If Target or Costco Ran A Law Firm

What if law firms provided the level of customer service, consistency, and value that we have come to expect when we visit stores such Target or Costco?

It seems almost like a trick question, doesn’t it?  Most people’s experiences of law firms are filled with anxiety, uncertainty, and a feeling that it’s going to be far too expensive for what you get.  It’s almost exactly the opposite of the experience we have with the best retail brands.

So what would it take to bring some of that Target or Costco touch to the law firm world?  This is one of the many questions that was addressed at the recent Reinvent Law Conference in Silicon Valley.

The answer is simpler than many people imagine:  Allow non-lawyers to split fees with lawyers.

In the United States, lawyers can only run businesses with other lawyers.  That’s one of the basic “ethical” rules that govern how law firms must operate.  In most states the law is known as Rule 5.4 of the Rules of Professional Conduct.

Rule 5.4 is a big reason why you don’t see a combination accounting firm/law firm, even though that combo makes a ton of sense as a way to serve business clients.  In addition, lawyers can only pay referral fees to other lawyers.  Most importantly, non-lawyers can’t invest in law firms.  This limitation prevents venture capitalists from providing the money that would allow a nationwide branded law firm from coming into existence. That’s what prevents someone from spending the money to start a law firm that looked more and operated more like Costco and Target.

In the UK, this world is becoming a reality.  In 2007, the British Parliament passed a law, The Legal Services Act, which among other things allowed non-lawyers to start law firms and invest in them. The result has been innovative new ways to consume legal services, ranging from websites that allow you to download legal documents to law firms. that promise to offer business clients predictable fixed prices.  We tend to think of the England as a very traditional place; we imagine barristers in court still wearing powdered wigs.  But the reality is that, at least with respect to how law firms are regulated, the United States is much more of the dinosaur and the UK is much more innovative.

So if you could find a good lawyer in a different way, would you?  If you wanted the process of hiring and working with a lawyer to be more convenient and a better value, would you be willing to consume law differently? Would you be willing to go to a mall to get help from a lawyer?

If the answer to any of these questions is yes, clients will need to be part of the movement to make these changes.  The 300 or so people who attended the ReinventLaw Conference are willing to change the legal system dramatically.  But right now, most lawyers are resisting change.  And based on my experiences, the American Bar Association, one of the leading lawyers’ groups, is much more likely to be an obstacle to change than a supporter of it.

So the bottom line is this:  If you want to see the law firm model change, it won’t change from the inside.  It will take the involvement of clients, prospective clients, and other non-lawyers.  It will take a good and steady tug on that leash.

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