If Times They Are a-Changing, Why Aren’t Lawyers Too? [by REID TRAUTZ*]

We are two decades into the internet era and have witnessed the transformation of entire businesses and industries. Remember travel agents, America Online, or video rental stores? Could you live without a smartphone, Amazon, or Google ?

As a profession, we’ve been alerted to the evolving future for at least a decade from a variety of commentators, including Sir Richard Susskind and Jordan Furlong, as well as various bar association reports, and most recently, the American Bar Association’s Report on the Future of Legal Services in the United States. Among the forces that are impacting the profession include a recognition that most Americans cannot afford to hire a lawyer and are seeking lower cost services; non-lawyer competition in the marketplace, especially from online providers; evolving computer technology, including artificial intelligence and data analytics, and changing attitudes among many within the profession that consumer protection from unauthorized practitioners is often really lawyer protectionism.

Whenever we discuss recent changes to the legal profession, we always seem mention just two examples: Legal Zoom and Avvo. Rarely can we think of another example of change in the legal marketplace. So while the world around the legal profession is changing dramatically, few lawyers are making changes to the way they practice law. We aren’t adopting new delivery models or new technology, nor actively asking clients in the marketplace what changes they would like to make legal services more accessible and affordable.

What changes has your firm made in the way legal services are delivered? Are you using the same office and tools that lawyers have used for 20+ years? We seem frozen in place. We read about the evolving changes to the profession, then go back to working the same way we have for decades. Why is that? Why aren’t we changing to take advantage of the new opportunities in the marketplace?

I believe there are three major impediments to lawyers changing how we practice. These prevent us from taking opportunities to serve more clients with more affordable legal services while maintaining a profitable law firm and satisfying career.

Ethics and Innovation

The Rules of Professional Conduct have a huge impact on how lawyers deliver legal services, and are an impediment to changing those services. Most of these rules are really business rules. They instruct every lawyer how to conduct their businesses. Only one rule addresses substantive legal conduct—Rule 1.1—Competence. All of the other rules inform lawyers how to deliver their legal services to clients: How hard we have to work (Rules 1.2 and 1.3) and when we can stop working for the client (1.16); when and how to deposit money (Rule 1.15); how to charge (Rule 1.5); when and how to communicate (Rule 1.4); how and what information to protect (Rule 1.6), and how lawyers can organize our businesses (Rules 5.4-5.6), among the other rules. Our advertising rules (7.1-7.5) tell us how we can communicate with potential clients, and other rules tell us who we can represent (Rules 1.7-1.9).

The rules play an important role in the self-regulation of the legal profession, and exist to promote and protect many worthy objectives, including consumer protection and meaningful access to justice. However, the ethics rules directly impact how services are delivered and the cost of doing so. The penalties for not following the rules can be severe. In addition to the time and cost of defending a disciplinary complaint, lawyers face loss of their license and the ability to continue practicing law. Good lawyers spend a career learning to stay within the scope of the rules, so as to avoid these penalties.

So if lawyers are directed to all follow similar rules that instruct us how to conduct our business, and lawyers face severe penalties for not following the rules, is it any wonder that few lawyers innovate?

For example, many state bars have imposed significant requirements and limitations on lawyer advertising. Numerous states require pre-publication screening and post-publication recordkeeping of all advertising, including websites. Navigating myriad advertising rules, especially in light of social media and other internet-based marketing opportunities, is daunting for most solos and small firms. 
It takes time, money, and effort on the part of the lawyer or law firm to comply with all applicable rules. The Florida Bar has published a handy 126-page guide to help lawyers comply with all the rules, regulations and recent amendments. Why should it take 126 pages to explain all the limitations on the right to communicate with the public about legal services? There may be good reasons for these rules, but we must understand the business costs these rules impose on firms large and small.

Lawyers face business hurdles not faced by other businesses. A plumber, accountant, etc.—may be hired for a specific task that is limited in scope, but lawyers who sell their legal services in the same way are subject to scrutiny, especially in litigation matters. Failure to properly document the scope of the relationship, or failure to convince a judge that a proper withdrawal is warranted, may leave the lawyer engaged in a business relationship that was not part of the bargain. Although the concept of limited scope representation (unbundling) has been in our Rules of Professional Conduct for years, it is still not welcomed in some areas of the profession. Ghost-writing complaints and briefs is one such area. Such uncertainty adds to our reluctance to use this method of lowering the cost of doing business and lowering the cost of services to clients. In 2013, the Illinois Supreme Court enacted a detailed court rule to facilitate limited scope representations and provide guidelines for judges, consumers and lawyers on such representations. However, although the court should be applauded for this step, few lawyers in Illinois are even aware of the court rule, so few offer unbundled services.

This does not mean our rules prevent us from delivering our services in a different way. However, it is clear that our rules have pushed lawyers into a delivery model that is difficult to change. The myriad Rules of Professional Conduct and our current disciplinary system make us reluctant to change. Finally, when a lawyer does seek to innovate, such innovation is too often met with UPL or disciplinary complaints filed by other lawyers.

The rules and regulations governing the behavior of lawyers make it hard to change, but it isn’t the only reason.

Innovator’s Dilemma

In his landmark book The Innovator’s Dilemma, Clayton Christiansen, the Kim B. Clark Professor of Business Administration at Harvard School of Business, chronicles how innovation takes place and how incumbents fail to seize the future within their marketplace.

A central thesis of the book is that it is hard to innovate and change most successful businesses. Christensen’s book suggests that successful companies can put too much emphasis on customers’ current needs, and fail to adopt new technology or business models that will meet their customers’ unstated or future needs. He argues that such companies will eventually fall behind. Christensen calls the anticipation of future needs “disruptive innovation,” and gives examples involving the personal computer industry, earth movers, and steel mini-mills.

As the title states, the innovator’s ‘dilemma’ comes from the idea that businesses or organizations will reject or be slow to adopt technological innovations because current customers cannot use them. In short, why change the business when it is experiencing success?

That is what is happening in law firms across America. The vast majority of firms are happy with the trajectory of their monetary success, so are not interested in investing in a new model of doing business. Why spend money to invest in new technology to create a business delivery model to compete with the one you’ve already built? In past decades that decision would be sound business judgment, but that is no longer true. Complacency among law firms is encouraging non-lawyer entrepreneurs to enter into the legal market and deliver legal services to address the needs of consumers seeking affordable legal services.

Make no mistake, bar associations and governmental agencies are encouraging lawyers to innovate their delivery model to close the persistent gap in affordable and accessible legal services. In fact, the ABA, the Federal Trade Commission, and some state supreme courts are encouraging non-lawyers to provide legal services too.

The Lawyer Personality

As lawyers, we are trained to question facts and hunt for the negative in order to protect our clients. We need to be skeptical of facts, look for fault and question what could go wrong. This negative mindset helps us to be good lawyers, but it can prevent us as business owners from moving forward in times of change.

Dr. Larry Richard—a psychologist and lawyer—has conducted psychological research about lawyers for 30 years. His research shows that lawyers have substantially similar personality characteristics when it comes to change. We are highly skeptical (unbelieving), highly autonomous (don’t like to be managed), and have low resilience (hypersensitive to criticism). As a group, our scores in these areas are at least two standard deviations from the norm. He sums it up like this:

“It’s little surprise that lawyers, even among other professionals, are not wholly accepting of change, especially when it comes in the form of a large wave. Reaction to the current level of dramatic change in the legal industry can manifest itself in higher levels of anxiety and, worse yet for lawyers, a consuming focus on threats rather than opportunities.”

So lawyers not only resist change, we run from it. We not only seek stare decisis, we revel in it. At a time of great change, we are as a group totally unprepared to meet the challenges created by change.

Creating Your Future

While it may seem that the future for lawyers is troublesome, nothing could be further from the truth. Lawyers are among the brightest people on the planet, who solve complex problems for other people every day. It’s now time to solve this one for ourselves. We have to put in the same time, thought and energy to this problem as we do for our clients. Lawyers must understand their obstacles to change and develop solutions. 
It means engaging other lawyers to change regulatory barriers to delivering more affordable legal services to more people. It means seeking consumer input and understanding what they value in the panoply of legal services. It also means learning to understand the impact of our negative mindsets on business decisions so that we can evolve with the changing marketplace rather than be left behind.

Reid Trautz is a lawyer, author, and practice management advisor, and is the practice and professionalism director of the American Immigration Lawyers Association. He is vice-chair of the ABA Law Practice Division Futures Initiative working to develop a new viable and ethical business model for the delivery of affordable legal services.

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