The Sidebar, 0521 COBJ, Vol. 50, No. 5 Pg. 22

PositionVol. 50, 5 [Page 22]

50 Colo.Law. 22


No. Vol. 50, No. 5 [Page 22]

Colorado Lawyer

May, 2021

The Post-Pandemic Future of Law Firms


"The future ain't what it used to he." —Yogi Berra

The world looks much different today than what it was or will likely ever b e again. The changes we see are not necessarily new, but they are moving at warp speed. We can yearn endlessly for the past, or we can pivot to the practice of law as it will look in the future. In my five decades as an estate planning attorney, I have observed the beginning of many of the changes that are now framing the future. This article looks at some of these changes and the rapidly increasing momentum that will result in more changes in the practice and economics of law firms of the future. Of course, these changes are merely the forerunners of what to expect and how to respond, but perhaps they can help us better prepare for what's just around the corner.[1]


The technological changes that affect law practice are perhaps the most obvious. Few of you reading this article will remember carbon paper and the IBM Selectric typewriter on which errors were difficult and time consuming to correct. Today, errors can disappear with a simple back space on your computer. Entire sections of text can be erased with a single stroke of the delete key. Computers allow for more efficient tracking of records and billable hours. Legal research with the help of Google is replacing vast expensive libraries. In 2015, 35% of law firm leaders said they could envision "newbie" associates eventually being replaced by IBM Watson, a data analytics processor that uses natural language processing, a technology that analyzes human speech for meaning and syntax to answer human-posed questions, often in a fraction of a second.2 Marketing, once considered unprofessional, is now an absolute necessity. Without Zoom, it would be impossible to conduct any form of relationship with clients. And imagine life without your iPhone.


Attrition is occurring from several sources. Due to the increased cost of a legal education and the displacement of new lawyers with technology, it will become increasingly difficult for prospective students to make the choice to enter law school. Faced with declining enrollment, several law schools have already been forced to close, including Concordia University Law School, Valparaiso Law School, and Whittier Law School.3 Others have been forced to merge for survival—University of Illinois at Chicago acquired John Marshall Law School. To entice more enrollment, some schools have lowered their admission standards, often producing ill-qualified lawyers. There are approximately 235 law schools, but only 199 are accredited by the American Bar Association (ABA) to confer a degree in the law.4

Here in Colorado, there's been a dramatic increase in the number of active lawyers, a significant increase in the number of women lawyers, and an increase in the average age of lawyers.5 As lawyers in large firms age, the typical pyramid formation of the firm becomes top heavy. A Stanford law professor predicted several years ago that, in 15 years, two-thirds of lawyers will not be practicing law.6

The stress of the pandemic has forced law firms to evaluate cost-saving measures, which include decreasing office size and negotiating rent concessions from landlords (the second largest expense for most firms), cutting salaries (especially those of senior partners), reducing partner equity draws, and getting rid of lawyers who chronically under perform or practice specialty areas not in high demand by clients. Recruiting, training, and mentoring young lawyers has become especially difficult as most continue to work from home.7

Challenges to New Lawyers

The investment in a legal education may no longer support a return on that investment. The United States has about 1.3 million law- yers—the most crowded profession in the country.8 Nationally, it's reported that there's one lawyer for every 300 people.[9]For the class of 2019, 90% of law school graduates got jobs, but this rate is considered not predictive of the future due to decreased employment due to COVID-19.10For example, the employment rate for the first quarter of 2020 was only 3.7%, clearly the result of the pandemic.11 Burdensome debt is a real problem. In 2018, 80% of University of Michigan law graduates left with student loan debt of $117,000.12 Law student debt today averages about $165,000, creating stress and resulting in deferred dreams, such as purchasing a home, starting a family, and enjoying expensive vacations.13 Law school debt is even more problematic for minorities. While average law school debt for white students is $101,510, the average debt for Black students is $196,760.14

Competition from Nonlawyers

There is an increasing challenge from non-lawyers providing cheap alternatives to legal services. Minnesota recently joined a growing number of states allowing nonlawyers to perform certain traditionally legal tasks. Arizona has eliminated the rule that forbids nonlawyers from co-owning legal services operations. The Utah Supreme Court last year approved legal reforms allowing nonlawyer ownership or investment in law firms. Law on Call is now the first U.S. law firm owned entirely by nonlawyers and operating because of these reforms.15 Clients pay $9 per month to get unlimited phone access to lawyers who can offer advice on business law, end-of-life planning, contracts, employment, housing, and real estate. If legal work is needed, the discounted rates start at $100 per hour. Three lawyers and two paralegals currently work for the firm.

LegalZoom has been allowed to perform services once considered the unlicensed practice of law by providing subscription services for wills and trusts, incorporation, partnerships, LLCs, and family law. Recent employment figures show 1,200 LegalZoom employees generating $275 million in annual revenue.16 Principal Financial Group does one better by offering free estate planning documents with its retirement plan accounts. The large accounting firms are also providing legal services. Deloitte, Ernst & Young, KPMG, and PwC employ an average of 2,200 lawyers in 72 countries; the strongest practice areas are taxation, immigration, and labor and employment. A New York task force recently hesitated to allow alternative business models such as nonlawyer ownership of firms, but it also suggested that social workers should be able to offer certain legal services and that a program providing trained volunteers to give nonlegal support to unrepresented litigants be expanded.17


Once considered unprofessional, advertising legal services is now a significant source of new business. Personal injury ads appear on television as frequently as auto sales and medical treatments for obesity. There is a vast population of consumers looking for legal help they can trust and afford. It's been reported that 110 million consumers seek legal counsel at least once annually.18 Of these, 58 million looked for a specific legal specialty.19 Of those who looked, 57% eventually hired an attorney. Research firms report that 39% used Google for their search, 34% visited online legal forms, and 31 % visited law firm websites.20Professional seminars for clients and prospects are an effective method of reaching a large population of potential clients at one time. With the potential for large changes in the tax laws from the incoming Biden administration, tax seminars will begin to proliferate.

Changes in Law Firm Structure

The traditional law firm was structured like a pyramid, with senior partners at the top, junior partners at the next level, associates further down, and paralegals forming the base. This eventually had the potential for conflict when the senior attorneys began to work less but (in the view of the "young turks") received an unfair portion of the firm profits. It was also tradition for young associates to strive for partnership, and when that goal was reached, they rarely left the firm. Increasingly, the legal landscape has been marked by lateral moves from firm to firm with a partner or group of partners taking their lucrative practice to a new firm where they could reap more financial benefit from their large clients. For example, the large Chicago firm of Kirkland & Ellis in 2020 had the most partner departures of any large firm, losing 54 partners through lateral moves.21 Without changes at the top, the threat exists that the pyramid will become inverted, with the base shrinking while the top becomes bloated.

Changing Lifestyles

The new generation of lawyers has increasingly become dissatisfied with the traditional law firm structure...

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