The future of law practice

The Georgetown Conference on the Future of the Global Law Firm was, I think, a very successful conference featuring an interesting extended discussion among regulators, academics in various disciplines, law firm consultants and top partners of big law firms.  Here's some comments by Gordon Smith. There was much too much to summarize in detail, but here are some overall reactions.

To begin with, the shape of the legal industry today tells us very little about the future. That's because this shape has been largely dictated by regulation of the structure of law firms, including restrictions on conflicts of interest, ownership and enforcement of non-competition agreements. These rules constrain firms that practice law in raising capital, retaining talent, and attracting clients.

In the long run, this regulation is doomed. Markets are demanding lower legal costs and more flexibility, and there is international competition to supply these demands. Markets and contracts will work around the rules. The rules themselves will be history when, for example, New York law firms have to start competing with, among other things, a liberated UK legal services industry.

Post-deregulation, there's no telling what will happen. At the conference, I hypothesized law firms with varying levels of lawyer control, as well as a bewildering variety of non-law firms selling various types of legal expertise. Bruce MacEwen aptly referred to the coming "Cambrian explosion" in the legal business, in which evolution is unprecedented and rapid.

Certainly there will be many variations on the globalization of law practice – firms that send their lawyers all over the world, franchise local offices, or practice international law from a home base. Even firms with local clienteles will have global supply chains, just like non-law firms today. Much legal work is already being routinized and shipped to India.

These developments are going to force us to rethink what it means to practice law or have legal skills, and how to teach people these skills. It's important to keep in mind that practicing law didn't used to be high-falutin. Once upon a time you apprenticed for it like other trades, and didn't even need a college education. That was before a powerful trade group called the American Bar Association and its equivalents throughout the world figured out how to make law practice a high-priced profession. Global competition may return us to some version of those days.

Just as the lawyer market has been protected by regulation, so has the law school world. So we still put all law students through something like the standard three-year routine that has survived for a century. We say that every one of them needs to be able to do the same set of things.  After all, a specific definition of law practice is essential to what it means to be a profession. 

In the future, however, the legally skilled may be people sitting in Bangalore who have never seen the inside of a US law school. Others, as Bill Henderson suggested, may be trained by law firms, as these firms wake up to the inefficiency of buying resumes. The market value of some kinds of lawyers may skyrocket, while that of others may plummet. Surely in this world we can't expect to be selling all law students the same $100,000 education.

The bottom line is that lawyers have been living within the comfortable protection of a regulatory monopoly. One of these days the zoos will close and the animals will be left to fend for themselves in the wilds of the markets. I'm glad that I was able to spend a nice long career in the zoo, although I think it will be pretty exciting out there in the jungle.