The Modern Legal Field: Adapting to Change

Posted on May 2, 2016 by Freiwald Law

I was never part of the “good old days” of law, back when firms were smaller and built relationships that created clients for life. Instead, it seems I’ve entered the field during a tumultuous time. Consumers are fed up with the old way of doing things and are seeking alternatives to traditional legal services. However, these alternatives have the side-effect of dehumanizing our interactions with clients; the human element that is so essential to the practice of law is fading fast. Law firms of all sizes have a choice to make; they can evolve alongside technology and the economy to meet consumer expectations while redefining their practices in order to reinvigorate the attorney-client relationship, or they can go extinct.

Technology is improving at an exceptional rate and impacts the legal field on all fronts. Face-to-face communication is being replaced by things like e-mail, which allows us to cover more ground in less time. Increasingly, we find ourselves foregoing building a lasting relationship with a client in exchange for one-and-done representation. Technology like e-mail and cloud storage means that firms no longer have to pay for courier services and physical storage, fees that used to be billed to the client. Moreover, as document templates become increasingly automated, lawyers can no longer bill for the hours spent drafting them from scratch. This puts many lawyers at the crossroads of embracing a more efficient way to practice and losing profits.

The economy also has a profound impact on the legal field. According to the New York Times Article: “Law Firms Risking Obsolescence,” the legal industry is seeing a decreased demand for service while the supply increases. The legal field is now a buyers’ market and only firms that adapt will stay relevant amidst the growing supply of technologically driven alternatives to traditional legal service.

The field in general, but particularly small firms, has been slow to embrace change. According to a 2014 Altman Weil Flash survey, “Law Firms in Transition” “Nearly half of all law firms with 250 or more attorneys are changing their approach to pricing, while only 22% of firms with 50 to 249 lawyers are doing so.” The Wall Street Journal Article: “Law Firms Face Fresh Backlash Over Fees” provides us with a glimpse into possible reasons why big law is changing more rapidly than smaller firms. Huge corporate clients grow weary of the way firms bill for services and have been taking proactive steps to reduce legal fees. For example, Johnson & Johnson has taken an interesting approach to curbing costs. They purchase their own subscriptions to Westlaw and LexisNexis and require lawyers to use the Johnson & Johnson accounts. Some corporations are only hiring firms that agree to provide services at a flat fee, which places the burden of staying within budget on the firm instead of the client. Other corporations are using billing software to review and flag questionable expenses. Big firms that aren’t willing to modify their practices will lose their largest sources of revenue to more innovative firms.

The clients with the deepest pockets have the resources to decide how they will be charged, but what about everyone else? For those living below the poverty line, there are organizations that provide low cost or free legal services, but they are often available only to people living at or below 150% of the Federal poverty line. To those who are eligible, these organizations can be lifesaving. However, these organizations are often focused on litigation and many of them don’t provide transactional services. There are few groups that cater to those who don’t qualify for free or reduced services, but can’t afford to pay Pennsylvania’s average hourly rates. This causes a gap in access to healthcare, estate planning, and other transactional services.

This combination of factors, the economy, technology, and the absence of affordable legal services, has created an opportunity for a new business model to arise, the legal self-help model. According to the ABA Journal article, “Latest legal victory has LegalZoom poised for growth,” these companies continue to grow amidst lawsuits aimed at shutting them down. It’s no small wonder they are expanding; legal self-help websites advertise the cheap, accessible, and fast document production consumers desire. However, by the very nature of allowing non-lawyers to draft their own legal documents, these services have limitations. Creating an estate plan can be complex and poor choices have serious consequences. Without proper counseling it’s easy to make a mistake on a vitally important document. In most cases, the document created through self-help won’t become effective until the consumer is incapacitated or dead, which makes modification impossible. The customer, family, and friends, must live with any mistakes, poor choices, or omissions that could have been prevented through consulting with an attorney.

Despite the success of these legal self-help business models, studies continue to show that people want to know their attorney is human. Perhaps it’s because consumers realize there are tangible benefits to hiring a lawyer. The client can feel secure knowing their attorney will counsel them to make the best choices to accomplish their goals. There are also ethical responsibilities that lawyers owe their clients, such as confidentiality, making determinations of capacity, and screening for undue influence and abuse. Consumers simply don’t receive the same benefits when they use self-help services but it can be hard to find a better alternative at such affordable prices.

A positive attorney-client relationship can be beneficial for the attorney as well because most legal business is generated through word of mouth. According to the ABA Journal, “Trusted sources are the most popular primary way for consumers to find a lawyer, according to the September survey. Forty-six percent of the respondents say they would ask a friend, family member or colleague for a lawyer referral, while thirty-four percent say they would contact a lawyer they know or whom they have used before.”  Advertisements and blogging aren’t as effective at generating business because consumers want a referral from someone they know and trust.

Big firms are changing to appease huge corporate clients and online services are targeting individual customers for one-and-done transactional services. So where does this leave smaller firms? Smaller firms must also adapt to survive. There are many ways a firm can adapt to create a meaningful connection while still providing efficient and effective representation. It’s important to realize that clients may be overwhelmed when they come in to meet with us; they are often dealing with a difficult situation and have limited experience in hiring an attorney. Meeting with clients face-to-face can help ensure they truly understand what’s going on. Many clients suffer from nodding head syndrome and allowing sufficient time for them to ask questions and providing a written recap in plain English combats that. This can help avoid client confusion over expectations and the outcome of their representation. Picking up the phone and calling a client with periodic updates before they have to ask also goes a long way towards making them feel like a valued client and not just another customer. There are also ways to positively incorporate technology into our representation in order to reduce the burden on clients with limited mobility or those who can’t afford to take time away from work. Participating in local events and providing seminars on often misunderstood legal issues relevant to your practice can increase firm exposure within the community.

Transparency in pricing, however, might be the most important step a firm of any size can take. Clients want to know exactly how much they are going to pay before the bill is due. This alleviates much of the anxiety caused by obtaining representation and establishes trust between the client and attorney.

Whether we want to admit it or not, changes are happening all over the legal field. We can become part of the discussion and use this momentum to better our practices, or we can become obsolete to new business models. The choice is ours. Freiwald Law is leading the way and embracing the changing nature of the legal field with the creation of a new healthcare and estate planning program called Community Legal Advisors (“CLA”). CLA is a modern transactional program designed to fill the gap in access to legal services and affordability. We strive to provide a realistic alternative to “DIY” services for the working class client, while building a strong connection within our community. CLA utilizes extremely low prices, such as $150 for an Advance Directive or a Will, two documents no adult should ever be without. Transparency is a primary concern of CLA, which means that all of our prices are posted online and are available to the client before they ever set foot in the door. No one should have to forego healthcare and estate planning because of the cost, and now they won’t have to. For more information on CLA visit the Community Legal Advisors Page or call us at (215) 875 – 8000.