The Five Major Changes That Will Impact YourSmall Law Firm

The following is adapted from The Small Firm Roadmap: A Survival Guide to the Future of Your Law Practice by Lawyerist.

As we see it, there are (at least) five major categories of societal changes happening today that will likely impact your firm in the future. To be sure, the future is still unwritten, and we can’t know exactly how these shifts will ultimately play out. But while the possibility exists that some of these changes will be non-factors for you, it’s a safe bet that at least a few of them will have a direct impact on your practice. Some of the changes we mention might feel like we’re being alarmist, which isn’t our goal. Our point is not to scare you or paint an apocalyptic future — we’re actually very hopeful and optimistic about the future — but rather to make sure you’re thinking about what might be coming next so you can have some plans to adapt and thrive in the face of coming change.

Change #1: Demographics

While right now most lawyers — especially firm leaders — are still white, male, and aging, that’s not what the broader population actually looks like in the US or Canada and will be even less true in the next ten years. As with most things to do with law, demographic change is slow in coming, but it is definitely coming. This demographic shift will come to firm leadership and employees, obviously, but also clients. The future of law practice is younger and much more diverse than it is now.

Diversity and inclusion is not just a passing fad; it is a recognition of reality. There is no likely future in which your firm — or any company — is successful while having mostly white men as leaders, employees, and clients. More women than men have been graduating from law school for years. Nearly one-fifth of the population has a disability of some kind. And white people will soon no longer make up a majority of the US population. In a future where the population of clients and the population of lawyers are more diverse, law firms will need to embrace these changes to build their teams and serve their market of clients.

Change #2 Economic Disruption

Sam and Aaron started Lawyerist in 2009 in the midst of the Great Recession. That global macroeconomic disruption and its impacts on small-firm law practice at the time were key motivators in how and why we started this company.

As we write this book in the summer of 2019, the United States is in the midst of the longest recession-free period in our country’s history. We have no crystal ball to predict when the next economic downturn will arrive or how severe it will be, but based on 250-year averages, we’re way overdue.

If the recession of a decade ago is any guide, an upcoming economic downturn would likely have major effects on clients, law schools, bar associations, legal employment, and our firms. It’s worth thinking about how ready each of our businesses is for changes in the economic climate.

Change #3: Climate Change

In addition to upcoming changes to our economic climate, we’re also facing changes to our environmental climate. Already, almost yearly, we are seeing record-setting swings in temperature, drought, forest fires, and hurricanes. Extreme disasters are becoming almost commonplace.

How might this affect the legal profession? First, it could impact some practice areas. With more climate-related disasters, more people than ever need protection from insurance fraud, representation for catastrophic injury and loss, and so on.

Second, climate change will influence where people live and how they get to work. Changes in ocean levels could fundamentally change the landscape of our coastal cities and states. What if Manhattan or New Orleans become partially, but permanently, submerged? What happens if Florida is brutalized by Category 4 and 5 hurricanes every summer? If you’re a lawyer practicing in these locales, how does this affect your practice?

Some of it is already happening. As we write this book, three of the four of us live in Minnesota, which experienced a record-setting-cold winter that kept people mostly inside for weeks at a time, including a record number of cold-weather emergencies that closed schools and businesses. With no other choice, employees in all sectors logged many of their hours from home or were forced to miss work. What if an extra-cold winter is the new normal? What if it’s impossible to get to work consistently every winter where we live? There are plenty of solutions to this, including trends around productive remote work, but if we aren’t ready for it and it keeps happening, businesses could be stuck.

At some point, we might stop treating extreme weather as exceptional and instead accept some of it as a new normal. You can either get ahead of this trend, or you can wait until the water is literally at your door.

Change #4: The Nature of Employment

The very nature of work has changed drastically in the twenty-first century. Employees in many sectors — including law — can work remotely while enjoying flexible hours, various life and well-being programs, and progressive forms of compensation. Everyone wants to be rewarded, acknowledged, and recognized for the work they do, and organizations across the board are working to create an environment that is more diverse, supportive, and accommodating to their employees.

Additionally, the nature of jobs themselves is changing. Trends in temporary, freelance, and gig work continue. Long-term employment with a single employer continues to become rarer and rarer as employees now routinely move between jobs every few years. Changes in and needs for specialization in technology, marketing, and customer service mean many workers need more lifelong professional training and education than they’ve needed before. The ability to work from anywhere — including having whole companies or teams who don’t share an office — is a growing trend.

And whether we end up with robot lawyers or not, technological advances will almost certainly change the way we approach our work in the future.

These forces fundamentally change much of the nature of jobs and employment. This creates interesting possibilities for shrewd firm owners. It’s easy to envision small firms in the future that are able to grow and shrink their businesses on-demand using the many remote, freelance-based resources available to them, depending on their current client load.

Change #5: Artificial Intelligence and Exponential Technologies

At this point, we are about 10 percent of the way through this book, and we’ve already mentioned “robot lawyers” a half-dozen times. So naturally, our section on the future of artificial intelligence is where we should talk about robots, but instead, we’re going to talk about progress. We can’t say what the state of technology will be five, ten, or twenty years from now; we can say with certainty that computers will be enormously smarter and more powerful.

Artificial intelligence has become a buzzword across almost every industry. At this moment, it is still more buzz than substance. But limited artificial intelligence technologies do exist, and they’re getting incrementally (or exponentially) better all the time. Machines are now routinely beating the best human minds at chess, Jeopardy, reading X-rays and MRIs, and spotting keywords in huge stacks of documents. But despite the incredible sophistication of those artificial intelligence systems, they are still very narrowly trained for a specific task: a chess AI will beat a grandmaster at chess but can’t beat your four-year-old at Candy Land.

So why all the hype? Simply put, because AI and other technologies have vast potential.

For the past half century, advancements in computer development have closely followed “Moore’s Law” — the 1965 prediction by Intel CEO Gordon Moore that the number of transistors on a microchip (and thus the power of computers) would double about every two years. The exponential growth of computing power in the last fifty years allowed for massive improvements in technology and the power of software and computers to continue improving at exponential rates has not yet run into limits.

Right now, advanced algorithms can perform many tasks quicker and more efficiently than humans can, but those same algorithms require constant feedback and testing. A computer won’t recognize an orange until someone teaches it to. But once taught, and with automated feedback loops built in to its processes, a machine-learning algorithm can get better and better and better in perpetuity.

AI won’t be replacing lawyers any time soon. But it will help us take shortcuts. For instance, AI can help us categorize and understand hidden patterns in large data sets. This can be incredibly beneficial in those moments when your team needs to pore through massive amounts of information in a short time. Traditionally, a firm had to hire an army of contract lawyers to review documents for sixty hours a week. Now software can do some forms of document review faster, more accurately, and cheaper than any group of humans.

Consider Tesla and their line of internet-connected, somewhat-self-driving cars. As fascinating and impressive as they are, these cars also raise important safety questions. When a Tesla is involved in an accident, the details of that accident are transmitted to Tesla, which can then learn ways to prevent that type of accident in the future and push software updates to all other Tesla cars, instantly improving the safety of every Tesla on the road. Internet-connected, software-driven cars learn to get better all the time. When a Ford is in an accident, the other Fords on the road don’t learn from that accident, and other drivers are just as likely to be in the same type of accident in the future. But a learning car fleet can improve, for everyone, constantly.

This same concept also powers digital lawyer alternatives like LegalZoom, which uses software algorithms to consistently find marginal optimizations and improvements to its documents. Though each learned change may be small collectively and building iteratively over time, these documents get better and better and better in perpetuity. So right now, their contracts have a way to go — a software-generated contract today is almost always inferior to one produced by an actual lawyer — but that won’t be the case forever. While they might be half as good as you today, they could be 51 percent as good as you tomorrow and 300 percent better than you in five years. Without applying similar underlying technologies, your legal team cannot make the same improvements at the same pace.

But there is good news here. So what if lawyer alternatives are using algorithms and machine learning to their advantage? There’s no rule that says lawyers can’t do the same and find ways to start using tools to build software learning and algorithms into the work they do.

Emerging exponential technologies like AI, quantum computing, genetic engineering, and DNA analysis, blockchain and cryptocurrencies, augmented reality and virtual reality — and the exponentially faster speeds of 5G (and eventually 6G) internet that might power them — all have the potential to both improve and disrupt many facets of our lives.

At the moment, almost all of these technologies are in their infancy and their future paths are very unclear. But change is coming and some of it may feel a bit like science fiction. The point is not to sit back and wait for our robot-lawyer overlords or to deny that any of this is coming; the point is to get curious about the opportunities these changes may create for us.

Those opportunities may come in the form of improved DNA testing in criminal investigations, the development of blockchain-enabled “smart” contracts, global broadband access that allows poor and rural clients to meet with lawyers for video conferences, virtual-reality courtrooms, or more efficient AI-powered evidence analysis. Or maybe something else.

For more advice on how to run your law firm, you can find The Small Firm Roadmap: A Survival Guide to the Future of Your Law Practice on Amazon.

For over ten years, the team at Lawyerist.com — Aaron Street, Sam Glover, Stephanie Everett, and Marshall Lichty — has been leading the charge toward the future of law practice. The Lawyerist team brings over fifty years of combined experience to their coaching and training services, helping thousands of lawyers across practice areas to build sustainable practices. The free resources, community forums, and Lawyerist podcast offered through their website attract millions of visitors each year, helping lawyers build valuable connections and learn innovating best practices to help them navigate a rapidly changing industry.