Study: Non-Lawyers as the Path Forward in Law Firm Innovationaderantuser
by Chris Cartrett, Executive Vice President
Law firms have never been more reliant on business of law professionals than today. While it’s not especially revealing to say as much, a new report – Legal Market Landscape Report – takes this a step further. It suggests non-lawyers are the key to improving law firm productivity and the best way to unlock those productivity gains is to give non-lawyers a stake in the outcome.
The report, which was commissioned by the State Bar of California, recommends the Bar remove the prohibition of non-lawyer ownership of legal services to begin driving innovation. The report lays out five benefits the profession can glean from this modification:
“Modifying the ethics rules to facilitate greater collaboration across law and other disciplines will (1) drive down costs; (2) improve access; (3) increase predictability and transparency of legal services; (4) aid the growth of new businesses; and (5) elevate the reputation of the legal profession.”
Introducing the Non-Lawyer Equity Partner
The ‘non-lawyer’ debate isn’t new, but it has been especially buoyant over the last 18 months. We’ve observed impassioned commentary both for and against the term. However, most of this has centered on professional standing in the workplace rather than ownership of legal services.
We even included it as an open open-ended question in the 2018 Aderant Business of Law and Legal Technology Survey – but never released the results. We are now providing the verbatim comments from respondents (see below). Suffice it to say, those comments in opposition suggest the term non-lawyer undervalues the productivity gains a law firm achieves by collaborating with specialists to manage the business side of a law firm.
We’ve observed such collaborative changes occurring inside firms for some time. Law firms are striving for tighter integration between the front and back office because it does improve productivity. While we’ve seen this anecdotally for years, our business of law survey in 2017 helped quantify the trend: nearly half of all respondents (47%) said the people with whom they collaborate internally is different than it was five years ago.
That’s what we find so remarkable about this new Legal Market Landscape Report. Its recommendations – removing the equity prohibitions – are directly tied to enhancing collaboration and productivity. The report is explicit in its finding that, “Solving the problem of lagging legal productivity requires lawyers to work closely with professionals from other disciplines.”
Confusing a Problem of Productivity with Pricing
The report examines how the cost of “human-intensive” services – medicine, higher education and law – are outpacing incomes. While the market is putting more of its income into healthcare services, for example, it’s forgoing the legal work. To be clear, the report says this is happening on the consumer side of law, but the lack of productivity gains also affects the legal services market for corporations.
On the corporate side, the complexity of “a highly interconnected and globalized world” means “lawyer specialization by itself is no longer sufficient to meet the finite budgets of even the world’s wealthiest corporations.” Yet both sides of the table largely mischaracterized the problem as one of price, when it’s really a problem of productivity.
“In the corporate market, clients cope by insourcing legal work and, when that is not possible, by demanding fee discounts from law firms,” according to the report. “Both clients and lawyers view the financial gap between legal budgets and the corporations’ legal needs as a problem of price – i.e., that legal services cost too much. Yet, it is more much accurately characterized as a problem of lagging legal productivity.”
The report suggests that current ethics structures prohibiting non-lawyer equity only serves to reinforce the status quo. Yet even with the current rules, the market is changing as alternative legal service providers take form. For law firms to truly achieve innovation and higher productivity, the report concludes the structure must change.
Removing the prohibition is “primarily to get lawyers to be able to collaborate on a very intimate level with allied professionals to solve this productivity problem,” according to the report’s author Bill Henderson who explained further in an interview with the Law Next podcast by Bob Ambrogi.
The Case for Making Ethics Changes Now
In an entry to Legal Evolution, an online publication Mr. Henderson created and manages, he says the catalyst for the State Bar requesting this report, was new rules put in to place changing the structure of the Board. Where Trustees were once elected, they are now appointed and “the reconstituted board will consist of seven attorneys and six non-attorneys to be appointed for four-year terms.”
In the aforementioned Law Next podcast interview, Mr. Henderson, who is also a Professor of Law at Indiana University’s Maurer School of Law, said he’s previously been skeptical that those rules could actually change. However, now that the State Bar is seriously evaluating adjustments, in combination with the fact that the state is home to businesses like LegalZoom, which is already challenging those boundaries, means The Golden State could be first.
Still, if the ethics rules around legal ownership do change, Mr. Henderson believes it could be upwards of 10 years before we see real innovation. He says that’s a case for doing this now – the future of law depends on it.
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Newly Released Survey Data: View Points of ‘Non-Lawyer’
As mentioned above, we sought to put some context around the debate over the term ‘non-lawyer’ earlier this year. As part of our annual research of business of law professionals, we asked an open-ended question: how does the term non-lawyer make you feel?
We received 68 comments — about half of all the 138 total respondents wrote in to offer their views. The responses fell into three broad categories: those that embrace the term, those that oppose it, and those that are on the fence.
What follows below is a representative sample of the verbatim answers we received.
Comments embracing the term:
- Law firms have always emphasized lawyers vs. staff, so no different than staff, administrative staff, etc. Comes with the territory.
- The term is useful – though it tends to promote what I think is a prevalent notion, that lawyers are an essential and “non-lawyers” are not because they are “non-lawyers”.
- That’s what I am… I am the non-lawyer member of the team. No harm, no foul.
- I’m a non-lawyer. The term has arisen to reflect that we now exist in an era where lawyers are not the only “key man” employees.
- Doesn’t bother me.
- I’m okay with it.
- I’m fine with it. I’m not a lawyer so it is applicable.
- No issue a non-lawyer to me is anyone who supports the lawyers either legal support or support team members. We treat the lawyers as our internal clients and assist them to deliver quality services to our external clients.
Comments opposing the term:
- Undervalued and unrecognized. Defining a person’s role or value via negative phrasing diminishes worth.
- Doubtful – clients do not want to pay for non-lawyers, so more non-lawyers = more overhead.
- Concerned on how this will affect profitability.
- Why use it? “Staff” is fine.
- I despise that title.
- Not part of a team.
- Continues the “them and us” culture where we should be working together to deliver value for clients.
- Second class.
- “Non” emotes a negative connotation; not sure it is beneficial in describing anyone.
- Lesser quality of work for non-commoditized tasks.
- Not appreciated.
- As a firm, we do not embrace this term as it has a derogatory connotation that those who are not lawyers are somehow inferior to those who are.
- Extremely derogatory term.
- Less important than the lawyers. That you are not a legal professional if you are not a lawyer.
- It is an undervaluing term. Indicates that if you are not a lawyer then you aren’t part of the team. It is disrespectful of the many qualifications held by the business services teams that make it possible for lawyers to get on with the revenue generating part of the business. You would never call someone a “non-factory worker” in a manufacturing business or a “non-engineer” in an engineering business. Why is the law so different?
Comments on-the-fence about the term:
- It’s no worse than “support staff. “
- I feel that it is a term that is used often, we have several users that are non-lawyer.
- The term “non-lawyer” has no bearing on emotion for me. There are several “non-lawyer” titles that are necessary to both front office and back office functions within most law firms.
- It sometimes feels demeaning but it is at least accurate. It is better than using the term “professional” to describe attorneys and timekeepers, which I have heard even from Aderant. That demeans the other professionals in the firm.
- Neutral slightly better than just support staff.
- It’s okay. I know how special I am and what I do. As long as I am not called the back-office. That feels derogatory.
- In our firm, we have only two categories, Lawyers and Professionals
Mr. Henderson’s term of “allied professional” did not surface in the comments, but perhaps it merits consideration. Let us know what you think. In the meantime, the rest of the 2018 Aderant Business of Law and Legal Technology Survey is freely available online without registration.