The evolution of the legal services market: Stage 1

I recently delivered my 15th and final presentation of 2012 about the changing legal market. Over the past 12 months, I’ve given speeches and keynote addresses to large firm retreats, sole practitioners, bar leaders and regulators, chief justices, law students, CLE providers, law librarians, and other groups and organizations throughout the United States and Canada. If I had one piece of advice to share from all these excursions, it would be that you will never regret bringing backup versions of everything electronic, especially should you accidentally spill a full bottle of water onto your laptop just before a presentation.

I haven’t just been speaking to these groups, however; I’ve also been listening to what these diverse stakeholders in the legal marketplace have to say. And I’ve taken away two sets of impressions.

The first is that a very wide spectrum of knowledge and perspective exists regarding the nature of change in the legal market. I’ve met lawyers and legal professionals who flatly dismiss any suggestion that the market is changing in ways that are revolutionary and permanent. I’ve met others who saw these trends developing years ago and have already re-engineered their businesses to adapt. The vast majority of audience members lie somewhere in between. Most of the people I’ve spoken with, however, have been surprisingly and encouragingly interested in what’s going on in the wider legal world and what it might mean for them.

My second takeaway, and the one I’d like to explore in greater depth over the next five days, is that there’s no real consensus within the legal market about just what’s happening to it. We don’t appear to have a collective sense of what kind of road we’re traveling, where it’s taking us, and at what stage of the trip we currently find ourselves. This is important, because without a shared understanding of both our journey and our destination as marketplace participants, it’s difficult to talk about how to make the trip better, shorter, and more productive.

So I thought I would set out for you my views on the state of the legal market and how change is rippling through it: where we’ve been, where we are, and where we’re likely to go. It seems to me that there will be five stages in the ongoing evolution of the legal market — and by extension, of the legal profession itself. By my reckoning, we’re about halfway through Stage 2. Today’s post will explore Stage 1; each of the next four phases will be examined in separate posts over the course of this week.

Stage One: The Closed Market


  • Law is a protected industry, with one legitimate, authorized, self-regulating provider (lawyers).
  • Legal knowledge and tools are largely inaccessible without lawyer involvement.
  • Lawyers regulate the market, policing their own conduct but also investigating and eliminating non-lawyer competition.
  • Lawyers “compete” with each other in genteel fashion, rarely undercutting other practitioners on rates or introducing systemic improvements to methodology or workflow.
  • Lawyers, facing no real competition and under no real pressure to innovate, create inefficient enterprises to deliver legal services, measure cost in hours, and price their services on a cost-plus basis.
  • Lawyer jobs increase proportionately, if not out of proportion, to legal service demand — the lawyer population grows year after year, like an expanding balloon.
  • Most legal services are expensive, and most lawyer careers are highly remunerative.
  • Legal technology is almost entirely “sustaining,” offering more convenient ways of carrying out traditional tasks without re-engineering those tasks.
  • Legal education is almost entirely academic and delivered to baccalaureate standards; professional experience is gained through on-the-job training, at clients’ expense.

Era: From most of the 20th century up until no later than 2008.

This is the legal market as most of us found it when we were called to the bar. In Stage 1, we run the show, and we run it to our liking. Not only do lawyers own the only saloon in town, we’re also the local sheriff, keeping the peace by prohibiting anyone from opening up a competing tavern. We enjoy the luxury of running our businesses as we please, safe in the knowledge that our collegial competitors in the profession will not create undue disruptive pressure through pricing or service delivery innovations. We deliver good products and half-decent service to a very limited, deep-pocketed clientele. Most lawyers make a fine living, and in many larger firms, they make an astoundingly fine living. These are good times for lawyers.

But they aren’t perfect times, of course. Our reliance on cost-plus pricing, our desire to increase profit, our aversion to risk, and our unwillingness to innovate all combine to create an over-reliance on individual hourly labour as an engine of growth. This in turn leads to burnout and emotional problems among lawyers and growing dissatisfaction with the lawyer’s life, not to mention frustrated clients who seek greater price certainty and more proactive interest from their providers. It also leaves us vulnerable to the possibility of competitors who might choose to play by different rules; we fail to develop any natural defences beyond regulatory action.

Legal education, meanwhile, underperforms its potential: most faculty have little experience with practice, and almost all faculty view the practicing bar with a certain degree of contempt, leading to generations of law graduates singularly unprepared for a legal career. Self-regulation, while critical to our independence, breeds bad habits of protectionism and self-indulgence. And it perhaps goes without saying that access to justice belongs primarily to those with the money to afford lawyers and the time to see legal matters through the labyrinthine legal process.

You could certainly argue the cut-off point for this era. Some might trace the beginning of the end to 2004, others to 1999; if you practised residential real estate, you can go back considerably further than that. There was no single “light switch” moment at which everything changed and a new paradigm emerged fully formed; evolution isn’t like that. Some of these tendencies weakened throughout the 2000s, while others are still going strong today. But it seems fair to assert that by 2008, when the financial crisis was breaking and the first provisions of the Legal Services Act were being enacted, the longstanding era of the lawyer-centered legal marketplace was drawing to a close.

An observer from outside the market could easily see how this artificially calm state of affairs might be ruptured, and would hardly be surprised to learn that such a breakage was imminent. Tomorrow, we’ll take a look at what happens when this long-closed market is abruptly breached by numerous external forces.

Jordan Furlong delivers dynamic and thought-provoking presentations to law firms and legal organizations throughout North America on how to survive and profit from the extraordinary changes underway in the legal services marketplace. He is a partner with Edge International and a senior consultant with Stem Legal Web Enterprises.


  1. Mark Keam

    Hi Jordan. Always follow your articles with great interest. I had to smile while reading your latest post. We used to describe the “Closed Market” as the “Salad Days”. They’re long gone!

    Looking forward to your thoughts over the rest of the week.

    Kind regards, Mark.

  2. Dustin Cole

    We are also experiencing the “last gasp” of the old guard trying to force the profession back into the closed market. Unbelievably, in a number of states over the past several years the CLE accreditation boards – largely populated by senior “I’ve got mine” lawyers who can afford to stand on high principle – have actually decertified both practice management and marketing for credit.
    There are rumblings and vague proposals. Four-year undergraduate-based law degrees. Residency programs pairing new lawyers with older. “Senior support” programs, attempting to pair new lawyers with older lawyers in smaller communities for safe successions. None of these address the central problem of legal demand leaving the control of the legal profession.
    The CPA profession saw their revolution coming in the 1980’s and re-imagined itself into the financial advisors and consultants that the most successful are today. And in the process, stole the first wave of “advisory” business from the legal profession.
    When the recidivists lose control of a few voluntary bar associations and the new generations take over, we will see a shift with promise: guilds becoming true trade associations, dedicated to promoting and supporting attorneys as successful business people, not just members of a now-dead secret society.

  3. Eric Cooperstein

    I think your assessment of the profession pre-2008 is spot on, except that I’m not sure I would agree that “most lawyer careers are highly remunerative.” I think it has long been true that many solo and small firm lawyers struggle financially. Nevertheless, there has also long been a perception that most lawyers’ careers are financially rewarding, which in turn has fueled the production of new lawyers year after year.

  4. Jeff Carr

    Jordan — as always, cogent, perceptive and thought-provoking. The stages of healing also come to mind — seems as if much of the profession is still mired in the denial stage. I fully agree with your observation about the uneven nature of change and evolution. It will be uneven, messy and painful — transitions generally are. Can’t wait see the next installments.

  5. Mat Boyer

    Jordan- Great read! I have found that even though we focus mostly on Legal Support that the challenges are the same. Those that feel that there is not much of a change (so therefore its just business as usual) and those that don’t know how to address the changes, as they can be fast and furious. What is even more fasinating is how little time people seem to have or want to invest in looking for ways to adapt or at solutions that may assist in addressing the change in one area so that they might have more time in another. I look forward to reading more.

  6. The Last Honest Lawyer

    Jordan, you have nailed “Stage 1,” which I recently labeled from a client’s perspective, “The Ugly”. Excellent comments by others as well.

  7. James Jensen

    Shock and awe will strike the legal community very soon. Technology will do things that will displace the silk stocking firms and level the playing field. Younger lawyers who grew up with technology and understand very well how to use it will take down the larger firms who depend on mass media marketing currently. The Yellow Pages are dead and the CEO of the White Pages admitted that the Internet was the primary reason for no longer publishing the directory. Once the Yellow Pages is no longer circulated, people will have to depend on the Internet or word of mouth to find an attorney.. My bet is on the Internet… So…lawyers…get your tech on or plan for early retirement.. I was a stockbroker when discount brokers came about.. I’m no longer a stockbroker… I’m now a officer of a tech company.. Remember, “Survival is not mandatory.”

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