Glimpsing the future – The democratisation of legal services

January 1, 2011

I am sorry; using a word like “democratisation” is not the best way to start any article.

I suspect I’may have lost some of you already. The alternative however seemed to be something like “how changes to regulation and advances in technology potentially make access to legal guidance more prevalent and more affordable”.

Centuries ago the printing of books began a revolution in the dissemination of information that began the empowerment of the working classes and accelerated innovation in commerce, the arts and the sciences. The internet revolution of the last decade is our equivalent today and is doing the same, but in an exponential way. Legal services are being caught up in this revolution too.

Access to justice, in terms of court representation, may still depend for now on the interpretive and presentation skills of advocates, but this is only a small part of the access issue. Access to justice begins with the realisation that protection/rights exist and that obviously requires there to be an awareness of those protections/rights.

Law firms however, while often full of people with the strongest vocational calling, have traditionally wanted to protect their intellectual property and this institutionally is a stronger factor than the desire to protect individual rights. As a result lawyers tend to be engaged by client only after awareness of a justice issue has already been raised.

This is however changing and law firms are no longer the major guardians of access to legal know-how. What is interesting to see now is that the major players in legal content publishing, companies such as Lexis Nexis and Practical Law Company, have established extraordinarily powerful bases as controllers of legal know-how. Ally this to, for example, the pace of development in mobile technology, in searchable databases, in “intelligent” algorithms etc, and suddenly legal expertise can be brought to a far broader audience than ever before.

This can potentially lead to the democratisation of legal services and, if the patterns that are observable elsewhere are repeated, then it will drive cost down, ultimately in most cases, to a negligible level.

Where once lawyers could charge for their time to assess, research, consider and advise, in future a few clicks of a computer mouse will give most people most of what they want. I am not judgemental about this and there is clearly risk (for lawyers and consumers) for all to see, but where good is good enough no one can deny the incredible opportunity that the publishers have to bring about unprecedented access to legal expertise that will change commerce, dispute resolution, protection of rights etc for ever.

While the view might be that this spells the end of economic viability for traditional small law firms, it does not necessarily have to be so for the lawyers who work in them. We should not confuse the evolution of structures (which may well change) and the public’s need for services. If more people are aware of their legal rights/responsibilities, this will almost certainly mean that markets for paid-for services will also broaden and grow as a result of greater public understanding and engagement.

Greater access to legal knowledge and services however is not just for those without economic means or for those who are otherwise disenfranchised. At the other end of the spectrum in this world where we will pay less and less for the gift of knowledge, I wonder whether relatively rich and powerful consumers of legal services will pay more and more for the wrapping.

I have lectured for years now on this theme; on the one hand even the most discerning purchasers of legal services struggle to articulate how they differentiate between providers in terms of the quality of legal expertise deployed. Yet on the other hand we are all capable of assessing whether the elements of the service we receive are acceptable. These elements, such as the accessibility of lawyers, the clarity of their communication, their understanding of context, nuance, tolerance to risk, and empathy with the client etc, are factors we all assess all of the time.

The inevitable conclusion we reach is that value (and therefore profit) will be attributed to the service we receive not to the legal advice itself. Obviously we will expect (perhaps even assume) that the legal content will be good enough and this is perhaps the role for regulators going forward to provide the “kite-mark” of quality we need, but in very many ways what we will increasingly pay for will be the quality of the interaction.

The providers of legal services therefore, especially providers who are not dealing in the high-end consulting services (the mega-deals, the inter-governmental activity etc) but who are working in the broad swathe of corporate, commercial and consumer law, must drive down the cost of their “product” while driving up the value of the service. This is something that we can see today in a variety of areas that are not obviously linked.

At one level law firms have become used to pricing the component elements of a transaction or dispute, in effect unbundling their service. This has encouraged a detailed examination of process and procedure that has improved efficiency and has also challenged law firms to consider what elements of a service/process are ones that clients might pay for and those which might have to be priced at a loss, even given away for free.

At another level the claims handling legal services that are provided to the biggest insurance companies focus value on the quality of the management information, the trends analysis and the efficiency improvements. This is as far removed as you can get from the traditional “wig and pen” caricature of lawyers and is in the same space occupied by serious process engineers and logistics management experts.

Moving into the transactional realm, the quality of relationships between lawyer and client still has significant influence. In this area of activity, if the client is made to feel valued it will help the lawyer to articulate value. However, this is a very vulnerable space which is always likely to be undercut at all times by the latest iteration of process improvement or technological advancement. The only realistic way in which this segment of market activity can be protected is to tie-in the client to a genuinely creative and important value-add proposition.

What does this mean? It means, for example, providing exclusive and insightful thought leadership to clients so that being a client ensures access to relevant and helpful strategic guidance on market/sector trends. Law firms that can leverage their position of privileged access across markets, from regulators to suppliers and to consumers, can draw trends, point to developments and opportunities and so can create competitive value for their clients. Value-add also means supporting the clients’ own resources for managing risk more effectively. This might be through training programmes, systems development and/or adding people to the in-house team.

The logical extreme of the approach will see legal content reducing in cost often to a point where it is free, but where the profitability of the supplier is developed through bundled “membership” services, through resource management, access to know-how systems and strategic advisory/consultancy services.

It might just be as well that in the mix of services offered and in the drive for brand differentiation, law firms will also invest even more in their CSR and pro bono work. It is a little too glib to say that clients will choose law firms because they have a strong commitment to pro bono, but as part of the rounded mix of factors, it is important.

The prospect is there for anyone to see – law firms will make less and less money from selling access to legal knowledge and more money from providing value added services. In turn lawyers will invest in their brand values to create perceptions of market differentiation and this may involve, for some at least, a significant commitment to pro bono services.

And so the circle may be joined.

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