How are nontraditional legal service providers impacting the average lawyer's practice?

• Author: Grady, Kenneth A.
• Position: Special Issue: Technology & the Practice of Law

Despite rumors to the contrary, the rise of nontraditional legal service providers has not meant the demise of lawyers--for now. These providers have made small but impressive inroads into the legal industry, and failure to take them seriously would be a mistake. Their significance isn't so much from the gains they have made so far as it is from the disruption they will bring in the future. But, more significantly, what they can't do sets the path to success for lawyers.

The range of services offered by nontraditional providers is impressive. They help lawyers review and select documents in litigation (Huron Legal), extract document information in corporate transaction data rooms (Kira Systems), interactively gather information through logic trees (Neota Logic), and build documents (Corporate Express). Nontraditional businesses offer new ways to do legal research (Ravel Law), resolve disputes (Modria), and obtain customizable legal documents (LegalZoom and RocketLawyer). Coupled with technology, they have offered less expensive alternatives to core legal services (e.g., Axiom Law and Elevate). (1)

Nontraditional providers have had modest success compared to the total size of the legal services market. In a U.S. legal market estimated at $275 billion, nontraditional providers have captured a very small percentage (low single digits, at best) of the market. Large corporate law departments have had a greater impact by shifting work away from large law firms to in-house lawyers or smaller firms. In the past three years alone, large corporations have decreased spending on large law firms by over $8 billion.

Although the economic impact of nontraditional providers has been modest, they are significant because of the disruption they bring. The legal industry is slow to change. Clients, however, have shown already that they are willing to move forward without lawyers if lawyers fail to change. This is the impact of nontraditional providers that lawyers should heed. Whether through individuals using online services or corporations sending work offshore, clients have clearly said that if lawyers won't adapt to solve client problems more efficiently and affordably, clients will go to nontraditional providers for solutions.

For all the impressive things these nontraditional businesses can do, what they can't do points the direction for lawyers in their careers. Technology can't match humans when it comes to soft skills. Take the case of former chair of...