A friend called me the other day and excitedly announced that his daughter had just been accepted into law school. My heart sank. As a business futurist specializing in the intersection between human capital and the rapidly maturing field of data and analytics, I dedicate a lot of time researching how the 4th Industrial Revolution will impact existing professions.
Let’s examine three trends that are leading to a reduced demand for attorneys.
Technology – A Game Changer
First, in both criminal and civil legal cases, discovery is the phase where the parties in a dispute are required to provide each other relevant information and records, along with all other evidence related to the case.
Remember the movie “Erin Brockovich” with Julia Roberts? Remember the scene where the defense team, in response to Brockovich’s team’s request for information, sent dozens of boxes filled with documents, burying the potentially relevant pieces of information? In that scene, there were 4 attorneys and 5 paralegals sifting through thousands of documents searching for information that would prove their case.
Since today much of what is requested is electronically stored information (ESI), such as emails, documents, presentations, databases, voicemail, audio and video files, social media, and web sites, law firms use a process called e-discovery. Electronic discovery is the process of searching digital information for evidence that will help prove their case.
As you can imagine, the automation of discovery significantly reduces the number of documents that need to be reviewed by an attorney. Overall, according to the World Economic Forum’s 2016 Future of Jobs report, 22% of tasks done by attorneys are automatable. Technologies like text analytics and machine learning are increasingly allowing data to tell its story. In turn, legal teams are free to focus their time on nuanced analysis, that which is not yet possible through cognitive computing.
New Players; New Rules
Second, there are disruptive innovations changing the way things have been done in the legal profession. According to Bloomberg Law:
• Companies like LegalZoom and Rocket Lawyer have taken over entity formation law (i.e., LLCs, wills, powers of attorney, etc.) Although some attorneys are working with these companies through legal services programs, far fewer attorneys are required in this space.
• Companies like Modria, an online dispute resolution solution (ODR) service, offers corporations and the court system out-of-the-box resolution flows to automatically resolve the most common — and historically time-consuming — disputes (e.g., debt, landlord/tenant, small claims, etc.). To date, Modria has settled more than 400 million disputes for eBay and Paypal.
Although Modria has not yet significantly impacted the legal profession, as small consumer disputes are of little interest because of the low stakes, Modria is now moving into the divorce litigation space. If online dispute resolution becomes a widespread alternative to divorce litigation, it will significantly impact both attorneys and mediators alike. Modria is capable of handling all manner and volume of cases, from simple divorce cases to complex child custody cases.
Finally, according to the 2016 Report on the State of the Legal Market, published by Georgetown University’s Center for the Study of the Legal Profession and Thomson Reuters’ Peer Monitor, clients are more prepared than ever before to disaggregate matters, to retain work in-house, and to bring in additional (even non-traditional) service providers – all in an effort to reduce costs and improve efficiency. In the decade between 2004 and 2014, corporate clients spent 25.8% less on legal services.
Although attorneys will continue to be critical in the end-to-end legal process, it is not difficult to surmise that the improvements in productivity through technology, the entrance of disruptive competition and the reduced spend from corporate clients will lead to the overall reduction in the demand for attorneys. According to the World Economic Forum’s 2016 Future of Jobs report, between 2015 and 2020 there will be a 1.7% reduction in the total legal workforce in the world’s largest economies.
Parents, Rethink Talk Track
I am a firm believer that education is never wasted. However, given the current cost of education and the diminishing opportunities in the market place once a student graduates, becoming an attorney today is a risky proposition. As parents, we must recognize that what we were taught and have known to be true during our lifetime (e.g., law and medicine are both paths to wealth), may no longer be true. We need to rethink the guidance and advice we offer our children.
The Foundation for Young Australians (FYA), a not-for-profit group which works with youth to create social change, says Australia’s national curriculum is stuck in the past and data literacy needs to be upgraded.
Australia anticipates that 44%, or 5 million jobs, will be automated by 2025. A study published by the FYA in 2015 reported that between 60-70% of students were studying for jobs that would soon be automated.
The Foundation's chief executive encouraged students to focus their studies on jobs that have a future. These include the digital economy, the green economy, health care, and aged care. And regardless of what you study, by 2025, 50% of all jobs will require advanced data literacy.
No matter where you reside in the world, the story is similar. All nations should be concerned with and focused on preparing today’s youth for the jobs of tomorrow. If not, the transition to the 4th Industrial Revolution will be very painful for many. Many of our antecedents who lived at the time of the 2nd Industrial Revolution (circa 1870) suffered greatly when the employment focus shifted from family owned farms to urban mass production and people went from being rural folk to being city dwellers.
To date, the 2nd Industrial Revolution has been the largest social shift in history. However, many predict that those changes will pale in comparison to what lies ahead. We need to course-correct now if we wish to avoid the coming impact.
With today’s unprecedented access to information, we have the tools we need to prepare. Let’s get moving!