I wouldn’t say it’s driven from the fact that law firms are struggling to keep up with client demands or looking to be more efficient from a profit-seeking motive. And I understand where you’re coming from – that’s what I would have assumed. The issue is, big law firms have a huge pool of people that they can hire each year if they’re short. They’re also not the most efficient industry – they wouldn’t invest in technology unless they felt they had to.
Your second point is more in the direction of how it started – in an ideal world, law firms would continue to charge really high rates and make more and more profit. That was often the case pre-financial crisis, until clients became a lot more price conscious. Now, clients care a lot more about price. And that means in a very competitive legal market, where law firms are trying to compete for clients, they have to show they’re charging reasonably or they won’t win work. We see that happening in due diligence –some clients aren’t happy spending money for junior lawyers to do due diligence if must of it can be outsourced for cheaper.
Now that technology is available – it’ll soon become the standard (and it has in some cases) for clients to ask what systems are being used by law firms to make things more efficient. Law firms which can complete tasks cheaper and therefore charge lower prices may be the most successful. Law firms also tend to follow what other law firms are doing, so when firms like Slaughters and Davis Polk do it, the rest follow.
It may also not just be about cost – there’s some evidence that particular software can be more accurate than lawyers in certain areas – which’ll be an even more compelling reason for the more sophisticated clients.
At the deep end, I don’t think we’re anywhere near the case of lower hours due to technology – especially at the kind of firms you guys are applying to. At the moment the technology is reasonably rudimentary and so even if clients are more price-conscious and technologically-aware, they still need a big team to provide advice. It’s more the case that junior lawyers may shift and take on more responsibility – where previously they may have been proofreading or compiling documents – they’ll do the other stuff computers can’t do yet, like liaising with clients or project management.
Lawyers are hired to do the legal stuff clients don’t want understand or want to do, so even if it’s simply inputting information into legal-software, for the near-future it’s still what we’ll do.