Someone Should Introduce Demand to Supply

Image [cc] MyTudut
I always enjoy an interesting convergence of ideas. Recently three news items hit my radar that appeared unrelated, until I gave them each a second look and more thought. The first item was the release of the whitepaper from Reuters (of Thomson / Westlaw and Pangea3, the LPO). The paper is entitled, LPO 2.0: the Next Phase of Legal Process Outsourcing Industry. I have previously noted the risk that LPOs will take business from law firms. This was validated in the whitepaper, by this money-shot quote:
Since 2005, the breadth of the services that have been performed and offered offshore has increased dramatically as the industry has become more sophisticated, especially in the areas of litigation, corporate transactional work, and governance, risk management and compliance. Not only are services growing in number, but services that have long been offered by LPO providers are growing to encompass more, and are being packaged as end-to-end solutions.
My prior post on this threat to firms noted the ethics police are apparently not seeing this as a clear ethics or UPL issue, so the door is wide open for this type of competitor. And from the looks of the whitepaper, the LPOs are kicking it open even wider.

Item #2 – “In Washington State, ‘Legal Technicians’ Will Be Allowed to Help Civil Litigants” The Supreme Court there is making this change to enable better access to justice. Here’s the money-shot quote:
“But there are people who need only limited levels of assistance that can be provided by nonlawyers trained and overseen within the frameworks of the regulator system. ... This assistance should be available and affordable. Our system of justice requires it. The court acknowledged concerns that the plan poses a threat to the practicing family law bar. But ‘protecting the monopoly status of attorneys in any practice area is not a legitimate objective,’”
And what do these two things have in common? Both are reactions to the failure of lawyers to meet market needs. LPOs sit at the top of the market. These new “Legal Technician” will sit at the bottom. 

Greg (a.k.a. #1) brought home the all of this with a comment he made about the article “Only 55 percent of law grads found full-time law jobs.” He wondered why so many lawyers can’t find jobs when there is so much need for them.

So at both the top and bottom of the legal market, non-lawyers are filling needs. Meanwhile lawyers can’t find jobs. What is wrong with this picture? Where is the invisible hand of Adam Smith when we need it?

My read on this: High demand existing alongside over-supply brings further evidence that lawyers lack a basic understanding of market forces. The days of lawyers getting work because they are good lawyers are over. Lawyers need to embrace a market driven view of the world and focus on meeting the needs of clients. It's either that or get out of the way and let the market do its thing.

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Steven B. Levy, author of Legal Project Management said...

If I want to sell an expensive violin and you're in the market for an accordion, do we have supply and demand or not? They're both musical instruments. (Okay, not everyone would concur about the accordion.)

It's possible that (at the low end) the supply is of lawyers and the demand is for legal-related services. Right now, the law requires the accordionist-manque to take up violin, which the WA Supreme Court noted might not be a mellifluous outcome. If most law-school grads, after investing a quarter of a million dollars of their (or our) money, want/need to ply their trade in a high-income manner, then it's not supply-and-demand but violin-and-accordion.

Irreconcilable? Springsteen uses both an accordion (Fourth of July Asbury Park/Sandy) and a violin (The Seeger Sessions). So maybe the gap isn't quite as large as I'm suggesting....

Joshua Kubicki said...

This also illustrates the current shortcomings of law school. They are teaching to prepare students for gaining employment in big law firms. With some exceptions for public interest and government jobs - schools simply are not broadening their curricula spectrum.

As you note there is growing demand for legal services just not the traditional kind as delivered by 20th century law firms. Yet schools are still teaching as though it is the 20th century.

So either we must develop new-kinds of lawyers and/or legal pros or the marketplace will simply adapt without lawyers.

And to those that claim there is not a "new normal" - not sure what you are looking at.

Larry Bridgesmith said...

On this topic, see also: http://www.ermlegalsolutions.com/?p=1752 As badly as we would like to believe the Dewey LeBoeuf collapse was an aberration, it serves as a high profile example of what is happening to many firms who cannot match their business service model to the market demands. Add to the mix the recent Altman Weil survey of law firm leaders which reveals that over 90% of them believe these market forces are here to stay and there will be no return to the "good ole days". There are many ways to learn the basic principles of economic theory. The most unpleasant of all is involuntarily.

Ed Poll said...

This is not a new phenomenon. Since I entered the profession, bar associations have talked about matching lawyers with low and moderate income people in need of legal services. No different today in that the need is there. But most lawyers either don't want non-paying clients or can't operate an efficient law practice with low paying clients. And the government continues to cut back budgets for public service minded lawyers who could help such people. An attitude of each for his own, no safety net, no help for others is pervasive in the public media. Thus, the Tea Party, the "just say 'no' Republican Senate and the reduction in California by $300 million in California's allocation for the courts. Not a pretty picture. Lawyers are merely a reflection of the society and economy, not the cause of the problems.

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