Can Lawyers Stay in the Driver's Seat?

Author: 
M. Todd Henderson
with: 
Daniel G. Currell

The law firm business is thriving, despite significant pain in the legal sector as changes take place. The continuing success of Big Law is in part because of its ability to adjust quickly to changes in demand by hiring and firing staff. But as Larry Ribstein saw, big changes nevertheless loom on the horizon. These changes will likely be driven by a series of specialized service providers who compete with law firms from a lower price point as Benjamin Barton points out in his article in this volume. If history is a guide, cheaper alternatives will evolve into higher-quality alternatives, at which point the law firms most invested in the status quo are likely to suffer greatly. While the significance of this disruption is often viewed in terms of how it will affect lawyers, in fact it should be assessed mainly from the perspective of consumers and society: does the quality of legal services rise or fall at any given price point?

While this is the correct question from a social standpoint, a related question of immediate interest to lawyers is this: will lawyers still be “in the driver’s seat” of the legal sector when the dust settles? Or will they cede their leadership in the way that architects ceded leadership in the construction sector? Architects were once clearly at the top of the food chain in the building sector, but that is no longer the case. Developers and general contractors have a great deal more power and, it must be said, make far more money. Will traditional law firms cede control of major legal projects in the same way?

This is a radical question – but we believe it is not frivolous. Lawyers don’t generally have sophisticated procurement, project management and commercial skills. These skills are important for managing complex legal matters, and there is a large and growing class of non-traditional legal service providers who are cultivating those skills. It could turn out to be more efficient for traditional law firms to focus on what they do best, which is far less than the work of managing every aspect of a legal matter – just as the work of an architect is much less than managing an entire building project. Architects supply a key intellectual input to a building project. By the same token, law firms could end up supplying a key intellectual input to a legal matter. As Bill Henderson points out in his article in this volume, there are cultural and practical barriers to law firms – as currently structured – changing their model to adapt to the market. At a minimum, the traditional law firm model faces stiff competition in the decades to come. More radically, law firms may find themselves sidelined from some of the most important aspects of legal representations.

Yet if law firms cede their traditional leadership role, effects on their clients and society will not necessarily be positive overall. Because of this, we believe it is important to consider the implications of these changes on the education, licensing, and regulation of lawyers. The traditional law firm’s ability to avoid the fate of other commoditized professionals will depend in part on how lawyers approach the content of their education, the design of their licensure system, and the regulation of their industry.