TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Saturday, March 18, 2017

The BigLaw Massacre Approaches

Robot Lawyer 2The American Interest, The BigLaw Massacre Approaches:

Bad news for the tens of thousands of newly minted lawyers who pass the bar every year and hope to get associate positions at big law firms sorting through documents for corporate clients: Robots are taking your jobs[,] Blommberg reports [JPMorgan Software Does in Seconds What Took Lawyers 360,000 Hours]. ...

The new technologies aimed at automating the discovery process don’t mean that high-flying lawyers will be put out of business. In fact, it’s possible that the firms that own these technologies could get more wealthy than ever before. But they do probably mean that the huge flow of cash into the legal sector every year will be somewhat reduced, and middling firms and lawyers will be in trouble.

In the long run, however, this will be good for everyone. Firms can redirect funds that would otherwise be spent on legal fees into research and development, leading to better products. And a loosening of the legal labor market will mean lower rates, and more access to legal services for people who need them but haven’t been able to afford them in the past.

http://taxprof.typepad.com/taxprof_blog/2017/03/the-biglaw-massacre-approaches.html

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Comments

When Paul originally posted this item, it was entitled "JPMorgan Software Does in Seconds What Took Lawyers 360,000 Hours." Now it has morphed into "The BigLaw Massacre Approaches."

Here's what I posted in response to the original:

An odd article. The original claim, made by JP Morgan’s publicists without published backup, was that the software would displace “360,000 hours of work each year by lawyers and loan officers.” I have unsuccessfully searched the internet to see if any breakout of this number between the two categories is available. Based on my experience as outside bank counsel, I would guess that almost all those hours were loan officer hours – lawyers are too expensive for this kind of routine work. Our firm was never called upon to review commercial loan agreements unless the deal was significantly nonroutine. My guess is that JP Morgan would still call in lawyers to review significantly nonroutine deals even after having run them through its new software. This is not to say that lawyers’ work cannot be automated. My point is simply that Bloomberg’s title -- “JPMorgan Software Does in Seconds What Took Lawyers 360,000 Hours” -- is an example of the classic game of telephone, where multiple repetitions of the same sentence eventually produces seemingly small changes in text that significantly change the sentence’s meaning. I doubt there is any factual support for the sentence as Bloomberg published it.

Posted by: Theodore Seto | Mar 19, 2017 1:38:13 AM

Suskind has been making these dire predictions since the 1990s. Read his books back to back and then look at the historical number of lawyers, lawyers as a share of employment, and lawyers' inflation adjusted pay, all of which have gone up over time.

It's a serious case of the boy that cried wolf, and in the case of right wing rags like the American Interest, fantasy and wish fulfillment.

Every year there are more lawyers and every year they make more and more money, no matter what new technologies come out, and no matter which political party is in power.

That's not going to change anytime soon.

Posted by: The boy that cried wolf | Mar 19, 2017 9:03:17 AM

You think the bar will give up its privileged position to robots? Attorneys will use their entrenched power to ban AI if it affects attorney's incomes.

Posted by: Johann Amadeus Metesky | Mar 19, 2017 10:12:21 PM

Forgive us if we take your analysis with a grain of salt, Ted, given that you wrote:

"Unless something truly extraordinary has happened to non-cyclical demand, a degrees-awarded-per-capita analysis suggests that beginning in fall 2015 and intensifying into 2016 employers are likely to experience an undersupply of law grads, provided that the economic recovery continues."

in 2013 at http://taxprof.typepad.com/taxprof_blog/2013/06/seto-.html, and the job outcomes for 2016 grads were essentially identical to the 2013 outcomes.

@Boy who cried wolf,

Do you also write commentary about how Uber and self-driving cars aren't threats to the taxi industry? And of course starting salaries for new attorneys are STILL down 20% in real dollars from what they were in 2008 (per NALP), and as multiple studies by economics professors with PhDs show us, graduating into a recession or starting out with a lower salary has negative repercussions for decades.

Posted by: Unemployed Northeastern | Mar 19, 2017 10:48:57 PM

Quote: "Every year there are more lawyers and every year they make more and more money, no matter what new technologies come out, and no matter which political party is in power. That's not going to change anytime soon."

The manufacturers of horse-drawn buggies and carriages could not have said it better circa 1900..

Cheaper but no better often wins a competition, as does better but not cheaper. In this case, both are likely to be true. There'll still be money in law for law as a process with an emotional component, as in probate. And there'll still be room for brilliance. The cost of losing an important case is too high. What's less likely to survive are those parts of law where neither is true, where rote work can be automated.

Posted by: Michael W. Perry | Mar 20, 2017 4:53:14 AM

If we are talking about discovery document search capabilities then yes, it can be done better today. Yet, it still takes analysis and discernment to find key evidence inside the mass of information necessary in a major litigation effort. No computer nor software can replace a human in review. At least until AI is far advanced.

Posted by: Monte | Mar 20, 2017 11:55:14 AM