The Revolution in Legal Services Delivery

Darrel PinkExecutive Director

Nova Scotia Barristers’ Society

Three are better than 1 !!

• Lightening speed change

• Changing client expectations

• Huge obstacles for those who fail to see what is coming

• Remember the ‘Kodak Moment’!

The Kodak Moment

The End of Lawyers1. Exponential growth2. Information satisfaction3. On-line communities

- www.clientinform.net- www.clearspire.com

www.clientinform.net

How can you be pro-active in keeping your clients‘updated on the status of their legal matters in a simple,efficient and cost-effective way?

Client Inform is just that - a simple solution which converts standard emails sent by your law firm and converts them into text messages (SMS) which are automatically forwarded to your clients' mobile phone.• This means that standard emails can be set up within your

firm that can be triggered when anything significant happens on a matter, resulting in your client automatically receiving a text message confirming the event.

Clearspire – a DC law firmWhere the most advanced businesspractices and most powerful technologiespromote excellence, accountability andvalue. Where every system brings clientsand attorneys into closer collaborationaround shared interests. Where theuniversal desire for a better law firm has led,finally and fully, to a true alternative.

The End of Lawyers1. Exponential growth2. Information satisfaction3. On-line communities4. The Net Generation5. Clicks & Mortals6. Disruptive technologies

Where to?What is happening to legal services delivery in

2012?- as a result of new regulatory models- as a result of technological innovation- as a result of non-lawyer investment in law firms

There is a growing demand for and provision of different kinds of services that are changing the face of lawyering!!!

Services for the Corporate lawyer

• www.corporationcentre.ca

• www.contracttailor.com

• www.dynamiclawyers.com

For the Individual Clientwww.legaltree.ca

– An emerging collaborative site from BC for both lawyers and SLRs/DIYs

www.roadtrafficrepresentation.com- Example of the commoditization of legal

serviceswww.mylegalbrief.com- Cdn. example for small claims work

1. www.justanswer.com- anywhere in the world!!!

2. video-conferencing kiosks hit shopping centres in new legal advice push

3. Law in your library-Birmingham and Westminster councils to offer legal advice via webcam in libraries – www.legalfutures.co.uk

Redistributing where legal services are delivered

Branding & Franchisingwww.highstreetlawyers.com

- trusted legal network (?)www.everymanlegal.co.uk

-a virtual law firmwww.qualitysolicitors.com

Virtual Law Firms A full-service law firm for the twenty-first century. Our Law Firm 2.0® business model prioritizes the highest quality of legal services by partners who have the most relevant expertise, while our structure maximizes efficiency, responsiveness, and value. … identifying and eliminating the inefficiencies of the traditional law firm model

• By eliminating central offices and other unnecessary expenses, we cut our overhead and offer compelling rates

On-line practice

Australian firm that has truly commoditized the real estate transaction:

With or Without Lawyerswww.elawyer.net.au

- focused on relationships among a number of client advisors

www.rocketlawyer.com- leading US on-line deliverer of legal advice

www.legalzoom.comwww.cybersettle.com

New OwnershipSlater and Gordon – Australia

www.slatergordon.com.au/

- In May 2007 Slater & Gordon Limited became one of first law firms in the world to go public

Alternate Business Structures- Will allow non-lawyer ownership of law firms – ‘Tesco Law’/’PCLaw”

www.sra.org.uk/home/home.page

Off the WallArtificial Intelligence and law practiceQudoc – Australia - www.qudoc.com.au

• Qudoc is an experimental search engine for Australian lawyers, and anyone interested in finding legal information. It's geared slightly more towards lawyers since it has a tendency to find in-depth legal information!!!

What does it all mean?• We are in the midst of a revolution• Change is occurring in an environment where

– The nature of regulation has changed– Technology is developing faster than most can follow– Borders are disappearing and ‘law is in the cloud’– There are huge opportunities for those who seek to

take advantage– There are huge demands for legal services that are

not being met– The future is unclear/uncertain/precarious for those

who fail to embrace change!!!

The choices are clearIs your head in the sand? Or will you embrace the

challenge and be

THANKS FOR LISTENING

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THE REVOLUTION IN LEGAL SERVICES DELIVERY Presentation to NSBS Annual Meeting

June 16, 2012

Darrel Pink Executive Director

Nova Scotia Barristers’ Society

At the outset, it is important to note I am not a “techie,” a “nerd,” or anyone else with sophisticated knowledge of technology, the Internet, communications, and in what directions they are moving. Rather, I am an observer. I watch what is happening across Canada, in the US and UK, and in other English-speaking countries. My interest is primarily in the common law world because it has the most relevance to us in Canada. But I am also a regulator. The issues that the revolution, I will describe, brings to us will require some significant thinking by you and maybe some significant changes in how we regulate lawyers and how you, as lawyers, do your work. This morning I want to share with you some of what I am seeing. Some of it will likely be familiar to most of you, some will show what is innovative, creative, far reaching and maybe, off the wall. But all will demonstrate that legal services delivery is in the midst of revolutionary change. Some will see this new world as threatening; some will see it as exciting. In less than a generation, the Internet has revolutionized our lives. It is difficult to remember when it was not part of how we do business, find things we want, serve as the platform for most of our communication. Yet it was less than 20 years ago that the word ‘internet’ appeared for the first time in The New Yorker in a cartoon entitled – ‘When you are on the internet, no one knows you are a dog.’ In that simple caption so much of what we as professional services regulators need to be mindful of is reflected – anonymity, innovation, speed and the loss of exclusivity. For if a dog can pretend to be a person on the internet, anyone can pretend to be a lawyer, or offer legal services. But the Internet is now old hat – at least the part of it that one accesses from a computer. It is the Smartphone – be it a BlackBerry, some might say with its aging technology, and the iPhone and now, more dramatically it is the ‘tablet – mostly the iPad – that is changing how work is done. For legal services, we are also in the midst of a revolution. How lawyers market to clients, get clients, and keep clients is in the midst of major transformation. How lawyers provide legal services and client expectations (both personal and institutional clients) for those services are undergoing phenomenal change. Just as few lawyers today could practice without email, in the near term few lawyers will be able to deliver their services just as they do now. The issue for many lawyers and legal regulators will be whether they see the revolution and embrace it, see it and ignore, or don’t see it at all. My thesis today is that

• Our clients and the public we serve are witnessing light speed differences in much of what they do.

• They will expect and demand that law practice be part of what is going around them in virtually every sphere of their lives.

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• Legal regulation is under scrutiny – changes have already occurred in the UK, Australia and New Zealand; last summer a book was published in the US called First Thing We Do, Let's Deregulate All the Lawyers and an editorial in the Wall Street Journal spoke favourably about it. The editorial argues that it is time for the legal profession to be deregulated, as other industries have been, in order to create price competition for legal services, spur innovation in the delivery of legal services, and reduce the premium that lawyers get for pricing their services as a result of strict occupational licensing.

• As a profession, the risk for us is that those who fail to recognize this, and who continue to think and act as they have been taught, and as they have acted for many years, face obstacles and challenges which will eventually become impossible to conquer.

• Ten years ago, no one would have thought that Kodak might disappear. The “Kodak moment” was almost ingrained in our DNA.

• As little as three years ago, we and our children bought CDs like they would never go out of style. Not one of those children today would burn music to a CD any more than she would to a vinyl disc.

• Today the iPad/iPhone/BlackBerry, the ‘virtual law firm’ and ‘cloud computing’ are but a few of the changes that are rapidly altering the world we live and practise in.

Though the services we provide – be they advisory, legal drafting, advocacy, or a myriad of other tasks – remain stable, it has to do with how we deliver those various services that will become the issue for the legal profession. Around the world we are seeing dramatic change in how those types of services are being made available to the public and the risk is that some of us in Canada, perhaps most of us in Canada, might be left behind. The issue is will we be Kodak? Will the way we practise be the compact disc? To set the context for this discussion I want to start with Richard Susskind, the author of The End of Lawyers (2008, Oxford University Press). When the book was released I, along with many, was skeptical about the accuracy of his predictions. Susskind himself was wary about forecasting the future. Yet in the four years since the release of his thought-provoking work, early indications are that Susskind has been quite prophetic. One area where he was bang on relates to “trends in technology” and how they would impact the delivery of legal services. He identified six trends that in his view would profoundly impact how law is practised and legal services delivered.

1. Exponential growth This relates to the power of computers, the amount of data available, and the rate at which growth occurs. Moore’s Law says that the processing power of computers doubles every eighteen months and the cost halves in the same period. Apply this to the infrastructures that support legal information. The amount of information that will be available on the average desktop computer will be staggering. Equally mind boggling will be the amount of information that can be stored on a mobile computing device – your smart phone. Those changes in technology will impact what is available to the lawyer and what is available to clients and how both use it.

2. Information satisfaction We will get only the information we want. In other words, we will have the ability to set the parameters for what we read and what is made accessible to us. You will choose to receive the Globe & Mail or the Chronicle-Herald online and only get those portions that are of interest to you – the business page, the sports section, the arts, whatever. You will

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not have to leaf through paper or information, in any area, that you have not asked for. You will be satisfied. The same will be true of clients. They will select what information they want and even what kind of relationship they want with their lawyer. And you will pay for the information that is online.

3. The online community Email plus the Internet (information) plus social networks results in fundamentally new ways to interact and collaborate with others and will burgeon in the years to come. There are literally dozens of examples but you might want to have a look at www.clientinform.net or www.clearspire.com . These are examples of law firms that are changing fundamentally the way that lawyers communicate and collaborate with clients. Their use of simple processes has changed how their way lawyers work and their clients’ expectations. As a society, we are already in the midst of changes in how people shop, communicate, research, and read. We should expect nothing less when we reflect on what is happening with legal services. These three changes noted by Susskind relate to what we will be able to do and will be expected to do as lawyers; the next three address with whom we deal – and how.

4. The Net Generation Susskind defines the ‘Net Generation’ as those who do not remember when there was no internet. Though there is no point, for most of us, that we can reference when seeking to remember when the World Wide Web did not exist, we do know the impact. Face-to-face communications for many have been replaced by social networking. Those social networks are used to organize, communicate, learn, and make friends. More and more they are also essential to the conduct of business. And the power of mobile computing will continue to accelerate the change.

Members of the Net Generation are now our clients.

5. Clicks and Mortals For Susskind, this is a play on the phrase “bricks and mortar.” Think about combining online and traditional human services. There will still be services that require and benefit from personal contact and that contact will still be in demand. There will also be services that are repetitive and routine, which will mean that they benefit from an online application. The question is, when will the Net Generation say that rather than personal contact they are quite comfortable, in their social networking framework, to conduct client meetings, detailed briefings and closings without ever having a face-to-face conversation? A few months ago, I had a conversation with a senior partner of one of Halifax’s large firms. He described to me an international closing in which a Nova Scotia company owned by shareholders in the United States and Switzerland conducted a financing with offshore funds and counsel in Nova Scotia and Ontario. The transaction from beginning to end was completed without a single face to face meeting. Susskind’s theory, as is evidenced by this example, is that the Net Generations’ preferences will go from mortals to clicks.

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6. Disruptive technologies Companies fail when they are too late in recognizing the impact of “disruptive technologies,” i.e. new and innovative techniques that emerge and fundamentally transform companies, industries, and markets. How work is done changes profoundly. Think only of the impact of digital technology on film photography (Kodak again) or Wikipedia on encyclopedias or the DVR on the VCR. In the practice of law, information technology and its effect on how legal information is gathered, analyzed and sold (that is what lawyers say they do) will support and, in my view, ultimately require lawyers to work in radical new ways. Lawyers who fail to understand that there are disruptive technologies at play her will likely fail – not immediately but eventually. When my father, who practised law for 65 years, realized he could dictate more for a lot less when he used a Dictaphone rather than a stenographer, she lost her job. She was replaced by technology. A case in point in Nova Scotia today might be the impact of the LRA on title searchers. So it is within this context that I want to show you some things that are happening around the globe. There is no magic to the way in which I cluster some of the changing ways in which legal services are being delivered. But many of them are leading edge and innovative. Some push the envelope. All threaten the traditional way law has been practised for generations and all challenge us to think about where we fit Services for the corporate lawyer A number of law firms and others are developing a wide variety of packages and services to assist the “corporate lawyer” although virtually everything on their site is also available to members of the public. Many suggest they are not “practising law”; some might suggest otherwise. CorporationCentre.ca shows how services that were once lawyers’ bread and butter have now been commoditized and are being sold to lawyers rather than by them. ContractTailor is another example of how our precedents, once seen as part of the capital lawyers built in their practices, are now readily available to clients and others. DynamicLawyers is another example of a site that offers Canadian legal forms and documents. The media testimonials for this and other sites have become common and are indeed a form of advertising. Noteworthy is that the owner of this site says he is not practising law. For individual clients Almost every one of the examples I use today provides a service for individual clients; however, these sites show offerings that are primarily tailored to individuals. Some are designed to provide services to their own clients; others see the market as providing reselling opportunities through small firms, to allow them to do work more efficiently. Legaltree.ca is a very innovative Canadian site that is designed to provide expanded legal information for both individuals and lawyers. What is unique about this site is that it has created a collaborative model which will allow lawyers to contribute information that will allow the site to grow – like a tree.

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Look at the commoditization of services in www.mylegalbriefcase.com and www.roadtrafficrepresentation.com. Legal Briefcase just merged with a cloud computing practice management firm to allow it to expand its services to allow solo and small firm lawyers to utilize their software to serve their own clients. Redistributing where legal services are delivered This discussion needs to be connected to the major changes in regulation that are happening in England. With the passing of the Legal Services Act in 2007, a major change in how lawyers and legal service regulation takes place began. Over the past four years there has been a dramatic shift in the nature of legal service regulation, with the creation of a number of regulators and the articulation of regulatory standards. For lawyers, the primary new operator is the Solicitors’ Regulatory Authority (SRA) which is leading the way in opening up the legal services market. The main way this is occurring is through the creation of ‘alternative business structures’ or the ABS. The first step on this road was taken when law firms became eligible for partial non-lawyer ownership. A number have already moved in this direction. The next phase is now unfolding with the first licenses for ABSs being granted by the SRA. Originally described as “Tesco Law”( named for the supermarket) it is clear that from the introduction of ABSs that banks, mortgage companies, real estate companies and others will seek to offer legal services in conjunction with other service they provide. The initial licences, granted by the SRA, were not too radical, simply allowing an expanded ownership for some small firms. But by allowing Co-operative Legal Services, a subsidiary of the Co-operative Bank, to provide legal services to the public rather than just to its members, the SRA has changed the playing field. Now, some large law firms are exploring creating relationships with some of their clients, likely financial institutions and investment banks, to create new forms of legal services delivery. Earlier this week a large British private equity fund announced its intentions to make a significant investment in commercial law firm Knights Solicitors, with the goal that the firm would grow to be one of the top 100 within three years. By changing the regulatory model and the ownership paradigm for law firms, the change has only just begun. In terms of location – where legal services are offered/delivered – some of the more innovative approaches suggest that there will be legal services kiosks available in shopping centres, where you will be able to receive legal advice in the privacy of a phone booth. Recently two municipalities in the UK announced that they would begin to make legal services available through local libraries in collaboration with a network of solicitors – HighStreetLawyers.com. If you look at JustAnswer.co.uk, it will not matter where you are. Both the nature of the services and the means by which they are delivered, takes the idea of ‘place’ to a different realm. It is another form of ‘virtual law firm’. JustAnswer.co.uk offers legal advice in many countries. So we will see that clients will have online advice available from a ‘live lawyer’ via a smart phone.

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Branding and franchising This phenomenon connects directly to the expansion of legal services/law firm owners. As the threat of competition arises from national scale enterprises, a number of ‘firms’ have been created to provide a leg up for small and local law firms by creating both franchise opportunities and business/practice systems which small firms can purchase. They would be similar to PharmaSave for small drug stores. The examples I have selected show the range of alternatives that are being developed. HighstreetLawyer.com is a network of independent lawyers. EverymanLegal.co.uk is another franchise scheme empowering lawyers to work in different locations and especially at home. QualitySolicitors.co.uk – note that they are award winning. This phenomenon is also occurring in the US, with firms now moving away from the physical storefront or tower office to the virtual firm – using reduced overhead and technology to radically change the pricing model and means of delivery of legal services. See VLP Law Group – www.vlplawgroup.com and Fisher Broyles Legal – http://fsblegal.com Practising on the Internet There is a need for a separate discussion about the emergence of the “virtual law firm”. There is not one single model. The two US firms we just looked at have structured their organization to be virtual – no bricks and mortar. But practising virtually, i.e. using the internet not only to communicate with clients but to do the client’s work, is a whole different thing. An Australian firm, Lawyers Conveyancing, does its real estate practice almost entirely online. What is fascinating about this entity is that they are proud of the fact that a client never needs to come face to face with a lawyer. In Susskind’s language, the clients seem to prefer clicks to mortals. Law without lawyers And the next iteration of this development is to offer services without lawyers being obviously present. eLawyer.com offers sophisticated services designed for estate planning and management. LegalZoom.com and CyberSettle.com are US sites that have been around for some time offering repetitive services.

This is no longer radical stuff. The province of British Columbia has now passed legislation to create a Civil Resolution Dispute Tribunal for small claims matters which can include an online dispute resolution component. Its use will be mandatory.

These examples have been around for a number of years and again demonstrate how the nature of legal service offerings available to the public is dramatically different. If Turbo Tax can be available for the public to prepare their own tax returns and provide a full range of tax advice, “Turbo Law” can’t be far behind.

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Pushing the envelope The application of artificial intelligence principles is not far away as it relates to the application of technology to the practice of law. Systems have been developed in a large number of industries where routine and sometimes even one off items can be addressed through the application of artificial intelligence logic. www.qudoc.com.au is one website in Australia that shows the direction into which some of the work is going where literally a lawyer will ask the question and the computer will provide the answer. For those who watched last year when the IBM computer beat the best of Jeopardy champions, it is not hard to envision when this technology is applied to the delivery of legal services, it will have far reaching and even disruptive effects. Conclusion We are in the midst of a revolution. The fact is that so many of the services that I have shown are available in Canada means, in my view, that law societies will have no choice but to address what and how they regulate lawyers and law firms and the delivery of legal services. Change is occurring in an environment where

• The nature of regulation has changed and will continue to do so. • Technology is developing faster than most can follow. Though lawyers need not

keep up with everything, as a profession, failure to be connected to the most relevant changes, presents a real and present danger.

• Borders are disappearing and ‘Law is in the cloud’ – services are provided from anywhere. Outsourcing in India to legal services for a global marketplace being sold from a desktop in London. The competition is no longer just across the street. It is everywhere.

• There are huge opportunities for those who seek to take advantage of them. But the pace and scope of change will require significant mental, personal and possibly financial investments.

• There are huge demands for legal services that are not being met. They create real opportunities to service an unmet market. What many of the systems that I have shown today will thrive because of two things – they have bitten off a small piece and done it really well, and they have systematized their work to create efficiency and economies of scale. Many legal services lend themselves to this and those who take advantage will thrive.

• The future is unclear/uncertain/precarious for those who fail to embrace change!!