4
ccording to the headlines, judgment day is looming for the legal profession. Last year, The Economist heralded an ''Attack of the bean-counters", warning that the Big Four accounting firms now had a greater share of legal work than Australia's largest law firms. In February, UK consulting firm Deloitte reported that 39 per cent of legal jobs would be lost to automation in the next 20 years. And eBay now resolves three times more legal disagreements online than the total number of lawsuits filed in the US court system. For better or worse, the legal profession is faci ng threats to its status quo. President of the Law Society ofNSW Gary Ulman believes it is not a question of whether law firms in NSW will be forced to adapt - it is a question of when. "Going by what is happening overseas and what is already happening in Australia, legal services and the way we now know them will continue to change," says Ulman. "Change is going to be driven by client expecr.ations and needs, by technology and the way in which governments resource courts, community legal centres and legal aid." Under Ulman's leadership, the Law Society is investigating the effects on NSW practitioners of such changes by launching a new Thought Leadership project on the Future of Law and Innovation in the Profession (FLIP). Central ro the project is a commission of inquiry that will invite submissions on the consequences and specific drivers of change in the legal profession. Beginning in May, pub lic hearings will facilitate discussions between legal practitioners, allied professionals, law schools, educators, clients and members of the public.

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Page 1: The Economist...up the legal industry with innovative pricing structures and outsourcing methods. US web-based companies such as Lawyers on Demand, Rocket Lawyer and Legal.io match

ccording to the headlines, judgment day is looming for the legal profession.

Last year, The Economist heralded

an ''Attack of the bean-counters", warning that the Big Four accounting firms now had a greater share of legal work than Australia's largest law firms. In February, UK consulting firm Deloitte reported that 39 per cent of legal jobs would be lost to automation in the next 20 years. And eBay now resolves three times more legal disagreements online than the total number of lawsuits filed in the US court system.

For better or worse, the legal profession is facing threats to its status quo. President of the Law Society ofNSW Gary Ulman believes it is not a question of whether law firms in NSW will be forced to adapt - it is a question of when.

"Going by what is happening overseas and what is already happening in Australia, legal services and the way we now know them will continue to change," says Ulman. "Change is going to be driven by client expecr.ations and needs , by technology and the way in which governments resource courts, community legal centres and legal aid ."

Under Ulman's leadership, the Law Society is investigating the effects on NSW practitioners of such changes by launching a new Thought Leadership project on the Future of Law and Innovation in the Profession (FLIP). Central ro the project is a commission of inquiry that will invite submissions on the consequences and specific drivers of change in the legal profession. Beginning in May, public hearings will facilitate discussions between legal practitioners, allied professionals, law schools, educators, clients and members of the public.

Page 2: The Economist...up the legal industry with innovative pricing structures and outsourcing methods. US web-based companies such as Lawyers on Demand, Rocket Lawyer and Legal.io match

"Essentially, we are looking to engage with a broad cross-section of the legal community -and those who are regular users of their services - to get their input on what changes are taking place and are anticipated to take place within the profession," says Ulman.

"The inquiry is intended to give the profession a 'heads up' on what's happening, as well as the tools and information they need to adapt."

Robot law is coming

When Ulman was admitted to practice in 1975, the pinnacle of client-communication technology was the telex machine - a newfangled device based on the wireless telegraph. A lawyer would write down a message for a trained operator to enter on the machine, causing brail-like codes to be imprinted on long strips of paper by the client's receiving telex which would be de-coded by the operator at the other end.

"Now I sit here looking at my desk and I have two computer screens that didn't exist when I first started as a lawyer," says Ulman.

''The marketplace is evolving and the millions of customers out there who need legal services need to be better catered for." CLAIRE BIBBY. SENIOR VICE-PRESIDENT OF LEGAL AND GENERAL COUNSEL AT BROOKFIELD PROPERTY PARTNERS

FUTURE OF THE PROFESSION

"I also have an iPad, a mobile phone and a telephone on which I can make hands-free conference calls around the world. I could not have imagined any of that would be around when I first started."

These days, computer screens and telephones are the most basic of the office technology lawyers use. Advanced document assembly systems such as Contract Express and Exari build legal contracts from online templates, while websites such as eBrevia automate contract review processes using machine learning. A legal document can be drafted and checked at the speed of your broadband connection. Many services even offer free trials.

Associate Professor Michael Legg is one of a number of experts who will sit on the Law Society's Future Committee that is leading the FLIP project. Legg has been a commercial litigator for 18 years and teaches discovery to law students at the University of NSW. He says advances in technology have completely transformed the task once reserved for paralegals and administrative assistants.

"Discovery used to be this dry area where students would just switch off," says Legg. "But for the past three years we've been including things like electronic discovery and discovery of social media. We are using predictive coding, machine learning and cloud computing. These have vastly expanded the range of possibilities in discovery, and in legal practice more generally. "Today, a practitioner's knowledge needs to extend beyond black-letter law. Modern lawyers need to comprehend technological possibilities and make decisions about where to search as well as put together a seed set of documents to train programs. If you're not somebody who's into technology, that can be a bit confronting."

ISSUE 22 I MAY 2016 I LSJ 39

Page 3: The Economist...up the legal industry with innovative pricing structures and outsourcing methods. US web-based companies such as Lawyers on Demand, Rocket Lawyer and Legal.io match

Features I FUTURE OF THE PROFESSION

Tinder for lawyers

An important area for investigation by the Future Committee will be the emergence of online platforms connecting clients with practitioners. Just as Uber disrupted the taxi industry, online market networks are shaking up the legal industry with innovative pricing structures and outsourcing methods.

US web-based companies such as Lawyers on Demand, Rocket Lawyer and Legal.io match clients to lawyers depending on their location and expertise. In Australia, LegalZoom and Adventbalance are the major players. These applications work like Tinder for the legal industry - simply email your matches to set up a meeting. Perhaps most daunting are the public performance reviews on websites such 'as Avvo, where more than 200,000 US attorneys have already earned star-ratings from their former clients.

Some platforms offer transparent pricing and will display the cost of a job as soon as a client posts it. This is in stark contrast to the traditional billable-hour pricing used by law firms, which has been described as "destructive" and "unreasonable" by commentators including LexisNexis. Legg believes alternative pricing structures have significant ramifications for the legal industry.

"If you introduce competition, you decrease prices," says Legg. "We will see that happen in a bunch of areas where technology is going to commoditise legal knowledge. Services formerly provided by the one law firm will become unbundled, and some processes will be outsourced. There will be certain work that can be done by computer programs or external companies for a lower cost."

Also driving down costs is the internet's almost limitless potential to offer free information. While case law and legislation from every Australian jurisdiction is freely available online, the game-changer for non-lawyers is the huge range of practical, jargon-free resources offered by Legal Aid and NSW Community Legal Centre websites . Check the NSW Tenants

4 0 LSJ I ISSUE 22 I MAY 2016

"If you introduce competition, you decrease prices. We wiUseethat happen in a bunch of areas where technology is going to commoditise legal knowledge. " M ICHAEL LEGG, ASSOCIATE PROFESSOR UNIVERSITY OF NSW

Advice and Advocacy Service website for examples of easy-to-read legal factsheets that guide tenants through common rental situations.

The threat of Dr Google

The power in the legal industry is shifting towards clients. However, with this shift comes the potential threat of unregulated service providers entering the market.

"Unregulated service providers may be cheaper and therefore more accessible for the public," says Senior Vice-President of Legal and General Counsel at Brookfield Property Partners, Claire Bibby. "There could very well be a high demand for them going forward, and there is a fear that lawyers may lose some of the protections we currently have."

As an in-house lawyer at Brookfield Property Partners who also engages the services of top-tier firms for her company, Bibby brings a unique insight to the Future Committee. She thinks there will always be a place for "Big Law" as the traditional, premium service offered by top-tier firms, most often to corporate clients. However, smaller firms will need to decide what kind of clients they will cater to and whether they will unbundle their services in order to assist the general population.

"I am a sophisticated purchaser, so the use of unregulated or smaller service providers isn't something I'm interested in," says Bibby. "However, there are millions of people out there who can't afford to hire a lawyer and are forced to represent themselves. Unregulated service providers may be cheaper and therefore more accessible for the public."

Legg says that while low-cost alternatives may be attractive to some, there will always be a market for lawyers with professional experience and accreditation.

"Dr Google is a good example," says Legg. "People go online and are happy to diagnose their symptoms but those people are not going to perform an operation on themselves. I think law is going to be similar. At a certain point, the risks or the expertise that is needed will make them think, 'I need to see a lawyer about this'."

Page 4: The Economist...up the legal industry with innovative pricing structures and outsourcing methods. US web-based companies such as Lawyers on Demand, Rocket Lawyer and Legal.io match

FUTURE OF THE PROFESSION

Members of the Future Committee, clockwise from top left: Justin Dowd, Jodie Thurgood, Elias Yamine, Elizabeth Espinosa, Jane Glowrey, Ben Stack, Michael Legg, Juliana Warner, Claire Bibby, Roshan Kumaragamage, Pauline Wright. Gary Ulman, Lana Nadj and Michael Tidball. Juliana Warner, Claire Bibby, Roshan Kumaragamage, Pauline Wright, Gary Ulman, Lana Nadj, Michael Tidball. Absent: Ed Santow and David Porter.

The future of the profession

Carl Schwait of the Florida Bar Board of Governors called it a "strange paradox" that millions of clients could not afford the fees most lawyers ask for, yet there are so many lawyers who wanted and needed more work.

As new market players begin to capitalise on this supply and demand problem, the legal landscape is changing quickly. However, with preparation and foresight there should be no reason that NSW practitioners and law firms cannot keep up .

"The marketplace is evolving and the millions of customers out there who need legal services need to be better catered for," says Bibby. "As lawyers , we need to anticipate what those changes are going to be and to structure our business and service delivery so we can meet the needs of the population."

With this purpose in mind, the Law Society's Future Committee will begin

holding public hearings in May, Other hearings will be held throughout the year. Although the committee aims to present an initial report by December, Ulman sees the FLIP initiative as an ongoing project that will continue beyond his term as President.

"It's not as if, come December, we will have found out all the changes coming to the legal profession and that's it, end of story," says Ulman. "This is an ongoing project that I expect will continue long after I've gone,

"We have 30,000 solicitors in NSW and as these solicitors adapt to changes in the profession, I believe it is important to retain a strong Law Society that is relevant to its members. One way of determining relevance is the way in which the Law Society helps its members to prepare for the future." LSJ Vis it lawsociety,com.au/flip to learn more about FLIP and find out how you can have your say.

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ISSUE 22 I MAY 2016 I LSJ 41