Look around you. In 2017, you probably still recognize the industry you know and love, but it’s not the same industry you started in years ago.
- When was the last time you sent a fax or looked at a phone book?
- Does your firm even have a physical law library or office?
- What software program does your firm use to create all of those legal documents? How old are your colleagues?
- Is your website mobile-friendly?
- Do you have social media accounts?
The new Millennium brought big changes to the legal industry. It’s amazing how fast the good life became the “good old days” for U.S. lawyers.
What happened? I call it the perfect storm.
A lot of industry experts point to 2008 as the year that changed everything. The Financial Crisis leads to an immediate contraction in the legal marketplace. Companies reeling from the sudden economic downturn cut back on legal spending. Law firms, that had grown accustomed to naming their price, sending a bill, and cashing the big check, suddenly find themselves starved for work.
Hiring stops. There are widespread layoffs. Some firms close their doors or merge with other firms to survive.
The market shifts from a sellers market to a buyers market. Corporate general counsel start putting billing pressure on law firms. As Richard Susskind says in is book Tomorrow’s Lawyers, they want more for less. If your firm doesn’t capitulate to their demands, GCs will find a firm that would do their legal work for the price they want to pay.
If it was just the economy, the legal industry might have bounced back over time. Unfortunately, there was something(s) else.
The Legal Tech Entrepreneur
While the Great Recession took most of the blame, a second squall that actually began years earlier, starts to take root (and will actually have a bigger impact over time.) Legal tech start-ups start to offer more timesaving legal technology solutions to legal problems. At this time, technology has had the biggest impact on discovery, legal research, and back-office functions but more is to come.
Why is the increased use of technology so impactful on the legal industry?
In a nutshell, technology means fewer lawyers are needed to do the same legal tasks. Fewer lawyers working faster on legal matters means fewer billable hours. When you bill by the hour, fewer hours equals a big financial problem for firms.
The Rise of the Internet
If only change ended there, but alas there is one more revolution that will wreak havoc for many years to come. It’s the Internet.
By 2007, the Internet became America’s second home. Social media platforms meant people spent a considerable amount of time online connecting with friends. While we were all liking and tweeting, we also started to buy (lots of) things from online retailers.
Then the smart phone created a 24/7-connected society.
My working life changed when I got a Blackberry in 2004. No more did I have to travel with my bulky laptop. I could read and answer emails from any airport or office around the globe. That freedom was nothing compared to my iPhone.
I can buy anything, connect with pretty much anyone, consume any type of media, and find any piece of information I ever needed from a device that fits in the palm of my hand. This small device and the applications (“apps”) that it spawned have upended every industry from books to cabs to hotels to newspapers to computers.
And the Internet’s impact on the legal industry is just beginning.
The Internet is upending the way lawyers and our clients learn, research, and communicate. It is also changing how lawyers create, market, sell, and deliver their legal services. It’s also the place where future alternative legal services will spring from.
In my opinion, the legal industry hasn’t felt the full impact of the Internet yet. Why? Regulation.
Law is a closed profession that requires special certification. Only lawyers can practice law. Only lawyers can own law firms. This limits outside interest in the legal industry. And there hasn’t been a big incentive for entrepreneurs to enter the legal market or lawyers to expand online.
In 2017, those who need legal services and those who provide legal services have limited online interaction, but that will change sooner than we think.
Being a lawyer today is different but still familiar. The future may be unrecognizable.