Robot, Esq. of the Future

September 23rd, 2013

Last week, I presented Robot, Esq. (updated version coming at the end of the month) at a GMU LEC Research Roundtable. This Roundtable offered several competing views of how what Larry Ribstein and Bruce Kobayashi refer to as Law’s Information Revolution will come into effect. I’ll have more on this later. In the interim, I’d like to flag a few recent articles that are on point.

First, Dean Frank Wu of U.C. Hastings posts at Above The Law, Resist the Robolawyer. Wu analogizes startups streamlining the delivery of legal services to Zipcars. He is troubled by this trend.

No doubt there is “commodity” work in legal practice. But even what might be reduced to routine still involves people’s lives. Between off-the-shelf legal forms and high-end bespoke opinion letters lies the range of human problems amenable to human remedies.

I will wager that, while we strive to introduce actual automation as well as scientific management (“Taylorism” for the aficionados) to law, the best lawyers will remain those who form meaningful relationships with clients. The most sophisticated matters demand not only judgment but also creativity, and the experts who possess those qualities do not wish to be treated as if they were a device for dispensing advice.

This is a point I raised at the workshop that is often lost amidst the shuffle. There are so many people working to make legal services available at a low cost, that quality is often lost behind–especially when legal work goes beyond commoditized, and must be customized. The answer I am usually given in return is that cheap legal services are better than no legal services at all. That is, the alternative to legal zoom is people going without a will, altogether. This is of course a fair point. But, my retort to that argument is that lawyers have an ethical duty to provide a certain level of services. Non-lawyer providers lack that ethical duty. When startups are providing services, not bound by any code of ethics, infused primarily by startup capital from non-lawyers, the risk to decreasing quality becomes prominent.

Second, a recent article in the ABA Journal Legal Rebels explains why venture capital firms are investing in legal startups that are not quite law firms:

U.S. lawyers know ABA Model Rule 5.4 prohibits them from sharing profits or forming partnerships with those who aren’t licensed to practice. In theory, this rule keeps the lawyering safely in the hands of the lawyers (and revenue from the practice of law safely ensconced at traditional law firms).

But does it really? And do outsiders looking to invest huge sums of money in the legal profession—in hopes of huge gains—even have their sights set on traditional law firm profits?

Not really. Instead, in the last five years we’ve seen nontraditional law firm Axiom Law negotiate M&A deals, alternative legal service provider Novus Law challenge the accuracy and efficiency of contract lawyers and BigLaw junior associates in trial prep, and hybrid company Clearspire create a model that allows a law firm and a business outsourcing company to work under the same umbrella. All three are disrupting the status quo of law practice, all three are taking work from traditional law firms, and all three are funded by nonlawyer investors.

At the workshop, many looked to the U.K., which as deregulated their legal services market as an example that the sky did not fall when non-lawyers were allowed to invest in law firms.

The U.K.’s legal services act of 2007 (which took five years to set up the necessary regulatory infrastructure) gave a green light for firms across the pond to take outside investment and combine with other professional services. And while closed-door discussions included big investors and bigger valuations among law firms, a lot of those deals never materialized.

The article also speaks of a law firm catching a client due to cool tech.

Akin Gump Strauss Hauer & Feld is one firm that is using its partnership with Novus Law—which reviews, manages and analyzes documents for large-scale litigation—to woo and serve clients. Novus’ procedures and real-time portal allows the firm’s attorneys and clients to track the discovery process and drives “end-game thinking” early on in a matter, says Akin Gump senior counsel Ashley Vinson.

“We recently did a large competitive pitch under very tight time circumstances which we were successful in, and Novus was an arrow in that quiver,” Akin Gump litigation partner Shawn Hanson said. “Interestingly, the client, which was a relatively new opportunity for us, had already heard of Novus.”

Third, Will Baude (who has an endowed untenured chair!) discusses Tyler Cowen’s recent book, Average is Over. Will offers this excerpt about how the future economy will impact the practice of law:

Potential customers can ask their smart phones where a lawyer went to school, what her class rank was, and what kinds of promotions she has received. That information will be accompanied by an asterisk: “This information explains only 27 percent of lawyer performance.”

The better lawyers will open up their courtroom performances, their win-loss records, their contract analyses, and their written briefs to computer analyses for more accurate evaluations of professional quality. Siri will tell you: “This lawyer’s written briefs are in the top eighty-first percentile of his peer group; that explains thirty-eight percent of performance on a corporate deal.”

Many of the lesser lawyers will decline to be rated by a computer-human team at all, for fear of getting a bad rap and also because producing the rating will involve some cost. That will hurt their business prospects, especially with wealthier and better educated customers. . . .

It’s going to be a very different world when consumers feel so much on top, and in some ways it will be more dangerous because consumers do not always know what they are doing. . . . Once professionals are rated, their customers and clients might scorn them more often and be less likely to heed their advice. A client may wish to plead “not guilty” when an experienced lawyer recommends the guilty plea instead, or recommends a settlement out of court. The client will bark back to the lawyer, “Look, you’re not even in the top third of lawyers in Denver!” It will be harder for doctors and lawyers to “nudge” us and control us, because we will become more used to evaluating them, standing above them, and applying the programs to them in a manner that will make them feel small and will make many of us feel more powerful.

To this, I think Frank Wu would counter that it is impossible for a non-lawyer to understand and appreciate the value of a lawyer. Historically, the reason for our self-regulated profession was the understanding that lay-men can’t comprehend the value of a legal service, in the same way they can assess if a piece of fruit bought at a store, or maybe a paint job is good. The ethical duties are imposed to ensure that the clients are treated fairly. Cowen (and others) would counter that now technology that can actually assess how good a lawyer is, and even rank them!

I suspect this ranking will be a major blow to the legal profession, and result in massive lawsuits. Recently Yelp was sued for posting a negative lawyer review. Explaining what percentile a lawyer’s brief falls into will be open season for vexatious lawsuits by spurned attorneys.

Fourth, Richard Granat reports on the ABA’s new Report and Recommendations on the Future of Legal Education that suggests “‘limited licensing of non-lawyers (“legal technicians”) to deliver legal services to the public directly without the supervision of a lawyer.” 

“However, there is today, and there will increasingly be in the future, a need for: (a)persons who are qualified to provide limited law-related services without the oversight of a lawyer; (b) a system for licensing of individuals competent to provide such services; and (c) educational programs that train individuals to provide those limited services. The new system of training and licensing limited practice officers developed by Washington State and now being pursued by others is an example and a positive contribution.”

The report sets as a goal:

“Authorize Persons Other than Lawyers with J.D.’s to Provide Limited Legal Services, Whether Through Licensure Systems or Other Mechanisms Assuring Proper Education, Training, and Oversight.”

These quasi-lawyers may reach a happy medium–they could perform the “commoditized tasks” with some lower standard of ethical duty (better than the non-existent standard for Legal Zoom), while reserving the more subjective tasks for full-fledge lawyers. Washington State has already experimented with these provisions.

I’ll have more later. This post simply collects a number of recent thoughts on this topic.