COVID-19 Will Turbocharge Legal Industry Transformation

26 Mar 2020 9:45 AM | Kim Fantaci (Administrator)

The 2019 novel coronavirus (COVID-19) is attacking the health, financial welfare, social order and political stability of nations across the globe. At a time when millions are fighting to survive illness, financial hardship, political upheaval, and other existential threats, it is difficult to look beyond the moment. The scourge of COVID-19 will pass. When, at what cost, and what its lasting impact will be are open questions.

One thing is certain: when the immediate crisis of the pandemic abates, life will be different.  Tom Friedman’s recent New York Times op-ed  suggests the coronavirus will create a new historical divide:  before-Corona (BC) and after-Corona (AC). Translation: Corona is a seismic event.

How will COVID-19 change the legal industry and what will it look like AC? Short answer: the coronavirus will turbocharge legal industry transformation. It will propel law into the digital age and reshape its landscape. The entire legal ecosystem will be affected—consumers, providers, the Academy, and the judicial system.

Digital transformation has been a C-Suite priority for years, but the legal industry has scarcely taken notice and is unprepared. The coronavirus will change that. It will produce a swift, comprehensive, top-to-bottom  reimagination of the legal sector. Here is a brief outline of what things might look like on the other side.

Remote Work and Distance Learning Are The Tip Of The Iceberg

The coronavirus has turbocharged law’s move to a virtual workforce and distance learning. The well-fortified walls of resistance have been breached with breathtaking speed. Office and school closures, social distancing, and stay-in-place measures have been met with widespread industry deployment of underutilized technological tools, an urgency to alter the status quo, a must-do, adaptive mindset, and rapid adjustment to new operating procedures. Legal culture has not, of course, had time to process this, but it has demonstrated that it can, when pushed, alter entrenched methods of educating and delivering services.

Remote work is nothing new to business.  A Report  by the Society for Human Resources Management (SHRM) found that 69% of organizations allowed employees to work remotely in 2019— three times more than the telecommuting workforce at the turn of the Millennium. There are several reasons why business is turning to more remote workforces: greater job satisfaction, more efficient use of company resources, and enhanced productivity. These and other factors explain why The World Economic Forum Future of Jobs Report cited changing working environments and flexible working arrangements as the #1 business market trend. Law has tenaciously clung to traditional ways of doing things. Even after the global financial crisis, the law firms adjusted at the margins—furloughs, reduced rack rates, and internal cost-cutting measures. This time things will be different; the changes will be broad, deep, and enduring.

The potential of distance learning has been realized by online educational companies like Coursera and Kahn Academy. They provide accessible, affordable, flexible, quality content to millions of online learners. These online companies also demonstrate that education is a process, not a place. It is a lifelong process in a world where competency and agility are as prized as diplomas and pedigree.

Online courses have long been resisted by law schools, Some have online offerings, but they are  comparably priced to the traditional classroom model. Law school tuition has continued to rise, triggering a tsunami of student debt. Law schools have responded by appeasing tenured faculty, hiring more staff, engaging in a building boom, and hiring more fundraisers. This cycle will come to a halt in the aftermath of COVID-19.

There will be a pruning of the law school herd. Consolidation, tuition reduction, flipped classrooms, and online programs will become mainstream, especially among non-elite schools. Alternatives to the three-year juris doctor (JD) program will proliferate as prospective legal professionals evaluate the time, cost, and value of a JD in a market where fewer professionals will engage in the practice of law and more will focus on the business of delivering legal services. A law degree will be a “nice to have” but not necessarily a “must have” for many aspiring lawyers.

Law schools will confront competition from new sources. Tech-enabled companies will create legal training and learning centers that offer competencies including, but not limited to, legal expertise. Other professional schools, notably business and computer science, will offer legal courses that complement their core curriculum and prepare grads for newly-created legal jobs.  Legal programs—and education more broadly—will transition from diploma mills to learning centers for life with a strong community component. Students will not be burdened by exorbitant debt, enabling them to pursue jobs for passion, not to maximize economic return to pay-off loans.

Law Firms And In-House Departments Will Be Transformed

Competition for talent and clients/customers will intensify in the post-Corona world. Legal consumers will engage providers that deliver solutions to business challenges. Elite legal expertise will be at a premium, but consumers, not lawyers, will determine what it is, when it is required, and how its results are measured. The competition for “bread and butter” and commoditized work will be more intense than ever. The traditional law firm partnership model, already showing stress cracks, will have exposed fissures in the AC world. Differentiation will become even more critical for firms to survive and so too will the need to collaborate with others in the supply chain. Talent platforms will accelerate this change process. There will be more collaboration across firms, corporate departments, and other providers, and the artificial divides separating them will disappear.

Corporate legal departments, legal swans of the last decade, will be affected, too. They can no longer rely on “insourcing” as a solution to C-Suite pressure to do more with less. In-house teams must determine “who does what?” and look beyond traditional insource/outsource paradigms. They will be challenged to reimagine the art of the possible and to restructure how legal delivery can meet enterprise expectations.

 “Going digital” was once an illusory concept for most General Counsel and their senior management teams. In the AC world, it will be well understood. The legal function will no longer be divided into law firms, corporate departments, and other supply chain providers. It will operate as a seamless, integrated team drawn from multiple sources. Its remit is to proactively defend the enterprise while collaborating with business counterparts to drive impactful enterprise value. The designation of a firm, in-house, or other provider resource will not matter—expertise, collaboration, delivery, results, and customer satisfaction will.

Consumers will benefit from the rapid transformation of the post-Corona industry. Corporate buyers will have access to platforms enabling them to identify needed talent quickly, reliably, and across geographies and skillsets. They will have secure, on-demand access to data-driven information to make faster, better-informed hiring and business decisions. Corporate risk tolerance,  business objectives, and other matter/client/industry data will be baked into this process. Legal risk will be one of a constellation of factors, not the centerpiece it has been traditionally.

The coronavirus will accelerate the growth, prestige, and market share of a handful of an elite cadre of enterprise legal service providers that includes UnitedLex and the Big Four. Their global footprint, scale, technology, process and delivery capability, capital, and broad, deep multidisciplinary expertise are well-suited to AC consumer demand for scalable, “safe hands” to solve large, complex, multidisciplinary, multi-jurisdictional challenges.

Axiom, a pioneer in reimagining legal delivery and culture, will fare well. Axiom’s well-established brand, depth and breadth of highly-vetted, experienced attorneys will be great assets in the AC landscape. So too will the company’s flexible, just-in time model, culture, and capacity to scale on the supply and demand sides draw talent and attract buyers. Axiom’s dual focus on satisfying its workforce and customers, coupled with its data-driven process and technology platform, are additional ingredients for future success.

FisherBroyles, an early new-model law firm and the only “virtual” one to scale, is another provider well-positioned for success in the AC world. The firm’s flat organizational structure provides flexibility to its lawyers, allowing them to set their own billing rates, organize project staffing with colleagues, and work when and as they wish. FisherBroyles attorneys collaborate seamlessly with colleagues as well as others in the supply chain. The breadth and depth of the firm’s legal expertise, coupled with its agile, flexible model and collegial culture, set it apart.  The firm’s model aligns the interests of its lawyers with the firm and the firm with its clients. This has been a winning formula that will be even more successful in a transformed legal landscape.

Courts Will Go Digital

My friend and colleague, Richard Susskind, addresses judicial modernization thoughtfully and thoroughly in his new book, Online Courts and the Future of Justice. His analysis is all the more prescient and timely since the volume’s publication predated the COVID-19 pandemic. Susskind questions whether courts are a service or a place and makes a forceful case that technology can help resolve the global access to justice crisis. He advocates for “online judging,” where human judges—not artificial intelligence—decide cases, though not in the physical courtroom via oral argument. He also supports “extended courts,” a self-help, virtual form of the traditional court function whereby the parties are provided a range of tools to promote understanding of rights and obligations. Susskind acknowledges that not all disputes are amenable to online judging or extended courts, but his re-imagination of everyday litigation is both realizable and an important step in combatting access to justice. 

The inaccessibility, cost, formality, abstruse rules, and protracted processes of courts in their present guise is misaligned with life in the digital age. The urgency of modernization is unprecedented. Courts around the world have ground to a halt when demand for accessible, efficient, and widespread administration of justice is desperately needed.

Conclusion

Friedman’s before-Corona and after-Corona line of demarcation is already taking shape in the legal industry. In a matter of weeks, legal education and service delivery have been transformed. The pandemic is putting tremendous pressure on courts to do the same.

The old guard will cling to the hope these are temporary changes. They will point to the recession precipitated by the 2008 global economic crisis and suggest the current one will take a similar course. This time  is different. Technology and new delivery models are far more advanced than they were in 2008. Consumers have a different mindset and a greater urgency to solve a growing list of complex challenges. The potential of technology and its ability to support new models, processes, and paradigms is already on display. The genie is out of law’s bottle, and it will not return.

The contours of the AC legal world are taking shape. There are challenges and opportunities. Those who upskill and adopt a learning-for-life mindset will find opportunity. Others that stand pat, hoping that things will soon return to the BC world, will be redundant. COVID-19 will produce a thinning of the herd and a reimagined legal industry.

Embrace the challenge.

Original article posted here

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