Changes in the Legal Market

Jotting down some rough thoughts on how new tech + more lawyers affects different parts of the legal market (apologies for typos):

Big Law

Large firms catering to large corporations, or more accurately, well-known partners catering to large corporations. Presumably, number of large corporations isn’t increasing relative to number of lawyers. Also, number of big law firms and well-known partners increase slowly because of the big law feedback loop — i.e. the only way you get to be a big firm is if you win big cases, and the only way you get big cases is by already being a big firm.

So for big law, your underlying demand (corporations) remains untouched. And your underlying supply (firms) is the same. But that doesn’t mean no change. More law students = more competitive to get a big law job. Effect of new technology — productivity per lawyer increases, and since caseload is fixed, lawyers per firm drops. You could argue that firms might hire more lawyers and ask them to do less work for less salary. But that’s unlikely — there are fixed costs per lawyer — HR, office space, etc. So firms are likely to hire fewer lawyers, but require higher productivity (ugh). And you’ll see the price tag for big law drop, although this will be the result of fewer hours billed rather than a lower hourly billing rate (assuming we don’t nix the hourly system altogether).

Solo Practitioner

Difference story for people hanging out a shingle. Supply is more closely linked to number of lawyers rather than number of firms, so legal costs should go down more dramatically. But this also depends on the nature of the legal services offered.

If you’re offering services with minimal court or client interaction — e.g. helping a small business owner incorporate, filing basic wills, drafting run-of-the-mill employment contract, etc. — technology works to your advantage. These things scale well. You have to charge a lower price per client, but you can also cater to more clients, so it’s a net wash. And if you’re sufficiently entrepreneurial, you can also seek out “underserved” clients, thereby expanding the market. For example, I normally wouldn’t pay a lawyer to review the purchase agreement for a new car. But suppose I could use my smartphone to snap a photo of the agreement and e-mail it to a lawyer. Normally, it’d take the lawyer an hour to review the entire contract, but by using pattern-recognition software to highlight unusual terms, she can send back her analysis of the contract in 15 minutes at a total cost of $100. I don’t know about you, but if it’s a $10K+ car, that seems reasonable.

On the other hand, if you’re dealing with legal services that require more interaction with people — e.g. child custody fights, criminal defense, landlord/tenant, etc. — then life is rough. New tech may help you do legal research or fill out forms faster, but it doesn’t do much to speed up interviewing a client or appearing in court. And you still have more competition, so you can’t charge as much as you used to.

Ethics

Some of this stuff poses an ethics problem as well. In order to compensate for the lower income-per-client, a lot of lawyers are going to take on more cases. To some extent, it’s great that more clients are able to get legal services at lower cost. But a lot of these lawyers are also going to take on more cases than they handle. And when it comes to stuff like child custody or criminal defense, that’ll get ugly. If it’s one thing that law school should teach, it’s time and case management.

The Great Dissent

One of my favorite semi-fictional exchanges of all time, found in Judge Kozinski’s dissent in U.S. v. Ramirez Lopez, 315 F.3d 1143 (2003):

Ramirez-Lopez: Isn’t the jury supposed to have all the facts?

Lawyer: Not all the facts. Some facts are cumulative, others are hearsay. Some facts are both cumulative and hearsay.

Ramirez-Lopez: Can you say that in plain English?

Lawyer: No.

What's the right length of time for copyright and patents?

One of my issues with copyrights and patents are setup is how arbitrary their length is. Copyrights lasts for your entire life + 70 years. A patent lasts for 20 years. That seems odd to me. The end result of billions of dollars worth of product development can be under protection for a shorter amount of time than some doodle you scribbled on a napkin one afternoon.

Ideally, the length of time a copyright or patent lasts should be tied to market behavior by producers. I’m not sure how’d you make this work, but as a starting point, the market value of a copyrights or patent should correspond roughly to your sunk costs in producing the relevant intellectual property. One you account for those, I feel the law shouldn’t offer any additional protection. You are of course, entitled to try to earn a profit, but your profits should come not from a monopoly but from making a better product than your competitors — and I mean competitors in a very narrow sense. For example, I’d like to choose between book publishers based on factors like the quality of the paper or which ones offer digital copies, as opposed to which one of them managed to snag the exclusive rights to a book first.

I really can’t justify sunk costs as a barometer of the ideal value of a copyright over say, sunk costs + 20%, but it seems to jive from from the standpoint of putting the original content producer on a level playing field with the copycats. If anyone has thoughts on this, I’d be interested in hearing them.

Gun Manufacturer Liability

In Torts yesterday, we started on strict products liability. At some point, we touched on the liability of gun manufacturers for the costs of crimes committed with guns. This naturally started up a shitstorm.

First, let’s assume that there is in fact a legitimate public interest in ordinary citizens being able to buy a gun (if there weren’t, then we would be discussing banning guns period, not strict products liability). Given that legitimate interest, my initial reaction was that holding gun manufacturers liable for gun crimes would be horribly unfair. It’d be the equivalent of holdng auto-manufacturers liable for hit and runs. After talking to my modmate Sam though, I think, from an economic efficiency and loss distribution perspective at least, it’s an interesting proposition.

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Life Experiences – An Example

A follow up regarding the role of life experience in interpreting the law:

In Jacobellis v. Ohio, the Supreme Court examined whether a particular film violated obscenity laws. In his concurrence, Justice Potter Stewart famously wrote, “I shall not today attempt further to define the kinds of material I understand to be embraced within [hardcore porngraphy]; and perhaps I could never succeed in intelligibly doing so. But I know it when I see it, and the motion picture involved in this case is not that.” (emphasis mine).

I humbly submit that the life experiences of Justice Stewart figured prominently in his knowing it when he saw it.

Impartial Defined

I’m going to Berkeley Law this fall, and in an attempt to get my toes wet, spent some time going over the transcript of the Sotomayor hearings earlier today. One of the issues that came up repeatedly was whether allowing “life experiences” to affect your judgment violated the duty of a judge to remain impartial. The most experience I have with judging is high school debate, so … big grain of salt, but myinitial reaction is no, it doesn’t. To understand why, let’s step back a little bit and consider what it even means to be impartial.

Law is not math. It is subject to interpretation. When your laws are written over the course of over two hundred (occasionally turbulent) year by thousands of (occasionally boneheaded) individuals, you’re going to get contradictions, gray areas, and general stupidity.  Ideally, you’d ask the legislature to clarify, but it’s possible (probable?) that individuals within the legislature will disagree on what they meant when they wrote it. And that’s assuming the individuals are still alive and conscious.

Therefore, law cannot be impartially interpreted in the same manner that, say, a calculator impartially interprets a mathematical equation. Instead, the best a judge can do to be impartial is to be consistent and by extension, predictable.

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