Why nearly 40% of lawyers are unemployed or underutilized, despite unmet legal consumer needs
Back in 2008, when Professor Susskind´s famous book “The End of Lawyers?” was published, it created a heated discussion among legal scholars and experts alike. Sussksind argued that the legal profession was at a breaking point and, unless lawyers´ business model and adaption of technology would improve drastically, the legal industry would suffer heavily from the age of digitalization.
With “The End of Lawyers?” turning 10 this year, it is a good moment to pause and review the state of the legal industry in 2018. So without further ado, here is my view on where the legal industry and its consumers stand today.
According to studies from the United Nations and the Legal Service Cooperation, 80% of civil legal needs are not met. That is an astonishing number, especially when we take into consideration that access to justice – and that includes access to legal advice – is a basic human right. It then does not surprise that Amnesty International reports reveal a “two-tier justice system” open only to those who can afford it, leaving the most vulnerable people unable to pursue justice. These facts are alarming and raise concerns over the ability of our legal system being able to provide the basic need of access to justice. At the same time, having the majority of civil legal needs unmet should mean prosperous days for lawyers – with so many customers looking for advice, lawyers should have plenty to do.
Surprisingly, recent studies on the state of lawyers conclude that up to 40% of lawyers in developed countries are unemployed or underutilized. Now that is an interesting correlation that I need to repeat to ensure it does not get lost: A majority of civil legal needs remain unmet, while the legal sector suffers from low employment rates. This creates a social and economic challenge at a global scale that must be addressed with urgency. But it also calls for explanation: How is it possible that so many lawyers are in difficult economic situations, while so many clients are in desperate need for their services.
Photo by Alex Block on Unsplash
Some researchers argue that government legal aid cuts, combined with high legal fees, are the main drivers for this unjust dichotomy. However, that fact alone does not explain why so many lawyers are unemployed or underutilized. Based on our research and interviews with lawyers, clients and legal associations over the past year, we see the disconnect being the outdated legal business models making services unaffordable to the masses, leaving the largest market segment of consumers under- or completely unserved. Lawyers are spending up to 40% of their time on non-billable marketing and administration work, increasing the price for billable hours disproportionally and reducing the hours left to advice clients. At the same time, consumers struggle to find the right lawyer and engage in a business relation with them. Current state-of-the-art technology has failed to address this disconnect and we feel that only the adaption of innovative technology and digitalization, combined with a platform driven business model, can help solve this problem.
Read on to our next post to find out how digitalization and innovation can help the legal sector and its clients.