Daniel Currell & M. Todd Henderson, "Can Lawyers Stay in the Driver's Seat?"

Article.  (h/t: Instapundit) Abstract:

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.

Comments

[Stephen Gillers]

We are told:

"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 ...."

Really?

My presumption would be just the opposite -- that lawyers will develop whatever skills they need to stay in control. We're talking about a profession that has been incredibly resourceful and adaptable to change in the last half century (and longer). Law schools graduate some of the smartest people in their generation. Not just smart, but clever. Yes, there will be need to adapt (as always), including today to technology and global trade, and yes, there will be pain for many, but profit to many, too. Same old marketplace competition as before.

Lawyers will not need nannies, I mean project managers. They will be the project managers while other lawyers will do the projects. Forty years ago the big law firms had 100-200 lawyers in one or two cities. Now many have 500+, some have 1000+, a few have 2000+. And they are all over the globe. Who's been managing that astonishing set of changes?