Monday, September 11, 2017

The future's so bright, but the legal industry refuses to wear shades

The law's fierce resistance to change and technological advances are soon going to collide. Over the past two years, there have been advances made in natural language processing and machine learning that could take drudge work like doc review out of the purview of human workers. Companies that normally subsidized the training of BigLaw associates and the doc review industry are turning to other avenues. This is not good news for the thousands of law graduates kicked out into the real world every year.

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Doc review and other drudge work is partially propping up the legal academic complex. Doc review allows some graduates to be able to make their loan payments. With an increased competition for jobs, even these positions are desirable.

As we've seen, law schools are willing to use any of the tools at their disposal to lure students through the doors. They tout income based repayment (IBR) as a "back door scholarship". IBR is seen as a panacea by schools, albeit one with a ticking time bomb attached. A new graduate trying to go solo won’t even begin to make a dent in the loans. Look closer at IBR. You are eligible only if you make below a certain amount of money. The fact that so many students are eligible speaks to how much of a mismatch there is between the cost of a legal education and the earning potential offered to law graduates. Schools don’t want people to know that law grads’ income are a bifurcated curve. You’re either a solo or at a midsize firm making barely enough to pay your debt or you’re earning $180k at a Biglaw firm. There's not a lot of middle ground.

Fortune 500 corporations have no interest in subsidizing inefficiency. Law schools famously don't teach students how to actually be lawyers. Firms are expected to teach new associates these skills. The practice ready curriculums some lower ranked schools are trumpeting is too little too late. This training by BogLaw is done on the client’s dime. With the advances in automation, the days of junior associates reviewing documents is close to done. Clients have no interest in bankrolling the creation of new lawyers. It was simply a cost of doing business in the past. The legal profession, filled with people who are allegedly experts in assessing risk, remained blind to the threat posed by automation. As corporations cut and contain costs, there will be less money for the Biglaw firms. What this means is that it makes sense for Biglaw firms to hire only the best. Automate the rest.

There are then two ways the industry can go. Firms have to rethink their value propositions. This likely won’t happen because the legal industry isn’t known for encouraging innovation. The other solution is to do more with fewer people, which is the general trend in the American workforce. Law schools have no interest in reducing student populations. The schools outside of the HYS holy trinity will continue reducing standards to keep the money flowing in. This intrasigence means the market will make the decision for the legal industry and law firms. We’ll get tons of thinkpieces and articles from the legal academic complex. And then change will occur because the current model is unsustainable. We just have to have to pop some popcorn, wait and watch the show.


15 comments:

  1. The makers of TurboTax are developing a software where laypeople can draft wills, divorce complaints, landlord/tenant complaints, immigration and bankruptcy forms. The software will retail for $39.99 and will further cut into the measly crumbs that solos have to fight over to get. Yes, the future looks very bright--for the software engineers.

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    1. Oh God.. Doomed.

      It figures.. I did a couple summers at H&R Block and they use their own software for tax prep. By and large, I found it excellent. Military tax returns require advanced training (special rules, domicile/residence, etc. and much more..) They are tough but I never had to worry about it. You just refer them to the person who has the training. My point is, I bet since then, 15 years ago, they have only improved the process.

      The areas you listed, especially immigration, will literally decimate that area of practice if TurboTax can successfully pull this off. In fact, all of those areas - bankruptcy, wills, simple divorces - are the bread and butter of many, many solos.

      So, if LegalZoom wasn't bad enough, you will soon have to lose business (and you won't even know it because the client never calls you or comes through your door) to this further technological advancement.

      Run.

      Run far AWAY from law and law school if you can, before taking on $300k in debt and believing the pipe dreams and glossy brochures and marketing spiel put out by the law schools who only care about the Fed. student loan money.

      In fact, forget college. Go into a welding or HVAC program, or some other trade school and learn to work with your hands. Plumbing, etc.

      Those are the good-paying jobs out there vs. the myth of stable, rich white-collar jobs. IT? Forget about it.. H1-B's and outsourcing will continue rolling on..

      Avoid that non-dischargeable debt and delaying valuable early years of your life for promises of pipe-dreams in the future which have a very, very good chance of never happening.

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    2. First I've heard about TurboTax, which a lot of middle-class people already use and trust now. If TurboTax does come out with DIY legal papers, it will not only legitimatize online legal self-help, it will dominate the field. And, just as a lot of CPAs use TurboTax for their clients, lawyers will start to use it for theirs, especially if there is a special version of the software for professionals, special pricing, and it presents itself as a tool for them, it goes to more complex matters than the self-help version, integrates with courts' e-filing systems, etc.
      So, to the extent it is solo- and small-firm friendly, I think it will help some lawyers.
      But, to the extent would-be PAYING clients decide to DIY, obviously not, especially if it is sold for public access to libraries and community centers, customized for their local jurisdictions. Then people could use it for free.

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    3. But software won't be able to represent the plaintiffs in Millions of Dolphins v. United States! That job calls for the legal savoir-faire of an InfiLaw toileteer…

      Really, I agree with 12:34 that college is generally a bad idea these days. But eventually the trades too will become glutted.

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    4. Do you have links for that? Not doubting, just want to read up on it.

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  2. And about that bifurcated income curve-while there are new grads getting those 160k/year jobs, it's important to note that a. there are not many of those jobs and b. those jobs are temporary, in light of the fact that very few associates make partner. Many do move on to jobs in-house or with the govt, but at much lower salaries, something no one ever mentions. And not all move on to these lower paying gigs; many have to fend for themselves.
    Which leads to the important part of the bifurcation: it's become something of an urban legend that the two poles are 160k(which very few get) and 60-80k(for the rest). This just isn't accurate; I'd argue that most small law associate jobs pay closer to 40-45k; entry level PD is about the same, and entry level at a DA office may be a bit higher-but competition for all these jobs is brutal. How brutal? Take a look at craigslist; doc review pays maybe $30/hour, and recent postings were offering $25 hour at small firms(no benefits for 6 months, and you better have a cell phone and a good car-these requirements are listed right in the ad, all expenses borne by the new hire).
    And if doc review disappears, since it's at the top end of the pay scale for scrambling lawyers, the bifurcation will get even more dramatic. It's not hard to envision a future where $20/hour is the going rate for new small law hires. And the real salary will be 40k/year, so no overtime is involved. As bad as it is now, it's a bleak future for this profession.

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  3. This is a good point, and one that is particularly concerning. The market is ludicrously glutted already, though we are at least slowing down the flood with a decline in matriculants.

    At the same time, we are at a point where automation is rapidly eliminating legal jobs, to the point where the gains we have made are threatening to disappear as the demand for legal jobs (and as you point out BigLaw jobs are no exception) crashes. Going to law school is still a terrible idea.

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  4. I actually don't think this is as big of an issue as some do.

    The second AI is good enough to take away doc review, it's certainly good enough to take away the drudgery of the vast majority of white collar jobs, and is even more applicable in the medical field, where a functioning AI is superior to doctors in the vast majority of cases.

    When that type of thing starts happening, lawyers will get a reprieve because everything will go at once, and we'll need a new economic model in place. Most jobs will be obsolete.

    As it is now, law is a far more competitive and smaller field than most of the other ones. Law can't actually drop much further. Law never did recover from the Great Recession---but everything else did. This next technological depression, and it will be a depression at least for some time, will take everything and anything, and law will no longer be an outlier.

    For most lawyers, this will be a massive improvement. Nobody is worse off than solitary victims. Throw everyone in the same boat and suddenly things don't seem so bad usually.

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    1. Good observation. I think that AI can be trained to look for specific keywords, but making judgment calls is still off in the future.

      That being said, we can get AI to the point where it redacts 95% of relevant material. Then you can hire a team of people to just check over the AI's work. If you're using machine learning, you can reduce this team of checkers over time to realize real savings.

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    2. As someone who went to a toilet law school in the mid 2000s and never had a legal career, and turned their life around by going to med school and pursuing a career in medicine, I have a couple of points.

      Law never recovered from the Great Recession, because the legal market was already crap before the Great Recession. The claims made by law schools in the 2000s, that all grads were employed making $100k salaries, was pure fantasy. I graduated unemployed. Other friends took non-legal jobs. The lucky ones took shit law jobs. I had a confrontation with the career services office. I had great grades and law review. I told the career services “dean” they published fraudulent stats. They told me the market was tough for new grads. I just had to keep applying. Several months after graduation, my law school published the same fraudulent job stats – 99% employed with average private practice salaries of $100k. The economy was booming in the mid 2000s, except for grads of toilet law schools.

      Even with further advancements in AI, we are nowhere near the point where AI could replace doctors, nurses, PhDs involved in medical research, etc. In the majority of cases, you can’t simply enter a few symptoms into a computer and get the diagnosis. You need a detailed history to help make a diagnosis. Also, because of the genetic differences among people, we can’t predict how everyone will react to a specific medication. Some people may not respond to one drug as well as they would to another drug. Some people may have side effects when other people won’t have side effects. A doctor relies on their experience, scientific data, and patient preference to select the right drug or the right treatment. That’s not the only area of medicine that relies on judgment though. Pathologists diagnosis diseases such as cancer by reading the patient history, looking at the gross specimen, and viewing slices of the specimen under a microscope. AI is not anywhere near capable of integrating all of this data and imaging and making a call on what disease the patient has. Many aspects of medicine rely on judgment, experience, scientific data, and patient preference, to evaluate treatment options and come up with the right treatment. Medical research requires creativity to formulate a plan to test your hypothesis. AI is not close to having the skills needed to listen to a patient’s story, the judgment, and the creativity to handle these tasks.

      There are now minimally invasive robotic surgeries. The surgeon sits at a counsel with a 3D screen, and they move joy sticks to control the surgical instruments. Perhaps we could be near a time when AI could perform the robot surgery. But what happens if the robot severs a vessel causing a massive hemorrhage? We still need a surgeon standing by to save the patient.

      I make these points for anyone considering career options. Don’t make the mistake I made. Going to law school set my career back many years. The market was crap for toilet law grads going back 15-20 years. Medicine is a great career where you can help people. You can be a doctor, nurse, PA, pharmacist, surgery tech, and have a stable career.

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    3. 6:07 here, I stand corrected.

      https://www.forbes.com/sites/paulhsieh/2017/04/30/ai-in-medicine-rise-of-the-machines/#ad6fa18abb07

      AI is showing promise in performing medical work.

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    4. Anybody keep any of the literature/screen shots of the fake job and salary stats? It would be great to get them posted for all to see, especially now.

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    5. Wipe pharmacist off that list. We are at 120 percent grad inflation since 1998 and you can add another 1300 H1-bs to that list...It's over since around 2009

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  5. 4:23, how I wish I did! When I was pre-law back in the early 1990s, nary a negative word was heard about job prospects after law school. There was no internet then, so only if you had an older sibling who had had trouble finding the first legal job were you clued in to the truth. And you would have been convinced that his not having a job was all his fault - he didn't study hard enough.

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