Lessons for Canada in ABA Report on Future of Legal Services

In 2013 the Canadian Bar Association (CBA) released its first report on the future of legal services in Canada. Last month, the American Bar Association (ABA) followed suit with its own report. What follows is a summary of key lessons and insights for Canada from the two-year long study.

Macro Trends

The ABA cites a few global trends that are impacting delivery of and access to legal services in America. Specifically, it cites technology and globalization as the causes of redefined market boundaries, in addition to post-recession era client expectations of delivering more with less. These are global trends, with the CBA reporting similar findings, including a general shift in power from suppliers to clients.

Costs of the Status Quo

Globally, trust in institutions is at an all time low, and the ABA argues that the legal sector is no exception. They suggest that poor public understanding of legal processes and services, along with the usability challenges posed by the American court system, lead to low public trust.

The ABA goes on to note that while accessing the justice system can be frustrating, it is also increasingly out of reach for low income individuals and families. As legal services have become more complex and time consuming, they have also become more expensive. As a result, a greater proportion of the public is forced to represent themselves, or to avoid the justice system altogether.

Existing and prospective clients of law firms have responded to these challenges by ‘voting with their feet’ reports the ABA. By reducing the volume of work referred to outside counsel, or by finding more efficient alternatives, clients are circumventing the traditional service models that many firms have been built on. These factors combined, they argue, put the industry on the cusp of disruption.

Obstacles to Innovation

Overreliance on traditional business models and the billable hour emerge as major concerns of the ABA. By punishing productivity, the billable hour puts constraints on firms’ ability to scale and innovate new forms of value. They go on to note that while some firms have adopted alternative billing practices, they have done so on a case by case basis rather than formally designing and implementing the systemic changes, as industries like financial services have been doing for years.

The ABA suggests that part of this reluctance may stem from a cultural aversion to change. The CBA’s own report supports this claim, noting that the legal profession tends to reward skepticism, making cultural and process changes challenging.

Furthermore, a lack of interdisciplinary collaboration and diversity of perspectives also stymies efforts to bring in new ideas. In fact, the ABA goes on to note that the majority of leadership positions at American firms still fail to reflect broader demographics. While the CBA reports that there are no national Canadian statistics on the participation of minority groups in the Canadian legal industry, provincial studies indicate that the proportion is still well below that of the general population.

Finally, the ABA notes that when innovation does take place, bar associations’ lack of data on outcomes makes tracking and communicating successful results challenging.

What Needs to Change

Clients, particularly businesses and organizations, are increasingly looking for alternatives to the billable hour. For law firms to remain relevant, the ABA suggests that firms partner with other disciplines and members of the public to co-develop new service models and billing arrangements that meet the needs of both parties with fewer resources. Collaboration is also cited by the CBA as a potential catalyst for innovation in Canada.

The ABA also notes the critical importance of public education to the health of the American legal system. Lack of education about the justice system can cause individuals conclude that they can resolve issues on their own, or that the issues aren’t at all resolvable. The ABA proposes that legal ‘checkups’ be offered by firms to help individuals assess their legal situation, and interpret their service needs.

The ABA also recommends that courts follow suit by making their processes more user-centered, meeting the diverse needs of litigants through technology and process innovations that ensure ease of use, fairness, and impartiality.

Law schools too, they argue, can have an impact on the justice system, by including principles of entrepreneurship and innovation in program curriculum.

Collaboration is Key

Collaboration – between lawyers, the public, courts, and other professionals – is a key feature of the ABA report. From improving court usability, to developing new business models, diversity of perspectives will be essential to maintaining a relevant, rewarding, and accessible justice system on both sides of the border.