This is the second installment of our serialization of the second edition of legal futurist Richard Susskind’s book “Tomorrow’s Lawyers: An Introduction to Your Future.” Reporter Chris Johnson spoke with the legal community to see what its members think of Susskind’s prediction. That piece can be read here. From Susskind’s book:
The Evolution of Legal Service
I maintain this binary distinction between bespoke and commoditized legal work is a false dichotomy and that legal services are in fact evolving through four different stages which I call bespoke, standardized, systematized and externalized. (Readers of the first edition of this book will recognize that I have moved away from the five-stage model presented there. The revised model better reflects the developments we are actually seeing in legal technology and, I hope, more helpfully explains the concept of commoditization.)
In practice, much of the work of good practitioners is not undertaken in a bespoke manner. To be sure, and I want to stress this, difficult problems do arise that undoubtedly require bespoke attention; but, far more frequently, lawyers are asked to tackle problems which bear a strong similarity to those they have faced in the past. Indeed, one of the reasons clients select one lawyer over another, or one firm over another, is precisely that they believe that the lawyer or firm has undertaken similar work previously. Most clients would be horrified to think, especially if they are being billed on an hourly basis, that each new piece of work they pass to law firms is set about with a fresh sheet of paper and embarked upon from scratch. On the contrary, clients expect a degree of standardization.
Take an employment contract as an example. If a bespoke approach were adopted, each employment agreement would be drafted afresh, starting with a blank canvas. However, unless the circumstances of the employment arrangement were particularly unusual, informed clients would expect standardization in two forms. First, they would imagine some form of standard process would be in play—perhaps a checklist or a procedure manual. Second, they would anticipate that their lawyers would use some kind of standard template or precedent as a starting point. In most reputable law firms, this kind of standardization, both of process and substance, is widely embraced. Clients have no interest in paying for re-invention of the wheel.
But the evolution of legal service does not stop at standardization. With the advent of technology, a further step can be taken—that of systematization. This can extend to the computerization of checklists or procedure manuals into what are known as workflow systems. These are commonly used in the insurance industry where there is automation of high-volume, often low-value, tasks and activities. Where there are many tasks, activities and people involved, and yet the process can be proceduralized, automated workflow can greatly enhance the efficiency of legal work. Systematization can also extend, however, to the actual drafting of documents. To use the employment contract example again, document automation is a technique that requires users to answer a series of questions on screen (for example, the name of the employee, the starting date of employment, salary, and so forth) and after completion of an online form, a relatively polished first draft is compiled and emerges. The underlying technology for this has been in existence since the early 1980s—it is a kind of rule-based decision tree, so that answers to particular questions cause a paragraph or sentence or word to be inserted or deleted, as the case may be. Document automation tends to have the added advantage that the user answering the questions need not be a legal expert or even a lawyer.
I know of one firm that systematized its document drafting internally and claimed that this new efficiency was a key differentiator for them in the market. However, one savvy client perceptively inquired: Iif drafting employment contracts, at least for the majority of employees, involves no more than completing a form online, then why can this not be done directly by the human resources department within the client organization? This line of thinking leads naturally to the ‘externalizing’ of legal services. This occurs when lawyers pre-package and make their experience available to clients on an online basis. It offers an entirely new way of tapping into lawyers’ expertise. Different ownership and charging models can be used when externalizing. The service can be made available on a chargeable service (the favoured option for commercial law firms), sometimes at no cost (an approach preferred by government bodies and charitable organizations), and occasionally but increasingly on a commons basis (in the spirit of Wikipedia and the open source movement).
I now think that this entire transition—away from bespoke service towards externalization—can usefully be termed the ‘commoditization’ of legal service. On occasions, some lawyers refer to what I would call ‘standardization’ as ‘commoditization’ where others equate commoditization with no-cost externalization. However, even when law firms or other providers charge for access to their online services, this can still mean dramatically lower costs of service for the client, while for the law firm it offers the opportunity to make money while they sleep—this is a radical departure from the hourly billing model, because the lawyers’ expertise is used without any direct consumption of their time.
For many years, I advised the tax practice of Deloitte. From around 2000, they progressed along a similar evolutionary path in respect of their tax compliance work: helping clients to prepare and submit their corporate tax returns. In the beginning, this was a handcrafted activity but they have moved steadily along the spectrum and, in the U.K., they distilled the collective expertise of around 250 of their tax specialists into a system for clients to use directly. In externalizing their tax knowledge in this way and selling it, they fundamentally changed their business model. They created a service that they intended would be of lower cost to clients and, because they have so many users, more profitable for Deloitte than the traditional bespoke offering. Interestingly, Deloitte sold that service to Thomson Reuters in 2009.
From the client’s point of view the arguments in favour of moving from left to right on my evolutionary path are compelling—as we move from left to right, the cost of legal service comes down, the price becomes more certain, the time taken to complete work reduces, and the quality—surprisingly for some—goes up (the collective expertise of many professionals invariably outclasses even the most talented bespoke performance).
Many lawyers respond dismissively to the idea of externalizing legal services as online offerings. They said that they did not go to law school to package or externalize their knowledge, they are not publishers, and they are certainly not software engineers. I look at the world very differently. I think if we can find new, cheaper, more convenient, and less forbidding ways of delivering legal services, then we should be adapting the way we work and adopting these new techniques. Our focus should be on helping our clients to meet their formidable more-for-less challenge rather than obstinately holding on to outdated, inefficient working practices.
There is no denying, however, that my model suggests, rather ominously for lawyers, that some legal resources will become readily available at no cost on the internet, perhaps even as a shared resource to which anyone can contribute and from which anyone can draw. I acknowledge that lawyers will not benefit commercially from the commoditization of legal services in these ways, but I urge that these forms of externalization will be fundamental in radically increasing access to justice for those who cannot currently afford legal services.
Excerpted with permission from Tomorrow’s Lawyers by Richard Susskind. For more information, click here.
