The end of low-qualified lawyers?

Deloittes 2016 report [Developing legal talent: Stepping into the future law firm] has garnered some attention for suggesting a ‘tipping point’ is coming to the legal profession as early as 2020.  In truth, as interesting as the report is, it has not really produced new evidence to support the claim that, “[Legal services businesses] will need access to lawyers who have a broader skill set and are not just technically competent lawyers.” This seems to be the guts of their case:

There are still significantly more law graduates than lawyer jobs available. Of those who find employment after graduating, over 60 per cent do not go into a job in the legal profession (see Figure 3). This ‘over-supply’ means that law firms are able to select what has been perceived as the best candidates. However, over the next decade, factors such as partners retiring, a shortage of appropriately-skilled workers and alternative career options in-house or within Alternative Business Structures could transform the profession into an employee-led market.

And:

…businesses are already identifying a mismatch between the skills being developed through education and those required in the workplace. Data from Deloitte’s Quarterly Legal Sector Survey shows slow growth in revenue generated per fee earner among the top 100 law firms (see Figure 2).

The productivity problem is an interesting one and skills do of course play  part.  Big Law are (a bit) worried by millenials who might not have the loyalty that big firms are even less inclined to show them than the once were.  Even so, that’s quite along hop and a skip to an employee-led market.  Much of the ‘productivity’ is embedded in big firms with high value work, for all that the likes of Riverview Law are chipping away at bits of it. And, in any event, the case made by New Law for productivity gains is that they show up not in the productivity of the legal service providers but in the productivity of those they service as least the way that productivity is counted here.

The report does show some interesting data on the overall growth in the legal activities sector .  Growth 2004-2014 is surprisingly flat but volatilely so.deloitte trends

Flatness occurs in spite of the number of solicitors’ growing by 17% between 2010 and 2016 (according to SRA data they quote). The feeling I came away with was it wasn’t the end of (qualified) lawyers we were seeing but the end of many more less qualified roles (some paralegal and most legal secretarial roles) and the entry of a more diverse – hopefully skills rich – body of non-lawyers into legal service providers.  This up-grading of the employee body may reflect also the shift of the market away from lower cost services (personal injury and legal aid being two field in particular which have contracted and may account for the post 2011 slump in legal activities employees above).  My feeling was reinforced by this next graph suggesting which bits of the legal employment market were ripe for technological disruption.
deloittes automation
We can see that in fact there has been growth in the number of paralegals but they are vulnerable to automation unless they are ‘other legal professionals’ in which case they are not so vulnerable. The difference between the two groups is not clear to me. My best guess is legal associate professionals here means those who work outside law firms, and ‘other legal professionals’ means those who work in law firms – but I speculate.
Another point of interest is the graph on gender and graduate employment destinations below. It is worth bearing in mind that significantly more women than men graduate from law school and that a higher proportion of them get 2:1s and 1sts, yet according to Deloitte’s data a lower proportion of women go ‘straight’ into the solicitors’ profession. It’s a little bit of an odd graph as the data source’s ‘other’ category probably reflects the high proportion of students going onto PG study – the LPC and BPTC in particular.
Perhaps the more telling differences for the women are that they are more likely to become legal associate professionals or legal secretaries straight from University.  We can only speculate on the why.
deloittes gender
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About Richard Moorhead

Director of the Centre for Ethics and Law and Professor of Law and Professional Ethics at the Faculty of Laws, University College London with an interest in teaching and research on the legal ethics, the professions, legal aid, access to justice and the courts.
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One Response to The end of low-qualified lawyers?

  1. Mark Gould says:

    My sense is that there is a lot more going on in the sector than Deloitte managed to capture. The productivity point is an interesting one, for example. The report highlights the 0.54% CAGR in revenue per fee-earner between April 2008 and April 2015 — a period during which clients needed significant reductions in fee levels, when alternative resourcing models (including labour-market arbitrage to reduce costs) became a real option, and when technological support started to make real inroads into the practice of law. I suspect that the pre-April 2008 period was an unnatural peak in productivity, and that is not really acknowledged in the report. Even without external pressures, if more work within the legal sector is done by firms outside London, where revenue per fee-earner cannot be as high (and nor are costs), national productivity will appear to fall.

    The employment trends graph from the report is another example of an image concealing more than it reveals. It would be interesting to compare employment in the legal sector with other related sectors, rather than the employment base as a whole. At the beginning of the period shown, the typical law firm might have employed as many business services professionals as lawyers (or more). Over the years, many of those support roles have been cut and/or outsourced, so that the ratio might now be as low as 0.3-0.5 business services employees to each lawyer. (An outsourced IT professional, for example, would not count as being employed in the legal sector, but in the IT sector.) That fluctuation may be a significant proportion of the changes shown in the graph of overall employment by law firms.

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