The trillion-dollar global legal industry has a looming skills crisis. Its roots extend far beyond law grads entering the marketplace lacking “practice-ready” capability or the vanishing, client-subsidized, on-the-job-training that firms once provided to young associates. Law’s skills crisis derives from the profession’s insular, self-regulated, anachronistic conceptions of what it means to be a lawyer, think like a lawyer, and competently represent clients in the digital age.
Legal Culture, Education, and Training are From Another Era
Law is mired in the mindset and training of the third industrial revolution. The Academy is detached from the marketplace and trains students for practice-centric careers that few will have. Many lawyers still function as they did a decade ago and retain the legal mindset that divides the world into “lawyers and ‘non-lawyers.’” The profession acknowledges the emergence of legal operations as a component of legal delivery, for example, but rarely grants it equal status or accords it a meaningful voice in management decisions. Even when a legal ops professional is a licensed attorney, s/he is, is relegated to second-class status compared to “practice” attorneys. This is emblematic of a profession that talks innovation but walks in place.
The World Economic Forum Future of Jobs Report examines the skills required in the digital age, the fourth industrial revolution. Critical thinking and problem solving, key elements of traditional legal pedagogy remain core skills in the digital marketplace. Other critical workplace skills—notably emotional intelligence (EQ), creativity, cognitive flexibility, and collaboration—are now equally important workplace competencies. These contemporary skills—and others including project/process management, data analytics, design, business basics, digital basics, risk prediction/management, and talent management—are largely ignored by the legal Academy and most executive education programs. They are also undervalued by industry talent managers even as they have become essential to satisfy rapidly changing legal buyer expectations. These skills are also foundational elements of new legal positions to be filled now and many more as yet to be created. The good news is that legal professionals have more career paths, lifestyle options, and geographic nimbleness than ever before. The bad news is that relatively few in the industry are prepared to fill the new roles.
A growing list of clients demand transformed legal services. What does that mean? Legal professionals must meld law, technology, and business and apply principles of digital transformation to the legal function. They must be proactive, data-driven, client-centric, and collaborative. They must appreciate that clients want solutions to business challenges, not legal tomes. Global perspective and cultural awareness are also critical, because law, long provincial by design, is now global. Legal professionals, regardless of by whom or where they are employed, will succeed in the 2020s only if they develop specific transformative skills that emanate from an understanding of key principles of digital transformation.
Law’s skills problem goes even deeper; it is cultural. Many lawyers still cling to self-perpetuated myths that have been debunked by clients. The long list includes: lawyers—not clients—decide what’s “legal work” and when their services are required; all work performed by lawyers is bespoke or at least differentiated; and only lawyers are qualified to deliver legal services. Legal culture is slow to embrace data, technology, new delivery models, multidisciplinary practice, regulatory reform, collaboration, diversity, gender pay equality, the distinction between the practice of law and the delivery of legal services, client-centricity, and digital transformation. Law is rooted in precedent; it looks to the past to prepare for the future. That is no longer the world we live in. Erik Brynjolfsson, a preeminent digital transformation expert, writes in The Second Machine Age that we are now “into a time when what’s come before is no longer a particularly reliable guide to what will happen next.”
Legal culture responds to the warp speed change—when it does at all—with buzzwords, denial, and self-congratulation. The packed calendar of industry award dinners celebrating pioneers, innovation, diversity, and other self-declared advances belies data exposing law’s dreadful scorecard on diversity, gender pay equality, advancement opportunities for non-white males, and other legal guild cultural holdovers. Then there’s the disconnect between the lawyer and client view of industry performance. Law’s net promoter score lags other professions and almost all industries. Legal culture needs a jolt; client-centricity, the ability to respond rapidly and effectively to new risk factors and challenges, data-driven judgments, and agile workforces are among law’s transformational musts.
The Legal Industry is Unprepared for Digital Transformation
The legal industry is failing to keep pace with the speed, complexity, and accelerating rate of business transformation. A recent KPMG survey confirms digital transformation is a key strategic priority for CEOs. It is also time sensitive—85% of enterprise decision makers think they have a two-year timeframe to make significant inroads on their digital transformation before sustaining adverse financial impact and/or lagging the competition. McKinsey reveals the high stakes of digital transformation—data-driven organizations are 23 times more likely to acquire customers, six times as likely to retain customers, and 19 times as likely to be profitable as a result.
Gartner reports that only 19% of in-house legal teams are well-prepared to support enterprise digital transformation. Most legal professionals—including General Counsels and their teams—are unequipped to deliver the transformative legal services that business clients demand. To service digital clients, legal professions must be proactive, agile, collaborative, digitally experienced, and function at the intersection of law, technology, and business. Global perspective, cultural awareness, agile teams, constant learning and improvement, are critical transformative skills and competencies presently considered outside the core knowledge of the law.
There is a widening gap separating client expectations and the ability of legal professionals—in-house, law firms, or other provider sources—to satisfy them. This is due in part to a failure of lawyers and legal professionals to appreciate how technology and cultural transformation are enabling digital transformation of global businesses at scale. Business clients are demanding a different, more holistic and impactful kind of legal service. They expect the legal function not only to protect the enterprise but, equally, to collaborate with business units to create enterprise value. This is not what lawyers and legal professionals were taught at law school or acquired in traditional legal practice.
A Two-Fer Solution: Solving Law’s Distribution and Skills Crises
Law has long had a distribution problem—plenty of lawyers but an imbalance between the corporate and retail (individual and SME) market segments. Unequal distribution and sky-high pricing have fueled the access to justice crisis wherein approximately 80% of Americans and a majority of businesses in need of legal assistance cannot afford it. Derek Bok famously quipped, “There is far too much law for those who can afford it and far too little for those who cannot.”
Rebecca Sandefur, a sociologist and MacArthur “genius” Fellowship recipient, contends lawyers are not required to resolve many common legal issues. Ms. Sandefur turns the access to justice crisis on its head, asserting that it is not a matter of unmet legal need but the byproduct of a complex, inward-looking web of rules lawyers have created. She’s right on both counts. Sandefur’s solution: lawyers must collaborate with other disciplines, use new tools—notably technology—and create new paradigms focused on achieving better client/societal results.
Sandefur’s prescription for law is already being filled in the corporate legal market segment. A handful of elite enterprise legal service providers (ELSPs) are transforming the legal function and expanding its impact by melding practice and delivery capability. Their tools include platform technology, multidisciplinary expertise, data to predict and mitigate risk, global footprints, ability to scale, and deploying lawyers when and if differentiated legal expertise is required. ELSP workforces are multidisciplinary, integrated, and possess the gamut of contemporary skillsets necessary to meet client demands in the digital age. They deploy the tools—especially technology—create new delivery paradigms, engage in collaboration with other disciplines, and achieve better results than traditional models. These elite providers are the embodiment of Sandefur’s theory at scale.
There is a unique opportunity to tackle law’s distribution and skills challenges as solutions for the two converge. Recommendations include: (1) education and training that is use-case driven and tailored to specific market segments; (2) retail segment training focused on new delivery models that are multi-disciplinary, utilize paraprofessionals, automate, and “productize” services to improve access, lower cost, compress resolution time, and leverage legal expertise (a distributed platform model); (3) closer alignment between legal buyers and legal educators/training programs; (4) law school curriculum/career services differentiation based on geography, market, etc. (not all law schools are Harvard); (5) micro-credentialing; (6) required digital training for all legal professionals; (7) regulatory overhaul that better serves clients/societies and is designed to foster competition, innovation, and multi-disciplinary practice; (8) skills mapping throughout one’s career; (9) multiple legal professional tracks keyed to function (think: medical industry); and (10) competency-based education and training directed to solving client challenges.
Many in the legal industry wonder how law students and early to mid-career lawyers will acquire necessary training. This presupposes that their training should be the same as past generations. It should not; how, when, with whom, for whom lawyers are engaged is different today than it was even a few years ago. The sooner the legal industry recognizes this, the more successful it will be in addressing its skills gap.
Featured in Dutch Legal Tech Update–a newsletter of curated articles, resources, tools, and conversations from the world of legal tech by Jeroen Zweers.