I read with great interest the CBA Legal Futures Initiative’s recent report, Transforming the Delivery of Legal Services in Canada (“CBA Report”). Although I disagree with much of the CBA Report, it eloquently expresses an increasingly common vision of the legal market, one that is more attuned to technology and does not view legal services as all that dissimilar from other goods and services.
I expect that anyone who is not already sympathetic to the need for greater liberalization in the legal market will find the CBA Report unconvincing, however. The CBA Report relies heavily on the work of Richard Susskind, who also served as a special advisor on the Report. Dr. Susskind is a creative and original thinker and some of his predictions regarding the future of the market may come to pass. But, as revealed by the Initiative’s consultations, Canadian lawyers are divided on the current state of legal market as well as the benefits of Alternative Business Structures (“ABS”):
Responses to the consultation demonstrated two over-arching perspectives: those who believe that change is happening in the legal profession, and those who doubt that transformative change is occurring or that there are compelling reasons to meet that change . . . respondents who cautioned against the need for change often expressed strong support for the public policy reasons underlying lawyers’ existing regulatory regimes.
Participants exhibited polarized reactions to [ABS] . . . some felt it would create a new form of “Big Law” without any concomitant benefits to lower-income and middle-income clients, whereas others felt it presented great possibilities for access to justice and innovation.
In light of these divergent views, one would expect the CBA Report to set out how the legal market is currently failing Canadians and how liberalization will help. For example, are clients dissatisfied with the services provided by their lawyers? Are they unhappy with the fees they are being charged? Has access to justice worsened in Canada and in what areas? How might "innovation" address these problems? What innovations are occurring in countries with ABS that are not occurring in Canada? How much business is going to alternative providers of legal services? Is there any evidence to suggest that ABS invest heavily in R&D? [1] The CBA Report provides very little data and states on page 37:
Throughout the CBA Legal Futures Initiative, participants were stymied by the lack of credible and accessible data on the Canadian legal profession. There is limited data available on the profession in terms of services offered, pricing, profitability, incomes, and cost structures. There is mostly anecdotal information on client needs, preferences, and satisfaction, and on access to legal services more generally. The legal profession has little information on emerging competitors and their business specifics, including marketing and pricing strategies.
The CBA Report proposes that a centre be created to collect such information but the lack of data did not stop it from calling for bold reforms.
One potentially useful data point cited by the Initiative from this study is that Canadians seek legal advice for only 11.7% of “justiciable events.” The CBA Report takes this to mean that lawyers are failing to meet the public’s need for legal services and that alternative providers of legal services are filling the gap. But these claims reflect a basic misunderstanding of empirical access to justice research, which is otherwise unexamined in the CBA Report. Non-lawyers frequently fail to conceptualize their problems as “justiciable events,” often believe they can address their problems on their own, and go to their unions, governments, or friends and family members for help (see table 40 in the above study). Consequently, it is unsurprising that most legal needs are satisfied without attorneys. If liberalization is intended to expand access to justice, the CBA Report should have at least examined why Canadians do not seek legal assistance (see table 39).
I do not mean to suggest that reforms should not be considered in the absence of perfect information, but there seems to be a high degree of innovation occurring without de-regulation (some examples are highlighted in the CBA Report). Asking Canadian lawyers to “experiment and accept some failure as a prerequisite to true innovation” (page 15) based on little more than Professor Susskind’s theorizing is highly problematic even if the consequences of failure to clients and the rule of law are not as great as many believe.
[1] Although not an ABS, a perusal of LegalZoom's SEC documents reveals that it spent $41 million on marketing in 2011 compared to just over $8 million on technology and development.