The legal industry has stayed essentially the same for a few hundred years and young people entering the profession have, historically, had a fairly good sense of what a career in law would look like, the options facing them and the time expected to reach senior positions in following each option.
More recently, we have seen four major changes that have affected the landscape, and consequently the career options for young lawyers. Firstly, the change in regulation of the profession locally (through the Legal Practice Act, 2014) which provides for the removal of the split-bar system and consolidation of the profession under a single regulator and, in time, the sanction of multi-disciplinary practices (lawyers working at firms that provide other services, like accounting and financial advisory services).
As these changes are implemented, we’ll see, as in other similar jurisdictions, advocates moving into law firms as ‘specialist litigators’, and establishing their own law firms, among other things.
The second major change is the advent of technology. The growing legal tech industry is providing the profession with useful tools to streamline practice and remove inefficiencies in the way lawyers work. Tools include those assisting with the tasks of discovery, workflow management, case law and other content research, document generation and collaboration between team members, document signing, customer relationship management (CRM) and invoicing and collections.
Many of the tasks now done by these technologies were previously carried out by junior fee-charging lawyers. Technology has also allowed, to a large extent, the standardisation and commoditisation of legal documents, to the point that the market can obtain fairly good quality templatised documents online at little or no cost. There are obvious risks to the use of such templates, but the fact that they are being used more and more cannot be ignored. As a result, the demand for bespoke legal work, and the lawyers to do it, is decreasing.
A separate but related point is the emerging field of smart contracts – contracts reduced to code and housed in blockchain technology (like that underlying Bitcoin, or one of its alternatives, Ethereum) so that they are capable of self-execution. The jury is out as to the ultimate usefulness of smart contracts and the level of ‘bespokeness’ that they could accommodate, but there is likely to come a time when certain lawyers will need to be thinking and drafting in code.
The third, and most important change, is one that has come from the economic pressure being felt across the globe. This pressure has meant that the services of typical law firms with high overhead structures, and consequently high fees, are less accessible to the market, and the market has sought alternatives. Entrepreneurial lawyers have responded by reworking the typical law firm model; bricks, mortar and all; and offering legal services in a completely different way. Technology has played a large role in this, enabling the offering of legal services, often by lawyers working independently and remotely, without the costly overheads. This trend, dubbed ‘New Law’, is finding traction across the globe, as the market moves more online and experiences a better value:cost ratio from these alternative service providers.
We foresee that the number of professionals employed by the large firms will decrease over time, and that the number of sole practitioners will increase. An exciting group to watch is the one we call ‘Elite Independents’ – exceptionally educated and experienced independently working practitioners, who offer their services through New Law platforms, in many cases from the comfort of their homes. These professionals will typically have worked their way up the established large firms, and moved away having done so. Whist they forego their slice of equity, they gain independence, flexibility of working hours and often higher earnings.
Lastly, there is the advent of Legal Process Outsourcing (LPO), whereby law firms outsource high volume review-type work to low cost providers who use paralegals and other non-professional (and less expensive) employees to do the work.
The effect of New Law, LPO and technology has meant that law firms are hiring fewer and fewer junior lawyers, are keeping on fewer associates after the completion of articles, and are offering promotions much slower than they did in the past. So, for junior practitioners, there’s no guarantee that they will make partner after a certain number of years, or become entitled to equity at a particular point. They are also discouraged by the fee targets to be met for upward advancement, and what it will take – from a lifestyle sacrifice point of view – for them to achieve their goals.
The bottom line is that it is getting tougher and tougher out there for young lawyers to follow the traditional paths within the profession. On the flip side, however, there are now many more options available to young lawyers than there were in the past. In addition to the positions of legal practitioners in the traditional sense, they include:
- Legal tech entrepreneurs;
- Smart contract specialists, primarily servicing the financial services industry;
- Positions, on both the business and consulting/legal side of New Law service providers; and
- Positions in Legal Process Outsourcing providers.
So, the outlook is far from doom and gloom – it’s just about making smart choices with an eye on global trends and what tomorrow’s consumer of legal services will be looking for.
Founder & CEO