A little less than three months ago (November 7/07), the Law Society of British Columbia’s Lawyer Education Committee released what I expect will one day be seen as a landmark report on MCPD. Earlier this month, the law society accepted the committee’s recommendation for a limited CPD regime in B.C. starting in January 2009. Other provinces are talking about MCPD to a greater or lesser extent, including Manitoba, Ontario, Quebec and Nova Scotia, but none currently intends to go as far as B.C. is going. I recommend the final report, and its interim antecedent, for a thorough and impassioned exploration of the state of post-call legal education in Canada and worldwide.

For me, however, the landmark nature of the report doesn’t arise so much from the new mandatory status of CPD. One way or another, either through law society requirement or through outside intervention by the marketplace or the state, the days when lawyers could choose whether or not to upgrade their skills and knowledge are coming to an end. What’s really promising about the B.C. decision is the broad range of approved CPD activities.

Traditional CLE course offerings are there, of course. But the report emphasized that CPD is broader than CLE, and the approved activity list confirms this. The law society will, for the purposes of filling the 12 hours of required CPD, also accept the following:

• attendance at CBA section meetings,
• attendance at an education-related activity offered by a local or county bar association;
• participation in or teaching at a group education program offered by a lawyer’s firm, corporate legal department, or government agency;
• participation in a law-related study group of two or more persons; and,
• writing law books or articles relating to the study or practice of law for publication.

Not only that, but thanks to the advent of phone-delivered, videotaped and online CLE, access to courses is finally becoming practical for lawyers who live outside major urban centers or whose inflexible schedules don’t permit in-person attendance at these sessions. Before we know it, the traditional image of CLE — lawyers sitting stiffly in classroom seats, taking notes on a thick binder while a lecturer reads out a speech or a PowerPoint presentation — will, finally, become a relic of an earlier age.

I think we’re seeing a major shift here: the legitimized redefinition in this country of what constitutes effective and acceptable CPD activity for lawyers. The new approach is more sophisticated in its appreciation of how adults actually learn and more cognizant of the realities of lawyers’ lives. Starting in 2009, post-call learning for lawyers should become more accessible, collaborative, interactive, and nuanced — and, it says here, effective.

Stephanie Kimbro is a North Carolina solo who operates a virtual law office. In a guest post at Susan Cartier Liebel’s Build A Solo Practice LLC blog, Kimbro describes her wholly web-based practice: no physical office quarters, secure personal home pages for clients, and a state-wide client base that can access its files 24/7. She provides unbundled services, bills and collects over the Internet, and competes with big firms using just the merest fraction of their overhead costs. Best of all, she’s in control of her own time and her own life. She’s already heard from other solos who want to license her homegrown software application and launch similar VLOs.

Further north in Pittsburgh, we find the Delta Law Group, two lawyers who have created, if possible, an even more innovative virtual firm. New clients are met by a partner who videotapes the detailed first consultation and then outsources the file to one of several local solos and specialists. Like Kimbro’s firm, Delta provides its clients with a secure extranet to follow the progress of their matters and conducts its administrative tasks online. Delta profits from an extremely low overhead as well as from access to a range of talented lawyers in whatever field of expertise is required.

These virtual firms obviously have their limitations — for example, they can’t take on huge or complex matters — but today’s small practices have the same strictures, serve the same kinds of clients and take on the same typical matters. The difference is that these firms liberate their lawyers from the burden of overhead, empower their clients with access and choice, acquire clients hundreds of miles away, and hire talented lawyers only for the duration of a single file. Oh, and they can afford to charge very reasonable rates. None of it would be possible without the Internet, or without an openness by these lawyers to innovation.

Small, flexible, accessible, affordable, and turn-on-a-dimeable — that’s what tomorrow’s solo and small firms will look like. It seems that, in some quarters at least, tomorrow has arrived early.

After making an offhand comment in a previous post, that only about 10% of all Canadian lawyers were in large law firms, I began to wonder if that was, you know, accurate. So I checked the statistical breakdowns available at the Federation of Law Societies of Canada website and confirmed that yes, out of 79,147 active law society members at the end of 2006, 7,282 were in law firms with 51 or more lawyers, so the actual figure turns out to be closer to 9.2%.

But then, as often happens when I come too near a demographic breakdown, I became intrigued by a related issue: this time, the relative increase or decrease in large-firm membership over time.

Obviously, in the popular imagination, the last ten years have seen massive big-firm expansion, thanks mostly to steady growth by established players like McCarthys and Gowlings or mergers of smaller regional players into megafirms like BLG or Faskens. That perception has been aided by trade magazines like Lexpert that focused on the biggest firms (and a few high-profile urban boutiques) to the exclusion of other law practices. At the other end of the spectrum, we’ve also heard about the challenges facing sole practitioners and lawyers in smaller centers, the difficulties competing with title insurers and paralegals, and we would tend to expect that the day of the solo is ending.

Well, I ran the numbers and came up with a few charts that might be of interest. First of all, I compared types of private law practices in 1996 and 2006:

This data is not as complete as I’d like: the ’96 numbers don’t have any data from the Barreau du Quebec or the Law Society of New Brunswick, and the ’06 numbers are still bereft of input from the Barreau, although happily, the Chambre des Notaires is included in both sets.

What struck me first of all was the 15-point rise in sole practices as a percentage of all law practices over the past ten years. Most of that growth came at the expense of small, 2-10 lawyer partnerships, which lost about 2/3 of their numbers — half to solos, it would appear, and half through conversion to professional corporations, which came available for the first time in many provinces over the past decade.

But the really striking fact, to my mind, is that the other three groups — 11-25 lawyers, 26-50 lawyers, and 51+ lawyers — stayed virtually the same over that period as a percentage of all practices. So in big-picture terms, the only real evolution among law practice distribution from ’96-’06 was a dispersal of lawyers from small firms into sole practices and a near-100% increase in the number of professional corporations nationwide.

That’s all well and good, you say, but “51+ lawyers” doesn’t begin to reflect the swelling ranks of the biggest firms over the past ten years. What we need to look at is the total number of lawyers in these firms, and compare them decade-to-decade. True enough:

Again with the caveats: the FLSC’s statistical summaries are very good, but they didn’t provide breakdowns of the number of lawyers in professional corporations in either ’96 or ’06, so I was obliged to omit the corporations from these charts. But since we’re only looking at law firms in both years, at least it’s an apples-to-apples situation. So, what have we got?

What we’ve got is stratification — growth at the ends of the law-firm spectrum, thinning in the middle. Solos and big firms constituted about 41.6% of the private Bar in 1996. Just ten years later, that had grown to just slightly over half — 50.1%. Again, the greatest loss was felt in the smallest non-sole practices, but all three of the median-sized law firm groupings saw an overall decline in lawyer personnel. This confirms the general impression that the biggest firms are taking a greater slice of the overall lawyer population. But it also comes as something of a surprise that in spite of the many and growing challenges of hanging and maintaining your own shingle, sole practices have risen over the last ten years. Go big or go small, it seems.

The thing is, I don’t really expect either trend to continue. Solos first: according to reports by both the B.C. and Ontario law societies, an outsized number of sole practitioners in Canada are in smaller centers or rural areas, which the Census Bureau tells us are rapidly emptying out. They’re also considerably older than average (55 (edit) 51 is the mean age), and by and large, they don’t have young proteges waiting in the wings to buy or inherit their practices.

Now, I don’t think we’re looking at the demise of the sole practitioner, by any means — in the more heavily urban future that awaits Canada, solos will retain the agility and flexibility that will come to define the post-modern law practitioner. As the Internet continues to redefine professional services and niches assume even more importance in successful practices, the solo life will in many ways become even more attractive. But I expect these two trends will balance out in the medium term, and with the number of solos figuring to decline over the next ten years, then starting to pick up again in future. Fifty years from now, in fact, I can see solos dominating the legal profession.

One of the reasons for that future dominance is that the biggest law firms are reaching a crisis point. Either you’re operating on a global scale, now and in the future, or you’re not. And if you’re global, you need tons of cash and an international presence that approaches ubiquity. At the very least, you need to be a serious player in New York and London. Right now, Fasken Martineau is the only Canadian firm I can think of that has any kind of noticeable footprint in both these cities, and a footprint is a long way from even a foothold.

I figure that two or three — four at the very most — Canadian firms will end up competing globally, and their total lawyer complement will never dip below 1,000 lawyers each. The rest of the pack will fall back — done in by an inability to compete for the very best talent here and elsewhere, the loss of the biggest clients to the global firms, and the vicious circles that these two phenomena will create. (And that’s assuming conflict-of-interest rules can somehow be finessed to allow firms to maintain any kind of large, multi-jurisdictional presence). Some of these firms will disintegrate altogether, while some will shrink down to 1980s sizes. The lawyers these dying firms emit in the process, like stars going supernova before burning out, will form constellations of boutique practices or alliances of solos, nationwide and internationally.

Really, in 20 years’ time, the whole notion of “law firm sizes” may very well seem quaint. It won’t be all that relevant how big your law firm is — with the exception of the global giants, size really won’t matter, because the heavily niched, increasingly mobile and wired lawyers of the future won’t find enough advantages to a common office space and letterhead. It may not even take that long, if the changes we can already see rippling through the profession start multiplying faster than expected.

But either way, in the long run, expect to see a whole lot of sole practitioners, a great number of smallish boutiques, a few regional alliances, and a very small number of behemoths. In the future, your law firm can be huge and powerful, or tiny and quick — there’ll be very little room for anything else in between.

The law societies of British Columbia and Ontario have produced reports on this subject, and both identify it as a serious matter for the profession. I’m not entirely sure that it is, for a couple of reasons.

First, that belief presumes that a shortage or absence of lawyers in small centers results in reduced access to justice in those locations. Lawyers have long believed that only they can really provide legal services competently, even as the alternative legal services market (primarily paralegals, but also including title insurers and do-it-yourself will CDs) continues to flourish every year. It would hardly behoove the LSUC, for instance, to maintain that lawyers are a sine qua non for access to justice when the LSUC itself has battled successfully to gain the right to regulate paralegals.

Before we decide that only lawyers’ services pass the threshold of providing access to justice, maybe we ought to let someone else try. If lawyers really want to ensure the best possible world for access to justice, they should help throw open the legal-services marketplace to as many competitors as the market will allow, and let clients sort the wheat from the chaff. Perhaps needless to say, I don’t think that’s going to happen.

Secondly, it’s not clear to me that law societies ought to be responsible for ensuring what amounts to a lawyer in every community, like a chicken in every pot. Law societies are statutorily charged with governing the profession in the public interest – hatching, matching and dispatching lawyers, to paraphrase the TV show.

The law societies are not, I don’t think, mandated to ensure access to justice; certainly, they have neither the funding nor the authority with which to accomplish that. If the marketplace is pulling lawyers away from smaller centers and towards the cities – which is also happening in the general population, as yesterday’s census results confirm – then I don’t see why lawyers’ governing bodies should attempt to maintain what amounts to an artificial geographical distribution of lawyers that belongs to a different demographic generation.

I’m doubtful in any event that the debt-relief option for lawyers relocating to smaller centers is the answer. Skyrocketing tuition fees are a relatively recent phenomenon, but small-center Canada has been failing to recruit new lawyers for much longer, as the average age of its current lawyers (55) attests. Debt relief also assumes that new lawyers will choose Red Deer over Calgary or Smiths Falls over Toronto primarily if their student loans will be paid off more quickly, and I’m not sure there’s evidence to support that. I don’t think these sorts of incentives have worked very well with doctors, for instance.

What this whole thing really presages is a discussion of who is a lawyer, and why. For all the organized bar’s contempt for paralegals, your average solo in Wawa, Glace Bay or Trail has a lot more in common with the local paralegal than he or she does with a pharmaceutical patent lawyer in Ottawa, a tax litigator in Vancouver, or an oil-and-gas dealmaker in Halifax. The general term “lawyer” now encompasses such a wide diversity of professionals that it doesn’t really make sense to categorize them under one term.

In future, I think we’ll see the legal services marketplace continue to break down along price points and risk factors. Already, the type of legal work most commonly found in small towns simply doesn’t pay enough to justify law society fees, professional insurance and practice overhead (or at least, to supply the type of income most lawyers still consider commensurate with their professional standing). Real estate alone is pretty much done as a lawyers’ staple; only title insurers and banks have the volume and risk coverage to properly manage it anymore.

So long as it costs a lot of money to obtain and maintain a lawyers’ licence, the type of legal work that can justify the cost of a lawyer will continue to shrink – in no small part because technological advances will continue to reduce the cost of many services lawyers have traditionally been able to offer exclusively. The urban-rural breakdown of lawyer distribution is as much symptomatic of this change in the legal marketplace as it is of any other associated demographic trend.

This post originally appeared as a comment to a post at Slaw on March 14, 2007.

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.