The Commoditization of Legal Services

Every now and then an idea or meme seems to catch fire and become ubiquitous in a very short time. In the past couple weeks, discussions and examples of the growing commoditization of legal services has come from a number of fronts.

Marketing pushes from consumer-targeted, off-the-shelf legal forms companies like LegalZoom, LawDepot, and USLegalForms are examples of legal products replacing services. Similarly, companies targeting the small business market, like Direct Incorporation and Business in a Box, are attempting to carve out their own niches.

One interesting element of the trend is the actual language being used to describe it. Language that Robert J. Ambrogi nails in a recent post at Legal Blog Watch.

"Legal services are evolving from a highly bespoke, highly customized product toward becoming a commodity. As part of this evolution, legal work will be unbundled into its constituent tasks and many of those tasks will be standardized and systematized."

From the perspective of an LPO (which provides actual services, rather than off-the-shelf products), the key word in that passage is "unbundled". Because the value in legal process outsourcing is identifying which legal tasks can be efficiently unbundled and outsourced for significantly lower costs.

This idea of unbundling is also prominent in Richard Suskinds new book, "The End of Lawyers? Rethinking the Nature of Legal Services". This description from Oxford University Press cuts right to the chase:

"It is argued that the market is increasingly unlikely to tolerate expensive lawyers for tasks (guiding, advising, drafting, researching, problem-solving, and more) that can equally or better be discharged, directly or indirectly, by smart systems and processes. It follows, the book claims, that the jobs of many traditional lawyers will be substantially eroded and often eliminated. This is where the legal profession will be taken, it is argued, by two forces: by a market pull towards commoditisation and by pervasive development and uptake of information technology. At the same time, the book foresees new law jobs emerging which may be highly rewarding, even if very different from those of today. "

For another of the many voices discussing the commoditization of legal work, the Chicago Lawyer has an excellent overview.