Legal Technology

Reinventing Professionals: Where is the legal industry headed in 2017?

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Ari Kaplan

Ari Kaplan.

Ari Kaplan talks to a panel of industry leaders in a virtual roundtable about where the legal industry is headed and advice for navigating prospective 2017 challenges.

They include:

Laura Broomell, COO of Greene Espel, and president of the Association of Legal Administrators
Ray English, assistant dean for the Office of Career and Employment Services at Sandra Day O’Connor College of Law at Arizona State University
Jordan Furlong, principal, Law21
Tony Gomes, senior vice president, general counsel and chief legal compliance officer at Citrix Systems.
Bill Henderson, professor of Law, Indiana University Maurer School of Law
Kate Holmes, managing director, FTI Technology
Joshua Rothman, partner, Fitzpatrick, Cella, Harper & Scinto

This Q&A has been condensed.

Ari Kaplan: Where do you see the legal industry headed in 2017?

Laura Broomell: I’m looking at operational challenges, and No. 1 on our list would be cybersecurity. We need to deal with internal protection from cybersecurity threats while continuing to offer our trainees and staff the flexibility from mobility, especially when it comes to technology. We also have more and more client requests for security and operational audits, and so we need to figure out how to do that efficiently with minimal cost. From the Association of Legal Administrators’ standpoint, we need to continue to focus on high-level training and networking opportunities for our members.

Joshua Rothman: Based on what we saw in 2016, we expect to see companies prioritizing the legal ability of the law firm when choosing counsel and making the cost of an actual project slightly less of a priority. We see companies that are less likely to go with the lowest bid without carefully considering the best fit for the work.

Tony Gomes: I think 2017 is going to be characterized by global policy uncertainty, which will lead to business uncertainty. With all of that policy uncertainty, I think general counsel and in-house legal teams will have, more than ever before, an important role in advising leadership teams and boards of directors. I like to say that the No. 1 job of the general counsel and the in-house legal team is to look around the corner. So more than ever before, I think we will be called upon to look around the corner, monitor policy developments on a global basis, and apply that to the company’s business.

Kate Holmes: We often work with legal teams both in-house and at law firms at the intersection of law and technology. Today, that encompasses a whole lot of different problems from data breaches: how you can appropriately protect sensitive data, [General Data Protection Regulation], how global organizations manage data and conduct business in compliance with data privacy regulations around the globe. There is major transformation taking place in IT right now, with organizations moving to the cloud.

Bill Henderson: The number of graduates in 2017 will be the lowest for ABA-accredited law schools. You have to go back to 1978 to find a similar graduating class size. 2018 is predicted to have an even smaller graduating class, and we have a massive amount of contraction taking place. Remarkably, although we have the same amount of graduates we had 40 years ago from accredited law schools, we have about 40 more schools. The average entering class has gone from 260 to 182, which leads to a lot of high fixed costs spread over a larger number of a law schools giving them a higher cost rate. When an industry typically enters this period, they enter into a period of consolidation and we see mergers because there’s too much capacity. One of the reasons law schools are struggling is because the ratio of entering salary to debt has almost doubled since 2000, so the starting salary has basically remained constant, but the actual debt load has continued to increase.

Ray English: What we are seeing from career services is that we are getting more involved on the admissions side. Given the cost of law school, students or prospective students are really looking closely at cost versus job and salary when they graduate. We need to expand the type of legal jobs that are out there, not just focusing on the traditional law firm jobs, but the other jobs in security, compliance, and other areas where JDs are much more competitive.

Jordan Furlong

Jordan Furlong: I think the legal industry is headed into turmoil: We’re experiencing a destabilization of the relationship between law firms and clients. What previously was a relatively simple, straightforward market is now more complicated. Law departments are keeping more work for themselves that they once routinely sent out to law firms, helped along by the increasing significance of procurement personnel and the rise of legal operations staff. We hear a lot about AI in the law; maybe 85 to 90 percent of it is hype, but the remaining 10 to 15 percent is real and will have a revolutionary impact.

Ari Kaplan: What advice will you give to your peers in terms of navigating challenges in the year ahead?

Laura Broomell: Join the Association of Legal Administrators or some other professional association, network with your peers, and get that high-level education that you need. More than anything, build a collaborative relationship with your managing partner and management team.

Josh Rothman: There is an opportunity for law firms to differentiate themselves through the creativity they offer. There can be a focus away from just saying “we can do it for this bottom-dollar price.”

Tony Gomes: This is a time of massive disruption because of rapid advances in technology. The No. 1 thing I tell my team, and the perspective I share with my peers, is that you just have to embrace this. The world isn’t going back, and it’s going to be the teams, the companies, the law firms and the service providers that embrace this new paradigm and proactively drive the world toward economic sense while still being able to make a profit in the new economic paradigm that are going to survive.

Kate Holmes: Three key trends that we think will accelerate are: (1) creating data assessments, which corporations are increasingly using to help them better understand where to get started and offering a road map for better data security; (2) using legal analytics and leveraging e-discovery software like Ringtail proactively, so technical skill and comfort with these types of technology will be helpful to anyone in the legal industry moving forward; and, (3) an emphasis on being practical yet strategic giving legal professionals a new opportunity to be at the table for discussions that they may not been involved with before.

Bill Henderson. ABA file photo by Wayne Slezak.

Bill Henderson: Stay calm because at the end of the day, talent is going to find it’s own level. So if you are a hardworking person who is open-minded and learning new technologies that have a customer focus, there is an organization for you. But it may be just a different organization than you are at now.

Ray English: Career services professionals are going to have to educate themselves about the changing legal market so they can be in better position to guide students and graduates on what kind of technology they need to look into and what kind of training the school needs to provide because students don’t know, and they don’t know what they don’t know, and it’s up to us as career service professionals to be able to advise them on the pathways and skills they need to get the jobs they want in the market.

Jordan Furlong: I’ve been trying to introduce a sense of urgency within law firms and among lawyers to act on these changing market conditions. Demand has been flat or declining at large commercial firms for the last 10 years. Am Law 100 realization rates have dropped from the mid 90s to the low 80s over the last decade, which is unprecedented. We have substantial cohorts, year after year, of unemployed or underemployed new lawyers who nine months after graduation struggle to find full-time legal work. My message to law firms is: What you’ve been doing in the past is not going to work very well in the future. Everybody who is involved into the legal market needs to fundamentally recommit to the lawyer-client or the law firm-client relationship. Legal services will be offered by any number of different providers in future. The law firm is not the only game in town anymore.

Listen to the complete interview at Reinventing Professionals.

Ari Kaplan regularly interviews leaders in the legal industry and in the broader professional services community to share perspective, highlight transformative change and introduce new technology.

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