Goodbye guild: Law’s changing culture

Mark Cohen’s column in Forbes, Goodbye guild: Law’s changing culture, struck a deep chord with this sentence: “Law is not about lawyers anymore”.

Rhetorically, one might ask, was law ever about lawyers? Like the other ‘original’ professions of medicine, priesthood and military service, law and lawyers – as I understand it – arose to further the interests of civil society and protect the rights of fellow human beings.

Which is what makes Mark’s commentary about law’s changing culture so important.

‘Culture’ describes the values, philosophy, shared objectives, and interactions – internal and external – of its members. Corporate culture, at its best, aligns the interests of the enterprise with customers and imbues workers with a collective mindset. That is crucial to brand building and market differentiation. Legal culture is something quite different.

Legal Culture Is All About Lawyers

Legal culture was forged by white, middle-aged lawyers for their peer group. Law’s ethos is insular and its composition is homogeneous. That is manifest pre- and post-licensure. Legal culture is rigid, hierarchical, pedigree-centric, internally-focused, cautious, reactive, and rewards input, not output. It relies on self-regulation to preserve the status quo and to guard against outside competition.

Legal culture promotes ‘lawyer exceptionalism’ as justification for its guild-like operation and hubris to perpetuate it.

Legal culture promotes ‘lawyer exceptionalism’ as justification for its guild-like operation and hubris to perpetuate it. Diversity is conspicuously absent from the legal ecosystem, especially at its highest ranks. Lawyers are trained to be ‘right’, risk-averse, and to identify problems, not to be reasonable, weigh risk/reward, and fashion solutions. Law creates its own standards of excellence that are based upon ‘reputation’ and the assumption that certain schools and firms—more than metrics or client satisfaction—confer and maintain it. Most lawyers believe it’s better not to make a mistake than to be creative in solving a problem. Lawyers are not trained or encouraged to be innovative; legal culture enshrines stasis and caution. Legal culture see things through its own prism; it divides the world into lawyers and ‘non-lawyers.’ And it takes great pains to preserve that separation rather than to align lawyers with their clients.

The legal profession commits to dual representation of individual clients and society. The access to justice crisis—the inability of the overwhelming majority of individuals and small organizations to secure legal representation resulting from its high cost—evidences law’s failure to honor its social compact. Pro bono representation is generously provided, yet most people view lawyers as greedy, socially detached, mercenary, and arrogant. Lawyers often use language designed to distinguish themselves from others rather than plain-speak that forges connections. That’s ironic for a profession that counts persuasion as a tool of the trade.

Lawyers typically have a not-so-beneficently paternalistic attitude towards clients. They justify their guild and its long-time monopoly over legal service by ‘protecting’ the public from ‘the unauthorized practice of law.’ That’s laudatory in theory but not in contemporary practice where alternative tools, delivery models, and process exist to deliver certain types of ‘legal’ service outside the traditional law firm model. The frequent penalty flags thrown at retail upstarts like LegalZoom, Rocket Lawyer, and AVVO are not so much about protecting the public from unscrupulous, illegitimate providers as they are about protecting lawyers from competition, thereby maintaining traditional legal culture and its monopoly. No wonder so many people hate lawyers.

Law Schools and Firms Embody Legal Culture

Traditional legal culture operates as a club. It has narrowly tailored membership criteria designed to preserve homogeneity. The club operates principally for the benefit of its officers– those that have ‘paid their dues’ and have forcefully advocated on behalf of maintaining club exclusivity. The parallels between the structures, reward systems, stakeholder profiles, and current state of law schools and law firms—laws cultural bulwarks– are striking. That’s not surprising since they have long had a symbiotic relationship whose purpose is to preserve the guild.

The Academy’s officers and stakeholders are its administration and tenured faculty. Full-time faculty are accorded unbridled freedom to engage in whatever ‘research’ they choose with no regard for its relevance or materiality to legal education and students. Publication is the core tenure criterion. The Academy rewards input, not output. Most full-time law faculty have little or no practice experience, and limited—if any—knowledge of the marketplace. They are happily oblivious to the scrum of client representation and the efficient delivery of legal services. The courses they teach generally vary little from year to year and generation to generation. This has been of no moment because law school enrollment soared from the 1970’s until the global financial crisis in late 2007. Law schools cashed in on demand and steadily increased tuition cost—a 400% increase during this timeframe. In the process, law schools became big profit centers, enabling them to operate as independent, cash-rich fiefdoms within the University. That has changed in recent years, of course.

But law schools apparently did not receive the memo.

Partners are stakeholders of law firms and have dictated the terms of legal service to clients. Law firms rode the wave of client geographic expansion and resultant increased demand for legal services, growing rapidly in size, geographical reach, and partner profitability. Law firms became large, undifferentiated ‘big box stores’ that sold legal knowledge to a captive market.  Like law schools, firms were the only game in town, and they made sure to keep it that way. The decades between the ‘70’s through 2007 were the legal guild’s golden age.

The traditional law firm partnership model provided great freedom within the firm; its decentralized management structure allowed partners to operate as tents in the bazaar. Partners were generally left to their own devices; firm management was consumed by hawking business, opening new offices, and convincing prized laterals to sign on. Origination was—and remains– the firm currency; partners with big books of business operated as if they ran their own shop. Law firm culture—like law schools—was about stakeholders having a “me,” not “we” attitude towards the institution and those it served. The legal ethos, then, is antithetical to corporate culture that sustains it. But that’s changing

 A New Legal Culture Is Being Forged By ‘Non-Lawyers’

Law’s insular culture is being reshaped by outside forces—consumers.

Legal buyers—like the rest of us—have been profoundly affected by advances in technology, globalization, and the effects of the global financial crisis. These powerful transcendent social forces have created a new client attitude and way of conducting business. They have transformed the way people communicate, buy and sell goods/services, and work. Self-regulation long served as law’s seawall to protect it from outside change, but regulation is no match for this ‘perfect storm’ whose impact extends well beyond the legal industry.

Customers—not lawyers— have tapped into these forces and are in charge now. They have effectively re-regulated legal delivery by driving change from the consumer side—especially in the corporate segment of the legal market. Corporate legal consumers—notably in-house legal departments—have become its largest providers. A recent article in Corporate Counsel cited an ALM Intelligence and Morrison & Foerster GC Up-at-night Resource Center report that in-house legal departments now handle approximately 75% of legal work. Legal service providers—tech and process savvy providers that deliver legal services but do not ‘engage in the practice of law,’ have a 2% market share that is expected to grow significantly. This is not simply a cost-cutting play; it is a refashioning of legal culture by those that consume its services.

Law is not about lawyers anymore, and the emergent legal culture reflects this.

The New Legal Culture Is Designed By Consumers

What, then, are the characteristics of the new legal culture? The answer to that question is found by analyzing the structures, reward systems, operations, and ethos of top corporate legal departments and service providers. They are transforming the delivery of legal services by separating core legal tasks- ‘practice’- from the means, resources, and tools required for its efficient delivery-the business of law.

Elite in-house departments and service providers have several common traits that are recasting legal culture: (1) alignment with clients that includes deep knowledge of the enterprise; (2) harnessing technology and process to separate ‘legal practice’ from the delivery of legal services; (3) viewing ‘legal service’ as a process where opportunities to automate tasks and harness ‘big data’ are proactively pursued;  (4) use of performance metrics; (5) output- result- eclipses input- billing, origination, etc.; (6) technology and process are tools that integrate the legal supply chain and allow clients real-time access to progress as well as an opportunity to collaborate; (7) legal service is an element of providing business solutions, not an end unto itself; (8) use capital to invest in technology and resources designed to promote alignment and efficiency; (9) an enterprise- not transactional- approach to problem-solving; (10) competency and experience-based focus over pedigrees; (11) diverse workforce; (12) attaches equal importance to legal, technological, and process expertise in legal delivery; and (13) melds legal expertise into other differentiated skillsets to solve major challenges that raise legal issues.

 Conclusion: Law’s changing culture 

Legal culture is undergoing a fundamental transformation, one that will not happen overnight. Law schools (like law firms) have been slow to read the tea leaves. They have largely failed to reshape their curricula to produce graduates that are practice ready for a marketplace that demands much more than a knowledge of doctrinal law. Unfortunately for students, this process will take time and will require fundamental changes in criteria for faculty hiring, advancement, and responsibilities. Law schools must take a far more holistic, inter-disciplinary approach to legal education and provide competency-based training to prepare graduates for a rapidly changing marketplace that demands new skills.

Law firms as we know them will be recast and have a corporate culture. The practice of law—the core elements of what lawyers should do—will intersect with the business of delivering legal services. This will derive from a culture that is diverse, agile, highly knowledgeable of clients’ business, constantly promoting improvement by evaluation of performance—internal and external—and accessible to the tens of millions that desperately need legal services but presently lack access or the means to engage it.

The new legal culture is shaped by client expectations, not by the legal guild.