Changes in the Legal Market

Jotting down some rough thoughts on how new tech + more lawyers affects different parts of the legal market (apologies for typos):

Big Law

**Large firms catering to large corporations, or more accurately, well-known partners catering to large corporations. Presumably, number of large corporations isn’t increasing relative to number of lawyers. Also, number of big law firms and well-known partners increase slowly because of the big law feedback loop — i.e. the only way you get to be a big firm is if you win big cases, and the only way you get big cases is by already being a big firm.

So for big law, your underlying demand (corporations) remains untouched. And your underlying supply (firms) is the same. But that doesn’t mean no change. More law students = more competitive to get a big law job. Effect of new technology — productivity per lawyer increases, and since caseload is fixed, lawyers per firm drops. You could argue that firms might hire more lawyers and ask them to do less work for less salary. But that’s unlikely — there are fixed costs per lawyer — HR, office space, etc. So firms are likely to hire fewer lawyers, but require higher productivity (ugh). And you’ll see the price tag for big law drop, although this will be the result of fewer hours billed rather than a lower hourly billing rate (assuming we don’t nix the hourly system altogether).

Solo Practitioner

Difference story for people hanging out a shingle. Supply is more closely linked to number of lawyers rather than number of firms, so legal costs should go down more dramatically. But this also depends on the nature of the legal services offered.

If you’re offering services with minimal court or client interaction — e.g. helping a small business owner incorporate, filing basic wills, drafting run-of-the-mill employment contract, etc. — technology works to your advantage. These things scale well. You have to charge a lower price per client, but you can also cater to more clients, so it’s a net wash. And if you’re sufficiently entrepreneurial, you can also seek out “underserved” clients, thereby expanding the market. For example, I normally wouldn’t pay a lawyer to review the purchase agreement for a new car. But suppose I could use my smartphone to snap a photo of the agreement and e-mail it to a lawyer. Normally, it’d take the lawyer an hour to review the entire contract, but by using pattern-recognition software to highlight unusual terms, she can send back her analysis of the contract in 15 minutes at a total cost of $100. I don’t know about you, but if it’s a $10K+ car, that seems reasonable.

On the other hand, if you’re dealing with legal services that require more interaction with people — e.g. child custody fights, criminal defense, landlord/tenant, etc. — then life is rough. New tech may help you do legal research or fill out forms faster, but it doesn’t do much to speed up interviewing a client or appearing in court. And you still have more competition, so you can’t charge as much as you used to.


Some of this stuff poses an ethics problem as well. In order to compensate for the lower income-per-client, a lot of lawyers are going to take on more cases. To some extent, it’s great that more clients are able to get legal services at lower cost. But a lot of these lawyers are also going to take on more cases than they handle. And when it comes to stuff like child custody or criminal defense, that’ll get ugly. If it’s one thing that law school should teach, it’s time and case management.