Today's Legal Marketplace: Understanding The New Legal Economy
Author: O. M. Atoyebi S.A.N Contributor: Romeo Pupu
The demand for legal services is never-ending. However, the shape and form which this demand takes have changed over the years. The legal services market is changing. This change has been driven by various factors over the years: Expansion of in-house legal departments, globalization (through mergers and outsourcing), technological advances, and the rise of Alternative legal service providers.[1] [1]
The onset of the Covid-19 pandemic brought the world to a standstill. The pandemic changed how different sectors, including the legal profession, operated worldwide. The legal profession in Nigeria was impacted in several ways, ranging from law firms having to lay off workers due to the downturn in revenue as a result of the pandemic, to our court system shutting down temporarily without a viable alternative.[2] [2]
As lawyers, we should always be at the forefront of societal advancement. Hence, we must understand what the legal marketplace demands of us today. This article will focus on grasping where the legal profession is in Nigeria today, in relation to the advancements happening around us, and how lawyers can make use of the new opportunities it presents.
TODAY’S LEGAL MARKETPLACE
Several expressions have been used to describe the amalgamation of tasks and processes, that make up the system of upholding the system of laws and regulations, that guide our day-to-day interactions as humans. Expressions like legal industry and legal profession have been used. However, in the past few years, the idea of a legal market or marketplace has become increasingly popular.
One can only speculate as to the reason for this. However, it must be noted that there is now a mainstream understanding as lawyers, that our role goes beyond knowing where to find the law and how to apply it.
The idea of a market presupposes a common area where goods and services are exchanged. When it comes to legal services, there are buyers and sellers. As lawyers, we are the sellers in this instance and the clients who come to us for our services are the buyers. This exchange between the seller and buyer takes place in the legal market.
Historically, this has always been a straightforward transaction. Often, when a person is in any legal trouble, they quickly find the nearest lawyer who can help them find their way out of it. A meeting takes place between this prospective client and the lawyer – usually in the lawyer’s office. The lawyer listens to the client’s problem and advises the client. The lawyer is then retained (if both parties agree), and goes about finding the best solution to the client’s problems, with the aid of the law and their experience in such matters.
While the clients will always need to find solutions to their legal troubles, the manner in which they go about it has changed. Today, a meeting between a lawyer and his client may take place using Zoom or Google Meet. In some instances, given the advent of AI-assisted technology, the client may no longer need the services of a lawyer because there is a computer program that can help with solving the issue that he/she faces.
Let us take a detour into market economics and how they affect legal services. Generally, a market needs a buyer and a seller (the client and the lawyer in this instance). Although there is also the need for a third party who will bring about competition. In the legal services market, this may be Alternative Legal Services Providers.
Alternative Legal Service Providers are firms that deliver legal services outside the traditional model of lawyers working in a law firm. They include but are not limited to:
- Legal Process Outsourcers (LPOs): These are independent organisations that carry out routine legal services (often high-volume, low-value tasks) on behalf of a law firm or in-house team. They are typically located in lower-cost regions.
- Captive LPOs: These companies undertake the same type of work as LPOs but are wholly owned by a law firm or a corporation. Again, they are often located in lower-cost regions.
- Managed Service Providers. These may be independent or captive and they typically carry out all or part of an in-house team’s function from end to end.
- Legal services provided by organisations that are not primarily law firms: For example, the Big Four accounting firms.
- Contract and Staffing Services: Here lawyers are provided temporarily to companies and law firms. Tasks can range from entry-level document reviews to those requiring highly skilled specialists.[3] [1]
The widespread adoption of legal technology is also changing the style and variant of services offered by various lawyers and law firms. Legal Technology refers to the use of technology to provide legal services and support services. It uses different types of new technologies from Artificial Intelligence (AI) to blockchain technology to provide niche legal and business solutions.
In the past, the term legal technology was more commonly associated with exclusively law firm technology, which helped with support services such as practice management, accounting, billing and document storage. However, from 2011, the term has grown to include technological solutions that make access to legal solutions easier for the public, online platforms for connecting lawyers and legal focused technology start-up companies.
The legal industry is known to be conservative. This means that the effects of the digital transformation of our society have not been as widespread when compared to other industries, like the financial services industry and media. Legal advice is usually written by legal professionals in various law firm structures and delivered using formal documentation on a one-on-one basis. Clients are dependent on lawyers for legal services as they lack the technical know-how and license to practice law. However, a wave of change is upon us and every 21st century should adapt so they do not find themselves redundant.
21st-century clients are exacting in their demands and armed with more knowledge than clients in the past. This means that for any lawyer or law firm who wants to remain competitive in the legal market, there is a need to rise to the occasion.
NIGERIA’S LEGAL MARKET
The legal market in Nigeria underwent some changes which led to its current state today. The first indigenous law firm in Nigeria was set up by Chief Frederick Rotimi Alade Williams, QC, SAN, Chief Remilekun, Fani-Kayode and Chief Bode Thomas. This law firm was called “Thomas, Williams and Kayode”.[4] [1]
The 1990s saw the emergence of law firms in Nigeria that were structured like the American and British Big Law model.[5] [2]
Although there is no official count of the number of law firms that we have in Nigeria, it is safe to say that the number of law firms we have are in their thousands and are of varying sizes.
In recent times, the legal market in Nigeria has had to contend with the negative effects of the Covid-19 pandemic, the fall in oil prices and the depreciation of the Naira. This has led to less revenue and profits for various law firms in Nigeria.
It is important to point out that on a larger scale, Nigeria’s legal economy includes, litigators, corporate and commercial lawyers, in-house counsel, lawyers in professional services firms and legal educators.
Law firms in Nigeria have faced stiff competition from professional services firms. This led to a recent ruling by a Federal High Court in Abeokuta restraining Ernst and Young Advisory Services Limited, Price Waterhouse Cooper Ltd(PWC), KPMG Professional Services and Deloitte & Touche Consulting Ltd from providing legal services. [6] [3]
The issues discussed above show the need for lawyers to equip themselves with the requisite skills for today’s legal marketplace. The question now becomes: What will lawyers do?
SKILLS NEEDED FOR TODAY’S LEGAL MARKETPLACE
Technological Skills:
Information Communication Technology (ICT) skills have now become a must-have for every lawyer. Whether it is getting comfortable with the intricacies of blockchain technology or using applications like Slack for office communication, it is important that lawyers pay attention to emerging trends in the world of technology. Here are a few ICT focused skills that lawyers need:
- Drafting: This includes proficiency in the usage of common office software such as Microsoft Word and Google Docs. These software applications can be used for drafting, editing and saving. They also have inbuilt collaborative features which let you work on documents with your colleagues.
- Data Analysis: Although lawyers are not data analysts or scientists, there may arise a need to use spreadsheet applications such as Microsoft Excel or Google sheets to build a database or a project plan using these applications. Lawyers should therefore familiarise themselves with the functions, formulas and features of these applications.
- Presentations: Being able to communicate effectively to clients, students, colleagues and other stakeholders is important as a lawyer. This is where presentations come into play. Understanding how to create an effective presentation or poster in Microsoft PowerPoint and or Prezi is important.
- Communication: Although most of us here are familiar with telephone, email and text conversations, other software applications that help with communicating in an organisation like a law firm also exist. These include Slack, Trello, Discord and Skype. It is important that lawyers are confident in their use and mastery of these applications.
- Data Protection and Privacy: A consequence of the move towards using online applications and websites for everyday and business needs, is that unprecedented amounts of personal data and information are being generated. This has led to issues like cybersecurity and data protection, and privacy being of the utmost importance for many businesses and persons. Lawyers need to be up to date on relevant laws regulating Data Protection and Privacy and their application in order to come up with business solutions.
- Blockchain: Although Bitcoin and other types of cryptocurrencies use Blockchain technology, Blockchain has enormous potential beyond financial use, which is only starting to be realised. Smart contracts are an area in which blockchain networks can be used to automatically facilitate, execute and enforce the negotiation or performance of an agreement. A smart contract has been described as a computer programme that acts as an agreement- the terms are pre-programmed and it has the ability to self-execute and enforce.
Commercial Awareness:
Commercial awareness can be simply defined as staying up-to-date on daily happenings and developments in the business and commercial world. [7] [1]
As highlighted earlier, clients these days are exacting in their demands, and expect their lawyers to have a good understanding of what their needs are. More often than not, these needs are situated in the macroeconomic environment. This means that lawyers must stay up-to-date on bits of news from the business world. Commercial awareness can take any of the following forms:
- Excellent customer service skills.
- Strategic thinking.
- Creativity
- General knowledge of financial markets and economics.
It is important to note that commercial awareness is not something that happens immediately. It takes a considerable amount of time to build deep sector knowledge on specific issues.
SPECIALISATION:
There is still an ongoing debate on the advantages and disadvantages of specialising in one area of law. Connected to this is also the question of when you should specialise.
However, one principle remains true: Clients will always pay for expert services. A straightforward path to being an expert is identifying an area of specialisation and focusing on it. For those who want to remain generalists, this does not mean that you abandon your other areas of interest or practice. It just means that you are well known for one area of law that sets you apart from other lawyers.
Of course, there is the understanding that our legal market may not have the requisite depth to support a sole focus on one particular area of law. However, it is encouraged that you are known for being better than other lawyers in certain areas.
CONCLUSION
The conception of a good lawyer is changing as societal advancements affect society’s interaction with the law and lawyers. As lawyers, it is our responsibility to be at the core of adapting to these changes while also maintaining a competitive edge.
Despite these ongoing changes, certain principles remain true. Our ability to remain relevant as lawyers lie in the ever-changing nature of the law and our intimate understanding of it.
A famous quote by the English philosopher, Jeremy Bentham, says “The power of the lawyer is the uncertainty of the law.”
[1] Tyler J. Replogle, “The Business of Law: The Evolution of the Legal Services Marker.” (2017) Michigan Business and Entrepreneurial Law Review.
[2] Christian B. Denton, “The Impact of Covid-19 on the Legal Profession in Nigeria.” (2020) International Bar Association assessed on 29/03/2022
[3] Victoria Pickard & David Saunders, “Alternative Legal Service Providers: An Overview.” (N/A) Thomas Reuters Practical Law assessed on 29/03/2022
[4] Femi Fani-Kayode, “In remembrance of Fani Power”, (Archived in 2012) Wayback Machine, NigerDeltaCongress.com
[5] Banwo and Ighodalo was founded in 1991, AELEX was founded in 1990 and Aluko and Oyebode was fpunded in 1993.
[6] Unini Chioma, “Court Restrains Ernst & Young, PWC, KPMG, Deloitte, from Rendering Legal Services in Nigeria” (2022) The Nigeria Lawyer assessed on 29/03/2022
[7] Billy Sexton, “Commercial Awareness”, (2021) All About Law, UK, Assessed 29/03/2022