May 2017

Law Needs a Better Distribution Model

There is much criticism of the “business” side of the legal services market both inside and outside the profession. From a client’s perspective, there are high costs, slow service, and a lack of access. From the lawyer’s perspective, there is formidable and increasing competition, lack of employment opportunities, and low margins. One of the key hinge issues in what causes this “tightening” within the profession is the current distribution model, which makes it more and more difficult to find employment, acquire new clients, and increase profits. The way that legal work is generally distributed in the current market can be analyzed and addressed on both a macro and micro level. Macro relates to the overall body of legal work and how it is distributed among sectors of the profession (e.g. large law firms, small law firms, legal clinics) and micro relates to how legal assignments are distributed within a given legal practice.

Distribution of legal work on a macro level.

At one end of the spectrum, larger law practices are in constant competition for the limited amount of legal work required by corporations. At the same time, it is estimated that 75% of all attorneys in the U.S. work in solo or small practices. One would guess that this larger percentage of the national attorney pool represents the remaining, non-corporate legal work, which is presumably the legal services required by non-corporate entities, mostly individuals and small businesses.

However, it is also estimated that more than 80% of people needing legal services in the U.S. either cannot or for various personal reasons are unable to access legitimate, competent services. With so much unmet legal need and on the other end of the spectrum so much competition among firms seeking legal work, we need to look for a more efficient way to distribute work among the different types of practice. So, on a macro level both the clients and lawyers suffer from the lack of an efficient distribution model.

Distribution of legal work on a micro level.

Large firms have the capacity to distribute work more efficiently by using the highest priced firm resources for the highest levels of work and utilizing the emerging lawyers for more time consuming research and drafting. This distribution model deployed within large law firms cannot be deployed within the majority of the legal services professionals, which is largely comprised of solo and small practices. Distributing work efficiently might be especially challenging for some small and solo firms that may be trying to maximize efficiency, but have fewer resources for doing so compared to larger firms. Further inhibiting efficiency is the fact that some lawyers at small or solo firms spend about 50% of their workday NOT practicing law due to their many other responsibilities. Plus, firms of all sizes today face tremendous competition to retain and find clients. With all of these complexities, efficient distribution in the small or solo practice is improbable because of the lack of resources. So, in this segment of the profession it's the lawyers that suffer from the limits of the traditional service distribution model, or in this case, lack of it.

With an improved distribution model, legal work will be produced more efficiently for all segments, which will result in increased legal assignments and improved profit margins for lawyers and ultimately lower costs and increased access for clients.

The distribution model in the legal profession refers to the way in which legal work is shared among lawyers. Again, on a firm basis, how it is efficiently distributed among attorneys with lower rates where practical and on a broader basis how work is distributed between legal services organizations. Either way, improved efficiency needs to be at the core of the distribution model. If we improve the efficiency of the small and solo firms, and thereby allow them pass on those savings to their clients wouldn’t we be able to reduce fees, improve margins and ultimately allow greater access to legal services? Would stimulating the legal services market overall encourage more people to seek legal help thereby increasing the amount of work required even by small or mid-size businesses who, like many individuals avoided seeking help because of the preconception that it would be difficult and expensive?

In today’s world of networking, what has been overwhelming absent from the legal profession is a network-based and project-based approach to distributing legal work.  When firms’ workloads require extra help from lawyers on temporary bases, some firms may not even realize the plethora of lawyers eagerly seeking work who can be available to help out immediately. In such situations, there needs to be an online network of lawyers who are ready to step-in and fill those project hiring needs. An all-in-one network site that’s quick, easy, and simple to use. A network where firms can quickly post their needs for lawyers and where lawyers can be hired quickly. A network where firms and the project lawyers whom they hire can structure their employment arrangements however they want to. A network where firms can actually get to know the people they hire, so that when another work need arises again later, firms know which lawyers to turn to. All that and more is made possible through the project distribution model.

The great percentage of unserved clients and their legal needs have to find their way to lawyers, probably small and solo firms who can find the necessary time to competently represent those clients. Yet, to do so efficiently in light of profits, those firms will need to find ways to create efficiencies, some of the efficiencies that already exist in the larger firms such as varying but still profitable rates among multi-level legal resources. Those efficiencies will allow the firm the ability to take on legal work and offer that work at reduced cost. One way to achieve this capability, rather than hire full-time multi-level legal resources (e.g. associates) is to hire them on a project basis.


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