The Compression of the Legal Profession

Lost in the fanfare of Google’s acquisition of Motorola, the announcement last week that Google has taken a financial stake in Rocket Lawyer serves to highlight one of the more important but frequently ignored transition of the legal profession – the erosion of general practice, preventive lawyering.

Along with Legal Zoom, Nolo and Quicken, Rocket Lawyer provides legal forms and simplified legal advice. For $19.95, a customer receives the form and the ability to speak to an attorney conversant with the legal issue. Depending on the complexity of the legal issue involved, the use of forms may provide a high degree of value and service that is good enough. Since the forms will not be challenged unless a controversy arises, most customers will never even know if the quality is sufficient. This is equally true, of course, of professional assistance conducted face-to-face by a local attorney.

The form-based commoditization of legal services likely has a far greater impact on the profession than out-sourcing. Few attorneys, if any, can compete with $19.95 to draft a contract. The technology will satisfy most. The problem, of course, is that those who need special assistance may not be aware of it. Like inaccurate driving directions or formula errors in spreadsheets, the technology will not flag its own mistakes.

For the profession the challenge is more significant. The work traditionally available to solo practitioners and small firms is disappearing, putting even greater pressure on the lawyers and law schools. As hourly rates climbed, the profession priced local service out of the reach for middle-class America. Technology has responded. The practice will never be the same.

(The notion of disruptive innovation is one I’ll be emphasizing frequently this fall as I embark on a new article regarding the law and management of disruptive innovation.)