Lawyers Are Not Special Snowflakes

The commoditization of law

Every so often, somebody posts an article to Reddit about whether technology will replace lawyers. The resulting conversation is usually split between small-firm lawyers, who claim that the “human element” of the profession can never be replaced, and big-firm lawyers, who believe that most of what they do can be automated with existing technology.

Both camps are right, to some degree. To the extent that law is a service business, it requires some amount of face-to-face interaction, in a way that computers cannot yet replicate. But in great part, law — like so many other professions — can and will soon be taken over by machines.

I’m not going to use this post to get into an explanation of how and why technology will take over law. There’s plenty written about that elsewhere. I just want to highlight a few interesting numbers about where the legal profession is going.

Observation 1: Here’s a graph of job growth in the legal services industry, compared to the economy as a whole.

Total non-farm employment bottomed out in late 2009 and then began to climb, reaching pre–Great Recession levels last year. The legal services industry, in contrast, never recovered. Despite the growth of the economy, the legal industry has flatlined far below its pre-recession level.

There are obviously a lot of stories one could tell about why this happened, but my preferred explanation is that law firms downsized during the recession and then realized they could do exactly the same amount of work with many fewer people. Forced by the recession to learn how to use computers, law firms realized just how inefficient they had been in the past.

Observation 2: I recently read a review of a book by Benjamin Barton entitled Glass Half Full: The Decline and Rebirth of the Legal Profession. The review, and other articles about the book, noted that of the 354,000 lawyers who file taxes as solo practitioners — between 25 and 30 percent of all lawyers in the U.S — the average earnings is $49,000. This means the average solo lawyer earns less than the average college graduate.

There are a lot of things driving this trend. First is simple supply and demand. An ever-increasing supply of lawyers and a decreasing demand for lawyers drives price down. Second, services such LegalZoom and Rocket Lawyer, which allow people to generate standard forms for business documents, wills and trusts, and other documents, have cut into what used to the be the bread-and-butter for a lot of solo practices and small firms. Legal services have become a commodity. With the help of the internet, your average person can shop between thousands of indistinguishable lawyers and increasingly indistinguishable computer programs.

Conclusion: This is all a wonderful thing from the standpoint of the consumer. Legal services are now available to more people than ever before. We still have a long way to go before the average American can afford to fully participate in the civil justice system or in family law matters, but the trends are moving in that direction.

Who this is terrible for is lawyers. Investing over $100,000 in an education that will not make you better off than having a bachelor’s degree is simply not an option anymore. If ever there was a time to rethink the cost and scope of legal education, that time is now.

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