Canada’s Big Bang

Earlier this fall, I gave a presentation to a Canadian law society that described the key trends in the current legal marketplace and forecast where they’re likely to lead in future. As part of the presentation, we discussed a series of hypothetical future developments that would require the profession’s regulators to respond. One of them went like this:

A new legal services company, GlobalLaw Inc., has risen suddenly and dramatically. Based in London, it has taken advantage of the non-lawyer equity provisions of the Legal Services Act to collect massive amounts of capital from investment banks. With this money, GlobalLaw has bought law firms and hired lawyers worldwide, created a huge and sophisticated online service infrastructure, and marketed itself aggressively in multiple jurisdictions. GlobalLaw has now announced plans to buy mid-sized firms in Vancouver, Calgary, Toronto and Montreal simultaneously, and to re-brand and operate them all as GlobalLaw offices. What do you do?

That scenario stopped being hypothetical yesterday, with the bombshell announcement by UK-based global law firm Norton Rose that it was merging with South Africa’s Deneys Reitz and Canada’s Ogilvy Renault. You can read the details in any number of places, including The American Lawyer, LegalWeek, the WSJ Law Blog, the Financial Post, and The Globe & Mail — a range of international coverage that underlines the fact that this, as Joe Biden might say, is a big freakin’ deal.

Norton Rose started the day with close to 2,000 lawyers in 31 cities on three continents, whereas Deneys and Ogilvy together total about 600 attorneys in eight cities, so this looks more like strategic acquisitions as part of a global expansion than a merger of near-equals. I can’t speak to the South African side of this deal, and I’m not even that interested in the logic of the moves from the firms’ respective strategic perspectives (though it sure looks sound to me). What I’m most interested in today is the impact of this development on Canada’s legal marketplace, which I think will be extraordinary.

Some context is necessary, especially if you’re not from around these parts: nothing like this has happened in the Canadian legal marketplace before. Baker & McKenzie was the first “global” firm to come to Canada, but its Toronto office opened in 1962, virtually the Mesozoic Era in law firm history. In 1999, Tory Tory DesLauriers & Binnington consummated Canada’s first (and to date only) cross-border merger with New York’s Haythe & Curley, a union that took something of a star-crossed turn for both firms. In 2008, pulses quickened briefly on a report, immediately denied by all parties, that DLA Piper was in talks with national giant Fasken Martineau DuMoulin. And that’s pretty much the entire notable history of foreign forays into the Canadian legal market, until yesterday.

So you can understand why much of Canada’s legal profession looked like a poleaxed mule when this news broke. Before yesterday, the largest law firm in Canada was Borden Ladner Gervais with 753 lawyers; with this merger, Norton Rose will have more than three times that number. The Canadian firm with the most overseas offices was Macleod Dixon with four, followed by Faskens with three; Norton Rose will soon have nearly 35 offices outside Canada. This is like Gulliver buying a house in Lilliput; or, to borrow a metaphor from the US-Canada relationship, like the elephant moving in next to the mice. This is the world arriving on your doorstep without calling ahead — all the talk about globalization suddenly turned into the reality of a legal behemoth setting up shop down the street.

Norton Rose OR (as the new firm will be officially known) seems likely to affect the Canadian marketplace in a number of ways. Obviously, with a critical mass of lawyers in cities across Europe, Asia, the Middle East and Australasia, Norton Rose will be a serious contender to pick up Canadian multinational clients (or the Canadian work of multinationals with head offices elsewhere). That platform will be equally attractive to potential lateral hires at other Canadian firms who’ll want to know whether there are wider horizons than those they’re currently flying. Aside from possible client and partner losses, incumbent Canadian firms will also be faced with new management pressures: as the Legal Post‘s Mitch Kowalksi points out, Norton Rose brings unprecedented financial transparency (the firm makes its annual report public) as well as superior knowledge management and online services to Canada. All of this changes the competitive calculus of a law firm marketplace that traditionally has behaved more like a cozy fraternity of genteel rivals.

I can see two other Canadian impacts flowing from this merger. The first is the fact that a precedent for global mergers has now been set, and precedent is both a reassuring and a galvanizing strategic force: nothing motivates a law firm more than removing the fear of going first while simultaneously creating the fear of going last. Will we see a stampede of Canadian firms rushing into global mergers? Not likely. But a lot of executive committees will meet to talk about what this merger means for them and whether there are similar overseas opportunities that their firms must now consider. There’s been a sense here that there are too many large firms in Canada for a population and a capital base this size: the Potash Corporation of Saskatchewan notwithstanding, this country is not and isn’t likely to become the world’s corporate headquarters. Some people think that if the law of conflicts of interest were loosened, a wave of national mergers would soon follow. This is a marketplace more than ready for change and consolidation.

But here’s something else to think about: Norton Rose is on a major expansion tear. Last June, the firm made headlines when it merged with Australia’s well-regarded Deacons. Deneys Reitz itself was Chambers’ African Law Firm of the Year in 2006 and maintains a strong commercial law presence in the continent’s biggest economy. (It’s beyond debate that Norton Rose must be looking very hard at potential US merger partners as we speak.) Ogilvy Renault is not a “national” firm as we understand the term — it has little presence west of Toronto (though its Calgary office, opened last year, has grown to eight lawyers), and it still houses more lawyers in Quebec’s capital (Quebec City) than in Canada’s (Ottawa). But it represents global companies like Bombardier, SNC Lavalin and Royal Bank of Canada, and is widely considered a “blue chip” firm within the Canadian profession.

All of which is to say, each of these three firms brought serious credentials to the table, yet each agreed to give up their names and identities to join another firm. So we’re learning that global platform matters, and global capacity matters, and maybe above all, global brand matters — we might very well be on our way to the Legal Transformation Project‘s suggested outcome of a future filled with megafirms and boutiques.

But we might also keep this in mind: the Alternative Business Structure (ABS) provisions of the UK’s Legal Services Act come into effect next fall, and any law firm aiming to be a global powerhouse would want to consider all available options to finance and pursue such a strategy. And I do know this: any global law firm with an office in Canada and with access to global private capital would turn this country’s legal profession upside down, from acquiring talent to investing in online infrastructure to marketing its brand to forcing law societies across Canada to look hard at regulations surrounding non-lawyer investment in or ownership of law firms.

This is all extremely early days yet, and the merger won’t even take effect until next June. But my feeling is that something very big happened in this country’s legal profession yesterday. The sudden deregulation of financial markets in England on October 27, 1986, has come to be called the “Big Bang,” and the coming introduction of ABSs in England & Wales on October 6, 2011, has already been anointed as the legal profession’s own explosion. Well, that was one very loud sound we heard across Canada on November 15, 2010.

Destroying your own business

Well before Blockbuster Video actually filed for bankruptcy protection earlier this fall, The Onion produced a prescient video about a museum tour based on the movie rental chain: Historic ‘Blockbuster’ Store Offers Glimpse Of How Movies Were Rented In The Past. One dazzled visitor remarks: “It’s like stepping into a time machine … it’s hard to believe people used to live this way.” The whole feature is well worth the two minutes, but the sting comes at the end, as the anchor adds: “Blockbuster joins a growing number of historical sites, including Buffalo, New York’s re-creation of a Virgin Records music store and Iowa City’s Borders Bookstore Museum.”

The only thing more striking than the dismantling of these former powerhouse franchises is the speed at which they’re coming apart. Blockbuster, Virgin and Borders were corporate giants with global reach and massive brand strength. Yet today, when you think of videos, music and books, you first think of Netflix, iTunes and Amazon, companies that launched in 2001, 1999 and 1995, respectively. How did the mighty fall so swiftly?

James Surowiecki asks that very question in a recent New Yorker column, citing not just Blockbuster but other former “category killers” like Home Depot, Toys R Us, and Circuit City, companies that dominated the “big-box” developments that spread like wildfire throughout suburbia over the last few decades. These stores were also giants in their day, but today each is either struggling badly in the new economy or has already sunk beneath the waves. Surowiecki puts his finger on the problem in three paragraphs that every law firm leader should read and take to heart:

The problem — in Blockbuster’s case, at least — was that the very features that people thought were strengths turned out to be weaknesses. Blockbuster’s huge investment, both literally and psychologically, in traditional stores made it slow to recognize the Web’s importance: in 2002, it was still calling the Net a “niche” market. And it wasn’t just the Net. Blockbuster was late on everything — online rentals, Redbox-style kiosks, streaming video.

There was a time when customers had few alternatives, so they tolerated the chain’s limited stock, exorbitant late fees … and absence of good advice about what to watch. But, once Netflix came along, it became clear that you could have tremendous variety, keep movies as long as you liked, and, thanks to the Netflix recommendation engine, actually get some serviceable advice. (Places like Netflix and Amazon have demonstrated the great irony that computer algorithms can provide a more personalized and engaging customer experience than many physical stores.) …

Why didn’t Blockbuster evolve more quickly? In part, it was because of what you could call the “internal constituency” problem: the company was full of people who had been there when bricks-and-mortar stores were hugely profitable, and who couldn’t believe that those days were gone for good. Blockbuster treated its thousands of stores as if they were a protective moat, when in fact they were the business equivalent of the Maginot Line.

What happened to Blockbuster and Virgin and Circuit City is now starting to happen to law firms, for all the same reasons. Firms have invested heavily in legacy costs like long-term leases of downtown offices with rich interiors, and have resolutely refused to take the internet seriously as a service delivery vehicle. They have thrived from the absence of client choice, but will suffer as new competitors offer more options and, ironically, more personalized service. Firms aren’t evolving because they can’t evolve: the lawyers within these firms are so invested financially and emotionally in the old structure that they can’t believe things could change.

It’s difficult to see how the outcome for our profession will be any different, because like Blockbuster, we aren’t even trying to adapt. Almost all the innovation in the legal marketplace is now taking place outside of law firms or on their periphery. Contract lawyers work from home, legal process outsourcers work from Mumbai or Manila, LegalZoom works entirely on the internet — these entities are the drivers of change today. The happy result for clients is a fractured marketplace in which they’ll have their choice of which providers to provide which services in which priority.

If you want to see what the client of the future looks like, in fact, take a good look at Colt Technology Services, a UK-based Europe-wide IT company profiled this week in The Lawyer. Colt’s GC uses a combination of providers, including law firms, an offshore captive operation, contract lawyers, and Berwin Leighton Paisner’s revolutionary Lawyers On Demand service, to meet his company’s legal needs. This is an established client trend towards using a portfolio of legal providers, and law firms should be aware of it by now.

But what really concerns me is this: where is the strategic response from law firms to the revolution outside their gates? Where are the signs that firms recognize the existential threats to their marketplace position and are reacting accordingly?

Here’s an example: last month, Bloomberg BusinessWeek published a cover story about Diapers.com, a sort of Amazon.com for baby and infant products that looked to be the next evolution in online shopping. Its founders were quoted in the article as saying they’d welcome a price war with Amazon, and the article was in fact titled “What Amazon Fears Most.” This week, Amazon announced it had bought out Diapers.com for a truly stunning $545 million. That is how you handle upstart competition that threatens your market position.

So what are law firms, facing the same kind of threat, doing these days? Merging with each other, of course: mergers within the United States, within Canada and across the Atlantic, with more surely to come. Same old response, same old thinking. Where are the law firms buying out LPOs and bringing them in-house? Where are the law firms adapting the online delivery methods of startups? Where are the law firms that recognize the peril of their position and are moving to thwart, or to transform themselves into, their smaller, swifter, hungrier new rivals? They’re nowhere to be found, and that’s why the future of law firms looks a lot more like Blockbuster than Netflix.

Surowiecki concludes his article with an observation that readers of The Innovator’s Dilemma will find familiar: “Sometimes you have to destroy your business to save it.” Law firms, unfortunately for them, don’t come with self-destruct buttons.

What’s your sports department?

As both a former journalist and a recovering professional sports fan, I was intrigued by this entry at Mark Coddington’s blog about innovation in newspapers. He reports on a study that found the department within most news organizations most amenable to innovation is actually Sports. The two journalism professors who prepared the report, along with other commentators, offered a series of possible explanations for this finding:

  • Sports journalists’ frenetic pace and round-the-clock deadlines are more conducive to the web than to print.
  • Sports journalists have tended to value their readers more highly — a key attitude in adapting to the two-way nature of online news.
  • The web was practically tailor-made for the way fans want to consume information about sports.

But the number-one reason cited, one that I think has resonance for law firms as well, was this:

  • Sports departments operate outside the rest of the traditional newsroom structure.

Coddington writes: “Innovation and risk-taking usually take place in autonomous divisions within an organization, ‘and at most news organizations, the sports departments are separate beasts, often working different schedules and feeling relatively less shackled by [tradition].’ Sports have long been thought of as the newspaper’s ‘toy department,’ the place where journalists can try out new styles and strategies, and since it’s not ‘real news,’ no one will get too worked up about it. Most sportswriters still bristle at the term ‘toy department,’ but as Jeff Jarvis and John Zhu suggested, it’s easier to experiment when you’ve been cordoned off from the sections of the paper that take their mission too seriously to try anything out of the ordinary.”

I’ve tried to become a kind of innovation botanist over the past several years, figuring out why it flourishes in some environments but wilts and perishes in others. This explanation makes a lot of sense to me, especially in the legal profession. Lawyers, risk-averse and change-resistant to a fault, hardly ever sign off on wholesale change from the start; but they’re often willing enough to offer up a small section of the garden for a new kind of approach and see what grows there, so long as the potential downside is clearly defined and delimited.

When I worked for the Canadian Bar Association, for example, and we needed to introduce an innovation of some kind (moving association newsletters from print to email, for instance), I made more headway through the liberal use of “pilot projects” than with any other method. Two or three small sections would agree to run parallel print and email publications and see which the members preferred. Virtually without exception, the pilot projects succeeded, and the majority of the control group switched to the new approach ahead of schedule. It was a demonstration of how innovation and experimentation in legal organizations is tolerated at the edges, a safe distance from the business core, where “no one will get too worked up about it” — but when it succeeds, converts can follow rapidly.

I also see this in my role as chair of the College of Law Practice Management’s InnovAction Awards, which were handed out at the College’s 2010 Futures Conference last month. This year’s winner, for example, was Pro Bono Net’s LawHelp Interactive program, which helps low-income people to quickly and easily complete essential legal forms online at no charge. Moreover, we gave an InnovAction Honourable Mention to Axiom LLP, a virtual or distributed law firm, for its function outsourcing initiative. Both of these winning organizations operate on what most lawyers would call the periphery of the traditional legal marketplace — yet it’s precisely on the periphery that real progress towards better systems and better results is being made, not least because these initiatives don’t appear to threaten anyone’s established position (so far).

There’s always a caveat, of course, and in this case, it’s the problem of migrating successful innovation from the periphery to the center. One of the comments on Mark Coddington’s post makes this point: “While the ‘toy department’ rep helps make it easier for sports departments to experiment, I fear it also makes it harder to reproduce that level of experimentation in other areas of the news organization. It’s much harder to convince management to remain as hands-off for “serious” news, and when you say, ‘Well, this worked for sports,’ it’s always shot down with, ‘Yeah, but that’s just sports.’” This will sound depressingly familiar to advocates of change within law firms, who consistently run into opposition from lawyers deeply versed in the art of distinguishing precedents to suit their own purposes.

But that’s not a good enough reason to quit before you even start. Right now, within your law firm or legal organization, is a sports department just waiting for the chance to rip off the restraints and show what it can do. Maybe, if you’re lucky, they’re not even waiting, and they’re already conducting furtive experiments like publishing a practice-group blog, offering and profiting from risk-sharing fee arrangements, making use of contract lawyers and LPO services, or designing the software that will revolutionize this practice area in a year or two.

Your mission is to find these subversives and give them everything they need to succeed. Cordon off a section of the garden, provide them with a wheelbarrow full of supplies, and let them know they’re free to fail without consequence. At the same time, protect them from pressure and second-guessing by the organizational establishment. Don’t let anyone violate the Roman Rule: “The person who says it can’t be done should never interfere with the person who’s doing it.” Find your sports department, and do whatever you can to help it infiltrate your entire operation.

Can’t buy me motivation

I still remember the story told by a friend of mine who quit his job at a large national law firm. The income, of course, was great. But he had become increasingly unhappy with the work he was doing, the people he was doing it for, and the culture of the firm for which he was doing it. After a lot of internal debate and many discussions with his wife about their financial future, he finally made up his mind, secured a position in-house, and went — with some trepidation and perhaps still a touch of doubt — to have That Conversation with the practice group partner. After hearing the news, the first thing out of the partner’s mouth was: “Can we offer you more money?” There went any last doubt whether he’d made the right call.

I’ve seen this scenario repeated many times, not only in law firms but certainly with unusual frequency there. The instinct to solve a problem by throwing more money at it — or more accurately, to interpret dissatisfaction primarily as something more money can cure — emerges with remarkable ease and frequency within law firms. Hardly surprising, since virtually every internal and external metric of success for law firms, and almost every major decision about strategy and tactics, involves revenue in the here and now. Money motivates. Money galvanizes. Money is why we’re all here, why we show up every day. So if you want something done in the firm, if you want to maximize your chances of success, just add money. Not happy? Here’s more money.

Yet while this belief holds firm inside partnership meetings, and seems to constitute the philosophical foundation of a remarkable number of law firms, a somewhat different picture emerges when you step outside that hothouse environment. The American Lawyer‘s most recent associate satisfaction survey (which, by the way, recorded its lowest levels since 2004) does highlight associates’ desire for salaries to return to pre-recession levels. But as Northwestern’s Steven Harper points out, the higher-ranked firms scored very well on factors such as “relations with partners and other associates, interest in and satisfaction level of the work, training and guidance, policy on billable hours, [and] management’s openness about firm strategies and partnership chances.” Associate salary does not drive associate satisfaction; there’s more to it than money.

Move outside the law firm world altogether and the evidence becomes more compelling. A widely circulated study of multiple Gallup polls found that on average, an annual salary of $75,000 correlates with the high point of people’s “day-to-day contentment.” Salary increases beyond that point improved people’s broader satisfaction with their place in the world, but it had no effect on their daily emotional well-being. The actual figure can be debated — it would certainly be higher or lower in various cities or industries — but the fundamental takeaway is that past a certain point, compensation fails to move the needle on happiness. Throwing more money at unhappiness is a waste of good money.

Then there’s the work of Daniel Pink, whose new book Drive explores what motivates people to do their best. His TED presentation on this subject is a masterwork. He describes extensive studies showing that people desire workplaces that give or encourage autonomy over their work, mastery of their subject and higher purpose behind their efforts. And he demonstrates not only that these intrinsic motivators are more important than extrinsic motivators (including money), but also that for certain types of work, increasing monetary rewards actually reduces people’s effectiveness. What types of work? Pink describes them as “right-brain, creative, conceptual kinds of [tasks, where] the solution, if it exists at all, is surprising and non-obvious.” That describes, among other tasks, most legal work of value. Monetary rewards narrow people’s focus, which is ideal for straightforward, mechanistic tasks. For creative problems, where the solution is on the periphery, monetary motivation does more harm than good.

This all matters if your firm wants to be successful for its clients and be competitive for legal talent in the 21st century. The factors that keep lawyers satisfied and that positively affect their ability to do their jobs are changing as we speak. Law firms that continue to act as if everyone and everything has their price, and that money is the fuel that drives performance, are going to struggle to keep the best talent and deliver the best results, and they’ll wonder why.

Now, of course money plays a role in satisfaction; but in most cases, what matters to people is less how much they make and more whether they’re being treated fairly. We all like to complain about new lawyers in large firms pulling down six-figure salaries that they “don’t deserve.” You hear the same criticism of professional athletes, whose income is wildly disproportionate to their actual societal contribution. But the measure to look at isn’t the stand-alone denominator of salary, but its percentage of the overall profitability of the company or industry: when pro athletes complain, it’s because they see the overall pie growing to mammoth dimensions and they want a proportionate share. Similarly, associates know exactly how profitable their law firms are. But when they see colleagues laid off and their own workload doubled while watching multi-million-dollar partner profits grow, they start to have understandable doubts about whether the firm is dealing with them in good faith.

So compensate your lawyers fairly, in the context of their contribution and your profitability. But once you’ve done that, turn your attention to ways in which you can improve their performance, illuminate their career path, and increase opportunities for communication. Focus on intrinsic motivational drivers of the best performance and attitude. And learn to de-emphasize the role of money in your efforts to motivate and satisfy your lawyers — especially if they’ve just walked into your office for That Conversation.

John Plank joins Edge International

I’m extremely pleased to announce that another world-class consultant has opted to join the Edge International partnership! John Plank specializes in personal communications and speaking skills for managing partners, practice group leaders and trial lawyers.

In addition to providing John’s services in leadership development and executive coaching, Edge is now the exclusive provider of John’s internationally acclaimed  “Commanding Presence” program of advanced communication and presentation skills for lawyers. Customized “Commanding Presence” workshops will now be available in-house to law firms and bar associations worldwide.

A professional coach for more than 25 years, John has a Master’s degree in voice and speech and served as a director of workshops and actor training at the Stratford Shakespearean Festival. A Scot currently residing in Canada, John coaches national leaders, senior executives and professional broadcasters; he is currently performance coach for CBC Television.

You can learn more about John by consulting his biography at Edge’s website. On behalf of all Edge’s partners and friends worldwide, please join me in welcoming John Plank as a partner with Edge International!

Law as an undergraduate degree

The start of the school year is upon us. You can tell from the firestorm of written commentary in the legal press and blawgosphere about the function, fitness and future of legal education.

Fanning the flames hardest is Brent Evan Newton, an adjunct professor at the Georgetown University Law Center, who has written an article with a title that (almost literally) says it all: “Preaching What They Don’t Practice: Why Law Faculties’ Preoccupation with Impractical Scholarship and Devaluation of Practical Competencies Obstruct Reform in the Legal Academy.” Newton’s piece does not, how you say, adhere to the traditional measured tones of academic discourse. Some excerpts, courtesy of the ABA Journal:

These “impractical professors whose chief mission is to produce theoretical legal scholarship” feel indifferent towards—and sometimes outright disdain for—practicing lawyers and faculty members with a practical bent, he writes…. “Especially at law schools in the upper echelons of the U.S. News & World Report rankings, the core of the faculties seem indifferent or even hostile to the concept of law school as a professional school with the primary mission of producing competent practitioners.

But Newton’s article is just gasoline poured over an already robust conflagration. Here’s what else the last two months have produced:

  • The New York Times revealed in June that several US law schools have retroactively inflated their students’ grades, ostensibly to “help these students find work in a difficult economy,” but perhaps equally if not more so to protect their own rankings and reputation. (Personally, it’s not clear to me how a school’s reputation is enhanced by pumping up grades the way a third-rate used-car dealership rolls back odometers.)
  • The University of Michigan’s law school has started including job offers from Indian legal process outsourcing companies on its career page. Fairly or not, Above The Law does kind of capture the zeitgeist of this one: “If you go to a top ten law school and end up having to go to India to find work, your law school … should forgive all your debts and furnish you with a public apology.”
  • While demonstrating the absurdity of the US News law school rankings — Stanford could have perfect admissions standards and still not attain the #1 ranking unless it spent another $350 million on salaries and textbooks — University of Indiana law professor William Henderson delivers a hard truth: “I don’t think even one law school in the US News Tier 1 has reached even 10% of its potential to educate and solve problems.  Too many one-professor silos.  Too much ego.”

These are the signs of a legal education system in the process of breaking down, a subject I canvassed in a recent column for The Lawyers Weekly newspaper: “Law school and the risk of irrelevance.” That column in turn prompted a dynamic discussion of the subject at Legal OnRamp started by Stephanie West Allen, who posed the key question facing those of us with an interest in the future of the profession: “What is the role of law school?” Many insightful comments followed, but I was especially struck by an excellent observation by Michael Stern, a partner at Cooley Godward:

Law school is the worst of both worlds–a lousy trade school and a lousy graduate school. Law school does not prepare practitioners to practice, and lacks intellectual rigor (it’s remarkable that a discipline founded on the interpretation of texts pays virtually no formal attention to hermeneutics and only outsiders like Stanley Fish, with his background as an English professor, ever write about “theory”; few law schools offer any courses providing any historical or sociological context for the evolving role of common law in capitalist society). Three years of reading cases is the equivalent of spending three years in an English Ph.D. program doing nothing more than reading random sonnets as ahistorically as a new critic might have done in the 1950s. And the idea that graduate students are the gatekeepers for the field’s professional journals is really nuts–proof of the vacuity of most legal “scholarship.”

This is an important point. When we criticize law schools for failing to teach practical skills, we’re essentially criticizing horses for not giving milk — it’s not what they’re set up to do. Absolutely, there ought to be practice and business training for new lawyers, but it’s pretty clear at this point that the schools aren’t going to provide it. So we might as well take the stool away from underneath the horse and go look for fresh pastures, so to speak — novel and better ways for lawyers (new and not-so-new) to learn skills that serve clients (I recommend Solo Practice University in this regard, by the way).

But when we say that law schools don’t teach practice, we unconsciously assume that what they do teach is theory — and I think Michael’s observation is correct, that that isn’t actually what most of them teach at all. Law schools do provide a grounding in jurisprudence and some legal theory, but that’s mostly in first year — from then on, it’s Basics of Tax and Intro to Family Law and Criminal Procedure 101 and so forth. This isn’t theory. When you take a class in Evidence, you’re not learning the philosophical underpinnings of what can and can’t be proved. You’re learning about the very real rules of evidence that are applied in real courtrooms to real people with real consequences. You can quibble with the effectiveness of an Evidence course in terms of its success at cross-examination training — but you can’t call it theory.

Michael asserts that law is a lousy graduate school — but I think we can go farther and state that in fact, law is not a graduate program at all. We call it “graduate school” because in most cases, you need to have an undergraduate degree to get in. But the term “graduate school” also suggests academic rigour, extensive scholarship, and detailed research into a subject’s fundamental nature, usually with a major thesis or dissertation requirement. That’s not law school. Invariably, those who take a graduate degree in a particular subject have already achieved an undergraduate degree in the same subject. That’s not law school, either — law school is our first exposure to the subject. Law school is a Bachelor’s degree.

Here in Canada, at least, we’ve always recognized this. Most Canadian law degrees are LL.B.s — Bachelors of Laws — even though you usually need to have an undergrad degree before you can enroll. American schools, by contrast, grant J.D.s, and I’ve never  understood how what is basically the same degree is given the title “Juris Doctor” — in no way does a law school degree deserve the comparison to a doctoral program. But “J.D.” sounds great, so much so that several Canadian schools (including my alma mater, unfortunately) have switched the name of their degree from an LL.B. to a J.D. without making any  substantive changes to the program.

This reminds me: during my own law school tenure, many of us would hang out at the Grad House lounge. At one point, the real grad students — the Masters and Doctoral candidates — complained about all these “baccalaureates” coming into the graduates’ building and taking all the good seats. I dismissed it at the time as petty rivalry, but I now wonder whether they didn’t have a point. When you get right down to it, your average law school curriculum is basically half Intro to Law and half Bar Exam Prep. You can call that a lot of things, but you can’t call it a “graduate program” without doing some serious damage to the generally accepted meaning of the phrase.

I think it would be great to see the current J.D. or LL.B. degree reconstituted as an undergraduate degree, the same as a Bachelor of Arts or Commerce. Four years of undergraduate work would be enough to provide a healthy grounding in legal theory, legal history, aspects of justice, all the things that law schools now teach, in a mixture with Torts and Contracts and Business Associations and so forth. In fact, a four-year Law undergrad would be a terrific grounding for any number of disciplines — don’t we always tell law students that a law degree opens up vast new career horizons to them? Better yet, students in other fields could minor in Law, or even take a handful of law electives. Think of the boost that would give to legal literacy among university graduates of all kinds, and to public legal education as a result.

How would we train practicing lawyers, then? Well, schools could create an MLP degree, a Masters of Legal Practice to mirror the Masters of Business Administration. You’d require an undergraduate degree in law to ensure the student had thoroughly learned the theory and the basics, to which you would add business skills, professional responsibility training, client focus, project management, and the other hallmarks of a competent practitioner. Or the local Bar could set up a training program, perhaps as a joint venture with the private sector, perhaps funded directly from the dues of licensed members. There would be separate streams for corporate, consumer, litigation, and single-client (i.e, government and corporate department) practice, all structured in consultation with state bars and courts and accreditation authorities. This is pretty much how legal education proceeds in the UK, and they seem to have done pretty well with it.

It’s a fair question whether we could handle such a radical recalibration of the teaching of law — it may well be that we’ve gone too far and too long down the current road to go back and try something new. (Although the University of Western Ontario, following the lead of the Carnegie and Best Practices Reports for legal education reform, is hosting a Canadian Clinical Legal Education conference next month). But at the same time, it looks increasingly as if some kind of radical treatment will be prescribed for legal education sooner or later. The awkward, neither-fish-nor-fowl nature into which law schools have evolved just isn’t sustainable in a legal marketplace where everything else is now subject to intense re-evaluation.

Pam Woldow joins Edge International

It’s my tremendous pleasure to announce that Pamela H. Woldow, one of the world’s top legal consultants and an unparalleled expert in legal project management and alternative fee arrangements, has joined Edge International as our partner and general counsel.

To those of you who read this blog regularly, Pam requires no introduction: you’ve seen me reference her work and her expertise here several times over the past 2 1/2 years. But if you’re not as familiar with Pam, let me briefly sketch her accomplishments (for a complete list, please see her full biography at the Edge website):

  • Pam has served as Chief Counsel of the Pennsylvania Department of Insurance and Deputy General Counsel of Pennsylvania.
  • She has worked as Director of Litigation Management for a $2 billion public financial services company.
  • She has practised complex commercial and environmental litigation with Sidley & Austin, Duane Morris & Heckscher, and a respected environmental litigation boutique.
  • She has been designated by the American Bar Association as a “Legal Rebel” – a change catalyst leading innovation in the practice of law.
  • She has served as a leading consultant to law firms and especially to general counsel for several years, providing advice and counsel to some of the largest in-house law departments in the world.

Pam’s written work includes some of the most incisive commentary available on AFAs and project management in the legal services marketplace, and her accomplishments and observations have received much legal media attention. We couldn’t be happier to have a consultant of such magnitude, and a person of such stellar character, join our partnership.

And there’s more good news: Pam has joined the blawgosphere! Please visit her new blog At The Intersection, and read her opening post about the corner at which general counsel and managing partners meet. And as always, you can still follow Pam’s excellent Twitter feed at http://twitter.com/pwoldow. On behalf of all Edge’s partners and friends worldwide, please join me in welcoming Pam Woldow to Edge International!

Will-writing and the redefinition of “legal services”

Last month, a BBC investigative program called Panorama exposed a wide range of illegal and unethical practices by “will-writers,” advisors who help people prepare wills and who are not lawyers. One result of that broadcast could be a significant clawback of lawyer regulatory power over the legal services marketplace in the UK, with implications for the future of this marketplace globally.

Here are some detailed accounts of the Panorama broadcast and of the resulting controversy. Briefly: the program uncovered several instances of will-writers who exploited their clients through massive overcharging, shoddy workmanship, and even outright fraud. The abusive will-writers were neither lawyers nor (evidently) members in good standing of one of the professional will-writing associations that have evolved with the 2007 passage of the Legal Services Act. That statute divides legal services into “reserved legal activities,” which are exclusive to lawyers, and “legal activities,” which are not exclusive to lawyers and are not otherwise subject to specific regulation. Will-writing is not included in the former category and, therefore, is considered an unregulated activity.

In the wake of the broadcast and the public recriminations that accompanied it, the relevant authorities are now under pressure to take swift action. The Legal Services Board, the overarching regulator of all legal professionals in England & Wales, has promised to fast-track a debate and decision regarding whether will-writing should be added to the list of “reserved legal activities” and given exclusively to lawyers. (The Law Society of Scotland is already pushing such measures forward.) An interview with two officials from the Law Society of England & Wales sums up lawyers’ concerns with the current situation (which will be familiar to all advocates of lawyers’ role in legal services provision):

It is the presence of untrained and unregulated people working in the area that has led to a range of problems that can adversely affect consumers, Clarke and Roberts insist. “A lot of clients don’t understand making a will can be a complex process. They think it should be simple, but often it’s much more involved due to the presence of step-children, property and other assets in other countries and lots of other issues which are a part of modern life,” Roberts notes.

Unregulated will writers who lack legal training often fail to understand the legal complexities themselves. “One I know was going to make a will for a large estate which would have been involved, so he merely suggested everything be left to a trustee who could sort it all out as he saw fit. All solicitors are not infallible, but experienced solicitors will understand how to deal with complex estates and take account of all the eventualities so the testator’s wishes will be realised and the estate can be properly managed,” says Roberts.

You can see where all this is likely to lead: to the designation of will-writing as a reserved legal activity under the Legal Services Act. In one respect, it’s difficult to argue against this turn of events. The abuse of unsophisticated consumers, many of them elderly or impoverished, is repugnant and needs to be stopped in its tracks. Solicitors, as noted, aren’t perfect, but they come with a guarantee of education and training and they are backed by insurance funds that can reimburse clients who’ve been poorly served. Wills and estates, in many cases, are not cut-and-dried matters and they can require sophisticated advice, especially at a time of generational change when demand for estate law help will only rise.

Given all that, making will-writing a reserved legal activity seems like a no-brainer. And yet, there are good reasons for the Legal Services Board to proceed with caution here.

To begin with, it’s not entirely accurate to call will-writing an “unregulated activity.” Consumer protection laws are in force precisely to protect the buyers of commercial services that fall outside specific regulatory schemes; moreover, the last time I checked, fraud is still on the books in Britain as a criminal offence. Provisions already exist in Acts and regulations to protect people from the incompetent and unscrupulous and to prosecute such predators where necessary.

Secondly, the current absence of a specific regulatory system for will-writing doesn’t mean that the only alternatives are full lawyer control or unfettered market freedom. The Institute of Professional Willwriters, one of the recognized will-writing groups, will happily remind you that it is the only organization of its type whose Code of Practice has been approved by the Office of Fair Trading. Self-regulation by the will-writing industry down the road is not out of the question, nor is the creation of a specific will-writing regulatory scheme that doesn’t restrict this area of practice to lawyers.

Thirdly, access to justice issues arise whenever a decision is made to restrict an activity to the legal profession. Part of the reason for the huge upsurge in will-writing services in the UK is that less than half of Britons have a will; considering that lawyers have had every chance to exploit this latent market and have failed to do so, it’s hard to make the case that they should now have exclusive rights to this practice area (especially since lawyer regulation tends to drive up costs). The legal profession and the government jointly own responsibility for a failure to educate the public in this area, with the result that, for example, 67% of consumers wrongly believe all will-writers are solicitors.

Fourthly and most importantly, the whole question of what should constitute a “reserved legal activity” hasn’t received nearly enough scrutiny. That’s the conclusion of a just-released report sponsored by the Legal Services Board and written by Stephen Mayson, the widely respected director of the Legal Services Policy Institute. In his report,

Mayson said he had found the origins of the six activities currently reserved to be “remarkably obscure,” with “little basis for suggesting a common policy rationale that justifies their existence”. For example, he discovered that the conveyancing monopoly came about in 1804 when Prime Minister Pitt the Younger wanted to appease a profession unhappy with his plans to increase taxes on articles of clerkship and practising fees. Professor Mayson said it would be “unwise to consider any particular legal activity for inclusion or exclusion in the absence of a broader set of criteria that could be generally applied.”

So there are good reasons for England & Wales to think twice before reflexively placing the writing of wills under the exclusive authority of the legal profession. But if you’re a North American lawyer who practises something other than wills and estates, and you’ve made it this far into this post, you’re probably wondering what possible relevance this has to you. I’d argue it has great relevance, because this looks like the first major skirmish in what will be a decade-long war over a crucial question: what should be classified as “lawyer services” and what can be classified merely as “legal services”?

We’ve tended to use “legal services” and “lawyer services” more or less interchangeably over the years, such that “legal services” has become a virtual synonym for “the practice of law” (lawyers have not hesitated to encourage this blurring of lines). But the will-writing controversy forces us to think about law-related services that, for reasons of both marketplace efficiency and access to justice, could and perhaps should be kept outside the strict ambit of the legal profession. Granted that a Wild-West free-for-all wills market serves no one’s interests: is the opposite end of the spectrum, wills kept under lawyers’ lock and key, the best alternative? Isn’t the middle ground worth at least some exploration and settlement?

Consider another example, a growing force coming from the opposite direction: legal process outsourcing. Three recent articles explore the impact of LPOs on the traditional big-firm business model, and I recommend a thorough reading of all three:

If I can try to summarize the thrust of three lengthy and insightful pieces, it seems to be that:

  • LPOs and other non-traditional legal service providers are taking a growing amount of once-profitable associate-level work from law firms,
  • the unbundling model upon which these new providers are based is changing client expectations about where and how certain types of legal services are purchased, and
  • the result will be law firms with work of less quantity but higher quality, which will inter alia benefit the quality of a legal career generally.

LPOs, essentially, are forcing law firms (and their clients) to ask the critical question of our times: is a lawyer really the best choice to do X? The answer in many cases is yes, especially when the job calls for the kind of judgment, nuance, skill and wisdom that lawyers bring to the best of their work. These are “lawyer services.”

But in many other cases, the answer is no: all or parts of tasks such as document review, due diligence, electronic discovery, document drafting and production, small-claims court representation, and basic transactions like house purchases, straightforward divorces, and as the current situation in England & Wales suggests, wills and estates, don’t always need a lawyer’s attention. Should the providers of these services, whomever they are, be qualified and trustworthy? Of course. Must they always be lawyers? I think the answer is: of course not.

As time goes on, “legal services” will come to mean “commercial services related to the exercise of law-related rights and the fulfillment of law-related responsibilities,” without the necessary inclusion of lawyers. “Lawyer services” will be a sub-category defined as “legal services that, for reasons of required skill and/or public protection, are provided exclusively by lawyers.” “Legal services” will be offered by a wide variety of domestic and foreign providers, none of whom need to be lawyers; their regulation will be specific to the competence required, and access to these services will be available more widely than when lawyers offered them more or less exclusively. “Lawyer services” will be the cream of what we now consider to be the very deep crop of lawyer activities, only the most challenging and the most valuable to clients.

There’s nothing novel about this kind of distinction in professional services.

  • Richard Susskind quotes the statistic that 4% of health-care services are provided by doctors, while 50% of legal services are provided by lawyers. We accept a distinction between “health” services (delivered by nurses, physiotherapists, massage therapists, psychiatrists, and many other “health practitioners”) and “medical” services (delivered by medical doctors — the word “medical” itself is derived from the Latin for “physician”).
  • When we go to have our teeth checked, we usually spend most of our time with a “dental assistant” and only the last few minutes with the “dentist.”
  • We use “architects” and “engineers” to design our homes and buildings, but we hire “contractors” and “tradespeople” to implement designs and renovations through actual construction — the heavy lifting, literally.

We accept all these situations as normal because the markets for these professional services have evolved to allow the most skilled professionals to do the highest-end, highest-value work and an army of other professionals, para-professionals and skilled craftspeople (usually under specific regulatory or quasi-regulatory regimes) to carry out the rest of the work. Doing it any other way — requiring medical doctors to give flu shots, obliging dentists to deliver teeth-cleaning, requiring engineers to lay bricks — would result in massive system backlogs, huge price increases, and widespread dissatisfaction by both the professional and the client — in other words, pretty much the situation we have now in the legal marketplace.

The legal marketplace, whether some lawyers like it or not, is heading towards the same kind of stratification as other professional fields, to a massive “sorting out” of what lawyers need to do and what they don’t need to do. It’s immaterial whether this is brought about by regulation or the marketplace; in the end, these two forces will be working in virtual lockstep to effect change. There will be a period of disruption, maybe even chaos, as we figure out how certain legal services are best delivered by non-lawyers; it won’t be a tidy process, and there will be damage of the kind suffered by will consumers in the UK (and associates in large law firms). But every marketplace has had to go through this, and if doctors could see their way clear to allow non-doctors to take on the sacred duty of preserving life and promoting health, I think lawyers can bring themselves to make a similar commitment.

This is what the next decade will bring: a Great Sorting Out of demand for legal services, as the market reviews its choices and decides where and from whom it wants to acquire what it needs. As time goes by, the category of “legal services” will grow by volume, while “lawyer services” will shrink by volume; but both categories, paradoxically, will grow in quality. Lawyers in particular will benefit from a task list that requires more sophistication and higher-level skills. For that reason alone, but also because of the ultimate interests of clients, we should be working to narrow our focus on the highest-level work while simultaneously supporting the development of practices and regimes to oversee the more basic work we used to do. It’s anyone’s guess whether our profession will step up to that challenge.