Do More Law

Law practice today is a land of opportunity. This is due to the combination of

1. underserved legal consumers, and
2. technologies and processes that make legal work more efficient, which make serving these consumers possible.

Lawyers who embrace efficiency have the opportunity to do more law for their clients. And make more money in the process.

We lawyers sell to a market that is not getting anywhere close to all the legal services it needs.  Underserved legal consumers fall into three categories:

1. Access to Justice. People without means to pay premium prices for a lawyer needing access to legal services.
2. Middle class legal needs. Many decently-well-off people don’t spend money on legal services that would help them. How many people use lawyers to resolve their disputes, negotiate their employment contracts or write their wills?
3. Corporates. Most companies, even the biggest ones, do not obtain anywhere close to all the legal services they need.[1]

This spread between latent demand and supply represents opportunity to sell more. Unfortunately the current techniques for delivering and selling legals services are so expensive and inefficient that these underserved consumers can’t or won’t pay for them.

On 3Geeks, I shouldn’t need to detail ways to practice law more efficiently. There are heaps, some more impactful than others. Processes. Using the right people for specific tasks. Expert systems. Contract analysis software. Machine learning. Collaboration systems. And so much more. With some effort, law firms could do much of their work at higher quality, at significantly lower costs (i.e., 50–75%).

Doing work more efficiently opens up two types of opportunities:

Do More of Current Work. Sure it’s possible to steal work from less-efficient competitors, but another interesting possibility is to upsell clients to more work by offering better value. Here’s an example from the contract review world I know best. In a typical mid-market M&A deal, with a company getting bought for  $200 million, law firm due diligence contract review would cover 75–200 contracts. But most $200 million companies don’t have 200 contracts, they have more like 5,000–10,000. That means counsel reviews under 5% of the target’s contracts. Is this limited review because diligence doesn’t matter? Well, no: due to the inefficiency of current approaches, even that scoped-down contract review is likely to eat up 30–60% of total legal fees on the project (arguably demonstrating importance).  But a missed restrictive covenant or bad indemnity could be crushing for the buyer, whether it’s in the twentieth-most-important contract, or the thousandth.[2] Clients would mitigate more risk if they reviewed more agreements. Why don’t they? Well, as above, status quo contract review can cost thousands of dollars per document. What if lawyers pitched clients on reviewing twice the materials for 20% more money than the last review they did for them? Might that be appealing to clients? Would lawyers be able to sell clients on this? Well, selling risk is something successful rainmakers do. What if clients buy this proposition? Can a law firm profitably deliver on 2x the work for 120% of the money? Yes! It’s easy to do more efficient due diligence contract review. We have seen Kira’s customers review contracts in 20–90% less time using our contract analysis software, and they tell us they are at least as accurate as without the software; we have started seeing transactional reviews in the tens of thousands of contracts, using our tech to filter where to look. Firms also have lots of opportunity to improve their diligence efficiency through streamlining processes and staffing matters differently (e.g., using less expensive people for parts).

Do New Work. There are lots of opportunities to offer new legal “products” that clients will pay for. Create new options leveraging efficiency to offer clients services they need but currently can’t get. Offer your clients a contract management system. Help clients prophylactically determine whether their contracts have FCPA compliance language. Build them a tool that will allow them to evaluate whether their team members are employees or independent contractors. Come up with other useful ideas!

Embrace efficiency to grow the pie and DO MORE LAW! Law today is the land of opportunity, but the opportunity is only there for those who seize it.

  
[1]    This runs like a #dolesslaw checklist. Options include: Have lawyers go through a company’s processes to spot risk. Set up a contract management database listing important dates (term, renewal), price increase calculations, rights, and obligations. Redo contract templates to be simpler to negotiate and use modern drafting language. Ensure legacy contracts meet company standards. In house lawyers at large corporates can tell you about how they are pulling back from using outside law firms but don’t have the personnel to meet their legal needs. This is not the behavior of people who think they are getting good value from their current legal spend. This is a contract law heavy list because of what I am most familiar with. Suffice it to say there are a lot more opportunities than these for corporates to spend money on.

[2]    Clients, perhaps rightly, might be willing to take the risk of missing a change of control clause in the thousandth contract, but how about an exclusivity or MFN clause that binds affiliates?