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At the cool new Law School Review Blog, Professor Henderson has this to say about the next generation of legal entrepeneurs:

Specifically, the artisan craft of lawyering is gradually giving ground to a new generation of legal entrepreneurs that use new technologies and businesses processes to improve quality and reduce costs of various legal products and services. The thrust of this movement is to standardize, offshore or automate many of the tasks formally performed by U.S.-licensed lawyers.  This tech-driven approach will dramatically improve lawyer productivity; yet, it is also likely to reduce the demand for traditionally trained law school graduates.

In the years to come, many of the most lucrative, challenging and innovative opportunities will lie at the intersection of law and other disciplines.  Law schools are ill-equipped to teach many of these critical competencies, such as teamwork, collaboration, project management, finance, marketing, statistics, knowledge management and effective communication across knowledge domains.  This retooling challenge entails both new substantive knowledge and unfamiliar teaching methods.  Regarding the latter, most of these skills and competencies require experiential teaching—i.e., learning by doing.

Here is the brutal truth: the resources to pay for this retooling are going to have to come at the expense of traditional scholarship. Time is our primary asset; this is a painful tradeoff because scholarship is the most enjoyable part of the job for many  law professors.  Further, unlike prolific scholarly writing, retooling curriculum does not enhance one’s prospects of getting a lateral appointment, so many law professors will not come to this party willingly.

Also the interaction in the comments between Bill and Orin Kerr is worthwhile.

Orin says:

Bill,

I’m relatively skeptical of your take on this, and I wanted to run the reason by you and get your reaction.

When I have asked a few peers who are in the business of practicing law if they think we are undergoing a major change in the legal market, or if we are just experiencing the usual cyclical pains of a recession, they generally respond that they think we are seeing the latter rather than the former. So that means that you as an academic are saying one thing about what is happening in the legal market, and the group I have spoken with who are actually in the legal market generally are saying another.

My question is, have you encountered the same skepticism among practicing lawyers that I have found in my (very modest) inquiries? If not, can you say more about what you have found when you talk to everyday practicing lawyers about these issues? And if so, can you give us some idea as to why you think you are right and the practicing lawyers are wrong?

Bill replies:

Orin, you raise a fair point and something I encounter often.

I have summarized the underlying data for my structural change / new legal entrepreneur analysis several places including the ABA Journal:
http://www.abajournal.com/magazine/article/paradigm_shift/

And more recently, the Truth on the Market symposium on deregulation of legal services:
http://truthonthemarket.com/2011/09/19/william-henderson-on-are-we-asking-the-wrong-questions-about-lawyer-regulation/

Lawyers generally don’t consult industry level data. When I talk to groups of practicing lawyers–and I do so regularly–and I show them trendlines and comparisons with other industries that have undergone structural change, very few continue to advance the deep recession argument because such an analysis just does not fit the industry level trendlines.

In the literature on industry change, incumbent denial and flatfootedness is a recurring theme; indeed, it is the reason for the new entrant opportunity.

When a lawyer’s phone is ringing and he/she has enough work and has earned a high living over a period of decades, I can be dismissed as an ivory tower Cassandra. I understand and accept this dynamic. I encounter it all the time. But I am focused on industry level evidence and discussions I have with a wide range of practicing lawyers and entrepreneurs. Applyng Occam’s Razor, I look for the explanation that requires the fewest assumptions. Structural change fits; it has happened in other industries; now it is law’s turn.

I hope my comment is responsive to your question. Thank you for commenting. Bill H.

The resistance to change, especially among lawyers, is so strong, it does not surprise me that practicing lawyers do not see the changes. How long did it take lawyers to take to email? Now they can’t be pried from their blackberries.

Update: More from Ribstein here:

Here’s my take on the future of legal education in light of the developments he describes.  It seems clear that conventional law jobs are rapidly being replaced by technology, there is significant political and competitive pressure on the existing regulatory model, and that changes in the profession will accelerate with deregulation. These shifts are occurring apart from problems in the economy.  Indeed, these changes will increase as the economy, and therefore environment for innovation, improves. In other words, a significant portion of the legal profession may be left behind by the recession’s end.

Think what even a 30% decline in the demand for legal education (or more if tuition continues to increase) would mean for legal education.  The law schools outside the first tier in places with poor legal job markets will be left stranded.  All law schools outside the very top will have to scramble for position by changing their products.

Exactly what law schools should be doing is unclear.  This is not a time to set in place a complete revamp that could get the market’s direction wrong. But law schools are foolhardy if they think they can continue to bury their collective heads in the sand because of the soothing noises they’re hearing from their (currently) successful alumni.

More from Larry Ribstein on the future of legal education based on the University of Chicago’s recent move to rehabilitate law and econ (summary here)

I recently discussed this market-oriented perspective on law teaching in my article, Practicing Theory.  The article’s basic point is that deregulation and fundamental changes in the market for legal expertise, particularly including those driven by technology, will  force law schools to think harder about how to make their students more competitive.  Unlike many commentators on legal education, I don’t think this involves more trial practice, clinics and externships in law schools, but rather a refocusing of the theoretical and policy-oriented work that is legal education’s traditional comparative advantage.

More specifically, we need better integration of law and technology.  We should also focus on legal architecture or engineering rather than the mechanics of applying received legal wisdom.  In the future the machines will do the mechanical stuff.  Legal experts will be needed to craft policy and design legal software.

So the question is, how can the theory and practice of law and economics best meet these market needs? Richard Posner comes closest to this general sentiment when he says “economic analysis of law may lose influence by becoming too esoteric, too narrow, too hermetic, too out of touch with the practices and institutions that it studies.”

David Weisbach offers what may be the most practical suggestion — more thinking about the use of computational models in law.  As he says,  this

is a very different view of legal analysis—it views problems as engineering problems that we model and test. It is empirical, practical, and solution-driven. The role of the legal scholar is to help frame problems, to think about how institutional structures affect the framing, to suggest solutions, and to help interpret and evaluate results.

Larry Ribstein and Dank Katz write about the UC Hastings “Strategic Plan.”

Larry isn’t impressed:

The plan (HT Leiter) has got everything, down to thinking about a mascot and faculty op-eds.

But I don’t see any planning for the future of legal education in the new legal information industry Hasting’s students will have to confront. This would seem to be sufficiently “strategic” to deserve some consideration.

Neither is Dan:

Lets just check the scoreboard for a moment:  UC Hastings is an institution that is just a few miles from the technology center of the entire world (click for the fun map) (what an unbelievable factor endowment!). So, in light of this fact, the UC-Hastings “strategic plan” basically makes no mention of the new legal information industry and how the institution might “strategically position” its students for technology infused Lawyering of the 21st Century.

An interesting piece from Slate that interviews Dan Katz at MSU (who I’ve blogged about before):

There’s no easy answer. The legal industry is one of the few remaining outposts of the corporate world whose operations are dictated mainly by human experience. Basic questions that anyone would want to know before committing to a million-dollar case—How likely is it that I’ll win? How good are my lawyers? Should I settle?—can’t be answered with certainty. “There’s a culture in the law around expertise,” says Daniel Katz, an assistant professor at the Michigan State University College of Law who is among the vanguard of legal researchers working to bring empiricism and artificial intelligence into law. “There’s a lot of human intuition, and people tend to think that whatever legal knowledge they have is uniquely human, and not subjectable to data and computers and automation.” . . .

In the last few years, the law has seen a rush of technological innovation, all stemming from computers’ increasing capacity to decipher and understand written documents. Many law firms now use “e-discovery” tools that can scan large caches of evidence in search of interesting facts and figures. Firms also have software to draft legal documents in a fraction of the time a human would take. And a few services on the horizon might do even more—negotiate the terms of a contract, for instance, or determine whether or not you should sue.

Automation will bring legal services to the masses. Many people who ought to hire an attorney to handle business or personal disputes can’t afford to do so. Software could potentially step in when you want to fight your mortgage lender, draw up contracts to start a small business, or sue for child-support payments

Larry Ribstein ponders whether the United States would recognize Indian law firms.