Earlier this morning, I snapped my last first-day-of-school photo of my older daughter who today begins her senior year of high school. While she’ll have many more first days in college, I won’t be there to document them before she leaves for that first class. And I won’t be there with a favorite meal prepared…

As you’ve probably heard, in a recent speech, President Obama endorsed cutting law school down to two years, with students spending their final year gaining work experience clerking or practicing at a firm.  Eliminating the third year of law school would reduce the overall cost for students, many of whom now graduate with debts of $100,000 or more.  A few bloggers have weighed in;  Professor Matt Brodie of PrawfsBlawg cynically asserts law schools won’t necessarily cut tuition so the anticipated savings may not result; at Legal Ethics Forum, Professor Stephen Gillers argues that unanswered questions such as what to call a 2-year degree to whether some tasks categorically require a three year degree. Scott Greenfield argues that the issue has to be addressed in the context of “the problem with the legal profession” with consideration of the potential consequences for clients.

Not surprisingly, my question is how a two-year law school program would impact solos. For me, impacts to solos are, in many cases, synonymous with impacts to clients because solos who can barely eke out a living or partake in risky ventures to make a buck without regard to ethics are a threat to clients.

No doubt, law school debt is an enormous hurdle to starting a law firm. Although the costs of starting a firm have declined significantly over the past decade, student debt has burgeoned such that new grads may have to cover $1500 in loan payments before they can pay for malpractice insurance, legal research, CLE and other costs associated with running a law practice. Before the job market went south, grads with an eye on solo practice could work for a few years, pay down debt, establish contacts and gain experience on an employers’ dime.  For grads with debt, I still view this approach as an optimal path to solo practice though I realize that for most, it simply isn’t viable any longer.

Assuming that cutting a year off of law school would commensurately cut costs by a third, a two year plan can help younger lawyers seeking to solo cost-wise.  But what about training – will new grads with two years of law school under their belt and a year of experience be ready to start a solo practice?

In the year since I wrote about big data opportunities for small law firms at  Clio’s Small Firm Innovation Blog, the legal profession’s interest in big data has exploded.  According to a May 2013 ABA Journal story , law firms are using big data to determine which cases are likely to be an easy win, to figure out what their competitors are charging and to determine whether a recruit is likely to succeed based on assessment of past hires’ records.

Unfortunately for solos and smalls, they can’t always harness the power of big data. For starters, big data applications don’t always come cheap. For example, according to Tech Crunch, a single license for LexMachina, which can help predict the outcome of patent cases costs $10,000 [As an aside, ABA big data article mentions that Vicki Veenker is a solo who uses LexMachina, but fails to disclose that Ms. Veenker is a former Shearman Sterling attorney who is Lex Machina’s advisory board so my guess is that she’s not paying full freight for the product].  But the other problem is that solos and smalls don’t generate a critical mass of data sufficient to enable them to draw conclusions about how long a particular case will take or how much it will cost.  By contrast, large firms handling dozens of cases for clients (for example, consider an insurance defense firm defending in PI cases or employment lawsuits) can mine this data for valuable insights.

Still, there are plenty of ways that solos and smalls can – and are – taking advantage of big data to educate and advise clients, identify new opportunities and market their practice. Granted, some of these examples are somewhat primitive, but they’re accessible and a good introduction to both the value and the sex appeal of big data and its foxy first cousin, the info-graphic.

According to the 2013 ABA Legal Technology Survey, virtual law practices are on the decline , reports  Bob Ambrogi at his Law Sites Blog. The decrease isn’t particularly significant; the number of lawyers who describe their practice as virtual declined from 7 to 5 percent between 2012 and 2013, while the number of lawyers providing unbundled legal services (an offering common to many virtual practices) declined from a high of 44 percent in 2012 to 25 percent, in line with 2011.

What accounts for the decline in virtual law practices? I think that several factors are at play:

  • Growing recognition that  virtual law practices aren’t sustainable. Almost three years ago, the blogosphere (in one of its last rare rounds of interactive discussion) debated whether virtual law practices were a viable business model.  I’ve long observed that while  solos ought to offer a “cheap and simple” option through leveraging virtual tools, in the long run, subsisting on a stream of low-end one off cases alone can’t work without the kinds of economies of scale that solos and smalls don’t have – and as a result, they fall victim to the perils of a volume practice.
  • Increased competition from non-lawyer providers. Almost four years ago, I observed  that large, well capitalized firms could easily set up virtual firms that would eat solo and small virtual practices for lunch.My prediction came to pass in part, thought it isn’t larger firms that are cannibalizing solo/small virtual practices but non-lawyer providers like Rocket Lawyer and Legal Zoom which offer stiff competition to lawyer-run virtual practices in a couple of ways.

    First, as Lee Rosen pointed out, often, many clients who purchase online services do so for cost or convenience and don’t understand the value add that a virtual lawyer might bring to the transaction. It’s hard for a lawyer who provides a $400 incorporation through an online portal to compete with a $200 incorporation at a non-lawyer provider site – clients wonder why they are paying an extra $200 for a lawyer they don’t see.  Moreover, to the extent that a client does want a cheap lawyer, services like Rocket Lawyer and LZ are now able to provide them. For $39.95 a month, RL offers a legal subscription plan that allows users to speak with a lawyer, while LZ will let customers speak with a lawyer as part of some of its offerings.

    Some might argue that virtual lawyers can compete through improved customer service – but that’s a challenge. Many of the client portal interfaces I’ve seen that are designed for lawyers are still clunky to use in comparison to the slick, quick and easy LZ and RL forms. Unless virtual lawyers can improve portal-based offerings or sell the other benefits of using a real lawyer (confidentiality! malpractice insurance), they’ll continue to lose market share to these larger non-lawyer providers.

  • Lack of regulatory certainty. Unbundled virtual law firms may never have been a great business model, but the weaknesses of the model are exacerbated by bar rules, bonafide office rules, advertising rules and uncertainty about UPL has a chilling effect on some lawyers considering virtual practice and no doubt, increases the cost of doing business – making it even harder for virtual lawyers to compete with Rocket Lawyers and Legal Zooms.
  • Reluctance to self-identify as a virtual lawyer.  The ABA Survey asked lawyers whether they considered themselves virtual. With increased emphasis on the importance of office space, lawyers may either be reluctant to go virtual or at least to admit that they are practicing virtually.

Although many law firms advise corporate clients on compliance, few firms have compliance programs in place observe Compliance strategists Donna Boehme and Joseph Murphy in this terrific piece, Inconvenient Truths About Law Firm Compliance.  That law firms are subject to ethics rules is no excuse, contend Boehme and Murphy.  Legal ethics rules didn’t deter the well-publicized DLAPiper billing debacle, nor do they address risks common to most corporate enterprises such as discrimination, social media issues, privacy and cyber-security.  Boehme and Murphy go on to list the reasons that law firms should consider developing a compliance program — including its potential to serve as a selling point for corporate clients.

For solos and smalls, a compliance program seems like over-kill. But it does offer valuable benefits.   Foremost, because a compliance program codifies a firm’s best practices and ethical and legal obligations and implements systems for compliance, a solo doesn’t have to explain the same procedures over and over again when he or she adds staff or outsources projects.  Second, compliance programs and codes of conducts can empower employees by providing them tools to make decisions. In particular, ethics compliance decision trees can help new associates recognize, identify and learn to deal with ethics issues. Cisco designed a cool decision tree for its employees, and the same design could be replicated for a small firm.

Looks like ABA Legal Rebel,  Carl Malamud, leader of the “free law movement” is at it again. This time, reports the Washington Post, Malamud has been busy posting building codes that govern at his website, PublicResource.org. Trouble is, the building codes — enacted by state and local law — incorporate industry-developed standards which are protected by copyright law. Some of the industry groups that develop these standard have now filed this  Complaint against Malamud alleging copyright violation.

The organizations argue that they invest a substantial amount of resources in developing standards and without copyright, they stand to lose a considerable stream of revenue. But Malamud contends – and I agree – that so long as these codes constitute law, the public has the right to access the information in usable form at no cost. Once liberated from the shackles of a pay wall, both the organizations that write the codes and other innovators can come up with other business models off which to profit.

At least in the case of the codes that are the subject of the dispute, the organizations make them available online. Don’t get me wrong, that doesn’t substitute for removing copyright protection which would allow more pervasive dissemination as well as development of new products for packaging or searching codes.  Would that were the case in the legal industry. As I have posted here and here, ABA Ethics opinions remain cloistered behind a paywall. Although true, the ABA Model Rules are  available on line, the Ethics Opinions form the basis of the body of law governing attorneys.  ABA and state ethics opinions are frequently cited in court cases – and the ABA itself has urged state bars to adopt  its ethics opinions. 

Just as a weekend in the country provides a respite from the hustle and bustle of city life, so too,  Bruce Cameron’s book Becoming A Rural Lawyer, is a breath of fresh air from the heaps of impersonal and jargon-filled formulaic guides, blogs and books on starting or marketing a law practice.  Though wonderfully lyrical and personal in tone, Cameron (who’s a rural lawyer himself) does not romanticize rural practice for a minute. Instead, he honestly shares the pros and cons and ups and downs while conveying an enormous amount of practical information about how to get a small town practice off the ground.

Perhaps the most important take away from Bruce’s book for me is that even as the practice of law may be changing in large firms or populated areas, many of the gimmicks and trends that may work in big towns don’t play well in rural areas. Bruce describes how his dreams of starting a virtual office — with amenities like online billing and appointment scheduling and free house calls were dashed because no one felt that sufficiently housebound to want to use the service. That included a 90-year old neighbor recently retired from farming (and being elderly would seem like an ideal virtual law candidate). Instead, Bruce discovered that most rural clients expected to see a lawyer behind a desk and further, believed that a lawyer’s office allowed for more privacy than handling a transaction in the home or workplace.  

There’s another challenge to 24/7 reliance on cloud-based technologies in a rural setting as well: continuity. Though service has improved, when disruptions happen, small towns are often last on the utility’s service list.  Bruce’s commentary on the limits of technology in rural practice oughtn’t be taken lightly. Bruce isn’t a fogey or luddite either — he comes from a technical background himself — so his observations about technology in rural practice carry added weight.

TechCrunch reports that there’s a new law technology on the block: SimpleLegal, a company that employs a  machine learning to read, understand and ultimately reduce legal bills.  As TechCrunch describes:
 All a customer has to do is ask their law firm to copy SimpleLegal on each invoice, and then the magic starts to happen. SimpleLegal’s system ingests the invoice and parses each line item into its database. Natural language processing systems figure out who billed what and for how long — and then that data is run through a machine learning system that flags outliers. One example: the system flagged a line item where a professional billed a half hour for mailing. That might not be too unusual but for the fact that the system knew the thing being mailed was a one-page form.
To date, SimpleLegal’s customers have reported savings of between five and twenty percent on legal fees. And SimpleLegal isn’t just for big firm clients – the service is free  for companies with up to $15,000 in annual legal bills – which falls squarely in solo/small firm territory.  It’s also not clear how SimpleLegal protects confidentiality (yes, attorney-client privilege applies to bills which are rich with insights about work-product and strategy) but presumably, transactions between law firms and SimpleLegal would be structured like those with other third-party freelancers or LPOs such that confidentiality is maintained (in fact, my 21st Century Retainer Agreement includes clauses to deal with preservation of confidentiality with outside providers).