Picture yourself in the offices of a large law firm, huddled around a computer screen with several lawyers, an accountant and a client service director. You are in the midst of a reverse auction, and the prize is a major piece of work for a multinational corporation. The monitor shows three pieces of information: the amount your firm is quoting, the amount the lowest-bidding firm is quoting, and the minutes and seconds remaining to underbid the lowest quote before the auction closes. The clock ticks down. “We’re $25,000 over the low bid,” one lawyer says. “Do you think that’s close enough to be in the running?” Just as someone else starts to respond, the screen refreshes. The question is now moot. The low bid just dropped another $25,000.
For most attorneys, this scenario would have been unimaginable before the economic downturn in 2008. But in today’s market, getting legal work through this sort of procurement process is commonplace. Andy Bayman ’89, a partner at King & Spalding in Atlanta, has participated in such auctions and witnessed firsthand the other sweeping changes happening within the industry. And whenever he returns to Vanderbilt Law School to discuss those changes with students, he makes no bones about what he observes:
“We are not going back to where we were.”
‘More Business than Law’
The legal industry experienced a seismic shift in 2008, and in many ways the dust has yet to settle. The last seven years have seen significant changes in law firm structure, marketing and hiring; the reallocation of entire categories of legal work to new industry players; the creation of new kinds of legal employment; and (arguably) a redefinition of the role of “lawyer.” One person who understands this particularly well is Professor J.B. Ruhl.
Before Ruhl became a David Daniels Allen Distinguished Professor of Law, he was a partner at Fulbright & Jaworksi in Austin, Texas, in the 1980s and ’90s. He recalls an “endless supply of work” in those years, during which “the universe of work was expanding faster than law firms could expand.” Between the booming economy and the opaque nature of legal expenses, legal spending drew less scrutiny than other items in corporate budgets. Lawyers worked on a matter for as long as it took and sent the client an hourly bill when the work was done. Law firms “rarely got pushback on billable rates or cost,” he said.
But things changed dramatically during the economic downturn. With revenues falling, companies had no choice but to make their legal spending more strategic. Legal decisions became more integrated with companies’ overarching business goals. As Ruhl puts it, “2008 forced the corporate general counsel to behave like the rest of the C-suite.”
As a result, today’s general counsels are concerned less with obtaining legal results at all costs and more with providing value for their company. “Every bill I look at every single month, for every single vendor, the question is, ‘Does this reflect the value I received?’ ” said Julie Ortmeier ’98, general counsel for Carfax, a Web-based company that provides vehicle history reports. “The billable hours don’t indicate value at all. The firm I hire really needs to help me reach a business result, and that business result is not 1,000 hours.”
The increased focus on value has many companies looking to keep more legal work in-house. As Ortmeier points out, it is “really easy to justify hiring an in-house attorney” when outside firms tend to charge several hundred dollars an hour. Further, beyond the dollars and cents, “you tend to get a better work product at the end of the day because the in-house attorney knows the client better.”
When a company does hire outside counsel, it is looking increasingly for a lawyer who understands its particular industry, not a local generalist. “The expectation of in-house counsel is that they’re not just lawyers anymore,” Ortmeier explained. “Lawyers can understand the law, but if they don’t understand the data—the business data, the financial data—it isn’t as impactful. It doesn’t add as much value to the business.”
Law firms have heard the message loud and clear. Even at a firm with 900 lawyers, Bayman feels the “increased challenge to be efficient and show how you, as a law firm, add value.” There is far more competition among law firms for work in today’s market and, thanks to technology, that competition is taking place on a national and global scale.
Prospective clients seeking help for a specific legal problem now want to hire a national or global expert in that particular area. Thus, lawyers are well-served by specializing early in their careers and acquiring a specific expertise. King & Spalding has committed to this philosophy in its firm strategy, which Bayman summarizes as “doubling down on our strengths” and “providing high value in several specific industries and practice areas where the firm started strong.”
This shift within the industry has altered the path to partnership for young lawyers. In the ’80s and ’90s, the path to success at a law firm was clearly marked. Young lawyers in that era “could show up, do high-quality legal work, put in the hours, and make equity partner,” said Ruhl.
But that is no longer the case.
Succeeding at a law firm today is more about being entrepreneurial and business-oriented, according to Bayman, and less about simply executing good legal work: “That’s certainly important, but it’s just table stakes.” Young associates, Bayman stresses, should learn about their client’s business and be willing to take control of their practice by investing their time in developing and growing their expertise.
“Many people lament that lawyering today is more business than law,” he said. “It is what it is. If you want to survive, you have to adapt to it.”
‘Explosion of Startups’
Amid the changing expectations from clients in the wake of the economic downturn, advances in technology also have played their part in transforming the industry. These advances began affecting the practice of law long before 2008, and for the most part, their influence has been beneficial for lawyers and clients alike.
For instance, the speed of email and telecommunications allows lawyers to handle work more quickly and across greater distances. While Bayman is physically located in Atlanta, he now has more cases in Philadelphia, Chicago, St. Louis and Los Angeles than he does in Georgia. That sort of nationwide representation has only become possible thanks to modern communication, electronic filing systems and firm-unifying computer networks.
Technology, however, also has taken bites out of the work that traditionally has been performed by attorneys. The clearest example is in document review. In the early stages of litigation or a transaction, there is often a need to review an enormous amount of documents for relevant information. Young associates often cut their teeth on these document-review projects in years past, physically traveling to a warehouse and reviewing reams of documents by hand.
Early “e-discovery” platforms revolutionized this process by allowing documents to be scanned and stored electronically for remote review by attorneys. Subsequent iterations of these platforms included sophisticated search features, which enabled attorneys to pinpoint the relevant documents much more quickly. This made the work more efficient (and more pleasant), but it also drastically reduced the number of hours young associates billed on discovery. Today, many e-discovery vendors have moved directly into the document-review business, hiring teams of staff attorneys and offering document-review services at rates that are typically much lower than those of law firm associates.
Dean Chris Guthrie has watched this trend unfold over the last decade. “It used to be the case that law was a pretty insular industry,” he said. “There was not a lot around it that was competing directly.”
“But now, there has been this explosion of startups, niche players, e-discovery shops, consulting firms and the like that aren’t technically within the rules of professional conduct ‘practicing law,’ but are engaged in support behaviors that limit the need for the practice of the law,” Guthrie said.
In addition, Ortmeier notes that “with the advent of social media and things like LinkedIn, these kinds of nontraditional law support companies and law support services are able to reach clients directly without having to have an association with a firm.”
Law firms, of course, are not sitting back and ceding document review to these competitors. Bayman is aware that “discovery is still the biggest legal cost for companies in litigation,” but he and his firm are working to bring that cost down. King & Spalding has its own off-site discovery center, staffed with a team of lawyers who have, for various reasons, opted to work in document review rather than as traditional, partnership-track associates. The technology used at the discovery center even allows for “predictive coding,” potentially eliminating the need for front-line review by humans—and thus saving clients significant amounts of money.
Nevertheless, e-discovery vendors have undeniably become a major player in the legal industry, according to Marc Jenkins ’03, associate general counsel and executive vice president of knowledge strategy at Cicayda, an e-discovery and litigation support company located in Nashville. Jenkins has seen disruptive legal technology from all angles.
Years ago, while practicing at a boutique law firm, one of his major clients purchased a contract management system that eliminated their need for contract administration work—about half of the work Jenkins did for the client. At no point did the client have any complaints about the legal service they’d received. Rather, technology enabled them to handle their needs more cost-effectively.
“We became a role player; we were no longer the star guard,” said Jenkins, who is also an adjunct professor of law at Vanderbilt. “Sometimes we got to hit the game-winning shot, but a lot of games we didn’t get off the bench. We quickly learned that role players can still get championship rings if they can adapt and play within a system.”
Rather than begrudging his clients or contract management software, Jenkins dove into the world of legal technology to see what opportunities were out there. In 2006, he encountered e-discovery systems and quickly realized that they were vastly less efficient than they could be. Jenkins developed his own methods and expertise in the field and ultimately joined Cicayda, where he provides technological services and applications to streamline work and improve the lifestyles of legal professionals.
‘First Inning of Change’
Daniel Reed ’94 is another Vanderbilt alumnus who has built a successful career at the intersection of law and technology. Reed is CEO of UnitedLex, a global consulting and legal services firm that provides comprehensive technological solutions for law firms, corporations and law schools.
UnitedLex’s broad offerings include front-end management consulting regarding technology strategy, the design and development of custom applications, and, in some cases, the performing of legal services for the client. In addition to its more than 100 software developers who design custom applications for clients, UnitedLex employs more than 2,000 attorneys to provide services as needed, including patent prosecution, contract support (from negotiation to monitoring performance), document reviews, data management and cybersecurity risk management.
Both Jenkins and Reed believe that the technological revolution in law is only just beginning. Jenkins predicts two more big developments in the near future.
First, he anticipates a variety of TurboTax-style interactive computer programs to handle repetitive, routine legal issues in different areas of law currently underserved by the legal industry, often because the cost of consulting a lawyer is too high. For instance, in a few years, a corporate HR representative trying to decide whether an employee is eligible for FMLA leave may be able to open a program, answer a series of questions, and get basic advice about the employee’s eligibility.
Second, Jenkins foresees data-driven decision making arriving in the legal domain. Imagine an IBM Watson-style machine that can aggregate and summarize litigation data in much the way a lawyer would, informing users that a trial in North Dakota on a particular issue would have X percent chance of success and an expected value of Y dollars in front of Judge Z if the brief cites three specific cases.
Jenkins stresses, however, that the future he predicts is not lawyer-free, but rather augmented lawyering. Lawyers will still be needed to monitor the technology, make sure it performs as it should and interpret its output, he says.
Reed’s predictions are similar. “If this is a baseball game,” he said, “we are probably still in the first inning of change, and I think that the force of that change is the large corporates driving efficiencies.”
Reed emphasizes that too many actors within large corporations—ranging from general counsel to boards of directors to procurement officers—are now too invested in recent changes to the legal business model for things to go back to how they were.
“The immunity that legal services have enjoyed for the last century or two has been lost,” he said.
While technological advances in the legal industry have been, and will continue to be, disruptive, they are not without their benefits. Guthrie observes that, because of technological changes, citizens are “potentially going to have an opportunity to get meaningful legal services in a much more reasonably priced way.”
But at the moment, “It’s very daunting for a regular middle-class person to think about going to a lawyer and having the end-of-life documents drafted that we all should have,” he said.
Jenkins and Ruhl both point out that this increase in the accessibility of legal services is a tremendous business opportunity for entrepreneurial lawyers. Jenkins explains that, because “the vast majority of people with a legal problem in this country do not hire a lawyer,” there are “huge untapped markets” for legal services. And Ruhl notes that, while the margins on this untapped work will not be huge, “the volume is gargantuan.”
Another positive outcome is that technology has the potential to improve both the quality of practice and quality of life for lawyers. Ruhl explains that, as technology streamlines or eliminates the commoditized work from the practice of law (the review, cite-checking and drafting of simple form documents), the lawyer is left with more time to spend on his or her craft. And reducing the time spent on commoditized work will improve lawyers’ work-life balance, according to Jenkins.
‘A Real Response to the Market’
Although the legal profession is going through undeniable changes, Guthrie stresses that the fundamentals of a Vanderbilt legal education remain sound. “Thinking, problem solving and process skills are still just as relevant in today’s legal marketplace as they were in the past—and will remain so in the future,” he said. “With that said, we’ve undertaken some creative initiatives to equip our students with additional skills to help them succeed after graduation.”
The Program on Law and Innovation, directed by Ruhl, is designed to prepare students for particular opportunities in today’s market. Currently, the program offers four core courses that cover e-discovery, legal project management, law and technology, and legal futurism, also known as “Law 2050.”
The Law and Technology course, taught by Jenkins, provides students with a unique opportunity to create their own legal technology. Groups of students are paired with Nashville-area nonprofits, and together they work to identify a basic, recurring legal issue facing the organizations. The students then devise a decision-tree–based legal application to help the nonprofit address that issue. The idea, Jenkins emphasizes, is to teach students “not just to think like a lawyer, but also to think like an engineer and an entrepreneur.”
Ruhl teaches Law 2050, which challenges students to anticipate future technological and business developments and predict how the legal system will respond to them. The skills and knowledge students acquire from the course are already making big impressions, much to Ruhl’s delight. In one instance, he says a student started describing a class project on drone law during a job interview, and his interviewer quickly summoned the firm’s managing partner to sit in on the rest of the conversation.
Bayman, who has served as a panelist for a Law 2050 class discussion, describes the course as “tremendous.” He also considers the Law and Innovation program “a real response to what is going on in the market”—something he has “not seen elsewhere.”
In addition to the Law and Innovation program, the law school has partnered with Reed’s UnitedLex to launch a “legal residency” program for select graduates. The innovative two-year program will provide participating graduates with full-time employment and extensive on-the-job training, and the program also has the potential to generate revenue for VLS to support student scholarships and services.
“The most exciting time to be in any area is when there’s disruption occurring,” Reed said. “It is a huge opportunity. But you have to be willing to go out and grab it.”
Vanderbilt Law is on the forefront, preparing its students to do just that.
The Program on Law and Innovation
In 1993, J.B. Ruhl—then a partner with Fulbright & Jaworski—was called to a meeting in Houston by a major Superfund client. He and six other attorneys from different firms were told that the client had made a strategic decision. “Rather than continue to work with 55 law firms across dozens of states litigating Superfund claims, the client had decided to narrow it down to seven lawyers, stop fighting the government and start suing their insurance companies for claims,” Ruhl recalled. “They said, ‘Here’s how it’s going to work. You’re not competing. We decide who works on cases, and you need to work as a team.’ ”
That was Ruhl’s first inkling of what he now calls the “post-normal”—a period of rapid change in the way legal services are delivered, driven by clients who approach legal services strategically and demand cost efficiencies. “We still don’t yet know what the ‘new normal’ is,” he stressed. “The economic downturn of 2008 accelerated changes that were already underway, but we are just beginning to see the implications of legal practice in a global environment.”
Ruhl, a David Daniels Allen Distinguished Professor of Law, remained a keen observer of the rapid evolution of the legal profession after he left practice to teach environmental and land use regulation. When he joined Vanderbilt’s law faculty in 2011 from Florida State University, Ruhl was encouraged by Dean Chris Guthrie to develop curriculum exploring the new realities of legal practice.
Ruhl’s Law 2050 course, named for what the legal profession might look like in the year 2050, was the result. The course examines the unprecedented change in the industry and what challenges and opportunities that change presents for the newest generation of lawyers.
“Change can be scary, but it’s not all bad. A lot of what’s happening is exciting,” Ruhl said. “I want students who take this class to embrace the change and show up at their firms willing to innovate and be entrepreneurial from day one. We need to populate the legal industry with young attorneys who have a different way of looking at things.”
For the uninitiated, the course can be a bit unorthodox—even daunting. So much so, in fact, that it comes with its own warning in the syllabus. “WARNING: Law 2050 is an unusual law school course,” it reads. “The course does not progress in a straight line. There are no right answers. You will be pushed to be introspective. You will be pushed to be innovative. In all of this, Law 2050 is more like legal practice than it is like law school.”
Adrienne Coronado ’14, an associate with Bass Berry & Sims in Nashville, can speak to the truth of this firsthand. She’s an alumna of the inaugural Law 2050 course offered three years ago and has since returned to campus, along with former classmates Holly Rhea ’14 and Ann Watford ’14, to talk to the latest group of students about navigating Big Law.
“Law 2050 could be discouraging if you didn’t know what to expect,” Coronado said. “Professor Ruhl would tell us, ‘Look, the old landscape is going away, and this is how it’s changing.’ But the flip side of that—the takeaway—is that we learned to make ourselves valuable, even invaluable, at our firms. We realized these jobs aren’t just out there for everyone and that to be successful you’ve got to chart your own course for your career.”
To help students do an even better job of this, VLS recently expanded its curriculum in this area. The new Program on Law and Innovation, launched in 2015 under Ruhl’s direction, offers an array of courses and extracurricular opportunities—including “legal hackathons” and student research fellowships—designed to prepare students to navigate a rapidly changing market for legal services.
The program grew out of Ruhl’s collaboration with adjunct law professors Larry Bridgesmith, an experienced mediator, and Marc Jenkins ’03, an executive with Cicayda, a Nashville-based e-discovery company. Together the three are working to develop courses that will enable students to pioneer areas of practice and develop and deploy new legal technologies. Bridgesmith teaches a new course, Legal Project Management, and organizes legal hackathons aimed at using technology to meet pro bono and business needs, while Jenkins has developed two courses: Electronic Discovery and Information Governance, and Technology in Legal Practice.
Ruhl, Bridgesmith and Jenkins are excited about working with students to understand the dynamics forcing change in law and legal practice and to develop the skills necessary to take advantage of those changes. “Today’s lawyers will need to be innovators throughout their careers,” Ruhl said. “Our goal is to equip Vanderbilt graduates to navigate these changes and, more importantly, to influence the directions in which they take law and the legal industry.”
VLS Partners with UnitedLex to Launch Innovative Program
Residencies are not just for physicians anymore. In fact, Vanderbilt Law School’s new partnership with UnitedLex, a global consulting and legal services firm, makes the case that law graduates also can benefit from such training programs.
The new “legal residency” program, launched in spring 2015 through VLS’ Program on Law and Innovation, mimics medical residencies by providing full-time jobs and hands-on training for recent law graduates. During the two-year program, “residents” learn to use 21st-century technologies and processes to deliver legal services to corporate clients and law firms in such areas as e-discovery solutions, cyber-security, contract management, patent litigation, intellectual property management, litigation services and immigration law.
UnitedLex CEO Daniel Reed ’94 founded the company in 2007 to deliver legal services with greater efficiency at a lower cost by deploying technology and process improvements. “We created our residency program to address the lack of training opportunities for recent graduates,” Reed said. “The program offers a great opportunity for recent law graduates to learn new and innovative ways to address client needs.”
Dean Chris Guthrie sees the UnitedLex relationship as a continuation of the Program on Law and Innovation’s curriculum—training law students to anticipate and respond to innovations in the delivery of, and access to, legal services. “UnitedLex is a forward-thinking company, and I’m tremendously excited about the opportunity this residency program affords our graduates to learn to deploy legal technology and resources,” Guthrie said. “This program has two key benefits for the law school. First, it opens up job opportunities and career paths for our graduates. Second, if we can help originate business for UnitedLex, this will create a revenue stream for us that helps support scholarships.”
UnitedLex launched its pilot “residency” program at the University of Miami School of Law and now is also affiliated with the law schools at Emory, Ohio State, Notre Dame and the University of Southern California. All affiliated law schools participate in a revenue-sharing program, with proceeds supporting the schools and their students.
Initially, UnitedLex expects to employ up to 10 recent Vanderbilt Law graduates and hire significantly more as the program grows. Lawyers in the program will receive classroom training from senior attorneys, supervise a case load and work directly with clients. During their two years at UnitedLex, they will gain hands-on experience in processes and managing data that will set them apart in the marketplace. Reed expects some residents will join UnitedLex’s permanent legal staff at the end of the residency.
“The UnitedLex residency program offers Vanderbilt graduates an opportunity to gain legal experience as they work on the front lines of innovation in the delivery of legal services,” said J.B. Ruhl, a David Daniels Allen Professor of Law and director of the Program on Law and Innovation. “I’m excited that we can offer graduates a direct pipeline to employment that combines work experience with training in current legal technologies.”