The question every legal regulator needs to answer

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Posted in: Access, Regulation

Earlier this month, I was fortunate to appear on the closing panel at the International Conference of Legal Regulators‘ 2021 Virtual Conference. The premise of our panel was that regulatory innovations are taking place in many different countries, and we should decide whether this is a good thing or not.

I was the last of the panellists to speak, and I shared with the audience the following observations, which I thought might be of interest to you.

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When I was reading over the description of this session, one line in particular jumped out at me: “Should everyone be embracing some form of innovation?”

I want to try answering that by reference to what we’ve just heard, because my fellow panelists are telling us something important about what’s happening not just in their own countries — reforms that authorize regulatory sandboxes, alternative business structures, and paraprofessional programs, among other things — but in the legal services sector worldwide.

What’s going on in all these places is really a return to first principles in legal regulation. These jurisdictions are asking themselves questions like, “What’s the purpose of legal regulation? What are we trying to accomplish here?”

I get to speak to a number of people in the legal regulatory field on a regular basis, and I sometimes ask them that very question: “What’s your purpose? What are you here to do?” And what I usually hear back is some variation on, “We are protecting the public.” I think many of you probably use that phrase, or it’s in your institutional mandate somewhere.

And I think it’s a really interesting answer, because it then allows me to ask an important follow-up question: “Okay. And what are you protecting the public from?”

That leads to a number of responses, which all tend to revolve around a common theme: “We are protecting them from unscrupulous providers of legal services. We are protecting them from incompetent purveyors of legal assistance.”

Okay. Good answers. I think we’d all agree that it’s pretty important to keep the unscrupulous and incompetent away from people whom they could exploit and abuse.

But see, here’s where it gets interesting. Because traditional legal regulation, having answered that question, then makes a fundamental error.

Traditional regulation says, “We want to protect the public from the unscrupulous and incompetent. And here’s how we’re going to do it. We’re going to divide the world into two groups: lawyers, and everyone else.”

So they divide the world into these two groups, and they say, “Lawyers: we presume you to be scrupulous and competent. Everyone else: we presume you to be unscrupulous and incompetent.”

Now, I put it to you that this is a category error. Traditional regulation takes one question — “How do we keep the unscrupulous and incompetent away from people?” — and answers a completely different question, by saying, “Here are lawyers. They’re fine. Everyone else is out.”

It’s an error because you and I and everyone else here today knows two things are true:

  • Some lawyers are unscrupulous and incompetent.
  • Many non-lawyers are scrupulous and competent.

I don’t think that’s a blasphemous observation. I think that’s reality.

And legal regulation recognizes half of that. Because it puts in place a system by which lawyers have to do certain things to get licensed, and they have to do other things every year to stay licensed. Now, I have my opinions about how effective those things are. But at least we’re doing them. We favour lawyers with the presumption of competence, but we test that presumption.

But legal regulation does not extend the same courtesy the other way. The presumption of incompetence and unscrupulous nature for non-lawyers is absolute. The prohibition is absolute. There is no process by which non-lawyers can try to rebut the presumption of their unfitness.

Except, that is, in England & Wales. And in Utah. And in British Columbia. And in Arizona. And in many other jurisdictions — like Germany and Australia and Scotland and Florida and Ontario and Washington and Alberta and North Carolina. In all these places, regimes have been set up, or pilot projects are being proposed and established, whereby people who aren’t lawyers are given the opportunity, the mere sliver of a chance, to say, “Hey — I know we’re not lawyers. But we’re ethical. And we’re effective. And we can do some good for people.”

And you know what — people need someone to do good for them. Because whatever the quality of the services lawyers are giving, most people aren’t getting those services. We know this. We didn’t need study after study to prove it, although we have them now, too.

And so I say to regulators, “Okay, you’ve kept the public safe from the unscrupulous and incompetent. More or less. So — is the public fine now? Do they have what they need? Is everyone happy?

“And if that’s not the case, then have you done your job? If the quality of legal services is high, but the availability of those services is a mere trickle, and millions upon millions of people can’t get the legal help they need, then is your work here done? Or is there more you can do? Are you here only to protect the public? Or are you also here to serve it?”

Answering those questions, I think, leads regulators to rethink their purpose, reimagine their goals, and readjust their strategies. It leads them to try something new and different, in hopes of getting better outcomes for more people.

There’s a word for that. It’s called “innovation.” And yes — everyone should be doing it.

The legal sandbox tipping point

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Posted in: Access, Innovation, Technology

You’re familiar with regulatory sandboxes in law, right? If so, feel free to skip down a few paragraphs. If not, here’s how I described them in a recent podcast:

A regulatory sandbox is essentially a safe space for innovation. Think of it as a closely monitored laboratory where experiments can be carried out — except these experiments are new types of services that are prohibited by current regulations, but that look like they could be beneficial to the public.

The regulator wants to give these experimental services a try — but it doesn’t want to immediately authorize a service that doesn’t meet the established criteria for authorization, sight unseen. So it creates a “sandbox” where the service can be tried out under close supervision, to see whether the benefits it provides outweigh the risks or harms it creates.

I’ve written about legal regulation sandboxes recently, and I’m far from the only one. Read Margaret Hagan & Jorge Gabriel Jimenez, David Curle, Jayne Reardon, Monica Goyal, Yves Faguy, Amy Salyzyn, and the Center on the Legal Profession at Harvard Law School. Regulatory sandboxes are an increasingly talked-about topic in the legal sector, but at the moment, only two North American jurisdictions have actually launched one: Utah, which is off to a flying start, and British Columbia, which has also received significant interest. (In this, as in other areas of legal innovation, England & Wales are already well ahead.)

But that could be about to change. On April 13, the Law Society of Ontario’s Technology Task Force released a report calling for the establishment of a Regulatory Sandbox for Innovative Technological Legal Services (ITLS) for a five-year pilot program. The report includes a motion for approval to be brought before the law society’s governors later this month. British Columbia’s regulatory sandbox deservedly gets the credit for leading the way in Canada; but a sandbox in Ontario — home to more than one-third of this country’s lawyers — would have an even more significant impact.

Ontario’s sandbox would be open to “any person or entity that is prevented by current regulations from operating an innovative technological legal services tool or program.” In general, the trial period would be about two years (though I’d imagine entities that rapidly deliver clear benefits with little evidence of risk or harm could be approved more quickly). At the end of this trial period, the entity may be approved, with or without conditions, to continue operating freely in the open market, or the law society would amend its by-laws to allow for this exception to the rules, or it would be rejected.

Note that “innovative technology” is a required element — the sandbox is not for, say, a real estate law clerk who wants to provide legal advice over the phone about selling your house. But that’s not the barrier it might appear to be, since Ontario also licenses and regulates independent paralegals, so there’s already a framework in place for “a person, but not a lawyer” legal service options.

And Ontario is an ideal place to host a tech-based innovation sandbox, precisely because Toronto in particular is the headquarters for a large and rapidly accelerating Canadian legal technology industry. Legal tech folks have been saying for years that it’s immensely difficult to attract the kind of investment capital needed to build and scale accessible legal solutions without the confidence that’s created by regulatory authorization. A legal tech sandbox would be the first step towards making that happen in Ontario.

Above all, one key theme consistently surfaces throughout the Task Force’s report: Legal technology is accelerating fast and changing the legal market, and this is the regulator’s best (and maybe only) opportunity to play a role in its regulation.

“As with other sectors and industries, the proliferation of new market entrants and innovative technologies will continue to transform markets and gain users, with or without the regulator’s involvement. Inertia on the law society’s part risks allowing ITLS providers to proliferate in Ontario outside of an effective regulatory scheme. … The technologies will continue to develop, but the law society may lose the opportunity to have an influence if it does not act quickly.”

Now, what’s interesting and coincidental about this development is that, while Canada’s largest jurisdiction considers a legal technology sandbox, the United States’s largest jurisdiction is doing the same. Four days before Ontario released its report, the State Bar of California’s Closing the Justice Gap Working Group held its most recent meeting, with an agenda that considered recommendations on the structure, governance, scope, application process, and criteria for a regulatory sandbox in that state.

The California working group, as you probably know, has been assigned to study innovative ways in which the legal market could be reconfigured to expand access to justice for Californians. Chief among its mandates is to explore whether and how a regulatory sandbox would operate in the state. As I wrote back in the summer of 2018, significant regulatory change to the legal sector in California would be a seismic event, one that would almost certainly trigger rolling changes across the United States for years to come.

I’m not privy to the Task Force’s discussions, of course; but the supporting materials for the April 9 meeting make for interesting reading. The report of the Scope Subcommittee, for instance, reveals that there was some discussion about restricting the sandbox to “firms that offered services to the unserved and underserved,” which the subcommittee defines as including “members of the middle class and small businesses.” This raises more than one red flag for me.

Set aside for a moment the problem of trying to screen out sandbox applicants according to who will buy their products and services (which strikes me as highly impractical in a free market), as well as the flagrance of the effort to restrict scope so as not to threaten the interests of lawyers and to put up roadblocks against the Big 4. The real problem here is singling out only “the middle class and small businesses” as unserved and underserved, which hides from the reality that everyone is unserved or underserved by the current legal system, and everyone deserves a better choice of remedies than what’s now on offer.

Nevertheless, the inarguably good news is that the Closing the Justice Gap Working Group is making real progress. Observers of the process with whom I’ve spoken appear optimistic that although the wheels of this process are grinding slow, they are grinding in a good direction. I don’t pretend that decision-makers in California are remotely swayed by what happens in Canada, but the fact that their northern neighbours in BC have approved a sandbox, and that Ontario might follow suit, could have at least some normalizing impact.

But in addition to Utah’s trailblazing effort, California and Ontario should also seriously reflect on the fact that Arizona blew right past the “sandbox” concept and opened its legal sector to all types of providers. Arizona eliminated its ethics rules barring “non-lawyers” from having an economic interest in law firms or participating in fee-sharing, thereby demonstrating what real reform of legal services regulation looks like (again, following the lead of England & Wales). Thanks to Arizona, sandboxes can no longer be viewed as radical departures from the norm — they’re now the safe, slow, middle way, the unobjectionable road to reform.

And that brings me to my final point: a friendly warning to any lawyers in legal governance in Ontario and California who might be tempted to derail this process for their own purposes. Not only would that derailment remove from the regulator any practical means of influencing new legal services providers, it would also render obvious to everyone the starkly protectionist agenda of the profession’s lawyer governors. And that, inevitably, would accelerate calls for fundamental changes to lawyer self-regulation.

The tipping point of regulatory reform in the law is drawing near. The legal profession should be throwing its considerable weight behind reaching this point sooner, in order to truly and fully advance the public interest — and thereby prove itself worthy to continue governing not only the legal market, but also its own affairs.

The power in your hands

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Posted in: Access, Governance

The most dangerous threat to public health and the global economy in nearly one hundred years — and make no mistake, that’s what the COVID-19 pandemic is — obviously deserves and receives our highest-priority attention. But the existence of a truly dire emergency doesn’t render our other crises and problems any less serious, and it doesn’t excuse us from the ongoing task of trying to resolve them.

It’s a dismaying turn of events that the pandemic has coincided with and overshadowed a critical moment in the legal regulatory reform world. On March 12, the Trustees of the California State Bar postponed a scheduled vote on whether to explore even the possibility of a “regulatory sandbox,” a mechanism that would allow supervised oversight of innovative legal services provision outside the traditional legal profession. The reasons given for postponing the vote included ominous terms like “political headwinds” and the need to “consult with all stakeholders.”

Andrew Arruda, a member of the task force that recommended the sandbox experiment in California, provides more details in this post, which also asks supporters of legal regulatory reform to write the State Bar Trustees and exhort them to vote in favour of the mere exploration of a sandbox experiment in California.

The stakes are extremely high: Although Utah has approved a sandbox and Arizona seems poised to introduce similar reforms, California is a bellwether state when it comes to American legal and regulatory trends. If California rejects even the possibility of considering a sandbox, that would constitute a severe setback to regulatory reform worldwide. If California forges ahead, momentum in favour of reform would increase tenfold everywhere.

Like you, I’ve been focusing my personal and professional attention on the pandemic. I wrote about the impact of COVID-19 on our justice system earlier this week, and I’ll write more on that topic here at Law21 next week. But while the pandemic unfolds, a critical turning point in legal regulatory reform has arrived and must be dealt with. I invite you to read the letter to the Trustees that I sent this morning, and if you agree with it, to send your own message of support based on one of the templates provided here.

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Dear Trustees of the California State Bar,

My name is Jordan Furlong, and I am a lawyer, author, and legal market analyst who tracks the rapidly changing global landscape of legal services. I’m writing you today to respectfully but urgently advocate that, when the recommendations of the Task Force on Access Through Innovation of Legal Services (ATILS) return for your consideration later this year, you cast a vote in favor of exploring a “Regulatory Sandbox” to consider and review innovative legal service provision.

Seeking Solutions

I’m absolutely certain that you understand the scope of the access-to-justice crisis afflicting California residents today, and I’m equally certain that you want to see a solution to that crisis as much as anyone else. The question, as it always is in such situations, is how best to procure that solution, balancing the benefits that can be achieved against the harms that could be suffered.

My suggested approach to answering this question is to think not so much in terms of “a solution,” but of “solutions.” There is no rule that says wickedly complex and intractable problems must be resolved by the application of a single type of remedy. Indeed, our experience dictates the opposite conclusion: that the more complicated and multi-faceted the challenge we face, the more nuanced and multi-dimensional must be the array of tools and approaches we bring to bear.

In this reasoning, there is a strong parallel to be drawn to our current health crisis, the novel coronavirus pandemic. Every type of authority — government, medical, scientific — is working hard to help people avoid or delay the spread of COVID-19. We are all (or most of us, anyway) working hard to “flatten the curve.” But we are taking multiple approaches, rather than a single approach, to help resolve the problem. 

  • We are not just avoiding large public gatherings of people, we are also staying home (except to get groceries and other necessities).
  • We are not just staying home, but we are also closing schools to prevent children from unknowingly spreading infections to each other.
  • We are not just closing schools, but we are also testing as many individuals as we can and working desperately to expand our testing capacity.

Any one of these tactics would go some distance towards slowing the spread of COVID-19 and decreasing the rate of infection. But if we only engaged in a single tactic, we would quickly find it to be terribly insufficient — we would lose the battle in short order. We need multiple tactics employed simultaneously to have any reasonable hope of getting through this pandemic.

(By coincidence, just before I finished drafting this letter on March 19, Governor Newsom issued his statewide order directing Californians to stay at home and avoid all unnecessary social contact.)

The Limits of “Lawyers-Only”

The access-to-justice crisis, while important, is of course not at the same level of seriousness as the COVID-19 pandemic. But the same reasoning, I submit, applies as well to the access crisis as it does to our public health emergency. 

Up until this point in history, we have deployed a single tactic to provide legal services: trained and licensed lawyers. We have not developed any other type or channel of service provision — indeed, we have outlawed such alternatives. To extend the analogy, it is as if we tested people for the coronavirus, but we simultaneously made it illegal to close schools or shut down movie theaters.

The result of this approach to the access problem is now so plain to see that it is virtually inarguable: Lawyers alone are insufficient to solve this crisis. We have tried — beyond any doubt, we have done our absolute best to employ one and only type of solution to the access problem, year after year, decade after decade. Yet we have not solved the crisis — indeed, we have seen it become radically worse throughout the last several years.   

We will not make any progress towards our goal of solving the access crisis unless we acknowledge this reality and deal head-on with its implications.

I am not here to tell you that giving Californians access to limited-licence practitioners, or court navigators, or AI-driven chatbots, or online interactive software for producing legal documents, is going to solve the access-to-justice crisis. I am here to tell you that unless we try to find out — unless we create the conditions for a series of controlled experiments to test our hypotheses — we will not move one inch closer to solving our problem. The “lawyers-only” approach has had 100 years to show what it can do — at this point, its failure must finally be conceded. 

Concerns and Responses

You might have legitimate concerns about the welfare of Californians who try these novel and untested methods, and those concerns are valid. Those concerns are explicitly addressed by the “Sandbox Model,” wherein alternative providers are: 

  • minutely examined and thoroughly questioned before they can interact with the public, 
  •  closely monitored and tightly regulated by a specialized oversight body during their interactions with the public, and
  • subject to subsequent data collection and assessment of their impact on the members of the public they have served.

You might also have legitimate concerns about whether these changes would pose a threat to lawyers and their livelihoods, and those concerns are valid. In response, however, I would observe that by its very definition, the access-to-justice crisis afflicts a portion of the market that lawyers do not serve. 

For lawyers to be threatened by these new providers, it would have to be the case that the markets and customers sought by these new providers coincide or overlap with the markets and clients served by lawyers. We know that is not the case. These are two parallel markets. Lawyers’ livelihoods will not be affected by the presence of alternative providers, precisely because they are “alternative” to lawyers.

Finally, you might have legitimate concerns about whether California is breaking precedent and moving too soon to explore the Sandbox option, and those concerns are also valid. But as you know, Utah is already forging ahead with the “Sandbox” regulatory experiment, and it seems likely that Arizona will shortly join Utah as a pioneer in American legal re-regulation. Task forces recently commissioned in Florida, North Carolina, and Connecticut, when they file their reports, seem likely to arrive at similar conclusions as did the Utah, Arizona, and ATILS task forces.

California need not fear being too early a pioneer. Before too long, it could be seen instead as too late a follower.

The Time is Now

In conclusion, I wish to urge you again to approve — not the establishment of alternative legal providers in California, not even the establishment of a regulatory Sandbox in California, but the exploration of the possibility of establishing such a Sandbox in California. It is almost literally the least disruptive and least controversial step that the Board of Trustees can take at this critical moment in time. 

I must also note that the current COVID-19 pandemic is certain to place an unbearable burden on our justice system. Courts worldwide are already finding themselves forced to cancel trials and shut courthouses. Law firms in Pennsylvania have been explicitly ordered to close their doors, and other states are sure to follow in the coming days. The justice system is going to grind to a halt, while the needs of Californians for justice and legal services in a pandemic will accelerate and metastasize. The time for action is today — right now.

Multi-faceted remedies applied simultaneously are the only way we will survive the coming pandemic. In exactly the same way, multi-faceted remedies applied simultaneously appear to be the only way to solve the access crisis. In order for us to find out whether this is correct, we have to try — to allow merely the opportunity to explore and test alternative measures. The power to try is now solely in your hands.

Contagion

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Posted in: Access, Governance

Back in July 2018, I noticed that the State Bar of California had created a task force to consider whether regulatory reforms could improve access to justice in that state. I wrote about this development with what you might call jaded optimism:

The smart money, the obvious prediction, says this task force will come to nothing, that the forces of intransigence will chalk up another win by making the right arrangements with the right power brokers, or simply by stonewalling until the reformers tire themselves out. … 

But here’s the thing: Eventually, change does arrive, often when you least expect it. At some point down the road, power in the legal market will shift away from lawyers just enough to enable new expectations, assumptions, and rules for how legal services are created and delivered….

There will be a moment when that shift begins. This might even be it.

A little over a year later, an extraordinary series of events, unprecedented in the modern legal profession, began to unfold. You might be aware of some or even most of them, but it’s not until you see them arranged chronologically that you fully appreciate just what has happened in the American (and Canadian) legal profession in a shockingly brief period of time. With quotes from the linked reports, here’s the chronology:

●  August 28, 2019: “The Utah Supreme Court … has unanimously approved a work group report that lays out recommendations for narrowing the access to justice gap by reimagining lawyer regulation. … The work group outlined a new structure for regulating legal services by: 1) loosening the ethical restrictions on lawyers in the Rules of Professional Conduct and 2) creating new regulations for companies and others providing some legal services. The report recommends amendments to Rules restricting lawyer advertising, as well as Rules prohibiting lawyers from fee sharing with non-lawyers or allowing non-lawyers to have ownership or investment interest in law firms.”

● October 8, 2019: “The Chicago Bar Association and the Chicago Bar Foundation launched a joint task force to respond to the market failure in consumer legal services. … [The task force will have] five working committees, which include areas such as ‘Modernizing Lawyer Referral & Law Firm Models,’ ‘Optimizing the Use of Other Legal Professionals’ and ‘Partnering with Online Legal Service Providers and Other Businesses and Technology Entities.’ … A public comment period is expected during the summer of 2020, with a goal for submitting recommendations to the Illinois Supreme Court in September 2020.”

● November 6, 2019: “The Florida Supreme Court has asked The Florida Bar to undertake a study of the rules governing the practice of law in order to determine whether revisions are needed to improve the delivery of legal services within that state. The Supreme Court directed the committee to look into the topics of lawyer advertising, referral fees, fee splitting, entity regulation, regulation of online service providers, and regulation of non-lawyer providers of limited legal services. … The letter asked that the study group complete its work and submit a final report by July 1, 2021.” (More details here.)

● January 1: 2020: Pursuant to recommendations of the Legal Services Task Team created by the Law Society of Saskatchewan and the provincial Ministry of Justice,  “amendments to The Legal Profession Act, 1990 include a clearer definition of the practice of law. The Task Team also recommended expanding the list of exemptions to the unauthorized practice provisions and creating limited licences that may be granted by the Law Society to non-lawyer legal service providers on a case-by-case basis.” (Also on January 1, the Law Society of Saskatchewan launched a proactive entity regulation regime.)

● January 9, 2020: “The creation of [Connecticut‘s] State of the Legal Profession Task Force was driven by the access-to-justice gap, as well as the challenges lawyers face in the current system. … Various task force subcommittees will examine alternative business models, how technology can be leveraged to advance the legal profession, and ethics rules. …The task force is aiming to produce a report by 2021.”

● January 20, 2020: “The Law Society of British Columbia‘s … futures task force has released a consultation paper and … is seeking input from lawyers, notaries, paralegals, the judiciary, organizations and the public to assist in its consideration of what legal practice will look like over the next decade, in particular the factors and forces that are likely to influence the delivery of legal services and the regulation of the legal profession.” The deadline for public comments was Feb. 29, 2020.

● January 23, 2020: “[The Global Legal Practice Committee of the ] D.C. Bar announced it will study evolving legal service delivery models in the U.S. and abroad, including non-lawyer ownership of law firms. … The possibility of loosened law firm ownership rules in the nation’s capital could be of special interest to the Big Four accountancies.” The deadline for public comments was March 9, 2020.

● January 30, 2020: “The New Mexico Supreme Court endorsed proposals to expand civil legal services in the state, particularly to lower- and middle-income residents and those living in rural areas.” The report recommends the creation of a Court Navigators program and further study of the licensing of non-lawyers to perform limited legal work.

● January 31, 2020: “A petition to the Arizona Supreme Court from Dave Byers, a member of the Arizona Task Force on the Delivery of Legal Services, proposes ‘substantial’ rule changes led by the proposed elimination of a rule forbidding non-lawyer ownership stakes in law firms and legal services operations. … The proposed rule changes will be considered at a rules conference in August. That will be preceded by a public comment process.”

● February 5, 2020: “…  and whereas experimentation with different approaches to regulatory innovation provides a measured approach to identify and analyze the best solutions to meeting the public’s growing legal needs, the [United States] Conference of Chief Justices urges its members to consider regulatory innovations that have the potential to improve the accessibility, affordability and quality of civil legal services, while ensuring necessary and appropriate protections for the public.”

● February 7, 2020: “The Illinois Attorney Registration and Disciplinary Commission (ARDC) has published for public comment an Intermediary Connecting Services Proposal [that] would regulate lawyers’ participation in for-profit matching services and regulate the services themselves. … The proposal would regulate lawyers’ participation in for-profit matching services and regulate the services themselves.” Comments are open until April 3, 2020.

That’s one way to put it.

● February 16, 2020: “The Association of Professional Responsibility Lawyers … in an access-to-justice report [that] could be released as soon as August … likely will make concrete suggestions, including rule changes, to spur states to increase access to legal services. This could include suggested changes to Rule 5.4 to open law firm ownership to non-lawyers, alterations that could redefine who can practice law, and reforms to make cross-state border representations easier. APRL is relatively small when compared with the ABA, but its recommendations in issues like lawyer advertising have carried weight.”

● February 17, 2020: “An overwhelming majority of the ABA House of Delegates agreed to approve Resolution 115, which encourages state regulators and state bar associations to explore regulatory innovations that could improve access to legal services, and to collect data on those programs. But the resolution also notes that it should not be construed as recommending any changes to the ABA Model Rules of Professional Conduct, including Rule 5.4, as they relate to non-lawyer ownership of law firms, the unauthorized practice of law, or any other subjects.”

● February 25, 2020: “The [California State Bar] Task Force on Access Through Innovation of Legal Services approved eight recommendations that will go to the bar’s board of trustees next month. The task force stopped short of calling for immediate changes that would allow non-lawyers to take an ownership stake in law firms. The group also opted for only a modest expansion of fee-sharing. Instead, the 22 members pinned many of their hopes for reform on the creation of a trial program for entrepreneurs known as the ‘regulatory sandbox.’ … The recommendations are scheduled to go to the bar’s board of trustees March 12.”

● March 9, 2020: “The Manitoba government is taking the first step to making legal services more affordable and accessible. … [New] legislation would let the Law Society of Manitoba designate and regulate another category of legal service providers, which would be called a limited practitioner. … The changes were suggested by the Law Society of Manitoba after a review found there were legal needs that weren’t being met and there was a need for more affordable alternatives for legal advice, information, and representation.”

● March 31, 2020: The State Bar of North Carolina has created an Issues Subcommittee to Study Regulatory Change. The Subcommittee will “examine the impacts that lawyer regulations have on access to justice and national reform trends.” The Subcommittee will hold its first meeting on March 31, 2020.

It will be almost exactly eight months between the approval of Utah’s Task Force Report and the first meeting of the North Carolina Subcommittee. By end of day on March 31, ten American jurisdictions, three Canadian provinces, the American Bar Association, and the US Conference of Chief Justices will have either launched task forces to examine legal regulation reform or have taken significant steps towards encouraging such reforms or actually implementing them.

Three brief observations.

1. It would be not just clichéd to call this series of events “a domino effect,” but also misleading. Many of these reform initiatives were conceived and carried out contemporaneously, with some awareness but only limited knowledge of what was happening in other jurisdictions. There is an element of synchronicity here: This wasn’t so much a series of cause-and-effect occurrences as a tectonic shift in the subterranean landscape of the law, manifested in several locations in less than a year.

The reality of a full-scale access to justice crisis seems to finally be registering with those who lead and regulate the legal profession, and these 15 separate reform efforts are the first results. All across the North American legal profession, many people appear to have had the same thought at about the same time: “This can’t go on.”

2. These efforts are not uncontested. State Bar presidents from New York, New Jersey, Ohio, Pennsylvania, Delaware, and Illinois fought the original ABA Resolution 115 and required the insertion of clauses protecting Rule 5.4 in order to win their support. Resistance by lawyers to regulatory reform efforts in California seems to have led that state’s Task Force to slightly downsize the scope of its recommendations. Hardly surprising, though no less disheartening.

But it’s important to recognize that this opposition has not yet thwarted or halted the reform efforts. As I told Law360, the amendment to the ABA resolution did not detract from the resolution’s scope or impact, but only clarified the limits of how the resolution should be interpreted. Reform opponents are playing a “prevent defence” rather than mounting any offence of their own, trying to slow the train as it leaves the station or preserve old exclusivities for a little while longer. Re-regulation has the momentum, and those on both sides of the issue seem to understand that.

3. The title of this post is obviously provocative, standing as we are in the rising shadow of a true crisis of contagion. But I chose the title deliberately, and not just because the spread of legal regulation reform across multiple jurisdictions feels infectious.

It seems likely that our society is about to enter a period of social and economic upheaval. If everything breaks right, it will be a brief, containable wave of sickness, followed by a short-term recession — a lot of extra hand-washing, cancelled trips and other inconveniences, but nonetheless an experience that passes like a summer storm. Or it could be something much more serious.

The further down that spectrum we’re taken by the COVID-19 crisis, the more transformational will be its effects on our economy, our governance, and maybe most importantly, our social contract with each other. Part of that social contract is that the elites who run things in our society are given license to do so on the condition they run things for everyone’s benefit. There is a lot — and I mean, a lot — of doubt in many people’s minds about the validity of that deal. When 39% of Americans would have trouble covering an unexpected $400 expense (and 12% couldn’t do it at all), how could they possibly manage a health emergency? Or a legal one?

So it might not be surprising to find, when we emerge from this coming crisis, that the terms of the relationship between the legal profession and wider society have begun to change. Even if the crisis is contained and short-lived, existing frustrations with the broken legal system will be exacerbated and amplified, and regulatory reform is likely to come swifter and more thoroughly.

But if the crisis is neither contained nor short-lived, then there might even be a Great Re-Ordering ahead of us, a turning point at which anger over a broken system turns into action, and deference to elites gives way to hostility, protest, and a readiness to rewrite that social contract.

So these legal regulation reforms might not be outliers at all; they might simply be preparing the legal profession for our new normal. Because as we’ve witnessed over the past eight months, radical new ideas can be contagious.

The implications of crowdsourced justice

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Posted in: Access

Early in 2017, when the US government decided to bar people from predominantly Muslim countries from entering the United States, more than a thousand lawyers responded to calls for urgent in-person assistance at airports, and websites were set up to coordinate legal advocacy efforts. In the spring of 2018, when the US government decided to detain asylum seekers on its southern border, severing children from their families and putting them in cages, legal advocacy groups again led efforts to fight these actions and drew hundreds of lawyers to the border to assist.

Setting aside for the moment the legality (or, depending on your perspective, the monstrous immorality) of these decisions, I want to focus on two kinds of responses that they generated. The first was the flood of lawyers who freely gave (and still give) their time, efforts, and skills to defend the rights and interests of the vulnerable people ensnared by these policies. Speaking for myself, at least, these lawyers renewed a lot of my faith in this profession.

But the second kind of response was, in its own way, more interesting: the galvanization of widespread financial support. The ACLU and other organizations reported huge surges in donations in the wake of the travel ban and the legal advocacy response to it. RAICES, the group that led the effort to help asylum seekers from Mexico and Central America and to reunite separated families, was the beneficiary of a Facebook-based effort that reportedly generated $20 million in pledges. I retweeted and amplified the call for “airport lawyers” in 2017 and made a monetary donation to RAICES in 2018, and I was far from the only one.

What we saw in these two incidents and responses were the first major examples of what’s becoming known as “crowdsourced justice.” These advocacy efforts were not financed by government legal aid programs or through formal “fundraising” efforts by the organizations involved — they were informally financed, either by the organizations in the moment or by concerned third parties from the grassroots, and they received donations from people in every walk of life, not just lawyers.

Crowdfunding has been with us for several years now, generating money for everything from high-tech startups to artistic projects to emergency health care, so it’s probably not surprising that it has finally come to the law. Its attractions are evident: At a time when legal aid funding seems to be slowly draining away in many jurisdictions — Americans spend more annually on Halloween costumes for their pets than on legal aid, to give you one notorious example — crowdfunded justice offers people a chance to personally support legal causes that touch their hearts or inflame their consciences. If you can get a thousand sympathetic strangers to chip in a small amount towards your legal expenses, you have at least a fighting chance of getting the justice you feel you deserve.

Along with the obvious benefits of crowdfunded justice come some less obvious concerns. For instance, is it ethical for a lawyer to take on a case when the client has crowdsourced her legal fees? Mark Palmer of the Illinois Supreme Court Commission on Professionalism produced this deep dive into that question for Attorney At Work and came up with some guidelines. “It would be advisable for the crowdfunding client,” he notes, “to inform contributors that their donated funds are non-refundable, that they will not receive confidential information about the client’s matter, and that they may not interfere with or otherwise exert control over the lawyer’s work.” 

Crowdfunding justice, of course, also touches on the old raw nerves of champerty and maintenance, the longstanding and justified concern that a stranger to a legal issue or dispute could benefit financially from helping to finance one side or another. It’s one of the reasons why some people opposed the emergence of third-party litigation financing, although as that nascent industry has generated massive profits, one hears that objection less frequently. (My own objections to litigation financing haven’t much changed since I first raised them more than a decade ago.)

Regardless of your views on litigation financing, however, you’d probably agree that there’s a difference between helping to finance a legal action in order to generate a profit for yourself, and helping to finance a legal action in order to achieve some social or policy objective or to support a worthy cause whose protagonist can’t afford legal assistance. If someone starts a GoFundMe to help them pay a lawyer to get through family court or to stop the deportation of asylum seekers, donating to that fund is an act of charity that will provide no financial reward to the donor. So I don’t think that crowdfunding a legal matter raises traditional ethical concerns around third-party involvement in lawsuits.

But I also think that crowdfunded justice does raise a different and perhaps more problematic concern — if and as it flourishes, it’s going to accelerate the ongoing privatization of the justice system.

This is not a new issue, of course. It’s well understood by both lawyers and clients that there are really two routes towards achieving an outcome through the litigation process:

  1. Using the slow, expensive, and increasingly broken-down public legal system (bringing your matter to government-run courts and tribunals, ideally but less frequently with the help of privately hired lawyers, and hoping your resources and stamina hold out until resolution); and
  2. Opting out of the public system and using the faster, more effective, and perhaps more expensive private legal system (bringing your matter to arbitrators and mediators, many of whom are former judges, for customized service and a quick resolution).

Much as is already the case with education and health care, the public system for legal remedies is the one you’ll avoid if you can afford to. If need be, you go to the court to get your consensual private resolution approved and entered into the public record, but that’s the only time you come near a courthouse. All other things being equal, I suppose, you’d be happy to use the public system if it were reasonably fast and efficient; but since it’s not, why waste your time in the slow lane when you can take the express route?

So as I say, that kind of privatization is hardly new. But what we’re seeing these days is the increasing role of the private sector — and the shrinking role of the public sector — in the funding of legal and justice matters.

Among the most important recent developments in the access-to-justice space was last autumn’s entry of Pew Charitable Trusts and its very deep pockets into the A2J picture. “The Pew Charitable Trusts,” wrote Bob Ambrogi for Above The Law, “an independent nonprofit with over $6 billion in assets, announced that it will now tackle the use of technology to modernize the civil legal justice system, meet unmet legal needs, and make courts more efficient.” In Governing magazine, Pew’s Executive Vice-President and Chief Program Officer Susan K. Urahn wrote more extensively:

We will work to increase access to free online legal tools, develop new platforms to help people interact with the courts and conduct data-driven evaluations of how these tools perform. The initiative will also identify policies that can improve outcomes for people involved in civil litigation, and will build partnerships with other stakeholders, policymakers and the private sector to modernize the civil legal system.

If state and local government leaders look closely at the challenges facing the civil legal system, the need for innovation becomes clear. Leaders from all three branches of government have the opportunity to modernize our legal system and truly provide equal justice under law for all Americans.

Now, to be absolutely clear, I think this is a tremendously positive development. Ms. Urahn’s assessment of the breakdowns plaguing the legal system are spot on, and the initiatives that Pew intends to support exemplify exactly the kind of fresh thinking and innovative approaches that we need. But having said all that, I also have to point out that this very worthy initiative is the work of a private foundation, not a government. Pew will pay to develop tools, platforms, evaluations, policies, and partnerships “to modernize the civil legal system.” I’m old enough to remember when that was the sort of thing governments did. 

Nowadays, conversely, governments seem to be looking for things they can stop doing, or at least that they can stop paying for, and they will happily offload something as expensive and wickedly complex as modernizing the civil legal system. It’s hard not to see the parallel, or at least the irony, that as the state of Alaska launches a Legal Navigator pilot project, developed and funded in part by Microsoft, to help people with their civil legal needs, the Alaska government’s 2020 budget eliminates all state funding for the Alaska Legal Services Corporation, the state’s only comprehensive provider of free civil legal services to low-income citizens.

Again, I want to emphasize that the Legal Navigator pilot program in Alaska and Hawaii, sponsored by Microsoft, Pro Bono Net, and the Legal Services Corporation, is unreservedly a very good thing. But programs like this should be complementing and amplifying government efforts to maintain and continuously improve the justice system. They should not be seen as a signal for governments to exit this space and abandon their responsibilities to that system and the people it was built to help.

I’m really glad that Pew Charitable Trusts and Microsoft, among other private entities, are getting involved in fixing the justice system. But that is not their day job. Eventually, they will turn to other activities, as they should, and will governments then carry on their good work and keep the momentum going? Or will they continue to defund legal aid, or close courthouses, or shut down pro bono assistance programs, or turn control of more prisons over to private corporations? 

And keep in mind, however deep the pockets of these benevolent institutions, they pale in comparison to the financing capacity of hundreds of millions of internet-connected individuals who are becoming accustomed to crowdfunding worthy public initiatives. Again, back in the day, the concept of everyday people contributing money to support and advance public objectives and the greater good was called “taxation.” But now, even the founder of a British legal crowdsourcing site feels compelled to remind governments that “crowdfunding should not be seen as an alternative to a properly funded legal aid system.” And she’s right. But her country’s government, which has been systematically destroying Britain’s public legal infrastructure, evidently disagrees.

Everything we’ve long assumed to be true about the way the legal system works is in flux, right now. California’s new task force could revolutionize legal services regulation in the United States, with Utah suddenly coming very fast behind it. British Columbia has pioneered a successful online dispute resolution system that reduces the role of judges and flat-out discourages the use of lawyers. The New York Times is publishing opinion pieces that correctly state that access to justice does not have to mean access to a lawyer. We are standing on the fulcrum of extraordinary change, and the decisions we make at this moment of systemic instability and dynamism will have consequences for decades to come.

But whoever provides legal assistance to people in need of legal remedies, and wherever and however those remedies are addressed and fulfilled, we must ask: Who should pay to support the system that enables it all? Who finances and bears ultimate responsibility for designing, operating, and improving the justice system?

I can’t speak for anyone else, but I say it’s the job of government, to be carried out by our elected representatives. We can all chip in to help worthy causes. We should all support corporations and foundations that practise good organizational citizenship. But not for one moment should we accept the notion that justice for all can be accomplished through funding by only some.

Hope vs. experience in California

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Posted in: Access, Governance

What we know: The State Bar of California is creating a task force that will examine whether to modify ethics rules requiring that only lawyers may own equity in law firms. The Task Force’s commission followed the acceptance by the Bar’s Board of Trustees of a “Legal Market Landscape Report” commissioned by the Bar from Prof. William Henderson of the University of Indiana Maurer School of Law. That excellent report, extensively researched and detailed, argues that requiring lawyers to be the sole equity owners of law firms stunts the development of more productive, one-to-many legal services delivery and contributes to a system-wide legal access crisis.

What we don’t know: pretty much everything else.

The question everyone’s asking is: Has the game-changer arrived? Is this the American equivalent of the 2003 appointment of Sir David Clementi to examine the legal regulatory structure in England & Wales, the first pebble in the coming avalanche?

My early answer is this: The chances that California’s task force will result in fundamental reform to law firm ownership rules in the United States are higher than they’ve ever been. That doesn’t mean they’re particularly high.

It makes all kinds of sense to be cautious here. No legal regulator, in any jurisdiction, has ever voluntarily renounced the ban on non-lawyer ownership. In both Australia and England & Wales, it was direct government intervention that started the process — and in both cases, that intervention followed extensive criticism of legal regulators for failing to address client complaints about lawyers. Whenever the spectre arises of “non-lawyers” in legal services delivery, the legal profession mobilizes immediately and throws its considerable weight against the prospect. Toby Brown summed up the strong case for skepticism more than three years ago. It would be foolhardy to bet against the lawyers here.

But if you were ever going to make that bet, this would be the time to do it. There are several factors at play here that could justify the idea that maybe, possibly, this time is different.

  • Last fall, the California State Bar “deunified,” spinning off its trade association activities into a separate non-profit and keeping its regulatory and disciplinary functions. The Bar no longer suffers from conflicting mandates to both govern lawyers in the public interest and advocate for those lawyers’ interests; only the first directive survives. The regulator appears to be taking its “recent reforms and clear public protection mandate” seriously.
  • The Bar’s new Board of Trustees has 14 members, only seven of whom are lawyers. All are appointed by the state Supreme Court, legislature and governor, rather than elected by the legal profession. Speaking from a jurisdiction where the regulator’s governing board is directly elected by lawyers, following extensive campaigns in which candidates promise to “represent your interests,” I can tell you that this is no small thing.
  • The report was commissioned pursuant to Goal 4 of the Bar’s 2017-2022 Strategic Plan, “Support access to justice for all California residents and improvements to the state’s justice system,” objective (d): “…determine if any regulatory changes are needed to better support and/or regulate the expansion of access through the use of technology in a manner that balances the Bar’s dual goals of public protection and increased access to justice.” There’s a pretty clear theme here.
  • The task force’s mandate is not neutral or deferential towards the status quo. Rather, the task force is to conduct an analysis of “possible regulatory reforms,” a phrase that at least suggests the task force is supposed to come back with findings a little more robust than “everything’s fine the way it is.” Task forces tend to examine their commissioning documents closely and parse the language that was used to launch them.
  • This isn’t just any state: It’s California, home to 250,000 lawyers and an historic pioneer in public policy reform. More importantly, it’s home to many alternative legal services providers, online document providers, managed legal services companies, legal outsourcers, and legal technology startups. They’ll have pockets deep enough to support any kind of lobbying efforts they might wish to make, in conjunction with access-to-justice organizations and chambers of commerce.

Now, even taking all that into account, the challenges here are immense. The legal profession in California and nationwide will almost certainly throw everything it has against the possibility of regulatory reform emerging from this process. A lot will ride on the membership of the task force, which hasn’t been chosen yet: A chair or prominent member with strong views about the preservation of lawyer exclusivity in legal services could easily drive the task force where every previous reform effort has wound up. And even if California did decide to expand ownership of law firms beyond lawyers, that won’t happen before late 2020 at the earliest, and it would galvanize opposition by the organized bar elsewhere. It would be a significant step forward, but it wouldn’t be the tipping point by itself.

But imagine for a moment what the legal market might look like if this reform actually happened. We’d find out if reform opponents were right all along, when they warned of  “non-lawyer” owners compromising lawyers’ judgment, abandoning legal ethics in favour of quick bucks, and exploiting vulnerable and under-informed clients with shoddy services and poor advice. The challenge for these opponents is that England & Wales has allowed “non-lawyers” to hold equity positions in firms for seven years, and there’s been little or no evidence of these outcomes unfolding there.

And on the list of potential benefits? Law firms offering equity positions to professionals and technicians from outside the law to restructure processes, build high-tech systems, and serve clients directly. Deeper cash reserves, enabled by injections of funding from outside investors, to finance technology and marketing upgrades. More non-lawyer equity holders moving in to replace retiring senior lawyers, thereby maintaining or growing the firm’s capital base. And ideally, the establishment of online legal services providers with the resources to offer the best of both NewLaw and OldLaw: low-cost, high-efficiency legal documents and services combined with high-quality legal assistance and advice from good lawyers. Not all of these benefits will be realized. But even one would be pretty great.

I’ve been in this business too long to harbour any illusions about the legal profession’s willingness to change. The smart money, the obvious prediction, says this task force will come to nothing, that the forces of intransigence will chalk up another win by making the right arrangements with the right power brokers, or simply by stonewalling until the reformers tire themselves out. The odds still favour that outcome, as they always do.

But here’s the thing: Eventually, change does arrive, often when you least expect it. Nothing stays the same forever, and believing that it will just makes it easier for nothing to change. I still root for the triumph of hope over experience, in spite of experience’s long winning streak. At some point down the road, power in the legal market will shift away from lawyers just enough to enable new expectations, assumptions, and rules for how legal services are created and delivered — just enough to start benefiting the people who need legal services more than the people who provide them.

There will be a moment when that shift begins. This might even be it.

Navigating the multi-polar legal market

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Posted in: Access, Clients, Law Firms

Georgetown Law School and the Thomson Reuters Legal Executive Institute are ready to call it: the party’s officially over. The 2017 edition of their annual Report on the State of the Legal Market is unequivocal in its assessment of how completely the commercial legal services market has changed over the past decade.

Corporate clients, under intense internal pressure to reduce the overall costs of legal services, insisted on taking control of their matters and managing the work of their outside law firms to a degree never before seen. [They] emphasized the need for greater efficiency, predictability, and cost-effectiveness in the legal services they received. This basic change in client attitudes … has resulted over the past decade in fundamental changes to the legal market itself. These changes are foundational and, in all likelihood, irreversible.

These trends are sufficiently familiar to us by now that we might dismiss this as merely a statement of the increasingly obvious. But consider just how much has changed in the last decade. Ten years ago this month, the Dow Jones Industrial Average stood above 12,000 points; the NASDAQ hovered around 2,400 and the S&P 500 at 1,400. Two years later, they’d each lost more than 40% of their value. While the indices have more than recovered in the intervening decade (they stand at 19,828, 5,565, and 2,268 this morning, respectively), law firms’ fortunes have not.

Back in 2007, as “The State of the Legal Market” reminds us, firms were coming off “more than a decade of almost uninterrupted growth in demand, revenues and profits.” As the report’s subtitle (“10 Years of a Stagnant Law Firm Market”) suggests, those days are a hazy golden memory. “[D]emand growth for law firm services has been essentially flat, productivity has been declining, expenses have been growing (albeit at a fairly modest rate), and leverage has remained essentially unchanged. In short, the only factor positively impacting revenue growth has been the ability of firms to raise rates 2 to 3 percent a year.”

So the market conditions for commercial legal services have changed, and many law firms are significantly worse off for it. But the remarkable thing (or the frightening thing, depending on your perspective) is that we haven’t even seen real change in this market yet.

All that’s really happened so far is that corporate clients have become rather more stringent about outside counsel budgets and have begun to use alternative suppliers more frequently. Those measured steps alone have been enough to eviscerate profit margins in many law firms. Imagine what will happen when clients start to get serious.

Because so far, they really haven’t. Ron Friedmann makes this point in an illuminating post titled “Legal Operations – What We Know Now.” Ron reports on the slow ascendance of law firm shared services centers and other staffing changes, but I’m especially interested in his dispatches from the client side, based on the Blickstein Group’s Law Department Operations Survey:

  • 57% of responding law departments, up from 50% two years ago, report having an LPM program. Of these, only 2.5% report the program as “very effective” and 44% as “somewhat effective.” In my view, more law departments need LPM and they need to do it better.
  • 63% report having formal metrics or reporting but effectiveness is low. On a scale of 1 to 5 (where 1 is primarily manual and 5 is fully automated with dashboards), the average is 2.1. To get more value from both in-house and outside lawyers, law departments must continue on the metrics past more rapidly.
  • Law departments use providers other than law firms for a range of functions as the chart below shows. Legal process outsourcers (LPO) are one provider type doing this work: 21% of respondents use LPOs, up from 17% in 2015. These data are one explanation for the relatively flat growth of large law firms.

These are, let’s be honest, pretty weak numbers. Fewer than 3% of law departments find LPM “very effective”? Metrics and reporting earn just a 42% average grade in sophistication? Barely one in five law departments sends work to LPOs? This isn’t a knockout punch; these are merely exploratory jabs — yet they’ve still been strong enough to send many law firms reeling.

There’s no single reason for the trepidation with which law departments have flexed their muscles so far. I don’t think you can attribute it all to doubts about the efficacy or reliability of alternative legal services providers: the major players in this sector have ten-plus years of outstanding results and tens of millions of dollars in annual turnover. Nor can you still put it down to loyalty shown by general counsel to their longtime law firms, a rapidly diminishing commodity as generational change reshuffles the ranks of law department leadership. It might, in the end, simply be the difficulty everyone encounters when trying to break old purchasing habits, multiplied by lawyers’ inherent difficulty in changing anything.

But I do think an additional, underrated factor might be a high degree of uncertainty within law departments about what their options actually are. I’ve presented to law departments and spoken with in-house lawyers who are intensely interested in getting better results, faster and less expensively, than their traditional methods have delivered. But they don’t know:

  • what categories of new processes or alternative suppliers are available to them,
  • which processes and suppliers are most highly regarded within each category,
  • which processes and suppliers are most appropriate to use in a range of situations,
  • what bottom-line improvements they should expect from using such processes and suppliers,

and perhaps most importantly,

  • what they themselves would have to do differently if they employed these processes and suppliers.

Armed with this information, law departments could greatly accelerate their use of alternative methods and suppliers of legal service delivery. The problem is that there’s no obvious credible place to obtain this information. The providers of the alternatives themselves are hardly an objective source of insight; equally, I wouldn’t rely on law firms to extol the relative virtues of their competitors. A number of legal consultancies have this capacity in theory, but I’m not aware that any specialize in practice (though I’d be happy to learn otherwise).

It seems to me that this calls for a new capacity in the legal market — one that I cover in my upcoming book Law Is A Buyer’s Market: Building a Client-First Law Firm, which you’ll be able to buy here at Law21 late next month. (Yes, this is a plug.)  Here’s what I wrote on this subject:

In this new market, legal services buyers have to work a lot harder to choose their legal services providers and must manage their legal affairs much more closely. They need to understand how legal tasks are carried out, which legal services (if any) they should carry out themselves, and how to monitor the progress of all their legal tasks against various time, budget, and effectiveness milestones. Even more challenging, buyers have to assess the value that their desired legal services provide to them, in order to figure out a fair price for those services and judge whether the services were delivered to expectations and specifications.

In this regard, a great opportunity awaits lawyers (or if not lawyers, anyone else with smarts and ambition): to create the role of “legal concierge.” This is a professional who gives you, not legal advice, but instead advice about buying legal services. He or she analyzes your situation, asks some questions, identifies potential sellers of appropriate services, and prepares you to approach and negotiate with them. You could think of it as a broker or real estate agent for legal needs, but I prefer the personal-service feel of “concierge.”

From a law department perspective, you could have a good argument about whether to “build or buy” this capacity. If the legal function is large and complex enough, you would invest a person or small team with the mandate of mapping out the entire ecosystem of alternative processes and suppliers and advising lawyers and support staff of the best options for each kind of project or case. Smaller law departments wouldn’t have the budget to develop that functionality, but they’d probably be interested in an outside concierge service that they could retain for advice on individual matters.

The real potential for a legal concierge, however, would be in the consumer and small business market. This sector is almost as dynamic as the commercial law market, in terms of emerging options to traditional law firms. But the buyers in this sector have almost no knowledge of the many cost-saving and efficiency-upgrading options that are now coming available to them.

Surveys repeatedly demonstrate that individuals and small businesses see legal services choice as a stark dichotomy: either hire a law firm or do it yourself (or ignore your legal matter altogether). They’re not just unaware of what other options can do; they don’t even think about the possibility that there are other options.

If you could reduce or eliminate that blind spot, you’d not only provide a valuable commercial service; you’d also go some distance towards closing the access-to-justice gap. Increasingly, I suspect, the A2J movement is going to focus less on making lawyers’ services more affordable, and more on making people aware that they have choices other than lawyers for their legal needs. In that vein, a good legal concierge could skilfully and objectively scan the legal market for various types of service providers and develop systems by which it could recommend that its clients retain one or another combination of such providers for its specific needs.

Like any good brokerage, of course, a legal concierge would have to be clearly independent and immensely trustworthy, so maybe it would be best to start out as a public or government agency (which would also alleviate the cost of using the service). But over time, I could see a company with a strong brand in trusted recommendations (hello, Amazon) take this service into the private sector. The legal market is becoming a complex, multi-polar environment, and with so many new destinations on offer, navigators are becoming increasingly necessary. A legal services concierge could be a good place to start.

Buyers of legal services are in ascendance, even if they don’t entirely realize it yet. Eventually, they’ll fully appreciate the power they hold and the options at their disposal, and they’ll start to navigate among those options with ever-greater confidence and discernment. Once that day arrives, many law firms might look back fondly on these last ten years not as an unhappy time of stagnation, but rather as a relative period of gentle and graceful decline.

The incidental lawyer

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Posted in: Access, Clients, Competition

The South Carolina Supreme Court ruled this week that LegalZoom’s services do not constitute the unauthorized practice of law. As reported by Greg Lambert at 3 Geeks, LegalZoom’s press release celebrates the news, while also taking pains to note that the company’s documents have been reviewed by the state Supreme Court and that it frequently refers its customers to licensed lawyers for more complex work.

What interests me more than the outcome of the case, however, is that a lawyer (and he’s not the only one) felt compelled to spend time and money challenging LegalZoom in the first place. Think about the practical results that would have followed had this lawsuit succeeded.

A source of legal materials that, by most accounts, is at least adequate for the needs of its customers would disappear from the state, leaving those customers once again with the prospect of hiring a lawyer they know they can’t afford or seeking a lesser alternative (along with a chilling effect on any other business inclined to try the same thing). Would lawyers have reduced their fees in response, to become more affordable to the low-income market segment that LegalZoom serves? If so, it would have been history’s first recorded instance of a supplier lowering, not raising, its prices in response to reduced competition. If there’s a net social benefit here, I’m not seeing it.

What, exactly, are efforts like this designed to achieve? “The protection of the public interest” is the standard justification — even though the public has an equal if not overriding interest in having tools and processes with which to exercise its legal rights, is already protected by the right to sue an incompetent or fraudulent provider in court, and is comprised of adults who presumably can make informed decisions about their own lives with their own money. There’s a subtle but importance difference between “protecting the public interest” and “serving the public interest,” and we’re supposed to be pursuing the latter more than the former.

The likelier explanation, of course, is that these efforts are really trying to protect the interests of lawyers. But I think they’re actually achieving the opposite. Whenever we reflexively oppose “non-lawyer” legal service providers, we’re saying: “There is no place for anyone in this market except lawyers.” But that sentiment is not based in reality. If you believe it, then you ought to take a step back and consider just how incidental lawyers already are in in this market — how far we’ve drifted from the centre of the legal system and towards its periphery. And every time we try asserting our indispensability in the face of reality, we just accelerate that drift.

The American Bar Association, the Canadian Bar Association, the UK’s Legal Services Board, the World Justice Project, Stanford Law School, the Canadian Department of Justice, and the Canadian Action Committee on Access to Justice in Civil and Family Matters are among the groups that have released studies over the past several years demonstrating what a small and shrinking segment of the legal market is actually served by lawyers. A good example is the Department of Justice study from 2007, which asked thousands of Canadians if they’d had a “justiciable problem” over the past three years, and if so, what they did about it:

  • Slightly less than half dealt with it themselves.
  • About a fifth did nothing.
  • About another fifth got non-legal help (e.g., unions, government, friends or family).
  • Less than 12% got legal help.

Given that this survey was published a year before the financial crisis, I don’t see how that 12% figure has improved since then. And it’s not an outlier: the UK survey found a similar result, as only about 16% of small businesses with legal issues turned to a lawyer to help them. According to the ABA, courts across the United States report between 60% and 90% of family law matters involve at least one self-represented litigant. The legal market, viewed in its entirety, is like an iceberg, 85% hidden below the surface. Lawyers have concerned themselves only with the small fraction above water. Everyone else is down there on their own, holding their breath.

We normally use facts like these to illustrate the “access to justice” crisis, and we convene panels in which we sternly lecture the profession and the courts about our moral failure: “Your access to justice is bad and you should feel bad.” And that’s fine. But what these facts should also illustrate is something that we ought to take just as seriously: the “lawyer irrelevance” crisis.

With a few exceptions (principally criminal defence work), lawyers are simply not relevant to 80% to 85% of all individuals and businesses with legal issues. We’re off the table: we’re briefly considered and quickly dismissed. We need to recognize and absorb the fact that a huge amount of legal activity already takes place entirely without our involvement.

And that was the situation before the market began bringing forth new options for legal solutions. We were already peripheral before barriers to non-lawyer entry began falling, before legal technology began making such impressive strides, before LegalZoom was bringing in $200 million a year, before the legal startup sector received $458 million in outside funding last year. One startup I spoke with last month was just the latest to tell me that that its product was designed to “take lawyers out of the equation.” When you consider how few equations we’re already in, this ought to bring us to immediate attention.

Consider what’s going on in the market right now:

  • Australia approved “non-lawyer” law firm ownership a decade ago, England & Wales has issued 300 Alternative Business Structures licences since 2012, and Ontario will soon become the first North American jurisdiction to grapple with this option (aside from Washington State, which has already approved limited-license legal technicians).
  • Computers can now do the following things: draft commercial contracts, review contract provisions, assess electronic evidence for relevance, answer legal and regulatory questions interactively, predict the outcome of negotiations, and partition marital assets in a divorce. What will they be able to do in another five years, or ten?
  • Self-represented litigants are receiving growing levels of institutional support: courthouse kiosks provide them with guidance, lawyers unbundle services to support them through limited-scope retainers, and startups create systems and programs that maximize their ability to get the results they want. Self-representation is becoming normalized.

So let’s say that lawyers serve about 15% of the total potential market, and make a decent living doing so. As a lawyer, you might be satisfied with that: let the other 85% take care of itself, or use one of these alternatives. You’ll continue to serve the highest-level, most lucrative market segment, the small chunk of the iceberg above the water. So what if lawyers are peripheral to the entire market? We’re central to the richest part of the market, the one you care about, right?

Right. But what happens when all these “non-lawyers,” all this technology, all these self-represented litigants and their supporters, get better at what they do? What happens when, in addition to being cheaper than lawyers and faster than lawyers, they start to become almost as good as lawyers? Do you really think they’re not going to look up through the water at the tip of the iceberg and think, “I’d like a piece of that?”

This is what I mean when I talk about lawyers becoming increasingly incidental. A huge amount of legal activity already takes place without us — and what the foregoing should make clear is that that amount is growing. The ability of the legal market to function adequately and competently without the involvement of lawyers is increasing. Deprived of access to the best and most valuable asset available to assist them — lawyers — people have started to look for substitute assets, and where they can’t find such assets, to create them. Those substitutes are now here, and filing UPL lawsuits against them isn’t going to stop the process that spawned their development.

Because too often, that’s how we’ve been responding to what the market is telling us: with hostility, or with arrogance. I’ve lost count of the number of lawyers who’ve chuckled at warnings about “non-lawyer” providers, saying (sometimes literally), “Ka-ching! Every time a client tries to use one of these companies, it just means more business for me when they come looking for help to straighten out the mess they made.” What a selfish, unprofessional attitude we’ve developed: comfortably serving our 15% of the market, blocking the other 85% from accessing whatever help they can get, and smugly feasting off the problems of those for whom even these efforts went wrong. And we wonder why people are looking for alternatives?

But here’s the thing: I don’t believe that lawyers are doomed to the periphery of the market — after all, we used to be central to it. There was a time when we were intrinsic to the enforcement of legal rights and the execution of legal procedures, essential to a functioning market in legal services. But over time, we allowed ourselves to become optional, to become something close to a luxury good — content to serve the most well-heeled clients with the most interesting cases in the most convenient manner. We’re meant to be stewards of the entire legal system, but we’ve confined ourselves to our small gated grounds and let the rest of the property manage itself.

But that is not irreversible. I’ve met too many concerned, creative and compassionate lawyers, and I’ve seen too many praiseworthy change efforts already within the legal profession, for me to give up on lawyers as a universal legal solution. I believe that lawyers can and should serve more than 15% of the market. I believe we can because the tools and the procedures are now available to enable us to offer high-quality legal services more efficiently, effectively, and affordably. And I believe we should because we are still (for the moment) the most valuable and effective resource available for the resolution of legal problems, and it’s wrong for those resources to benefit only a select few.

Maybe not everyone needs the skills and expertise of a lawyer. But everyone deserves the opportunity to find out if they do. Let’s stop fighting the needs of the 85% and start figuring out how we can serve them instead.

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.  

And the walls came down

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Posted in: Access, Purpose

Last week, I had the pleasure of delivering a speech to the Institute for the Advancement of the American Legal System (IAALS), an innovative program headquartered at the University of Denver that addresses reforms to legal education, access to justice, and judicial selection. They had asked me for a presentation that would explain the challenges facing the legal profession today and outline the contours of the legal market of tomorrow.

I thought you might like to read a condensed version of my remarks, which touched upon many issues that I’ve canvassed here at Law21 over the past few years. Considering that this is also my 400th post here, it seemed appropriate to share what amounts to a summary of my views on the legal profession, the legal market, and the legal system.

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We face enormous change in the legal marketplace: primarily, the emergence of new competitive and disruptive forces that are mounting increasingly formidable challenges to our traditional assumptions and understandings about legal work. At the same time, we are grappling with a legal and justice system that is not giving anyone much satisfaction, and is in fact giving many people a great deal of heartache. There are numerous disconnects among how things used to be in the law, what they’re like today, and what we wish they would be.

So what can we do? Perhaps not surprisingly, I say we adapt. We need to see the legal world as it is and as it surely will become, and then we imagine what it might be and do everything we can to make that vision real. Our memories, our narratives, our assumptions and expectations about the law — both individual and collective — these are the walls we’ve built around the legal market and around ourselves, and they are limiting our vision. It’s time to lower the walls and let illumination come in.

Let’s begin by seeing the legal world as it is. What are we up against? What are we dealing with? Here are five points to get us started.

  1. Growth in lawyers’ business has stalled. With a few exceptions, law firms of all sizes have seen business slow down, revenues flatline or decrease, and new business become increasingly difficult to find.
  2. Lawyers’ pricing is under tremendous pressure from clients. I mean “pricing” in both a dollar amount sense — rate discounts are multiplying — and as a methodology — flat fees are proliferating.
  3. Low-cost alternatives to lawyers are picking up business. Large firms have seen the rise of law department insourcing and legal business outsourcing. Smaller firms have seen Legal Zoom, Rocket Lawyer and the like target their markets.
  4. A huge glut of unemployed new lawyers is building up. Employment rates for new lawyers in the United States have fallen sharply in the wake of the financial crisis. At large law firms, they’ve fallen off a cliff — down 40% in the last five years.
  5. And finally, although you may not have felt it, an earthquake struck the legal profession earlier this year. Its epicenter was London: it was the issuance of the first licenses to operate what’s called Alternative Business Structures, law firms owned by non-lawyers.

These, at least, are not predictions or suppositions. This is really happening, right now. And it’s happening because of a series of changes to the legal marketplace, both here in the US and worldwide. Once again, I’ll give you five to consider.

  1. A lengthy period of strong economic growth powered by heavy borrowing, interspersed with occasional hyper-growth bubbles and busts, has come to an end. We are not in a “recession,” in the usual sense of the word. We are in a lengthy period of slow deleveraging and weak, fitful growth. It should last at least another five years, and maybe longer, give or take a fiscal cliff, a Euro collapse, or a hard landing for China’s housing boom.
  2. Clients have acquired a potent combination of knowledge, power and urgency. Basic legal information is more widely available today than ever before. Basic legal tools are easily accessible at low cost or no cost across the internet. And clients cannot and will not spend a dollar more than they absolutely must on anything, and most especially on lawyers.
  3. New providers and new technology are starting to enter the market. I mentioned companies like LegalZoom and legal process outsourcers a moment ago, companies in their infancy that have already generated a surprising amount of business. But there’s also new, disruptive technology that can replicate basic lawyer functions and, in some cases, more complex lawyer functions.
  4. Generational change continues. We tend to forget about this — partly, I think, because everyone was talking about the rise of the millennials and the retirement of the boomers, right up until the financial crisis. And then suddenly, we didn’t hear much about work-life balance anymore. But generational turnover continues, and it affects legal organizations of every kind. And let’s not forget: it also affects clients. The cultural values of both legal buyers and legal sellers are slowly transforming.
  5. Finally, the regulatory environment for legal services is changing. Lawyer self-regulation is gone in Australia and it’s gone in England and Wales. In my home province of Ontario, paralegals are members in full standing of the Law Society of Upper Canada, lawyers’ governing body. The United States will hold out against this trend longer than anyone else — except possibly India — but its arrival here is still only a matter of time. Lawyers will be sharing the market with non-lawyers, and I cannot overstate how important that will prove to be.

So where will this lead us? What does the “future of the legal profession” look like? Here are some of the key features I think we can expect in the legal marketplace of the future.

1. Systems and technology will make substantial inroads into the legal market.

Today, if someone asks me, “Can machines replace lawyers?” I’m inclined to say, “Well, only if the lawyer in question isn’t very good.” Now, that’s a little harsh, and it’s not entirely fair — to either the lawyer or the machine. If you were to ask me instead, “Can a machine replace aspects of what lawyers currently do?” —  well, that’s a different question, and the answer in many cases is yes.

Automated contract creation, data-crunching analysis systems, expert applications that answer regulatory and compliance questions, online dispute systems powered by game theory — all these programs are available right now. They are solidly built, they are attracting investor interest, and they are only going to get better as they grow. They do their jobs in minutes, not in billable hours, and they are more reliable and sophisticated than many lawyers would be prepared to credit.

We’re at least 10 years away, probably more, from machines that can completely replace lawyers. But we’re already in the era when machines can displace lawyers — take on some aspects of their work, some percentage of their tasks, bump them aside, jostle into their seats, force them to go do something else. And that percentage is going to grow. I can’t tell you at what rate, or how quickly. It will be different for different markets and different types of work.

But the fact is that a great deal of what most lawyers do is not that complicated. At least some of it can be done by non-lawyers — and in some firms, it already is, by secretaries, paralegals and clerks; in future, it will be done by machines, processes and systems. But in many law firms today, it’s being done by lawyers. It’s what many of the hours billed in the legal profession today consist of — and that is not sustainable. That’s a hard truth. But we need to hear it said.

2. Non-lawyers will have proliferated throughout the market.

I dislike that term intensely, by the way: “non-lawyers.” We are the only profession I know that divides the world into “us” and “not us.” We use that term all the time, and we rarely appreciate how insulting it is to the people thus described.

But non-lawyers are coming. We are going to share this market with them. The sooner we accept that and start working to accommodate its impact, the better. They’re coming because they are proving their abilities and reliability every day. They’re coming because lawyers have claimed too much territory under the all-powerful description “the practice of law,” too many activities that do not require a lawyer’s rare and valuable skill and judgment.

And they are coming because we have done a lousy job of serving the entire legal market. Clients, both individual and corporate, are spending more and more and waiting longer and longer for outcomes that leave them less and less satisfied. And that’s just the people who can afford lawyers and the legal system in the first place. Many people are not even in the game at all.

And that is on us. These problems developed on our watch, under our administration and stewardship of the legal system. They are our responsibility. We have had ample opportunity to rectify them, and as everyone here knows, we have not moved fast enough or far enough. So governments and citizens are going to start saying, “Time to let someone else try.” Time to start putting the “Unauthorized Practice of Law” in the history books. Look at what’s happening in England and Wales, and recognize that eventually, inevitably, it will happen here.

3. The legal profession will be smaller, but also more specialized and successful, than it is today.

I don’t really see a way around a smaller bar. Gradually, year by year, innovations will continue to disrupt the legal profession. The capabilities of providers outside our profession will expand, from lawyers in India to para-professionals in North America to software packages in the cloud. Lawyers simply will not be necessary to accomplish things that required our services in the past.

It’s possible that we may still need more than 1.1 million lawyers in the United States ten years from now. But I don’t see it as probable. What I see as probable is an endgame for a legal education system that is already producing more law graduates than the market can employ and far more than it will need in future. And I don’t see any likelier outcome than that dozens of law schools will find themselves superfluous to the new legal market.

I do think we will need fewer lawyers. But I also think that the tasks those lawyers end up doing will, on average, be more valuable, more sophisticated, more demanding, and more remunerative than they are today. I think that a market will emerge for more sophisticated legal needs, a robust market that needs lawyers to provide counsel, wisdom, advocacy and preventive law services — the fence at the top of the cliff, as Richard Susskind says, rather than the ambulance at the bottom.

This is where I think the modern law firm has made its greatest mistake. It keeps trying to force more and more low-value, hourly-billed work out of a resource — real, live, human lawyers — that is intrinsically intended to provide high-value work. We’re not meant to spend our days filling out documents and conducting basic transactions and providing “commodity” services. That’s not why we went to law school. We’re supposed to be put to a higher, better use. Call me a cockeyed optimist — not many people do — but I believe that in the future legal market, that’s what will emerge.

It’s not just our clients that would benefit from this, nor just the latent legal market that would finally be tapped by a wider, deeper range of fully accessible legal service providers at affordable prices. We would benefit from this. We are professionals, and if you trace that word back to its Latin roots, you’ll find that it comes from the Latin profiteri, “to serve.”

We are a serving profession. We are fiduciaries to our clients, ambassadors of the rule of law, foundation stones for a civil society. Or at least, we’re meant to be, although I think we’ve lost our way a little over the past few decades. But I believe, in future, that’s what we can become again. And we should be a happier, more fulfilled profession as a result, because we’ll be better aligned with our best use and our best purpose.

In the words of IAALS’s mission statement, we need “continuous improvement” in the legal system — constant development, ongoing innovation, relentless efforts to make tomorrow’s reality better than today’s. We need to challenge assumptions, break down walls, illuminate the landscape.

My advice to you, in this ongoing effort, is to look beyond the walls of the legal profession, beyond the boundaries of what we have always taken for granted, always assumed is the normal state of affairs in legal services. It’s not normal; it never really was. As a profession, we need to be prepared to let go of our defenses and preconceptions, to lower the walls we’ve built around ourselves and our clients.

We need to recognize that we’re not the only ones who can help. There are other people, other solutions out there that want to help improve the legal system too. Yes, they’re a little unsteady on their feet. Yes, they’re still getting the hang of it. But they want to help, and they can help — and whether we like it or not, eventually, they will help. If and when they displace us, then it’s up to us to find a new, better place and a new, better purpose.

The only real question is whether we’ll extend our hand, and how long it will take for us to do that, to build the future legal marketplace and reforge our profession at the same time. If we do, then I’m hopeful and confident that that future will arrive a lot sooner than we think.

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.

Lawyers and the red balloon

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Posted in: Access, Competition, Innovation

Like many parents of small children, I’ve gotten to know Thomas The Tank Engine, and the peculiar universe he inhabits, far too well. As an example, I’ve now read the story James and the Red Balloon so often that I’ve begun to draw lessons for the legal profession from it.

To summarize: among the trains that work the Sodor Island Railway is James, a generally decent but often fussy and sometimes belligerent engine. On this occasion, James is unhappy to learn that a new mode of transportation has come to the island: a big red hot-air balloon. While the other engines admire the new arrival, James is peeved. “Taking vacationers around the island is our job,” he complains. “What if the balloon takes our passengers away? What will happen to us then?” By the end of the (admittedly brief) story, James has brought his grievances to rotund railway boss Sir Topham Hatt:

“But now the passengers will ride in the hot-air balloon.”

Sir Topham Hatt laughed.

“You’re right, James,” he said. “But they will need a ride home — in a train!”

James was delighted.

Sir Topham Hatt was right. The engines were busier than ever taking vacationers to and from the airfield.

On Sodor, as the Thomas stories bear out, change is rarely welcomed — but once everyone understands the situation better, change is accommodated and in the end, usually turns out to provide a net benefit. This is a message aimed at children but that resonates in the grown-up world, where we all tend to resist change despite the fact that eventually, it usually makes things better for everyone.

Few grown-ups resist change as staunchly and successfully as lawyers, of course — we’ve always shot down red balloons as soon as they appear in our sky. That doesn’t just apply to new technology, where we were among the last professionals to adopt email and where many of us still insist that Facebook is just a fad about which 500 million people are sadly misguided. And it doesn’t just apply to new ways of doing business, where we still reflexively feel that selling our work in tenths of an hour is natural and sensible or that 1,000 lawyers in 20 law offices worldwide can call themselves “partners” with a straight face. It applies above all to our approach to the legal marketplace over which we maintain, in most jurisdictions, strict regulatory control.

Lawyers, as a matter of course, restrict the supply of legal services and enforce Unauthorized Practice of Law provisions. We rail against title insurers and do-it-yourself will kits and independent paralegals and downloadable contracts and legal process outsourcers and a host of other low-cost competitors. We say (and we often believe) that we do this to protect the interests of clients and the public — but outside the soundproof walls of the profession, we come across more as protectionists than as guardians with a selfless concern for the greater good. We come across as hostile to change simply because it’s different and threatening.

My point is not that all these new providers and approaches are inherently trustworthy and high-quality. My point is that we won’t so much as let them make their case — even if, over time, they could introduce changes and innovations that make the pie bigger and better for everyone. Take, for example, LegalZoom. Richard Granat at the E-lawyering Blog gives us one of the most arresting titles in recent law blog history: Will LegalZoom become the largest law firm in the U.S.?

LegalZoom has been beta-testing a concept which links its marketing capabilities to a network of law firms that offer legal services under the LegalZoom brand. With some state bar associations accusing LegalZoom of  the unauthorized practice of law, it might make sense for the company to seek deeper alliances with networks of attorneys who are able to offer a full and ethically compliant legal service. Solos and small law firms, leveraging off the visibility and prominence of the LegalZoom brand, could reduce their marketing costs and enable these firms to better capture consumers who are part of the “latent legal market”  on the Internet.

Richard goes on to list the challenges that this concept likely would encounter, and suggests a “safe harbour” provision that would allow experiments like this to operate on a pilot basis in a specific jurisdiction to test their application. Another approach might be to simply launch the service, await the inevitable regulatory challenge, and let the courts decide whether the legal profession’s anti-competitive rules really serve the public interest. But for me, the lesson here is that LegalZoom, a company regarded with contempt by many lawyers, could end up using its considerable brand power to work with law firms, reduce their marketing expenditure and increase their business (not to mention, as Scott Greenfield points out, doing something to improve access to justice). That looks to me an awful lot like a red balloon bringing more passengers to the railway.

Smart companies in mature industries encourage red balloons (new competition and innovative technology) because they see them as a way to enlarge the market, reach more customers and increase everyone’s bottom line. The people at Amazon could foresee the day when Kindle users began swapping their books much like music listeners once traded tracks on Napster. Rather than fighting the trend, they’re now leading it by allowing users to “lend” an e-book to a friend for two weeks. Isn’t Amazon cutting its own throat by encouraging people to read books without buying them? On the contrary, says the founder of a Facebook lending book club: it will increase sales because people will want to own the book they borrowed (e-books can only be loaned once, ever) or weren’t able to finish in the two weeks. Libraries didn’t exactly kill the publishing industry when they first opened up, either.

It’s a pretty sad comment on the legal profession to say that publishing has become a more mature and forward-thinking industry than law, but that’s where we appear to be. If we want to change that state of affairs — if we want to grow up as a market and as a profession — then we need to stop thinking like a selfish train in a children’s story, viewing new arrivals as a threat to our narrow, entrenched interests. We need to find ways to welcome and accommodate the red balloons that are now floating, in growing numbers, into the sky above our heads. Chances are, at least some of them will end up bringing more passengers our way than we think.

Jordan Furlong speaks 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.