The state of flux in the business of Law

At his best, man is the noblest of all animals; separated from law and justice, he is the worst – Aristotle

As long as humans have been living in societies, there have been customs and rules – which defined the laws of that society – to adhere. The area of law is a complicated one – it is science and art combined: despite it having a set of defined rules (the science), their interpretation and implementation varies on the context (the art). The interpretation and implementation of these laws varies, depending on the law systems enforced in a country; either one or a combination of Common Law, Civil Law, or Religious Law. Not only are the systems different, there are various bodies/subjects of law, each dealing with problems of a different nature. The common subjects ordinary individuals exposed to are Criminal Law, Tort Law, Property Law, and Corporate Law.

Since the economy is tightening worldwide, law as a business is seeing changes, from law firms losing clients to rivals poaching employees. In a time where the Internet is a dominant component of our lives, the field of law is also seeing changes in status quo due to the Internet. Not only can one easily compare and hire, say a lawyer from a medical malpractice law firm over the Internet, it has also become a marketplace for lawyers working on a freelance basis, to select the cases they wish to work on. The Internet has also allowed ordinary individuals to work on legal matters through a DIY approach.

Increasingly competitive playing field
In the past, several law firms worldwide would take pride in their reputation, which would attract and retain clients automatically. However, the reality is that as the business landscape is becoming more competitive, companies are increasingly scrutinizing areas to cut costs wherever possible, the legal expenses being one of them (since it is the one of the most expensive). Several law firms charge their clients retainer fees (akin to a periodic subscription fee), as well as additional fees pertaining to working the case on hand. Most companies do not require legal services all year round, and since retainer fees can be exorbitant, companies are willing to ditch prestigious law firms altogether.

However, another research shows that businesses are still willing to retain the prestigious law firms, perhaps because it reflects well on them, and because these firms are more likely to have better advisers (and experts) to help the business than smaller law firms. This research found that it is the mid-sized law firms, not the large, prestigious ones, which are increasingly facing the prospect of losing clients: Companies are willing to retain prestigious law firms, while working with the smaller law firms on ‘mid-to-low level’ matters (due to the better rates and services provided), resulting in the mid-sized firms losing most business.

Players switching teams easily
Previously, there was an understanding between prestigious firms not to hire experts from rivals – primarily to display trust in their existing employees, and to not reflect poorly on the industry. However, as firms are facing difficulties in retaining existing and attracting new clients, they are not averse to the idea of recruiting specialists from rivals. Having more specialists on board not only improves the firm’s expertise, image, and reputation (hence more likely to retain and attract clients), it concurrently weakens the expertise and reputation of the rivals – especially of the firm from where the specialist was recruited. As common with any other business, these specialists have no reservations about switching to rivals, so long they get a better offering there (better pay, position, etc.).

…Or playing individually
Businesses (and ordinary individuals) are increasingly looking to minimize legal expenses, and overlooking the reputation of law firms (with firms losing some of their lure to attract talent). This has created an opportunity for several lawyers to work on a freelance basis – a commonality in today’s on-demand economy. This trend is particularly becoming popular amongst the younger lawyers, who want, amongst other things, a work-life balance (one which is inexistent in a full-time law career), as well as choose the cases they want to work on.

Working on a freelance /ad-hoc arrangement benefits others as well – the law firms, businesses, and the clients seeking law services. As law firms are looking to optimize operations, they have a leaner team of permanent staff, and only bring in additional help (the freelancer) as required, as opposed to having more staff and not utilizing them efficiently. Similarly, several businesses often have their own in-house legal team, which deals with most matters, but brings on board additional help (previously other law firms, now freelance lawyers) as needed. As for clients and ordinary individuals, they can solicit, and pay for, legal assistance as required, as opposed to paying a retainer fees for a firm, in addition to the cost of legal assistance sought.

Amateur lawyers (the DIY approach)
Several legal procedures are relatively simple, yet the complicated jargon in the paperwork, as well as a lack of understanding of the procedures, mean ordinary individuals seek legal assistance. An opportunity was created for several platforms to provide easy-to-access legal documents and services. Businesses (or individuals) can simply access the platform (for a fee) to access the paperwork required for their purpose, fill it out and get it vetted by a legal expert/attorney. As several SMEs are often strapped for cash in the early stages – when they often require the most legal assistance – as well as ordinary individuals reluctant to pay high attorney fees, the DIY approach is increasingly popular.

However, several experts have warned against overly using the DIY approach as it leaves the client vulnerable to various risks. Some of these risks include the one-size-fits-all approach to legal issues mean that the legal assistance may not completely cover all the legal assistance (such as consultation) required. In addition, these DIY platforms often offer generic paperwork, with several innocuous clausal omissions (which may be important to a particular business), leaving the client at risk of not being completely protected. Conversely, working with an actual legal expert will ensure better results, as the experts better understand legal complexities, and identify all the issues which need to be dealt with, much easily.

Laws have been around since the dawn of human civilization. As times progressed, various different systems and subjects of laws have been defined. Law is an area which is a highly lucrative business, but one which has been experiencing several changes recently. Clients (businesses and individuals) are looking to cut expenses (legal being one of the highest) and are ready to overlook the reputation of the firm. However, some clients do take reputation into account and as a result, law firms are poaching talent from rivals to bolster their ranks while weakening the rivals’. The Internet too has created an impact – from creating an online marketplace of freelance lawyers, to providing DIY legal services. It remains to be seen, though, how long before even these trends become outdated.

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