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Does legal disruptive innovation mean the end of lawyers?

Without clear legal service design, informed by what should constitute legal practice, the scope in which law firms operate will continue to shrink, and with it, commercial opportunities as well as access to justice for the general public, writes Chantal McNaught.

user iconChantal McNaught 29 September 2021 NewLaw
Does legal disruptive innovation mean the end of lawyers?
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What we don’t know about legal services can hurt us

The reality for the legal profession is that in today’s age, the scope of legal practice is expanding, and with it, the competition.

While the Uniform Law simply prohibits anyone unlicenced from engaging in legal services, the work done or business transacted in the ordinary course of legal practice is changing rapidly.

At the core, we know representations to courts and government entities, and any advice pertaining to that – advocacy – remains squarely within the scope of what it means to be a certified legal professional in Australia.

But what of the advocacy-adjacent work? Important transactional work and advice is slowly, but determinedly, growing and there is ever more competition from in-house or into the remit of the non-lawyer professional to conduct what would have ordinarily been private legal work.

Something needs to be done, I argue. To address this fact that there can be many ways in which a member of the public can “get the job done” without having to engage a certified solicitor.

Legal disruptive innovation and the ‘jobs to be done’ theory

Harvard Business School Professor Clayton Christensen is well known for his “jobs to be done theory of disruptive innovation. This theory can be applied to the challenges faced by the legal profession due to the lack of certainty around what constitutes legal services.

Professor Christensen speaks in a Harvard Business Review podcast about how McDonald’s was able to increase the sales of milkshakes, not by reducing the price, but by redesigning the milkshake as a solution to a “job that needed to be done”.

The “jobs to be done” theory works on the principle that a product has more value when it can solve more than one problem. Understanding the problem that needs to be solved is, therefore, the key to successfully growing sales of that product.

Applying this to the law firm, the firm should look at every service it provides to its clients as a separate product and then ask of the “jobs to be done” for each. The question for each product/service becomes, “what event has occurred for a person or business to need to hire a lawyer to get the job done (over all other options)?”

Take a will, for example. A person can hire a lawyer for that job, complete a will kit, or use an online will tool. The job isn’t that the person needs a will. The job is when the person has thought about the consequences of their death, the administration of such an event, and is seeking a certain outcome for that event. It is around this that the legal service should be designed.

This approach is at odds with what is actually occurring and is written here frequently – that legal technological innovation should reduce the costs of legal services. We have somehow collectively assumed the job that needs to be done is that lawyers need to be cheap.

This is the persistent myth that the only way a person would agree to hire a lawyer is when the lawyer is the cheaper option. The full background as to why this is a myth deserves its own paper.

What this failure to complete a legal process design and to believe in the myth of cheap legal services has resulted in is that legal practices are hastening their pace towards shrinking the scope in what constitutes legal service.

We have forgotten what we do that makes us lawyers

There are now arguably fewer jobs for lawyers to do as clients have more options to get the job done, rather than hiring a lawyer.

One way this is occurring is by legal process outsourcing (LPO). LPO is driving away the activities which have traditionally been conducted by trainee and junior solicitors within law practices. So now it is far too expensive for law firms to train future lawyers due to the rise in lower cost LPOs, as clients build their appetites for low-cost-high-return legal services.

Suddenly, there is a negative feedback loop. Firms are designing their services around a low-cost pricing model rather than designing the legal service around the job the client needs to be done. This has placed pressure on practices to reduce their operating costs and use solutions, such as LPOs, which has resulted in fewer lawyers being trained in legal work due to expense. Fewer lawyers mean clients are more likely to shop around for the solution to the job that needs to be done. Therefore, resulting in lawyers designing a low-cost pricing model to remain competitive against other options.

In this context, and despite law schools producing more law graduates than ever before, law graduates are no longer seeking a practitioner career. Instead, the lack of opportunity caused by the LPO displacement is causing graduates to seek more available advocate-adjacent careers, which will promise more financial incentive than any domestic lawyering ever could.

The end of lawyers?

It is not too late to press pause on this trend. The Law Council of Australia has already successfully advocated for the removal of the double-registration requirements for solicitors to also be registered migration agents to provide migration law advice and services. Actions such as this are steps in the right direction in maintaining the value of the admitted practising certificate holder.

Each practitioner can do their part to uphold the profession, too. It is trite, but practitioners focused on client outcomes will be far more valuable to clients than focusing on a cost-cutting exercise, causing unmitigated damage to the future of the legal profession.

Designing an appropriate solution for each job that a client would need a solicitor to do, is an effective and appropriate way to protect the profession.

The solution here is by no means exhaustive. And my assumption is that advocacy-adjacent work disappearing from the legal professional wheelhouse is a negative outcome for clients. It is possible this is a good thing, and I guess we all must be open to that possibility.

However, the legal profession’s history demonstrates a clear rationale for why the activities of the advocate and advocate-adjacent are worth protecting with high entry standards and lengthy training. The administration of justice gets no easier, and shouldn’t it be the passion of any proud and professional solicitor to provide a solutions-oriented outcome for clients?

I personally welcome continued discussions on how LPOs can improve legal services – not by outsourcing important work in the name of reducing some small expense for a client – but to help focus the profession on the value and impact solicitors can provide to their clients.

It may not be the end of lawyers just yet. A well-designed legal solution that ensures clients hire a lawyer for the job is a good start to prevent such an ending for the profession.

Chantal is an admitted lawyer, writer, researcher, and is passionate about all things legal practice and technological innovation and cats.

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