Tuesday, July 26, 2016

Thought Experiment: What Does the Uberization of Legal Practice Mean?

Yesterday I had lunch with Joanna Goodman, a journalist who writes for the Guardian and the Law Society Gazette on matters technological, and we talked about the conservatism of law when it came to incorporating technology.

This has led me to a thought experiment I'd like to try out here. First, a couple of assumptions: this is speculation into a distant future. I say this because in my experience it takes approximately a generation for lawyers to change. That although this is a thought experiment I would like to make a distinction, often lost, between expert occupations and professions. Professions have elements of judgment, wisdom and the like that derive from the long cultures that back them. We can't deny that law, as an occupation/profession, has hundreds of years of cultural development and history that are transmitted in all sorts of ways--memes, apprenticeship and knowledge. Expert occupations are often devoid of, or avoid, this type of cultural environment.

The thought experiment. The rise of Google, Facebook and Uber signify a number of fundamental changes in the way we live. Data is free. Communication is seamless and no longer bound by time and space as it was in the old days. Ownership is mutating into sharing (the gig economy). Data is empowering in that we can now manage and manipulate huge amounts of unstructured data. Google has successfully incorporated this into its autonomous vehicles. Amazon is developing autonomous drones to deliver packages to customers.

Uber is disrupting the taxi industry everywhere by using data to enable people to use their cars as a taxi service when they want. Of course, Uber is facing backlash from conventional monopolistic taxi businesses. Despite this the move towards uberization seem inexorable.

We know from Google, Tesla, and Uber that the weak point in the chain is the human. Humans don't behave like machines and have accidents. Tesla claimed that the failure of its recent enhanced cruise control was far rarer than normal traffic accidents. Moreover, the patch to fix the problem will be transmitted to all Teslas when ready. Compare that to traditional automotive recalls that necessitate individual action.

Underlying Uber's strategy is the removal of the human driver. Google's autonomous vehicle would answer this. There is a further aim behind this which is to move people away from "owning" vehicles that are used partially and are wasting assets. Instead of owning we would adopt, rent or subscribe to "personal transport solutions". To get from A to B, I need transport of a kind not necessarily my own vehicle.

Streets would be clearer, congestion reduced, and air cleaner. So onto lawyers.

At present, we have a lawyer or a law firm. In a pre-Uber sense we own it. The law firm is an expensive conglomeration of people, land and other assets, which makes it expensive to use, and reduces access to justice.

Much of legal work can be done without human intervention or minimal human intervention. For example, minor dispute resolution can be done online: divorce, parking tickets, complaints about banks. Document construction relies on computers. With the increasing sophistication of AI and tech, we have entities like ROSS Intelligence based on IBM Watson, Kim, and Ravn that are using unstructured data to improve legal power.

What then is the purpose of the law firm? At the moment it is a signalling device: my law firm is bigger or better than yours. This is the bet the bank type of deal. But for most law firms at the consumer end of the market, there appears to be little justification except that they satisfy their owners. And for most business owners there is a feeling that lawyers and law firms don't understand their businesses or want to. How much of what companies need in terms of contracting could be put into smart contracts on blockchain?

What if law firms were uberized? Much work would be automated--think compliance, IP, and regulation management. Remember Stuart Brand said "data wants to be free" back in 1984. So much of legal information would be free, like medical information, and the AI will shape it to individual ends.

The work that requires a human dimension could be done by real people but wouldn't necessarily require firms. If we need those intangible attributes of professionals like judgment and wisdom or high level advocacy, then we seek out humans for them. But much of this could be done through networks than physical firms. After all, there is little to distinguish one law firm from another. They are largely fungible.

I won't begin to speculate what this means for law schools....


Monday, January 04, 2016

How Mortal is Big Law?

Despite all the theories put forward, the forensic evidence adduced, the conspiracies mounted, Jack the Ripper wasn't caught and so didn't meet his just deserts. It keeps retired coppers and others in business however. The fate of Big Law is similar. 

Today an article in the Financial Times (accessible here) proudly proclaimed "dominant New York corporate law firms increase market share." This links to a post I wrote last year, "Death of Big Law Announced Prematurely..." There has been so much fatalistic talk about the demise or collapse or unsustainability of Big Law that it ought to be six feet under but it isn't.

My evidence for the continued longevity of big law firms depends on a particular category of work, mergers and acquisitions (M&A). M&A is big ticket work--the deals are large and the fees generated are huge. And M&A deals create so much work it doesn't stop when the deal is "completed". For law firms there's considerable follow-on work out of each deal. In 2015 M&A surpassed the $5 trillion mark, many of which were mega-deals. 

I analysed the structure of Big Law at a conference in St Gallen last year where I argued the segmentation of the legal market, globally, was now so extreme that the position of the dominant law firms could be unassailable. The key firms occupying the legal stratosphere are Skadden Arps, Cravath Swaine and Moore, and Wachtell Lipton. Their respective deal values are:

Skadden                          $1.4tn       (25%)
Cravath                           $888.4bn  (18.7%)
Wachtell                         $760bn      

A Citibank law firm adviser said:
“Consider the megadeals that have just been announced in the last few weeks and the timeframe — it’s going to take these firms well into 2016. And if you consider any antitrust issues, any regulatory oversight needed, that could also further lengthen the time of the work that’s going to be involved. The corporate advisory work that stems from those deals, and the boost from solidifying client relationships, should also help them get hired for future matters.”
Of the top 10 law firms doing big M&A work nine are based in New York and the only London firm is Freshfields at number 9 which worked on the Royal Dutch Shell-BG Group and ABInBev-SABMiller mergers.

The legal market is highly stratified and parts of it are highly successful and appear impregnable to the threats articulated by Susskind, Beaton, or MacEwan. Does this mean the doomsayers are wrong? There is something about their respective analyses that seems to dent their conclusion that Big Law is on a downward trajectory. The picture is far more complex than we have allowed for.

Elite law firms have been resolutely placed in the same category as other professional service firms and despite some big insolvencies law firms have been resilient. The big New York and London law firms occupy a unique category. They fit the "winner takes all" category defined by McKinsey some years ago. They mostly focus on their core strengths, promote clear and strong brands, and are venerated by CEOs and general counsel.

I'm not going to predict the imminent death of Big Law since it proves its resilience (for more than a hundred years). The numbers will be winnowed no doubt as there are too many fungible law firms which take the middle ground, scrabbling for the same work. Some will reinvent themselves into New Law but most will continue the same. The result is the stratification of law firms will become even more embedded. It's rather like the decline of the middle class in America while the 1 percent grows richer.


Friday, October 30, 2015

Why there are no foreign lawyers in India...

I've put up a new version of my paper on foreign lawyers and law firms in India, which sounds like there are and there aren't.

It's on SSRN.


Wednesday, October 07, 2015

The Law of Legal Services

(thanks to pinoycivilservant)

The market for legal services has changed enormously in the last several years. Regulation, organisation, online delivery and more have altered so as to make the English legal market quite different from most others. I'm not tracing the history of these changes in this post as a large part of this blog has already done this.

Whereas students of change like me avidly follow what's happening through articles, the trade press and conferences and the like, working lawyers are often bemused by the changes taking place around them. For them the regulatory landscape is transformed.

The recent publication of John Gould's book The Law of Legal Services (Jordan Publishing; 673pp) will be a mixed relief. The size of the book denotes the growing complexity of legal regulation while simultaneously telling the reader that all she will need to know about the subject.

Gould and his contributors are comprehensive. They start with the regulatory framework, using the Legal Services Act 2007 as the starting point which is followed by the regulators and codes and compliance (chapters 1-3).

Following codes is misconduct and its treatments. There are the types of misconduct--unauthorised practice, overcharging, confidentiality, for example. The ways they are dealt with varies by regulator but each is explained. The last chapter in this section discusses tribunals and the range of sanctions available (chapters 4-6).

The next set of chapters (7-10) are focused on the lawyer-client relationship: the contract, fiduciary duties, lawyers' negligence and compensation. A thorough reading of these ought to prevent any malfeasance by lawyers as there are many examples and cases that indicate both good and bad practice.

The final chapters (11-13) deal with the business of lawyering, which is something lawyers need a good grasp of as regulators are now in the business of monitoring the business aspect since they may have to wind down failing practices.

Lawyers and those working in legal services have a wide range of organisational forms open to them, whether it be partnership or an Alternative Business Structure. For example, we have Gateley's, a law firm partnership, that is now a publicly floated company, LegalZoom, an online deliverer of legal services which is an ABS, as is Riverview, another law business. (I've covered these elsewhere.)

Given this complexity, even though it is not explicitly stated, the consumer of legal services is the centre of the market. It could be a consumer who needs small business advice, property conveyancing, an international takeover, or someone who wants unbundled legal services (i.e. not the whole package but just part). Lawyers' responsibilities and accountabilities therefore must align themselves with clients'/consumers' needs.

This is primarily a book for legal practitioners rather than academics (although they will find it useful as a reference text). It is to be supported by a publisher's website that will upload updates and links to other materials. Practitioners probably should buy a copy or at least know where a library with a copy is located nearby. The law of lawyering now has a reliable and comprehensive repository.


Thursday, September 24, 2015

How do you feel about the future of the legal profession?

(thanks to globallegalpost)

Following the brouhaha of Jonathan Sumption's remarks on equality and diversity in the legal profession and especially the higher judiciary--just be patient and wait 50 years--it's time to find out what people think about their futures. For those of you interested in following up the debate on Sumption, it's worth reading Steven Vaughan's astute response.

The Legal Week Turning Points hub for future lawyers has commissioned a survey which you can complete here. It has questions on diversity and more. The more who complete it the better.

I hope this is the beginning of more sustained research along the lines of the Harvard Law School Career Study.


Friday, September 18, 2015

Solicitors from Hell Don't Go Away.....

Four years ago I came out of the BBC after a heated radio discussion with the former CEO of the Law Society, Des Hudson, about the website Solicitors from Hell. He was furious with the website for defaming lawyers while I said it's a manifestation of a feeling among the public that you should tackle: don't shoot the messenger.

Of course they shot him (Kordowski). The court imposed damages, injunctions and closure. But I pointed out to Des, this is the internet. Solicitors from Hell will pop up elsewhere outside the UK jurisdiction and you won't be able to do anything about it. Mirrors, dear boy, mirrors....

In a judgment by Mr Justice Warby in the Queen's Bench Division, the boutique law firm, Brett Wilson, sought and obtained summary judgment against Solicitors from Hell (solicitorsfromhelluk.com) in its latest manifestation this September--damages and an injunction.

I'm not going to rehash the case except to say the judge declared the words used had a defamatory tendency. See paragraph 25 of the judgment. But much of what the judge said referred to bringing unknown defendants to court. The problem being that no one could discover who the operators of this website were. No one ever replied to the plaintiffs' communications.

WHOIS searches revealed the owner to be Anonymous Speech, a proxy registrant, and appeals to them brought no response. There were two physical addresses, one in Tokyo and another in Panama. The claims were brought against "Persons Unknown". And successfully so.

Yet Solicitors from Hell is still there. And it's there in more than one manifestation. There are solicitors fromhelluk.com, solicitorsfromhell.com, as well as cowboysolicitors.com.

I'm not sure what Brett Wilson or the courts think they've gained by this. Brett Wilson has a moment's publicity via the Law Society Gazette saying they were defamed, which will be forgotten, in a flash; a claim for damages that will never be enforced; an injunction that is virtually unenforceable; against the continuation of a newly-publicised website far from the reach of the courts.

This is a losing battle for the legal profession. In fact it's a bit like wars in the Middle East. It doesn't matter how much you bomb them, they ain't going away. Constructive engagement is the only way to go.


Thursday, July 30, 2015

You Robot! What Does It Mean to Regulate Artificial Intelligence?

(thanks to howstuffworks?)

There's a huge amount of discussion in the media now about killer robots annihilating hordes, autonomous (driverless) cars running amok and mowing down people, and at the point of singularity Skynet will say no to being switched off and we are in a continuous war of us against them.

There's also a huge amount of rubbish being spoken too, so it's time to introduce some clarity and (real) intelligence to the arguments surrounding us.

My colleague, Dr Paresh Kathrani at the University of Westminster, is organising a debate on the question posed in the title of this post. We will hold it on October 8 at the university.

Paresh has put together a great collection of thinkers in the field. We have

Joanna J Bryson of Bath University' Computer Science Department. Her web page says: "At Bath I do research in both artificial and natural intelligence, with a particular emphasis on cognitive systems."

Lisa Webley of Westminster Law School who researches the legal profession with special interest in issues of gender and diversity. She is also fascinated by the changes occurring in the profession occasioned by technology.

Paresh Kathrani of Westminster Law School who instigated this as a result of a longstanding discussion held on Twitter (which rages still). He comes at this through a philosophical interrogation of what it means to be a human agent in a technological age.

Alan Whitfield of the University of West of England where his "work at UWE spans Research and Public Engagement. I conduc​​​t research in Swarm Robotics within the Bristol Robotics Lab. I am director of the Science Communication Unit, and undertake public engagement work centred upon robotics. Within that work I have a particular focus on robot ethics."

Chrissie Lightfoot of Entrepreneurlawyer.co.uk. Chrissie is one of the most notable thinkers on the future of the legal profession and has written a well-received book on this provocatively titled: The Naked Lawyer.

And, me.

We aim to be kicking off around 6pm. There will be more details soon.

If you want to join the debate early, then start following us on twitter @PKathrani, @j2bryson, @alan_winfield, @TheNakedLawyer, @lisawebley, @JohnAFlood.


Thursday, July 16, 2015

The Future of Law Firms

Great conference coming up courtesy of University of St Gallen, Switzerland, on October 1, 2015. The conference itself is being held at Haus zum RĂ¼den in Zurich. Interesting line up of speakers (including me). Here they are:

Details of who's who here:

Booking details and registration are here in English and here in German. And if you would like more information contact Rahel Germann at rahel.germann@unisg.ch.


Wednesday, July 15, 2015

How Foreign Lawyers Failed to Colonise India

Recently the big corporate law firm of Amarchand Mangaldas split between two brothers, Cyril and Shardul Shroff. The settlement is published above. The division allowed outsiders in to the strange world of Indian law firms, generally private and very profitable. Although the number of corporate law firms in India is small they are powerful. The number of lawyers in India is huge, however. Together both have resisted and repelled attempts by foreign law firms (UK and US) to set up offices in India.

As part of the GLEE project at Harvard Law School under the direction of David Wilkins, I've written a chapter for a forthcoming book The Indian Legal Profession in an Age of Globalization (eds) David B. Wilkins, Vikramaditya Khanna and David M. Trubek, Cambridge University Press. The paper is available on SSRN at http://ssrn.com/abstract=2629429.

My chapter is "Theories of Law Firm Globalization in the Shadow of Colonialism: A Cultural and Institutional Analysis of English and Indian Corporate Law Firms in the 20th and 21st Centuries".

The abstract reads: For many years foreign law firms have been trying to establish themselves in India. But the resistance from the Indian legal profession is so strong they have successfully prevented any establishment. The Indian government has from time to time tried to enable foreign law firms to enter the Indian legal market but without success. The paper examines the legal cultural and institutional reasons for this predicament. I argue that although India has a highly regulated market its corporate law firms are antithetical in their organisation and culture to the way the big global UK law firms are organised. In order to aspire to the 'single firm' ideal UK law firms have invested heavily in developing their normative and cultural positions. This enables UK law firms to exist almost independently of regulation because they have shifted the burden of organisational control from outside to within the firm. In these respects Indian law firms are weakly organised because they hew to kinship, family based structures that resemble the 19th century iteration of the UK law firm. There is also the colonial legacy that lives on in India and the struggles of the new international law firms appears very much like a new imperialism, hence the fear and rejection.