Cinderella And The Legal Industry

by LeClairRyan

legal cinderellasMarch Madness is upon us, and this year’s tourney did not disappoint. From Mercer’s thrilling win over Duke to Dayton knocking off both state rival THE Ohio State University and heavily favored Syracuse, touted underdogs have knocked off perennial powerhouses. The powerhouse teams seem to have every advantage: stronger recruiting classes, larger and arguably better facilities, and plainly, more money from more booster participation. More money for coaches, travel, recruiting and facilities.

Honestly, if I take this analogy too far, it will lose credibility, so I’m going to limit how deep it goes. But there are parallels between the NCAA Tournament and what is happening with the legal industry. The perennial powerhouses of old are losing market share both to upstart firms and entities (last year, Florida Gulf Coast played into the Sweet 16, despite having been founded while I was in law school), and to firms that historically have been unable to compete in the same space (if Butler makes the three at the end of the 2010 championship game, they cut down the nets instead of Duke). While there are still more parallels to make, I want to talk about one in particular: access.

The market adjustments in the legal services industry fall into any number of categories, but broadly, they can be boiled down to two: cost/efficiency changes and increased access. I’ve talked a lot in this blog about the former, but for this post, we’ll discuss the latter.

I started practicing law at an insurance defense firm in New Jersey. While we defended insureds throughout New Jersey and did so well, most of our clients did not call us for high-end, high-exposure cases, and they did not call us for work outside the state. I moved in my third year to a much larger, regional firm, and I became involved with more intricate and higher value matters. The auto cases and the $15,000 slip and fall cases were gone, although that background served me well in defending catastrophic injury cases and branching out into commercial litigation. Still, the work was relatively pigeon-holed. New Jersey and Pennsylvania were the venues for more than 95% of my work over the next 8 years.

When I arrived at my current firm, I was able to build on those foundational underpinnings, but my offering was far more substantial. With multiple offices across the country, and a firm that backed my belief in alternative fees for portfolio-scale projects, I was able to build a much more substantial book of business both individually and collaboratively. What I was able to give those clients was access: access to equivalent talent in multiple jurisdictions; access to the benefit of working with a large firm without the inordinately high rate structure of many of them; access to economies of scale that previously they either had to build themselves or go without.

But this story is not about me or LeClairRyan, at least not exclusively. It is about medium and small business getting access to the same level of legal work as companies with capitalization in multiples of thousands or hundreds of thousands. It is about recognizing the part of what we do that is science, not art, and then delivering both the art and the science on a much broader scale.

In the 1930s, as America limped through and out of the Great Depression, one of the biggest economic issues facing the country was unemployment-induced poverty. The problem was deep, and it was rampant, with unemployment in the United States approaching a staggering 25%. Quite simply, particularly in certain areas of the country, there were simply no jobs and no infrastructure to begin to develop them. The distribution of wealth (and I’m not talking about handouts) was simply impossible. Roosevelt’s New Deal philosophy attacked this problem head on. With the creation of the Tennessee Valley Authority, jobs and infrastructure were created simultaneously in states that needed both desperately. The TVA was designed to boost hydroelectric power throughout the region, as well as develop methods by which the agricultural segment of the economy could grow and thrive. The programs of the New Deal provided access to wealth for generations, because it provided jobs that built the infrastructure to provide both more jobs and greater yield.

The movement in the legal industry is largely client-driven, and it is largely a reaction to at least the perception of a disconnect between attorneys and their clients. But there is a different, and some would argue more important, by-product of that movement: increased access to the legal world for those who were shut out of it before. LegalZoom provides legal forms and documents to anyone who has a couple hundred dollars. It does not dispense legal advice (as the commercials are all very careful to tell us), but what it does is allow small businesses and individuals with highly-rated forms to do things that perhaps they would not do, like incorporate or protect the family assets with a will. LPOs and avant garde firms developed efficiencies that have slashed the cost of encountering the legal system for many. Even some traditional law firms have “broken ranks” and developed more efficiency and been able to reference horizontally across industries. Moreover, the efficient system can be re-sold to an ever emerging market of legal consumers.

Lady Justice wears her blindfold because fundamental fairness dictates that everyone should have equal access to the courts. As this by-product continues to evolve, we are likely to see more and more ingenious ways of delivering legal services to the general public. That vision of equal access will continue to grow with that evolution. It’s a brave new world, and the increased access will make the legal world a better place for all, so that even the smallest clients may one day be able to cut down the nets.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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