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The Future of Law

Expert View

Winter 2010
By Stephen N. Zack

Stephen N. Zack, President-elect, American Bar Association

We may soon arrive at a point in time in the legal profession when the phrase "hanging out your shingle" will be superseded by, "registering your domain name." The legal profession has changed and is evolving every day. The question is -- where will these changes lead?

Legal practice in the United States has traditionally been regulated by state supreme courts and state bar associations. We are moving toward a future of greater regulatory complexity as traditional divisions separating states and countries dissolve - through the power of the Internet - and allow for lawyers and clients around the globe to interact and compete.  Together, technology and new business opportunities are catalysts for building bridges and partnerships beyond our borders.  In particular, we need to examine how new business models and technology allow lawyers to better serve their clients in this new practice paradigm.

The terrain of this new legal landscape is still forming and will continue to shift. The current economic downturn offers us an opportune time to examine the climate of the legal profession and the possibilities for its future. We need to determine whether what we have been doing in the past and what we are doing in the present will not only produce the results we want, but also produce the positive results that our clients want.

Lawyers are an integral part of the economy and the community in the United States. The principles of the rule of law that are embedded in the U.S. Constitution have enabled this country to establish both a strong democracy and resilient economy. While there is a strong sense of tradition within the legal profession in the U.S., we need to recognize that other countries such as Australia, Canada, England, Germany, Scotland, Spain and Wales  are also exploring new ways of competing and responding to unmet legal needs - at home and abroad.

More than 10 years ago in Australia, the New South Wales Attorney General's Department issued a report on competition and concluded that the partnership model for structuring and operating law firms was anticompetitive. As a result of the report, New South Wales passed a law to permit Incorporated Legal Practices, including multidisciplinary practices. Lawmakers thought the changes would increase competition and lower costs to consumers.

It should come as no shock then, that the first publicly traded law firm in the world was a personal injury firm based in Australia.  More than twenty years ago, the concept of publicly traded firms and lawyers partnering with non-lawyers was considered by the ABA's policy making body, but ultimately opposed.  That discussion revealed a prescience for the future of legal practice long before the technological advances of the ‘90s could add to the debate. 

Now we have Internet or "cloud"-based use of computer technology through which business applications are accessed online, and data and software are housed on a server. This kind of technology can save on capital expenditures for some lawfirms which can, for example, use cloud computing like a utility and get charged for resources used or on a subscription basis. 

Third-party funding of lawsuits used to be considered unethical.  Australia has been using it the longest, followed by the United Kingdom, and the U.S. has entered this arena, as well.  As innovative changes are considered we must remain mindful of how regulation can help us maintain our core values while allowing firms to succeed economically. 

Each of these trends indicates change.  For those of us who grew up in the era of hanging out a shingle, the notion of virtual law offices may be disconcerting, but they are already out there.  We have arrived at a time in which technology is proliferating, clients are looking for cost savings and businesses are looking for new ways to invest through publicly traded law firms or by funding litigation.

The American Bar Association is responding to these developments that are affecting the legal profession.  The ABA's Commission on Ethics 20/20 will look at the possible need for changes in ethical rules or professional regulation in the U.S. in light of the globalization of law practice.  It will explore the competitive and ethical implications of multijurisdictional and multidisciplinary law firms with the understanding that all of these issues affect the spectrum of legal work - from big law firms all the way through local practitioners.  All of these considerations will proceed deliberatively and thoughtfully so that we can reach consensus.

As we look at these issues we must also look at the changing client base.  If the U.S. moves toward publicly traded law firms, who will be at that table?  Our business models are changing and so are the demographics in this country.  As of July 2008, Hispanics constituted 15% of the nation's total population.  Projections show that by July 2050, Hispanics will make up 30% of the nation's population.  The number of Hispanic-owned businesses in the U.S. is expected to grow nearly 42 percent in the next six years with total revenues up 39 percent.  As the ABA's Commission on Ethics 20/20 continues to look at the ethical implications of a more globalized legal profession, I will bring together a separate commission of lawyers, scholars and business leaders to address and recommend solutions to key legal issues affecting Hispanics throughout the United States.

The future of the legal profession will not only depend upon a diverse client base, but also upon attracting students who understand and appreciate the values of fairness and justice as embodied in the U.S. Constitution. It sounds lofty but it's really about sound economics. Strong economies are based on stable legal systems.

We need to increase people's knowledge about how our government works.  I intend to create a three-day educational academy for high school students, so they can learn more about the Constitution and our nation's three branches of government.  The program will be taught by ABA lawyers using a curriculum created by the ABA.  It is imperative that our youth understand why our nation's founders wrote this document outlining our nation's values and why it is important to protect our fundamental freedoms.  Our democracy and our economy depend upon the preservation of these freedoms.  And if, through this civic education program, we inspire students to pursue a career in the law, it would bode well for the future of the law.

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