The extent to which legal work can be reduced purely to administration and process has been overstated and in fact “lawyers are needed for all legal jobs”, Professor Richard Susskind has acknowledged.
He also said the vision of traditional law firms focusing on complex legal work with tech-driven alternative suppliers handling more routine matters has not delivered and needs to be rethought.
The idea of carving up legal work horizontally in this way should be replaced with a “vertical view of legal work” where every task requires “a mix of legal expertise, process and technology”.
The futurist was writing for Harvard Law School’s Center on the Legal Profession with Neville Eisenberg, the former senior partner of Berwin Leighton Paisner and now head of BCLP Cubed, a service from Bryan Cave Leighton Paisner that looks to integrate volume legal delivery with complex legal advice and legal operations support.
The pair said the horizontal disaggregation of legal work, “while producing many benefits”, has not driven a degree of innovation in law firms and alternative providers “that delivers clients the outcomes they want—not least, significant cost reduction and improved risk management”.
Though the continued success of the traditional business model meant law firms saw little need to change substantially – they were not on the fabled burning platform – this ignored the fact that many in-house legal departments were.
“They are being asked to shoulder more legal and compliance work than ever before and yet are suffering from relentless pressure on costs.”
Alternative providers have not scaled up sufficiently – with the exception of e-disclosure providers – while regulation in most jurisdictions protected the traditional approach, but the pair suggested that a simpler answer may simply be that “the innovations by law firms and the new business models of alternative providers have not yet actually met the demands, needs and wants of clients”.
It turned out that horizontal disaggregation – what Professor Susskind has previously explained as ‘decomposing’ a matter into its constituent parts and sourcing the most appropriate provider for each – “is much easier to talk about than to implement”; reasons included inexperience in doing it and the fact that clients still preferred their legal matters to be handled by one supplier.
Professor Susskind and Mr Eisenberg said the idea that there was a layer of process-driven work that required little involvement of qualified lawyers had turned out to be “an oversimplification”.
They explained: “It is true that there are many legal tasks that are, on the face of it, routine, repetitive, and can therefore be standardised. But the extent to which legal work can be reduced purely to administration and process has been overstated.
“In relation to the everyday or business-as-usual work, it is often assumed that, if the matter is low-value, then the legal content is correspondingly low. There is, however, no direct mapping between the value of legal work and the complexity of legal work.
“Low-value issues can raise impenetrable legal questions, while high-value problems can sometimes be legally straightforward. In daily practice, it is not possible simply to allocate everyday legal work to the lower reaches of the pyramid…
“This involvement of lawyers is not an occasional need. It is at the heart of reliable legal service.”
This led to a vertical way of looking at legal work, they explained. “The idea here is that all legal matters require a mix of legal expertise, legal experience, and process, even if the great bulk of human hours spent are on the process component.
“For routine legal work, therefore, the law and lawyers should lie at the heart of legal service.
“The common narrative that great swathes of legal work can be taken on by non-lawyers with playbooks or by autonomous advanced technologies neglects the essential sense-checking, supervisory, quality control, and gap-filling contributions that only lawyers can make, if legal service is to be robust and reliable.”
If lawyers were therefore “needed for all legal jobs”, this presented a challenge for alternative legal providers given that in most countries (albeit not England and Wales) they could not employ them.
“Here, then, is one clear explanation of the apparent failure of alternative legal service providers to scale—it is neither possible in practice, nor desirable for most clients today, for great quantities of work to be undertaken without the direct and active involvement of practising lawyers.”
But Professor Susskind and Mr Eisenberg urged law firms not to rest on their laurels as a result: there was still “pervasive pressure” on clients to secure more legal service at less cost.
Though many firms have created in-house alternative provision, such as lower-cost centres staffed mainly by paralegals for more routine work, generally most partners “regard these as add-ons” and they have “rarely” been integrated with mainstream services.
“Full-scale vertical integration in law, as a business model and in operational terms, can be regarded as transformative, unlike much of the current work on innovation in law firms, which has been focused on improving old processes or applying technology to streamline traditional ways of work.
“Vertical integration is a much more fundamental change.”
This would require a more concerted push on knowledge management, “helping lawyers to become more efficient, providing playbooks for staff engaged in process-dominated work, and underpinning the automation of appropriate tasks and activities”.
Law firms would also have to use technology “more extensively”, moving on from simply improving operational efficiency to systems “that take on legal tasks and provide insights into the legal needs of clients” – this meant artificial intelligence and machine learning.
They concluded: “There is opportunity here for law firms—if they can build vertically, supplementing their mainstream lawyers with paraprofessionals, technologists, project managers, and others, then they will be able to compete with full-service alternative providers (where they are permitted) and dominate the markets in which regulation prohibits lawyers from delivering their services from alternative vehicles.
“For both law firms and legal suppliers that integrate vertically, new competitive opportunities will emerge.
“In turn, clients will be more confident in the outcomes when they outsource their work, and this will lead to new opportunities for cost reduction and improved risk management.”