The mainstream revolutionary

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By Legal Futures

21 September 2010

In the first of a two-part interview, Professor Richard Susskind talks to Legal Futures Editor Neil Rose on publication of the updated edition of his book, The End of Lawyers?

Susskind: discussions about multi-sourcing are now commonplace

Richard Susskind finds himself in an unusual position. Having spent many years promoting ideas that some in the legal profession found persuasive, but a good number found fanciful and others downright lunatic, he says it is “slightly disconcerting” to discover that he is becoming mainstream.

The new introduction to the paperback edition of his 2008 book The End of Lawyers? – the fourth of his books on the legal profession – begins by observing that lawyers are coming around to his long-held belief that there need to be major changes in the legal system. He reckons some lawyers have now progressed through all “four stages of acceptance” identified by the British biologist JBS Haldane, although many are still somewhere between three and four:

  1. This is worthless nonsense.
  2. This is an interesting, but perverse, point of view.
  3. This is true, but quite unimportant.
  4. I always said so.

Two years have passed since submitting the original manuscript and penning the new introduction. Though Professor Susskind says he subscribes to Bill Gates’ theory of technology – that a lot less happens in two years than you think and more happens in ten years – there have been significant developments in that time.

It’s the economy, stupid

Chief among them is the economy, which had yet to fall off a cliff at the time of the first book, and that happening has led to what he sees as the main development – simply a change in attitudes.

He reckons that the recession has crystallised the “underlying commercial imperative” that was starting to take hold two years ago of in-house counsel wanting more for less. “This drive… has been strengthening year on year. And one of the big debates that I discuss in the book is whether or not when the economy returns and the dust settles, we will just revert to fairly high hourly rates and the old tariff essentially. And most law firms and clients I speak to say that’s not going to happen. You can’t put the toothpaste back in the tube.”

This is because law firms have shown that they can offer flexible fees and fixed fees, they can outsource work, they can use paralegals more effectively and so on. “Why would any general counsel, when they get the same quality of work, want to pay more? So I think we’re seeing a change in the legal market.”

He has seen it himself just from the invitations to speak at major conferences, including partner gatherings of the biggest firms in the world. He used to joke that it is hard to convince a room full of millionaires that they have got their business model wrong. “That was true four or five ago. It might be an interesting talk I can give, but then what? [They would say], what really is the incentive for us to change when something’s working rather well? Over the last couple of years everyone’s had a bit of a wake-up call.”

As evidenced by all the results released to the legal press in recent months, firms have managed to maintain their profitability, but “at a cost”, says Professor Susskind, “the cost being human cost. And unless there’s more investment in terms of talent, technology, marketing and so forth, firms will be running on empty”. Nonetheless he believes that lawyers, as never before in their working lives, have seen that the market could change radically, and that they themselves have to be more open to the ways of working. “So these discussions about multi-sourcing, about technology, about what clients actually think, are now not unusual. They’re actually commonplace.”

LPO comes of age

The other significant area of movement has been the rapid development of legal process outsourcing, which he believes has “come of age”. He continues: “When I wrote about the outsourcing, in fairness to me, with some optimism in 2008, there weren’t really any concrete case studies of serious legal process outsourcing. And now the market’s worth about half a billion dollars and it’s rapidly expanding.

“Serious law firms and major clients are embracing it and many others are actually investigating it. In many ways the Rio Tinto outsourcing arrangement was the turning point where, very publicly, it was shown to be possible to take discreet tasks, such as due diligence or basic document drafting or document review in litigation, and send those somewhere else.”

Professor Susskind’s theories go further, of course, into what he calls “multi-sourcing”, where a legal matter is broken down into its constituent parts and each element sourced from the most appropriate provider. Here too he is starting to see attitudes change. Though many people argued that it was not possible, he points out that lawyers have being doing this for many years anyway. “Solicitors package work off to barristers and delegate work to junior lawyers. They send it off often to other firms or to regional offices and so forth. So it’s not entirely alien.”

On a related point, he thinks that decomposing is also the key to the topical issue of reserved legal activities and what should be the preserve of a lawyer. Instead of just reserving an area of work to lawyers, it should be broken down to identify which specific tasks require “greater trust” – such as holding client money – “unique skills” or for some other reason need to be regulated.

Accelerated thinking

He finds that the emergence of the legal process outsourcing industry, and the impact of the economy “have caused lawyers really to accelerate a lot of their thinking and really to revisit how they work and how they deliver services”.

The key is to realise that there are many options, as exemplified by City firms such as Hogan Lovells with its Mexican Wave scheme and Berwin Leighton Paisner’s Lawyers on Demand service. Professor Susskind finds that “a lot of lawyers tend to fixate on outsourcing to India”. As part another project he is working on, he has identified 16 objections that he hears from lawyers to outsourcing to India. “And once they’ve voiced one of these 16, they think ‘well, it’s either that or you go back to the old ways of working’.”

The second part of this interview will be published tomorrow. It will cover alternative business structures, the threat to law firms from legal publishers and the subject of his next book.

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