On a daily basis, we see ample examples of the gig economy in action, from Uber to Instacart, but would it work within the legal industry? It actually may
On an almost daily basis, we see how the gig economy works in action, from your Uber driver, to your Instacart grocery shopper, to someone from Task Rabbit who assembles your Ikea furniture. And as the gig economy continues to grow, its utility expands, now offering professional services like project management, marketing services, and more.
Could legal services be next? One law firm, DAHL Advokatfirma, in Denmark, has successfully incorporated a work structure where senior project managers assemble teams comprised of both firm lawyers and specialized freelance talent as needed on a case-by-case basis, moving away from the traditional lawyer-client relationships centered on individual lawyers or practice groups.
Leaders of DAHL Advokatfirma have said, that that with this approach, their clients have become more attached to the firm itself rather than to the individual lawyer. Will the gig economy invade the sanctity of how law firms conduct business, or will the status quo prevail?
There is much to address in answering this question; and in this article, I will review some of the factors that law firms and clients will need to consider in order to get a good understanding of why a gig economy might work in law firms and what the challenges they might face. At a minimum, there needs to be seven factors addressed to make a gig economy model work in the legal arena: supply, demand, client acceptance, infrastructure, culture, economics, and ethical issues. Let’s examine each of these factors.
There needs to be a supply of legal providers for a gig economy model to work in the legal arena. Yes, it seems that there is a potential pool of willing lawyers, and two factors are influence that situation:
- It’s not getting easier to find full-time employment as a lawyer coming out of law school — According to the U.S. Bureau of Labor Statistics, “employment of lawyers is projected to grow 4% from 2019 to 2029, about as fast as the average for all occupations.” Further, job competition in the legal market is projected to be strong for the next decade because more law students graduate each year than there are available jobs.
- Individuals want flexibility in their work-life balance, including lawyers — A significant portion of lawyers want to see changes in their work-life balance. A 2019 ABA Journal article found that 20% to 25% of younger lawyers would accept a cut in compensation in exchange for more flexible working arrangements, more time off, or a reduction in billable hour requirements. According to recent research from Thomson Reuters Acritas, more than three-quarters (77%) of senior lawyers surveyed said they want to retain the more flexible elements of their remote working environment that they’ve gotten used to during the pandemic. Additionally, 22% said they are likely to leave their firm if it didn’t want to accommodate the new way the lawyers want to work.
Based on these two factors alone, it seems there is a potential supply of lawyers who would work in a gig economy model.
There needs to be a demand for this model by law firms; fortunately, there are two areas where a version of the gig economy already has taken root:
- Sole practitioners or small firms — An independent lawyer, likely a general practitioner who has clients with less complex needs, is a good example of this trend. Working in a gig model with clients could be a way to increase profitability in a smaller practice.
- Large law firms that use contract attorney services — Larger law firms that hire contract lawyers to assist on large matters in roles such as document review, are another example. This approach could work in a gig model as well, and it even may be more efficient for a large firm. Firms utilizing contract document review resources, for example, don’t usually hire these resources directly, but rather go through staffing firms. Using a gig model, these law firms could efficiently hire the lawyers of their choice, whenever they want, perhaps with a cost savings. Firms also could bring together teams of lawyers and others to work on transactional matters based on the expertise required in the particular situation, thus customizing and optimizing the team even further.
3. Client acceptance
Of course, there needs to be acceptance by clients for the gig economy model to work in the legal ecosystem, or else the model will not work. Clients of firms with extensive and sophisticated corporate, litigation, estate, and other practices are unlikely to embrace the model initially. These clients often have as much deeper relationship with individual attorneys, their teams, and other resources than with the firm itself. For these law firms, encouraging client acceptance of these new practices will be a challenge.
This same challenge may not apply to consumers of retail legal services such as the drafting of simple wills, uncontested divorces, one-off legal advice, and more. Indeed, consumers of these retail legal services often do not have a strong loyalty to a law firm or a particular attorney.
As noted above, DAHL Advokatfirma is an example of how the gig economy is gaining acceptance by consumers. With this approach, the firm’s clients have become more attached to the firm itself rather than to the individual lawyer. While one or even a few firms does not mean broad acceptance, it is an interesting start.
By infrastructure, I mean that law firms need to put in place policies, processes, and systems to facilitate their gig economy initiatives. Just as Uber and Lyft have policies, processes, and systems in place to make their models work, law firms will need to do the same. These changes will not be insignificant, but with the focus on innovation that we are seeing throughout the legal arena, it should be doable.
Law firms will need to ensure that issues such as conflict of interest management, quality control and review, as well as management and retention of work product are addressed. In addition, relevant legal research and other systems will need to be in place. Security and system access must also be addressed and will be challenging with gig workers coming and going in and out of a firm’s environment. Further, firms will need to be innovative in how billing will work, and they may have to realize that the traditional hourly billing model may not be the best approach.
Clearly, the culture of law firms that embrace a gig economy model will be impacted, and this will be an human resources and client service challenge. A gig economy model will be disruptive to those law firms that implement it, and these firms need to address internal challenges such as new names and faces coming and going, as well as engaging with clients and managing expectations as to who will be working on those matters.
The economics for both law firms and the lawyers working in a gig economy model will be challenging and will provide some barrier to entry. There will be costs, some not insignificant, to make a gig economy work in the legal arena, and some of these costs are obvious — such as added investment in new or upgraded technology and the additional training that will be necessary to ensure that all participants understand the policies, processes, and the use of the systems required.
Some of these costs are less obvious, such as the learning curve that both the individual lawyers and the law firms will encounter and the cost and possible disruption of dealing with new lawyer resources on a much more frequent basis. Marketing and business development efforts and costs must also be considered, as well as additional management time, particularly during the ramp-up period.
7. Ethical issues
Just as importantly, ethical issues must be addressed by any firm adopting a gig economy model. The individual lawyers and firms that participate in the gig economy model must also have appropriate policies, processes, and standards in place to ensure that they are meeting legal industry ethical standards. The American Bar Association should assess this gig economy model for lawyers and establish standards that both lawyers and their firms should meet.
In summary, we have a possible model for a new approach to providing some level of legal services. Of course, as with any radical change to traditional ways of doing things, there are many skeptics.
Still, will the gig economy model work in the legal industry? I believe that, even with all the challenges, it can work, and that lawyers should be giving some thought to the idea that the gig economy model may well be in their future.