the legal market is unusually difficult and confusing for its customers, and that inevitably works to lawyers’ advantage.

    As for “the absence of disinterested regulators,” I stand by that contention, firmly. Lawyers regulate the legal profession, which is as it should be; I hope it stays that way for a long time. But lawyers also regulate the legal marketplace; we decide who is allowed to offer legal services to the public and who is not.

    And remarkably enough, throughout the history of legal regulation, everyone who’s not a lawyer has turned out to be insufficiently competent or trustworthy to offer such services, and accordingly has been ruled to be engaged in the unauthorized practice of law. Most lawyers seem to think that’s perfectly normal; most people outside the law do not. They see one group of providers essentially attempting to regulate competitors out of business, and they can hardly be blamed for drawing that conclusion.

    It’s not a question of whether lawyers are sufficiently pure of heart to place the public interest ahead of their professional interest — and I’ve met enough unapologetically protectionist lawyers to doubt that anyway. It’s simply a question of the reasonable apprehension of bias. How can lawyers reasonably be expected to objectively decide whether we should allow more people to come in and compete for our business?

    The answer is: we can’t. We may insist that we can separate our own interests from those of clients and society generally, but we won’t be believed. And we shouldn’t be. We have a real, financial stake in the outcome. It has taken court rulings or government intervention to allow people like retired police officers or paralegals to access the market after lawyers have barred the door. We are not disinterested when it comes to deciding who should be allowed to sell legal services, and that alone should disqualify us from being able to regulate this marketplace.

    I’m a lawyer. (Current, not former, thanks.) Lawyers are my friends and lawyers are in my family. I think this is a great profession and there are days when I think it really is a noble calling. But that does not excuse our sins. That does not excuse our active participation in helping create a legal market — the one we regulate — that is realistically accessible only by the incorporated, the rich, or (less and less all the time) the poor. That does not excuse the arrogance that routinely tells the self-represented, “Sure, go ahead and handle this yourself or hire some unregulated schmuck; you’ll end up having to come back to me and pay twice as much to have me fix the mess you made.” It doesn’t excuse our complacency.

    And that brings me to my last point. You can believe what you like; but I don’t write this blog to build business for myself. (If I did, you think I’d be writing stuff like this about my customers?) I write this blog because I’m trying to tell lawyers what I genuinely believe: that a storm is imminent, and that our profession is too important to too many people to be indulged or protected or allowed to ignore a rapidly changing world. I’m trying to speak truth, as best as I see it, to a profession that wields power, enjoys prestige, resists change, and hates (as you’ve ably demonstrated) to be criticized.

    I’m telling lawyers, as the comment above yours said, what we don’t want to hear, because I believe it needs to be heard. Listen, or don’t.

  3. Bradley Wright

    Hi Jordan,
    One, there are great swaths of the law that absolutely would not be improved by some of the changes you are trumpeting. You seem to think that lawyers have an unfair monopoly, but lawyers are not a monopoly as that term is generally used. For example, in my main area, real estate law, there are 7,500 lawyers practising real estate law in Ontario, about 400 in my city alone, against whom I have to compete for business. A “monopoly” featuring 7,500 competitors in one jurisdiction is not a monopoly contrary to the public interest. A monopoly is having just four billion-dollar companies controlling 87% of the conveyancing business as is the case in the US. In Ontario, despite the existence of the so-called but misnamed monopoly, we have 7,500 competitors. In the US, where no laws protect lawyers (and by extension the public), there are essentially four competitors. Which system do you think produces the greater benefit to the public and to the integrity of the registry system? The competition among real estate lawyers in Ontario is ferocious and is why legal fees for real estate work have not budged against inflation in the 28 years I have been practising. In jurisdictions where large corporations have killed off the real estate lawyers (partly by claiming in their naked self-interest that all they want to do is be able to “compete” with lawyers), competition is hugely reduced as the lawyers are quickly loss-leadered into extinction. Lawyers in the US have told me the process takes less than nine months. Once the lawyers are gone (and have moved into other areas of law such as litigation where, desperate for work, they sue McDonalds for spilling coffee in your own lap and doctors for hangnails thereby driving up the cost of medical services to asinine, tragic levels), the market is then run by a handful of large corporations to the immeasurably huge detriment and horrendous cost to the public. Be careful what you wish for. If you want more “competition” in Ontario than the very high level that currently exists in such areas as real estate law, you will produce an environment that will destroy competition and cost the public astronomically more than what the lawyers ever charged (and get far inferior service in the bargain). I can demonstrate to you that a title insurance regime versus a lawyer and survey based regime is, far from cheaper than lawyers and surveyors, about 14 times more expensive to the public than a lawyer and survey regime while simultaneously delivering a vastly inferior product.
    Two, almost all commentators, yourself included, continue to make the mistake of lumping small firm solicitors work in with the access to justice problem in the barrister world. There is no access to solicitors problem. We are in every community and the fees we charge from start to finish on the file are in the few hundred dollar range – very affordable, and usually considerably less than what other players (e.g., realtors, mortgage brokers, and so on) are charging, especially when measured against the time and effort devoted versus the charges for that time and effort.
    Three, there is an access to justice problem affecting barrister work. That much is obvious. Litigation is very time consuming and time is money. Those with money are better able to spend the money to pay for the time it takes to win (and winning is what the clients care about) and that hurts those without the same resources. That has not changed since the last Ice Age. The main reason litigation is so expensive (the fees charged from start to finish in litigation files are far, far higher than the per file fees of small firm solicitors) is because it takes so long to move from opening the file to resolving it. That is mainly caused, not by the barristers, but by, in part, clients who will not agree to an early and reasonable resolution, and by, mainly, the justice system itself, which was created by governments specifically to discourage the public from continuing along the continuum from issuing the Claim to receiving the judgment from the Court of Appeal. The government wants to keep trials and appeals to a minimum because the government has to pay for the system that leads to trials and appeals – the judges, the court staff, the pensions, the physical plants. That is why there are so many hurdles – discoveries, mandatory mediations, pre-trials – before you finally get to the trials. Magna Carta, signed in 1215, contains about 63 clauses. Some are preamble and administrative, but many, many of the clauses limit the power of the king. Clause 18, however, says, in effect, “Bad King John, would you please, please, please send more judges out on assizes so that we can get our disputes resolved in a timely and cost-efficient way?” That was 797 years ago. Governments have always made, and always will make, it difficult and expensive to resolve disputes.
    Four, there are solutions to the access to justice problem on the barrister side of the bar (and I could share them with you another day), but they should not include such silly, horrifically expensive, short-sighted, essentially clueless notions as opening up solicitors work to corporations who will then engineer the death of the solicitors in their own greedy interests to the great detriment of the public. Not for nothing did the State of California accurately describe the American title insurance industry as “a dysfunctional industry in which the public pays too much”. Not for nothing did the Supreme Court of Iowa accurately describe the American title insurance industry as “an invidious form of business”.
    I could go for the length of a heavy book, but I will simply ask you to please stop misreading the legal services environment, please stop extolling simplistic “solutions” (that, in reality, will harm, not benefit, the public), and please stop lumping solicitors in with the barrister problems.
    Cheers,
    Brad

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