lotf2011 | ian mcdougall

23 June 2011 | Lunch Presentation | Ian McDougall | 1

23 June 2011 | 12:30 - 13:30 | Lunch

Future of the Legal Profession

By: Ian McDougall

It is fascinating to ponder how the law will develop over coming years. My own retrospective anthology was

called “Cases That Changed Our Lives” and tried to examine the impact of legal changes on the lives of

people. But something that often gets overlooked, and therefore has to play “catch-up” as the law moves

on, is how the legal profession changes? How will the profession of law change to meet the needs of a

changing world? I believe it is a mistake to imagine the law developing without any impact either on, or

from, the actual practice of law.

So, I hope, in the time I have today, to take a brief look at a possible direction for the legal profession and,

in particular, what will be expected of it.

Many people say that to study the future we must look at the past. Indeed, the common law system

absolutely relies on that premise. But let us see whether the past developments in the legal profession can

give us any clues to future development.

Let me start with a very brief history to set the scene.

Gradually, the modern law office has transformed into an amazing place. In the distant past, people

employed “scribes” to copy important documents, when the ability to write was a skill in itself. Of course,

the introduction of printing machinery led to the commoditisation of the written word. For a long time, the

most complicated piece of technology most law offices had was a typewriter. Research was (and still is in

many ways) a process of reviewing a mountain of paper; books, periodicals and statutes. An important part

of the legal advisor’s skill was just being able to retrieve the relevant area of law.

But, back to my story; As I say, printing took the place of the scribe and eventually technological wonders

such as the telex machine and photocopier were introduced. They were quickly followed by the word

processor. As telex and word processors were introduced, the operators were able to capitalise on that skill

and commanded salaries for that work. But the ability to use such technology, in turn, became widespread.

This technology was also gradually superseded by the introduction of multi function computers with LAN

systems and, then, the internet and, maybe soon, the Cloud.

In my view, the legal profession has been extremely conservative in the area of professional change and

especially technological development. I rather suspect that, given the choice between doing nothing and

changing the way the legal profession works, much of the profession would choose to do nothing.


Yet, when the Information Technology world focused its gaze upon the “back-office” functions of law offices,

it became clear that commoditisation was not only possible, but necessary.

More recently, aided and dare I say provoked to an extent by In-House Counsel, law firm focus has been on

driving down costs, and/or providing some additional value added service. Increasingly, a fair proportion of

the work can be done by the “client” with its in-house advisor. In fact, a LexisNexis survey conducted during

the height of the recent economic downturn showed that 60% of corporations responded to the downturn by

“insourcing” their legal work. That is, bringing the work inhouse and increasing the size of their inhouse

teams. But the same commercial/budgetary, pressure to increase efficiencies, and show ever improving

value, is being focused on the private practice legal profession with an intensity never before experienced. It

was heightened by the recent economic recession.

Current Legal Service Methodology

Efficient legal services have, effectively, three components in delivering services to clients;

Firstly - The frontline provision of advice. The most fundamental and value added service

of all. But one which, for reasons I will explain later, is the latest to come under pressure

to change;

Secondly - Back office systems which enable an office to manage itself – billing,

time recording and document management being obvious examples.

Thirdly – the knowledge management systems - that is, providing the tools to support or

enable the advice to be given – research and workflow solutions are the examples.

As I said, the first impact that IT had on law firms was the back office system element. Computers are

particularly good at doing standard and repetitive tasks!

But the developments of interest to all legal advisors is how the provision of the legal advice itself will be

changed in future by the introduction of technology. If you had asked our law office of the distant past, or

indeed even of the 1970’s, what they thought of a computer actually giving advice to a client, they may well

have thought the idea pure Star Trek. And you might still think this sounds strange now!! But we can see

how commoditisation is even affecting the provision of 1st level legal advice.

Let’s take a contract. The construction of a contract is considered an area where drafting expertise is the

value added service. But does it continue to be once a systematised version is created? It is now possible to

create systems which can ask questions and then automatically deliver draft documents. No legal advisor

needs to be involved in the conversation!

A process can now, to a large extent, be managed by a computer with an administrator under legal

supervision. It is clear to see how the commoditisation has led to the matter being managed by a less

qualified (and therefore, usually, cheaper) person than otherwise would be the case.

But change does not stop there. Any legal advisory process which can be reduced to a series of fixed (albeit

numerous) considerations can be automated. The lay client can led by the hand through the procedural

steps and the relevant core research material integrated into the system and accessed if necessary.


By taking the legal information, integrating it into a workflow process, the basics of legal advice, at low

level, are pre-analysed and commoditised. Technologically, all of the elements are in place to commoditise

much more of the provision of legal services. Maybe even the actual provision of first line legal advice?

It is now possible to have research products integrated with matter management products integrated with

Document Profiling (i.e. categorising and systematic filing of documents) integrated with an electronic

disclosure tool with voice recognition software and audio responses from the computer.

The efficiency gains may be obvious to see. But here is the amazing point – all these systems exist NOW.

So, let us add some further recent developments to the legal industry into the mix;

Multi-Disciplinary Services

In many parts of the world, these are becoming an increasing focus. People mention phrases like “one stop

shop” It is the idea that a single company can provide a client with a multitude of different skills and

services including legal advice. Many accounting firms have had in-house legal departments helping with

projects for some time already. It is not too much of stretch to take this further. What about an architect’s

firm also providing the legal advice to enable planning permission for buildings to be obtained?

In the UK, we have recently had this issue dealt with by the Legal Services Act which, for the first time, is

going to permit commercial organisations to own law firms. The governance and code of conduct issues are

still being worked through but that is a matter of time.

The electronic way of doing business is transforming the law as well as the profession; from jurisdicitional

issues tweeter’s breaching national court injunctions. The legal profession cannot ignore the impact

technology is having upon it.

Bulk/”Factory” Law

As a counterpoint to what seems to be the prevailing wisdom, I want to briefly mention “outsourcing or

offshoring.” This became appealing in the UK first among banks and call centres, and then to a much lesser

extent, by law firms themselves. Why have they outsourced legal work? Because it is a low cost

environment that allows lower level legal work to be done more cheaply.

The “outsourcing” industry quickly caught on to the fact that much legal work is relatively repetitive and,

therefore, can be done in low wage environments. The so called “legal process outsourcing” companies have

taken this on and there was a spurt of growth. I shall be, deliberately, a little controversial now and say

that, in my view, LPO is a fad! It distracts us from the real debate about the development of the legal

profession. Why do I say that? For a couple of reasons; Firstly, anything which is simple, repetitive or fairly

low skilled (as I hope I am explaining) is in fact work for which a computer is ideally suited. No matter

where you are in the world, or how little your wage is, a computer requires no salary. It can work

continuously on repetitive tasks without getting tired, demanding a wage rise or better working conditions.

Which, secondly, means that areas where LPO’s have grown (like India, for example) can only experience

growth in skilled areas on the basis of low costs for a limited time. Wage inflation in India is running well

into double digits, especially in the skilled sectors. Having a billion people as a potential work force does not

drive down costs when a massive proportion of them are still totally illiterate. That is not how you sustain a

low cost environment for skilled tasks.


There are also issues of corruption, data loss, data protection, and various other matters that the, currently

favoured, outsourcing nations have to deal with.

Fees & Risk

We have heard much about “Innovative Billing arrangements”. Actually, I almost sick of hearing the phrase

– it gets mentioned so often. But what does it really mean? I suggest it means that both parties, customer

and provider, will take a costs risk in the project. This is not something the legal profession has been used

to doing. We are a profession raised on hourly fees. That means that no matter what happens to the client,

the law firm gets full fees for what it has done. No risk. The client may lose, but the firm still charges for

what it does. Innovative billing, quite common in other industries, can mean the firm accepts a risk it will

not be able to charge for all the time it has spent or it shares the full risk with the client on an outcome

basis – most commonly no win-no fee or, slightly less common, no completion - no fee. In my view, its time

will come, only not as quickly as has been predicted.

A speculation into the future of legal services

So far we have looked at the past and the present. Let’s consider the future. Sometimes we have to make

great leaps of imagination (and risk ridicule) to try to plot a path into the future.

• Who would have predicted, even as recently as the 1970’s, that an legal entire case could be created,

managed, documents sourced and arranged for disclosure, lodged with the court and served,

completed and billed without a single piece of paper being used? Yet the majority of evidence in

litigation matters now comes to us in emails or other electronic file formats.

• Who would have thought, that it was anything other than science fiction that a computer would be

able to ask you questions and, from those questions, generate a contract?

• Who would have thought that you could talk to a computer and get it to follow instructions? Or that

the computer could actually talk back! Yet, that technology is available now. Voice recognition

software is widely available and synthesised computer voices sound more human than ever. It’s not

the norm yet, but it is becoming increasingly widespread

But this is the important point; these things will continue to become widespread if efficiency gains are to be

made.

So, I think, on the basis of what I have said, let’s make a number of further predictions.

• It seems clear that if technological development, I also mean commoditisation, continues then more

and more legal advice functions will be carried out by computers. No, let me rephrase that, MUST be

carried out by computers if real efficiencies are to be wrung out of ever tightening budgets.

• The importance to the profession of its relationship to the legal solutions providers, for example

LexisNexis, will become even more important than it was when we were pure publishers. Instead of a

supplier/customer relationship, there will have to be a much closer relationship involving systems

management & research development and, dare I say it, “cloud” computing.

• This leads to the notion that more legal work will be done by lay administrators who can simply follow

the process laid out for them by the automated system. The cost and efficiency savings becomes

obvious.

• The legal advisor will become specialised in interpreting the law in the light of the facts of each

individual case. To do this most efficiently, the advisor will require the sophisticated support tools that

I have referred to. The real value of the legal advisor will become, increasingly, judgement and


experience. They will be the premium skills - as they are in many other professions; all designers can

draw, but some are great designers! As a result, we may even see the re-emergence of old fashioned,

and very much longer, apprenticeships. This is because experience and judgement can only come by

having that skill handed down from wise(r) senior colleagues who have been there, seen it and done

it. There will NOT be a requirement for an ability to remember which book the law is in, or what a

piece of statutory text actually says (a computer can tell you facts and will be able to do so in

milliseconds). Instead, an ability to correctly interpret and judge those facts is what will be required.

• Using technological efficiencies enables continuation of the trend in keeping costs under control and

focusing on the actual delivery of value added legal advisory and management services. Law firms

may abandon their own IT infrastructure and have their information and support software provided by

“cloud” integrators who can manage both the information and practice management requirements.

The extent to which we will see the abandonment of the traditional “office” is something I have more

of a doubt about within a short time scale. Yes, many people live a great deal of their lives virtually,

but I think the more virtual your life, the younger you tend to be. That means it will take a

generational shift before we see many truly virtual law firms.

So, I will conclude with some final points. It is clear that economic/budgetary pressures require a never-

ending hunt for further efficiencies. The future will see a drive for professionals to move higher up the value

chain; those things that can be commoditised will be commoditised.

That means, eventually, workflow tools and other electronic legal support measures will become a necessity,

not a choice. Will there continue to be the great single or multiple volumes of works on legal subjects? Or

will there be a mass database of information, sucked out and into workflows as needed? If that becomes the

norm, how will Judges, in referring to text precedents, be satisfied that they are referring to an expert

opinion upon which they can place weight?

The automated workflow and content solutions will allow lawyers to focus the real added value that they

provide; that is interpreting facts in a legal context to provide advice on an individual case by case basis.

That skill cannot be replaced by a computer. That skill requires technology which remains the prevue of Star

Trek. I can also make a statement that may stand out as going against the current trend; Insourcing, using

technology and lower skill administrators will be the way that efficiencies are eventually wrung out in

companies large enough to invest in them.

As I say, all of these issues have an impact, sometimes profound, on the development of the legal

profession itself. So I hope I have stimulated some thinking that will start now.

lotf2011 | ian mcdougall

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