Just as it did in 1995 and a dozen times since 1980, the Federal Government shut down “non-essential” services this week. While I have no intention of this post devolving into a political debate, a brief discussion of the history of the current shutdown is warranted so that I can make my point relevant to this blog.
In March, 2010, the Legislature passed, and President Obama signed into law, the Patient Protection and Affordable Care Act, the most sweeping piece of health care legislation ever passed in this country, intended to ensure that insured health care was available to every American. In June of 2012, the United States Supreme Court ruled the Act constitutional, clearing the way for the Act to be implemented as soon as practicable, which, as it turned out, was not until October, 2013. In the interim, President Obama was re-elected by a rather wide margin.
Leading up to the roll-out of the PPACA (yes, I steadfastly refuse to refer to it as Obamacare, because I’m not 12), the House of Representatives voted to repeal the Act more than 30 times. Given that the repeal tactic never came close to working, the House instead decided to refuse to pass a budget that included the funding of the Act. Since the 1970s, there has been a standing opinion from the Attorney General’s office that it is illegal for non-essential government employees to work in the absence of federal funding to pay them. Thus, when the deadline came and went for passing a budget to fund the federal government, all non-essential personnel were furloughed, and the federal government shut down. Now the bigger issue that looms is the raising of the debt ceiling, as the government will hit that debt ceiling later in October, 2013. This risks the fragile state of the world economy in that the United States will default on its debts for the first time in history.
So how have we gotten to this point? Again, I am not trying to make any political point, but one could argue that there are those within Congress and elsewhere in the Federal Government who seem to thrive on this turn of events, because they fancy themselves disruptors. Big government is broken, they say, so we have to change it. But rather than fixing the manner in which the government is broken, they have taken the tack of disrupting because any change must be good change; disruption for the sake of disruption.
Perhaps this position is over-simplified. (It is.) But it brings us to the fair point of what is going on in parts of the legal community. There are those that believe that there is nothing wrong with the status quo in the legal community. That we should just continue to bill everything by the hour, and that the need to increase revenue can be satisfied in just two ways: increase rates and bill more hours. (Those people are wrong.) There are others who started on the fringes and are now loudly becoming more mainstream, who feel that the entire system should be burned to the ground. They tilt at the windmills of overbilling scandals, and they argue that such overbilling is not just rampant, but ubiquitous. Those people are also wrong.
The system for the provision of legal services is neither 100% working nor 100% broken. Despite the protestations of detractors, development of alternative fee arrangements is no more a panacea for the issues facing the legal community than a continuation of the Cravath model is the answer.
But there is hope. There are some really smart people doing some really great things. Groups like Valorem Law Group and ERM are developing practices around efficiency and automation. They’re pulling the science out of legal services and applying it, so that they can concentrate on the art. And guess what? They’re doing it for…..cover your ears disruptors….PROFIT. Even the largest firms are getting into the act. Proskauer hired an expert in legal process management to teach their rank and file about how to properly deal with clients and discuss the next phase of the legal services framework. And clients, more and more, are honing their understanding of alternative fee arrangements and value based billing.
It is an exciting time to be an attorney. Sometimes that excitement is steeped in fear of the unknown. There is much to do. Increasing the requirements to pass the bar may help, as could limiting traditional concepts of state licensure. Burning down the industry is neither necessary nor advisable. The future is here, as they say, and there are many of us in both traditional and non-traditional firms who are embracing the steps forward.