Unbundling gathers pace

Following my recent blog on unbundling legal services (or rebundling as Professor Stephen Mayson prefers to call it), I'm seeing many examples of the concept emerging into the market, including http://lawyersupportedmediation.org.uk/, http://www.evident-legal.com/ and http://www.absolutebarrister.com/.  Some law firms are getting their act together too, with a client firm of mine recently asking me to write workflows for 'supported divorce' and 'kick start' divorce packages.

This may well turn out to be the most disruptive and lasting impact on the legal market and one which will take hold quite firmly over the next 12 months.  Watch out in particular for initiatives from this site, all of which will be available on a white label basis.

OPG's April Fool's Joke

What is it about April Fool's Day that regulators find so hard to resist foisting their unfunny jokes on the beleaguered legal profession.  The Jackson reforms were set to be implemented from 1st April notwithstanding very late publication of the rules, a less than fine tradition going back at least as far as the Woolf changes implemented on the same date in 1999 when, guess what, the CPR were published only a couple of months or so before the Day of Practical Jokes.

Clearly, someone at the Office of Public Guardian has taken a shine to the idea, hence the notice published today, that in 10 days' time many of the forms used in the making and registration of Lasting Powers of Attorney will be changed and must be used from that date.  When will the forms be available? On the 1st of April, the very day from which they become obligatory.

Now, in a world that the OPG seems to think still exists, where every form is either printed and written on or downloaded and completed from scratch, this would be fine.  But the OPG apparently has some inkling that some of us have become a little more advanced in our working practices, for it makes the helpful suggestion, "check that any form-filling software you use has been updated in line with the changes to the [forms]".

Well, thanks guys.  Form-filling software comprises collection of data and workflows and the programming of forms.  It is not a 5-minute job.  At a stroke, the investment in such systems is rendered useless until the software can catch up.  Would it have been too much to supply the forms a month or so in advance of the changes, so that software amendments could be properly planned and implemented?

I should know better, but I felt compelled to ask these questions of the OPG by email this afternoon, but received a reply that Kafka would have been moved to write about, to the effect that their targets are to answer correspondence within 10 working days and we know what date that takes us past...

Unbundling legal services

The Law Society President has suggested that unbundling legal services could enable law firms to help legal aid clients denied legal aid after 1 April.  My initial inclination to comment on this in The Law Society's Gazette was dampened by a quick trawl through the comments section.  This is not a good place to go if you want quality of debate.

Perhaps understandably, the comment pages of The Gazette have become the refuge of a lot of disaffected solicitors struggling to keep their head above water, but many of them do a discredit to their profession and themselves by displaying an alarming degree of hysteria and a propensity to abuse those who dare publish anything unpalatable.  The most vicious insults tend to be hurled by those who hide behind an anonymous posting.

The President's message is that there will be many people who could do with some help and guidance on particular issues but cannot afford to pay for a full legal service from beginning to end of, say, a Family case.  I don't wonder at this, regardless of whether legal aid withdrawal was going to happen.  I have never been able to fathom how there could ever be much of a market for people able and willing to pay in the region of £200 an hour for any service, or at least not for a service that could be racking up those charge out rates for many months.

This model has been sustainable for a very long time for two principal reasons, mystique and protectionism.  The mystique surrounds the complexity of the law and its procedures, making it hard for the uninitiated to go it alone with any confidence.  The closed nature of the profession and the concept of reserved activities has kept it safe from commercial competition.

Protectionism was pulled down by the Legal Services Act 2007 and we are now seeing a wave of non-lawyer owned companies entering the market and challenging the old ways and costs of doing things.  Many are, however, still making the most of the status quo in terms of how work is done, which still keeps prices high even if they are offered as fixed fees rather than hourly rates.

The big game changer is the power of technology to pull back the curtain of mystique.  We largely gave up paying scribes to read and write for us centuries ago and there is now no longer any reason why we need to pay someone to tell us what the law says and how it can be applied.  The tendency of the Internet to reduce pricing to zero is well illustrated by a domestic experience I had recently.

My tumble dryer had broken down and I didn't know whether the problem could be fixed or was terminal.  Not so long ago, I would have had to call out an expert and pay for the call out just for the answer to that question.  Now, I was able to go online and within seconds find any number of helpful videos explaining exactly what the problem was and how to fix it.  I then had the choice of doing it myself, in which case I could order the parts online from the site that told me how to do the job, or call out an expert from the same site to come and do it for me.  As it happens, the problem was shown to be terminal, so I invested in a new machine, but did not have to pay an expert to tell me that this was necessary.

Where would I go again if I needed further help?  Back to the same site, where I know that they charge only what is valuable to me (doing something I can't do for myself), and who share their knowledge over matters that they know someone else will share if they don't.

Legal services are no different in principle.  Many lawyers still cling to the view that their websites shouldn't "give away the Crown Jewels", i.e. should tempt you into the shop but not tell you anything that will make this unnecessary.  This is a view that will soon mean no one will even bother to look in their window.

I have sought to put these words into practice, through the launch of Road Traffic Representation, an online legal service for those faced with prosecution for motoring offences.  Here, you will find not just an explanation of the law, but an online process that will without charge diagnose not only the likely penalties for the offences charged, but also the potential for any defence.  The processes use artificial intelligence in a question and answer to process to arrive at the advice.  Only if the visitor then wants representation does the site select and appoint a barrister and then automatically brief Counsel by collating all of the data collected during the online process.  It is at this point that the visitor pays a fixed fee for representation, i.e. pays for what is valued and not for mere process.

This will be the future for legal services.  I am now actively making RTR available to law firms and ABSs on a White Label basis and this will be followed by similar services in many other areas of law.  Unbundling and pay-as-you-need is here already.

Legal Futures Conference on the Cutting Edge of Law

I was delighted to be asked to speak at the Legal Futures Conference on the Cutting Edge of Law in London on 19 November 2012.  Neil Rose, the creator of 'Legal Futures' has for some considerable time now been a beacon shining a light on the path opening up before us in the modern legal landscape in the UK and it was no surprise that a significant number of overseas visitors were in attendance both as speakers and part of the audience.

The USA were well represented by LegalZoom, speaking and listening, and Daniel Katz from Michigan State University, whose startling presentation is commented on below.  I am aware of at least two Australians in attendance, one of whom I met in the post-match pub debate.  He is the founder of his commercial firm in Adelaide and I was astonished on asking him what brought him to London to hear him say that he had flown in specifically for the conference.  The UK is leading the way in changing the infrastructure of legal services and the world is watching.

It's a long time since I've witnessed such an attentive audience.  Most stayed right to the end and this was no CPD points gathering exercise.  It seemed to me that everyone in attendance was in one way or another part of the great changes that are taking place and the rapt attention in the conference room was matched only by the highly charged buzz of exchanging ideas in the lunch and refreshment breaks.  It was a good place to be.

So who said what?  Arlene Adams, CEO of Peppermint Technology, opened with what has become something of a benchmark in terms of client expectations.  This is not a place to go into detail on the findings, which are summarised well in Neil's blog.  I was surprised to learn quite how many people still want face to face communication with their lawyer, but I do expect this to change as other options become mainstream.  Nonetheless, I agree with Chas Rampenthal's view expressed on behalf of LegalZoom that people (let's not get hung up here on the tiresome client/customer debate) want choice and they should be offered that choice in terms of how they receive the help that they seek.

Adam Sampson, Chief Legal Ombudsman, treated us to the view of us from the client's shoes and my favourite of his observations was that until taking on the job he had never heard of the term 'disbursement' that we so glibly bandy about.  (For that matter why do we call our fees 'costs'?)

I don't think any of us were surprised to hear Brian Weston of the Institute of Customer Service tell us that 67% of disaffected clients will spread word of a bad experience, but nice to hear that 1 in 4 would pay more for excellent service (or at least tell a researcher that they would).

Karl Chapman, CEO of what has in my view been the most dynamic new entrant into the market - Riverview Law - told us a lot about the impact they are having, but said quite simply that none of it was rocket science, just stuff that any of us could do if we thought enough about those we are serving and what they want.  Who can seriously argue with his assertion that the status quo is untenable?  The only blot on his otherwise pristine copy book was to offer a day at Chelsea FC as part of a prize for an online competition.  Still, nice to spend as much time there as the average Blues manager I suppose.

Conveyancers look away now.  Harry Hill (In-Deed, former Countrywide) had some very depressing figures to show us demonstrating just how far Conveyancing firms have allowed agents and other third parties to suck all the profit out of the work.  I hope that at least the firm that charged a happy Harry £5,500 for a Will (that's an awful lot of tax planning) attracted his custom without having to pay anyone else for the privilege.

Trevor Howarth showed just how simple it is for a well known brand such as Eddie Stobart can drive (sorry!) willing clients and barristers to meet in the middle for a fixed fee.

So far, much of what we had heard was a story about marketing, so it was interesting to hear Doug Crawford, CEO of myhomemove, explain how automation was at the heart of the success of the country's first ABS.  Telling too, and no surprise, that Avin Rabheru of Smedvig Capital, behind this ABS, explained how dealing with the traditional partnership structure was not usually fruitful in terms of multiple decision makers not making effective (or often any) decisions.

Saleem Arif of Quality Solicitors spoke eloquently about the brand, but I would have liked to have heard more about how the work that the brand is generating will be processed.

"Partnerships are dead!" exclaimed Tim Oliver of Parabis.  Actually Tim doesn't go in for exclamations; it was more of a statement made with quiet authority that a partnership is not a suitable business structure for making dynamic decisions.  Rather, said Tim, resolutions often come down to the lowest common denominator.

Mention of quiet authority, not to say, massive confidence, prompts me to note how Greg Shields, CEO of Forster Dean, spoke with pride about the work of this 29-office firm, which specialises in personal injury and conveyancing and yet does not pay referral fees.  The open culture that Greg spoke about was refreshing and he was pretty clear that separation of ownership from management of the firm was central to its success.

If you've wondered about the story behind James Caan of Dragons' Den investing in Knights, David Beech, the firm's managing partner, was happy to tell the tale.  David's background is in private equity and has shown the way for traditional law firms (Knights was established in 1759) mixing it with modern investment.

Onto the last lap, I found myself sandwiched between two impressive American speakers in Chas Rampenthal, General Counsel of LegalZoom (see comments above) and Daniel Katz, Assistant Professor of Law at Michigan State University's College of Law.  Once Daniel got going (and he took off with all the speed of a Harrier Jump Jet), I felt guilty that I had delayed him in apparently going over time with expressing my views about online legal services and how I have sought to manifest them in the shape of Road Traffic Representation (with many more services of this kind to follow).

Daniel teaches computational legal studies and his students must know that they can't attend his lectures with a hangover, for he cracks on at a pace but great lucidity when explaining how much better predictive technology is becoming and how no one can take for granted that humans will always be the master of sorting all the nuances required in considering and applying the law.  The saving grace is that he is of the opinion that man and machine together will beat the machine on its own, but the message is clear in that we would be foolish to assume that we will always have centre stage in advising on the law.

This was easily the most worthwhile conference I have ever attended.  The learning didn't stop in the formal setting and some of the best ideas were exchanged in a pretty full pub afterwards, or at least I thought so at the time...

The American take on online legal services

I read with interest and some dismay this article in the Wall Street Journal on American lawyers' responses to emerging online legal services.  The comments the article attracted, particularly the first comment, missed the point spectacularly, so I have written this to the author of the article to provide a different perspective:

"I read with interest your article on virtual lawyers.  I am a solicitor in the UK who has for years provided workflow systems for law firms, because in practice a lot of the work that a client pays for is pure process that does not warrant the substantial hourly rate across the board.  Last year I launched direct to the public Road Traffic Representation (RTR), an online legal advice and representation service for persons charged with motoring offences. 

"RTR uses artificial intelligence to analyse details of the offence and the motorist’s driving record and advice on likely penalties if convicted and potential defences.  The model took a couple of years to construct, compiling questions that a lawyer would ask a client face to face and responding to the answers.  This routine of taking instructions is pure process and the dispensation of the advice is a modern way of translating the law into the client’s circumstances.  It is all provided free of charge.  The client then has the option to pay for what is of real value to him, namely representation in court.  The brief to Counsel is generated automatically from the data collected from the site in the virtual interview process.  Should the client require the comfort of one to one advice to supplement the free online advice, a fixed fee of £35 (including VAT) buys telephone advice from a lawyer for an unlimited period of time.  The advice is noted on the client’s secure part of the website and forms part of the brief to Counsel if the client seeks representation.

 

"I intend extending this model to many other areas of the law.  I believe that delivery of legal services in this way will become the norm in the near future.  Centuries ago we paid scribes to read and write for us.  Our children, let alone our grandchildren, will marvel at why we paid lawyers to tell us what the law says.  Meanwhile, I was disappointed but not entirely surprised to see the first commentator on your article focus on cheque fraud.  Why on earth anyone would think of marrying a cheque payment process to an online service is beyond me.  Secure online payment systems suit online services.  More importantly, the comment demonstrates the mind set of many lawyers burying their heads in the sand and thinking that their world is not going to change in the same way that everyone else’s has and will continue to do, only a great deal more rapidly."

I will be fascinated to see whether this response is aired publicly in the WSJ and if so, how it is received!

No need to remain office bound

I attended a meeting in a hotel lobby some time ago and as I entered the vast room I was struck by just how many similar meetings were going on.  I’ve been doing business like this for a many years now and there have always been plenty of others doing the same thing, but I haven’t witnessed quite such numbers other than in a conference environment.

These people were clearly not all part of one group.  Everywhere there were earnest and convivial conversations going on as the participants leaned over laptops from comfortable armchairs and sofas.  One of my companions was a high flyer in commerce and I asked him if this really was a phenomenon that has arisen in relatively recent years or was it always so outside the professions.  He confirmed that technology has made all the difference to the numbers now conducting business in this way, so much so that hotels are specifically gearing up for this kind of trade and often turn a greater profit per square foot of informal meeting space (even the formal meeting rooms are disappearing) than bedrooms, bars or restaurants.  The table turn is high and yet coffee, sandwiches and Wi-Fi access are consumed in sufficient quantities to deliver very healthy margins.

The hotel I attended was part of a chain and yet it was well appointed and an improvement on most offices I have ever worked in or visited.  Free parking was plentiful and the whole experience was energising.  Once over, my colleagues and I went our separate ways, all working from home as it happens.

This is not a trend that I can see being reversed.  People are being freed from the constraints of working in one fixed place and firms should at the very least be asking themselves whether they need as much office space as they currently occupy and whether there are opportunities to reduce rental and associated overheads and engage in a more flexible and in my opinion more enjoyable way of working.  I recommend a strategic review of all leases and a plan in place well before lease expiry and break dates, as once those dates pass with new leases or further locked in periods, the opportunity will be lost for several more years during which time the pace of change in technology may cause a largely office bound workforce to appear more and more anachronistic.

A shift in working patterns could also bring about changes in volumes of certain types of work.  A shrinking market for office space would obviously impact on the volume of commercial property transactions as office space lies empty.  Shortages of good housing stock could lead to office blocks being transformed into apartments, thereby rejuvenating the residential market.  Strategic reviews may need to be far reaching…

Companies urged to consider self-service model

A recent survey of general counsel of 74 major companies conducted on behalf or LexisNexis found that 55% of general counsel want to see colleagues take a more 'self-serve' approach to the creation of low value or low risk contracts.  What does this mean?  Put simply, if sound processes are in place to apply a suitable contract template to a given requirement, non-lawyers in the business should be able to produce the contracts themselves without using valuable in-house legal resource or potentially expensive external legal resource.

Whilst law firms serving corporate counsel may be relieved to find that the survey also reported 57% did not agree that contract templates within their organization are visible and easy to find and 51% did not agree that such templates are kept up to date, this is likely to amount to only a temporary reprieve.  Change has been a while coming, but that it will come to pass is inevitable.  As long ago as 17 September 2009, Barclays’ Group General Counsel Mark Harding made this interesting comment in The Law Society Gazette:

“We haven’t decided definitively what the right model is for us...The bigger prize of outsourcing is the standardisation of documentation, which we’ve gone in for big time, because you don’t need a lawyer involved at all. If you’ve set the templates up right, you’ve got electronic version control and all that, then it’s ultimately a better solution because you eliminate the legal cost.”

Barclays will not be the only company to recognise that standardisation (and systematisation) can lie at the heart of what lawyers have traditionally offered as part of a bespoke professional service, and it would appear that some of these companies will now start to replicate systems for themselves at considerable costs savings.  This puts at a distinct disadvantage firms that have not even systematised their own working practices, as their potential corporate clients will dismiss any notion of instructing such firms.

The LexisNexis report relates that the desire to move to a self-service model is being hampered by those who should make it happen being too busy fire-fighting, but undoubtedly the pressure to cut costs that is mounting all the time will have the desired effect and there will be substantial change.

For years, law firms, particularly in the commercial sector, have failed to take up the challenge of systematising their work where this is possible and now it may be too late.  Why would a company pay a law firm to run an automated process that the company can run itself?  If companies create workflows using software that has been available to law firms for decades, and design those workflows to alert them to where higher level legal expertise may be required, they will make the substantial savings in costs that they require, as well as improving their own efficiency.

I fully expect that embedded workflows in corporate processes will become commonplace within the next few years.  This is not all bad news for law firms, as this will create opportunities to interface between different workflow systems so that those firms that do invest and use properly the technology available to them will increase their own efficiency by being able to exchange data with their corporate clients, rather than rely on manual processes.

The forward thinkers in both the commercial and legal worlds will prosper if such thinking becomes manifest.  Others will fall by the wayside.