My Cousin the Watchmaker

9 min read

Our guest writer, Murray Gottheil, a retired lawyer, shares insights on the future of the legal profession, highlighting the importance of adapting to legal technology.

Way back in the 1970’s, and just before the introduction of the digital wristwatch, my cousin Sandy started her training to become a watchmaker. Fortunately, she soon realized that the future of making and repairing mechanical timepieces was not bright and she retrained to become a commercial artist and then a web-designer. I offer this story as a way to highlight the importance of staying informed about evolving technology.

About ten years ago I attended a partner’s retreat at which we had an expert speak about the future of the legal profession. (I knew that he was an expert, because he was from the United States and he had PowerPoint.) Since I do not remember his name, I will call him the Sage.

The Sage explained to us that in the future (which would be just about now) there would be two types of lawyers.

I will call the first type the “Traditionalists”. They would process large volumes of mundane work, competing with paralegals and web-based businesses for ever-reducing fees.

The second type, who I will call the “Experts,” would be lawyers who develop a reputation for being smart, strategic advisors who are valued for their expertise, and paid handsomely.

The Sage made it very clear to us that if we wanted to be successful, we would have to move on from producing documents and become Experts.

I think the Sage nailed it, although in addition to the two types of lawyers he identified, I suggest we also have two additional categories.

First, there are the “Nitwits”, who are already emerging. They adopt legal technology such as AI without the slightest bit of thought. They present fictional cases in court, have Chat GPT draft legal memos and documents which they uncritically pass on to their clients, and take AI’s word for what the law is. These people somehow got through law school and the Bar Admission process and promptly forgot everything that they learned. Unfortunately, there are more than a few of them.

The second type are the “Innovators”, who are essentially the Experts on steroids. Not only are they great client advisors and emotionally intelligent, but they harness the power of legal technology to produce legal widgets as well. They provide you with expert advice to guide you through a matter and also produce high-quality documents to complete the job in an efficient, cost-effective manner. People will pay more for their documents produced with legal technology because their reputation is excellent, and they take responsibility for the products that emerge from the process.

With insincere apologies to those people who say that I am a bit too ‘judgy,’ I would suggest that the Nitwits are losers who should be booted from the legal profession but never will be because of the pressures on the Law Society not to appear to be ‘protectionist.’ But I will save that rant for another day.

I feel kind of sorry for the Traditionalists. They are going to work much too hard and earn way too little. Some of them will deserve their fate because they are too cheap and/or lazy and/or fearful to get on the technology bus. Others will have been at it too long and be unable to keep up with the pace of change. Either way, everyone will be competing with them, and their clients will not be motivated to discern between good legal work and poor legal work. These clients will choose their providers based on price. The Traditionalists will end up competing with “GetYourLegalDocsHere. Com.” And losing.

Which brings us to the Experts and the Innovators. They will both do well, because they will be selling their expertise, not their ability to produce documents. The Innovators will do even better than the Experts because they will provide a full service, likely working with paralegals.

Let me give you an example of how this might work.

In the old days, I used to implement corporate tax reorganizations. Not being smart enough to be a tax lawyer, I would receive a sophisticated tax memorandum from a tax accountant. I would apply a little bit of brain power to ensure that the accountant had not screwed anything up on the corporate side. Then I would have my corporate clerk produce almost all of the documents required to give effect to the tax plan. That would include things like rollover agreements, amalgamation agreements, resolutions, share certificates and share transfer forms. I would do the quality control and arrange for the documents to be approved by the tax accountant, explained to the clients, and signed. Sometimes there would be a more sophisticated legal document that my corporate clerk could not handle, such as a shareholder’s agreement, and I would draft that. It took many hours and we billed quite a bit for all of them.

Today, the Experts can still prepare the tax memorandum and be paid handsomely for doing so. People remain willing to pay for expertise and strategic advice (at least for the foreseeable future.)

A tax lawyer who is an Innovator, working with Appara Pro, can prepare both the tax memorandum and all of the documents, in a quarter of the time that it used to take my clerk and me. A really smart Innovator will charge the same price that I used to charge. An emotionally intelligent Innovator lawyer may also choose to work less while maintaining their income.

Of course, over time, as good legal technology becomes ubiquitous, legal fees will continue to drop as lawyers compete with paralegals and internet providers. When that happens, the Traditionalists who are still producing the documents the way that I used to do them will have to work much harder or will see their incomes tumble.

So, what can today’s lawyers do to get ahead? Here are some suggestions:

1. Accept that there is no going back to the good old days when lawyers had a monopoly on legal services.
2. Understand that the clients will not, in fact, eventually figure out that they get inferior service and advice from the internet and return to being willing to pay whatever fees lawyers want to charge to cover their fancy car lease payments.
3. Subscribe to the Greek philosopher Heraclitus’ theory that, “everything changes and nothing remains still; and you cannot step twice into the same stream,” or in its modern formulation, “the only constant is change.”
4. Position yourself to be at the head of that stream that you cannot step into twice. Use legal technology to put you there now and keep up with it as it changes to remain there.
5. Understand that over time, being a document producer and being a lawyer are going to be two very different things.
6. Either decide that you are not really going to practice law, but instead simply sell electronic documents on the cheap, or climb out of that trough and do what you went to school to learn to do.
7. If you are determined to be a lawyer and not a document producer, put in the time and effort to learn how to be a talented, knowledgeable, and trustworthy advisor who clients will flock to for your brainpower and your people skills.
8. To the extent that there is a natural document production function in your area of specialty (for example, implementing those tax memos; producing wills after providing estate planning advice; or drafting purchase agreements after establishing the strategy for an acquisition), be at the forefront of the legal technology required to produce, review, revise, and distribute those documents.
9. If you are in a firm of any size, hire a Chief Technology Officer who is an integral part of the management team and pay them a lot of money. No, I am not talking about the person who is going to crawl under desks and connect cables or configure the new laptops. I mean the person who is going to be sure that your Law Firm Ship does not eventually slip under the waves of irrelevance.
10. Think about the members of the legal profession being in a never-ending foot race, while legal technology is like the water flooding out of a burst dam. At the front of the race are the lawyers who are always moving into new areas of practice as the world around them changes. They are just ahead of the crest of the water and using legal technology as efficiently as possible. Behind them are the waves of ever-improving legal technology swamping their competitors.
11. Continue to look five and ten years ahead to where the legal profession is headed and be ready to change your service offerings to include new areas where all of the thought required to create new legal technology has not yet happened. Try to be the lawyers who create that original thought.
12. Also, keep up with legal technology as it evolves. You need to both out-run it by doing legal work that it has not caught up to yet, and be early to adopt it as it does catch up.

And now a word for the paralegals. I suggest that you will have to do two things to be successful in the new world. First, like lawyers, you must see yourself as offering more than just document production. You have to be the experts in understanding what has to be done and in knowing how to get things done, and position yourself as the people who lawyers rely upon to show them the way. Next, you need to choose your markets carefully. Your best markets are going to be as follows, and all of them require you to be an early adopter of legal technology:

1. You can join the morass of internet providers doing the low-end work cheaply. I do not recommend that approach;
2. You can try to create a brand for doing legal work better than the average internet provider and charge a premium for it;
3. You can align yourself with the Traditionalists and charge them handsomely for saving them from themselves;
4. You can work for the Experts who recognize the importance of legal tech but for whatever reason want to outsource using it; or
5. You can align yourself with the Innovators who are so successful that even with legal tech they struggle to keep up.

Regardless of which market you choose, you need to be at the forefront of the technology revolution and leading increases in productivity.

And finally, I ask what will happen to lawyers when the AI becomes so smart that it can provide emotionally intelligent strategic advice. I will leave it to another Sage to figure that out because the only thing that I can come up with is that we will all be screwed, and you better try to make your money before that happens.