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LegalZoom Buys First Law Firm in England. Law Society Throws in the Towel

ThinkstockPhotos-179520805Calling its move "a step towards building a ‘next-generation’ law firm," the legal technology company LegalZoom has bought its first UK law firm, a 200-year-old conveyancing firm in Wakefield, West Yorkshire. The Law Society Gazette has the story.  LegalZoom was approved for an ABS (alternative business structure) license earlier this year. LegalZoom was founded in the U.S., but in 2014 the European private capital firm Permira became LegalZoom's largest shareholder.

Meanwhile, in other legal tech start-up and conveyancing news, the Law Society of England and Wales has scrapped a multi-million dollar online conveyancing portal intended to "revolutionize" home buying.


The Revealing Parentage of Europe's Most Developed Online Dispute Resolution Court System

ThinkstockPhotos-479710499According to Legal Futures, The Netherlands is leading the way in Europe in the practical application of online dispute resolution. The Rechtwijzer 2.0 describes itself as “the first ODR platform for difficult problems such as divorce and separation, landlord-tenant disputes and employment disputes.” Its development says all you need to know about whether, how, and how fast the staid and geography-bound global legal system is changing. The platform was designed and built by Modria, a California and India-based company founded in 2011 for the resolution of disputes on eBay and PayPal. Its founders are Colin Rule and Chittu Nagarajan. Rule, a non-lawyer, journeyed from a Peace Corps position in Eritrea in 1989 through the Harvard Kennedy School of Government into the stratosphere of innovative mediation and dispute resolution. Nagarajan, an English-trained lawyer, converted a part time position at PayPal to establish a community court into a full time position, leading to the co-founding of Modria itself.

Think that the Atlantic and Pacific oceans and our balkanized, state-based judicial system will keep these transformative innovations at bay in our world? Think again. Modria's software is in use in Ohio to resolve disputes over tax assessments and keep them out of court. A New York-based arbitration association is using it to settle medical claims arising from certain types of car crashes.

And what about Michigan? Court Innovations, a Michigan company developed out of the University of Michigan Law School, uses similar technology to resolve traffic disputes through an online option already adopted by six district courts in Michigan. 


Despite Best Intentions, Legal Profession Diversity Stagnant in England

ThinkstockPhotos-486126081As in the U.S., the British have recognized racial, ethnic, and gender disparities in the legal profession and have pursued strategies for greater diversity and upward mobility in the bar and bench. According to a report out today, the strategies aren't working. Elite private school graduates, where minority populations are underrepresented, still dominate. Today's report notes that the proportion of top judges and prosecutors from the elite schools has decreased only slightly since the 1980s. Three-quarters of top judges and 71% of top QCs attended private schools.  (This 2014 report in the Guardian gives a more comprehensive picture of elite school dominance in UK society overall.)

Notably, stagnant mobility in the U.K. legal profession does not appear to be the result of active resistance to the proposition that more diversity is beneficial. According to the survey, 52% of the "senior figures in the legal industry" polled said that improving social mobility in the legal profession would be beneficial to their firm.  71% agreed that improved social mobility would benefit society as a whole. But the reasons given for not hiring more candidates from "disadvantaged" backgrounds suggest that a change is not coming soon. Respondents pointed to "presentation at interview" as the main barrier to getting law firm training contracts, followed by lack of pre-university educational attainment and lack of understanding of the profession and business.

A host of neuroscience studies explain how the same leaders who openly embrace the value of diversity make decisions based on implicit bias that undermine their best intentions. Take this test to find out how this science applies to your own brain.


Surprise? Accountants Eating Into Lawyers' Work in UK After Reforms

ThinkstockPhotos-451334397According to this story from Legal Futures, the ability of non-lawyers to invest in UK law firms is resulting in “intense competition” for mid-tier law firms from Big Four accounting firms, all of which are licensed under the reforms of the Legal Services Act of 2007 as alternative business service (ABS) providers. The story says the accounting firms are “quietly” taking the more commoditised work away from mid-tier firms, and, according to the head of legal services at the Royal Bank of Scotland, are about to move up the law firm food chain. He summarizes:

The upshot of all of this upheaval is that legal work has become disaggregated, with significantly bolstered in-house teams acting as de facto project managers to a host of legal and resource providers, with the traditional law firm just one constituent part – albeit, in many cases, the one doing the most complex, more profitable work.

Although in the U.S. growing national businesses such as LegalZoom provide a variety of legal services outside the traditional law firm legal service delivery model that is constrained by the rule of professional conduct banning non-lawyer ownership, no jurisdiction in the U.S. has a non-lawyer ownership ABS model like the UK's.


Does It Matter to UK Lawyers Whether Britain Leaves the European Union?

ThinkstockPhotos-482480268A referendum on whether the United Kingdom should leave the European Union could happen as soon as next spring. Should UK lawyers care?  According to an analysis by Oxford Economics commissioned by the Law Society, the answer is yes. The UK is Europe's leading legal services provider but that an EU exit would threaten that status, the study suggests. The study concludes that legal services providers would be disadvantaged disproportionately compared with the UK economy as a whole due to their reliance on intermediate demand from other sectors likely to be adversely affected, particularly financial and other professional services, and from resulting lower levels of business investment. 

Another reminder that law is an industry as well as a profession, that the market for legal services increasingly is global, and that barriers matter.


Today's Best Read on Diversity in the Legal Profession: How Long Should We Wait?

 

In 2010, the body responsible for regulating UK lawyers, the Legal Services Board commissioned a qualitative study of barriers to women and black and ethnic minorities in the profession. At the moment, there's a hot discussion going on about the report, prompted by an interview of a justice of the English Supreme Court, Lord Sumption (real name), who is a self-reported advocate for gender equality. Among Lord Sumption's cautions as reported in "Rush for gender equality with top judges 'could have appalling consequences for justice'," is the following:

We have got to be very careful not to do things at a speed which will make male candidates feel that the cards are stacked against them. If we do that we will find that male candidates don’t apply in the right numbers. 85 per cent of newly appointed judges in France are women because the men stay away. 85 per cent women is just as bad as 85 per cent men.

In the UK, diversity statistics are published annually by the judiciary. Here are 2015's. Until reading Lord Sumption's comments I would have thought that the bad news is that racial, ethnic, and gender barriers to success in the legal profession appear to be universal and nobody's come up with a good answer yet. But Lord Sumption's remarks suggest that there are some effective steps available that could make a big difference right away, but that we shouldn't implement them too fast. It's okay, in fact, if it takes 50 more years to reach equality. As far as I can tell, that's a new perspective injected into the diversity conversation. No wonder it's generating so much commentary.

For a quick and punchy read on the subject, try Lawyer2B's "Diversity and the profession: a reply to Lord Sumption."

Video: A trailer for Silk, a BBC TV series with a female barrister protagonist. If you're a fan of English courtroom drama, don't wait to see it.


What Innovation in Legal Services Looks Like Globally

57e40ed973fa59abd35136c371af3b88Freshly home from the inspiration of the 2015 conference of the International Institute of Legal Association Chief Executives (ILLACE) in Washington, D.C. I have a heightened appreciation for the promise of Innovating Justice's annual challenge to direct entrepreneurial energy into developing innovations in the justice sector. 

Here's just a sample of this year's candidates for the €20,000 prize:

  • An initiative to make business registration accessible and transparent in Nigeria through automation
  • A public platform to promote consumer protection in the banking industry in Kenya
  • An educational app to make legal resources accessible anywhere, anytime in Canada
  • An app to simplify contesting and paying for parking tickets in Belgium
  • A model to recruit, train and place volunteer lawyers in the slums to provide free legal advice to slum dwellers in Argentina.
  • A U.S.-developed plan to develop a globally collaborative and market-friendly means of collecting and diffusing information about arbitrators

Warning: be prepared to spend more time the Innovating Justice site than you might expect. It's rich, inspiring, and beautifully designed.


What Would It Mean To List A Law Firm On The Stock Market?

ThinkstockPhotos-479382552First, it would mean that you are not in the U.S., where the rules of professional conduct in all 51 jurisdictions on non-lawyer ownership of law firms currently stand in your way. And you are probably not in Canada, either.

But if you are so inclined and you happen to be in Australia or the U.K. where non-lawyer ownership of law firms is permissible, you can find some handy advice about the decision to list a law firm on the stock exchange here, including:

 

You don’t have to speak to many solicitors in merged or restructured law firms to discover that the reality of life beneath the new corporate surface is rarely smooth or untroubled. There’s nothing new in that, and Gateleys may well be the honourable exception that proves the rule (I have no direct knowledge of them), but the point is that many law firms simmer with politics and egos: the different elements of merged firms continue to operate in quite different ways long after the surface change; partners do not easily submit to any rules at all, let alone those of a listed company, and certainly not to rules that the partners haven’t chosen themselves.

Whether that is better managed in a corporate context is a nice question. There will be some who argue it will, and they may have a point. But the risk is just as much that, with key personnel deprived of partner status; forced into a corporate straitjacket, and deprived of the freedom of management and manoeuvre which has enabled them to function, that the web of relationships that makes most law firms tick is strained to breaking point.

Think about it.  Seriously, think about it. USC's Gillian Hadfield says lifting the ban would greatly increase access to justice.  The U.K. is providing some real evidence.  And Indiana's Bill Henderson warns about the costs to the profession of delay, arguing that our ban on nonlawyer ownership is driving nonlawyers to take on various disguises to deliver creatively financed legal services in competition with lawyers. 


Canadian Chief Justice on Change in the Legal Profession

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When a country's chief justice embraces key concepts of legal futurism you know that the ideas are going mainstream. In an address to the Canadian Bar Association in Calgary last month, Chief Justice Beverly MacLachlin emphasized that technology threatens the very relevance of the legal profession:

 

In the age of the Internet, people are questioning why they, the consumers of legal product, should be forced to go to expensive lawyers working in expensive office buildings located in expensive urban centres. Why, they ask, should a client retain lawyers, when integrated professional firms can deliver accounting, financial and legal advice? Why are simple disputes not resolved in simple, cost-effective mediation rather than by elaborate and expensive court proceedings? Public attitudes and demands are changing.

She identified four basic opportunities for positive change and challenged the profession to:

  • embrace flexibility and innovation
  • expand service to sectors that may not have benefited from legal services in the past
  • restructure the ways law firms have traditionally organized their internal operations
  • collaborate with other lawyers and other professionals, in recognition of the fact that clients’ problems are often complex, polyvalent and incapable of solution on uniform cookie-cutter models

And she offered two jokes to light the way:

“How many lawyers does it take to change a light bulb?” The answer, “What’s change?”

But, she said,  she prefers this one:

“How many psychiatrists does it take to change a light bulb?” The answer, “One, but the light bulb has to want to change.”

Photograph: Agência Brasil


Twitter-Driven Push For Refugee Legal Help Is Huge Success

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On Aug. 3, an English barrister named Sean Jones launched an online campaign to get lawyers to pledge one billable hour to Save the Children’s refugee appeal. His target of £7,500 was reached by the end of the day. As of mid-day Sunday, he's exceeded his original goal by over 1500%. For more, follow #BillableHour, read The Guardian story. And donate here.

Jones told The Guardian “My view has always been that lawyers are a lot more generous than people give them credit for..".  We agree. That's what SBM's A Lawyer Helps is all about -- changing our image, one story at a time.