Accessing law on demand
Will the legal marketplace soon have its own "Uber" moment? This article looks at how New Law can help access to justice.
The marketplace, like nature, abhors a vacuum.
Just ask Uber’s founders, who in a few short years built the world’s most highly valued private company by understanding how hard it is for people to get around town. Airbnb, another champion of the on-demand economy, jumped at the opportunity to help homeowners make money from spare rooms by connecting them to tourists looking for a more authentic travelling experience. There’s also the emerging FinTech sector, credited with helping consumers gain access to credit where banks refuse to offer loans.
How strange then, that the legal industry persistently ignores a massive market of consumers with legal needs that, for whatever reason, continue to go unmet.
For the past couple of years, industry watchers have predicted that law firms will soon meet their Uber moment, as technology loosens the grip they have had on clients for decades.
Canada’s legal market is currently estimated at C$26-billion – a fraction of the U.S. market, now pegged at roughly C$555-billion, but significant nonetheless. Even more astonishing is that up to 85 per cent of Canadians choose not to involve a lawyer to resolve their legal problems.
Consumers of legal services want practical solutions, transparency, price certainty, and affordability, says Chris Bentley, the executive director of Ryerson Legal Innovation Zone. The problem is that all lawyers have managed is to deliver process, complexity, uncertainty of cost, and lack of affordability.
“I’m not sure there’s an appreciation of how much money is on the table for lawyers,” Bentley, a former attorney general for Ontario, told an audience gathered at the MaRS Discovery District during a recent summit on The New Frontier of Legal Innovation. He worries that lawyers are missing out on an opportunity “that is going to be filled by others.”
Regulatory barriers are one explanation for lawyers’ inaction. They can lull established players into a false sense of security, thinking they are protected against challengers. The taxi, hotel and banking industries all eventually found out the hard way that these barriers can be classic regulatory Maginot Lines, easily dismissed and circumvented by new challengers coming out of nowhere. Small wonder the incumbents in those industries are now pressuring lawmakers and regulators to step in to ensure there is a “level playing field” where the old-timers and the new entrants can compete “fairly.”
Some signs of this are already emerging in the legal space. In the U.S., LegalZoom has managed to beat back challenges made on regulatory grounds that claimed it was engaged in the unauthorized practice of law. Axiom Law, using technology, has managed to become one of the largest providers of legal services in the U.S., and has recently moved in to the Canadian market by acquiring part of Cognition LLP. Axess Law in Ontario has proved itself to be among the most aggressive in attacking an under-served market, by opening close to a dozen stores in retail spaces across Ontario. The firm uses best retail practices and technology to make it more affordable and easier to access a range of legal services such as wills, mortgage refinancing and even uncontested divorces.
Even large established firms see that in-house legal departments are winning the battle for traditional corporate work.
The recent announcements of legal innovation partnerships between the likes of McCarthy Tétrault and Blakes with the MaRS Discovery District are a testament to the realization that new competitors are changing the playing field. Ryerson University’s Legal Innovation Zone has also recently teamed up with Osler LLP to offer support to innovative legal startups.
It is encouraging that law firms are finally showing signs that they are prepared to embrace modern business practices and technology better suited to 21st century consumer habits.
What’s less certain is the impact a new mindset will have on meaningfully attacking the access to justice crisis. On this count, Uber, Airbnb and FinTech all offer another set of cautionary tales.
Uber likes to trumpet its success in making urban transportation more accessible in under-served neighbourhoods. But the evidence shows that is mostly true for people with money, who travel in relatively affluent areas. What’s more, critics worry that Uber’s success is eroding the political will to fix public transportation for the most needy.
Meanwhile critics of Airbnb around the world charge that the service has become so lucrative for property owners that it’s killing the local rental markets, which leads to higher rental prices.
And there are concerns that regulators need to do more to ensure that all Canadians have access to secure financial services, no matter how accessible they may be.
Similarly, policymakers need to be reminded that access to quality and affordable legal services is critical to the health and wellbeing of citizens. Otherwise NewLaw may end up doing just enough to broaden access to a range of services that we fool ourselves into believing that society is doing what it should to tackle our growing access to justice deficit.
The danger is that this belief will sap the political will to properly reform our justice system where everyone is supposed to be equal before the law.