Gig economy and its legal implications
Most of the laws that regulate lawyers and the legal profession were written in the heydays of typewriters. It was a time before modern machine learning, chatbots, blockchain, Trustpilot-reviews, and a millennial workforce in search of flexibility and purpose. Having the major digital transformations of the legal field of today and tomorrow in mind it's fair to assume that the framework of legal ethics will need a closer examination in the coming years.
In order to act in due time Advokatsamfundet (the Danish Law and Bar Law Society) formed an expert group in 2017 consisting of Counsel members as well as young tech focused lawyers. Two years later, including a field trip to Silicon Valley meeting tech companies, law firms and universities, major trends in the legal tech transformation as well as potential implications have been identified.
This group has recently published a report named “Legal Tech & Advokatregulering” (Legal Tech and Regulation for Lawyers). Four major trends in the legal field is highlighted and discussed in the report, namely (1) increased use of Big Data, Artificial Intelligence and Machine Learning, (2) the Internet of Actions where machines work autonomously, (3) the Future of Work including the rise of the gig economy, and (4) more transparency, self-diagnosis and consumer-power.
Legal Tech Weekly has interviewed Danish lawyer Martin Lavesen, who has been chairman of the expert group and concurrently is managing partner in DLA Piper Denmark. We focused on discussing what the rising gig economy means for the legal profession and the potential ethical or regulatory impact.
Gig economy and its legal implications
“You can say, that our report asks more questions than it answers. The aspiration for the group was to get an understanding of the future for the legal field and how the technical development will change our way of working. We wanted to to provide the Danish Law and Bar Society with intelligence in order to get a educated understanding of the potential impact of our legal ethics,” begins Lavesen.
So what part of your research showed that the gig economy is going to be a major trend?
“Gig economy is not specific for the legal profession. To my understanding flexibility is a general trend. The next generation – the millennials desire a greater flexibility and work-life balance than my generation. Apparently the next generation do not to the same extent need ownership, strict patterns. In the legal profession, this could mean that the flexible lawyer of tomorrow do not need to sit in the same office for 8 hours every day when the alternative is to be sitting at the dinner table at home working independently with consultancy gigs. Today we already – especially abroad – have companies that have created a business model by offering that legal consultants from their network digitally can be “insourced “to clients,” answers Lavesen.
There is nothing new in lawyers going solo and creating their own one-man businesses after they have spent some time in a traditional law firm. So what is different now?
“In principle that is correct. However, the lawyer who opens up his or her own shop is independent. The lawyer living by “gigs” so to speak, will need to collaborate with law firms or inhouse legal departments without actually being an employee. Thus, the law firm will still be the point of contact for the client and the “gig” lawyer will be a sub-contractor,” says Lavesen.
He explains that the concept originates from the music industry where a musician usually perform single gigs. Various reports show that increased freelancing and project management will result in up to 40 % of the traditional jobs will disappear in the coming years. Much of this change is driven by the technological advancements that enables people to work independently of time and space. But potential benefits for the law firm scan also be a result. As explained in our article, the fluid law firm, the firms can get access to more specialized talent without increasing employee expenses. As stated in this article: “Traditional companies are not able to compete with those who have 100.000 ambassadors, but only 100 on their payroll.”
However, according to Lavesen this new form of work causes some ethical discussions, at least within the legal profession.
“How do we make sure that the freelance lawyer in fact remains independent conducting different gigs as part of large engagements? How do we secure full secrecy for the client when legal sub-suppliers are being used to solve part of the assignment? The most evident problem relates to the issues of conflict of interests. When a new matter is started up in a law firm, a thorough inquiry is conducted, including ensuring that no conflict of interests exist. This can be done effectively as we are having standard procedures and using the same electronically system. This might be a challenge using an external consultant. Such challenge can arise when the matter in taken on, but also during the handling or after conclusion of the matter.”
How can that be solved?
“I cannot provide a complete solution today the ethics challenges . To some extent, confidentiality can be dealt with using non-disclosure agreements. Certain instructions and procedures might also to some degree assist in securing that no conflict arise. Overall, any lawyer shall act according to the principles of good legal ethics as laid down in the law. However, the Code of Conduct for Lawyers as implemented by the Danish Law and Bar Society might need certain amendments to take this tech development into proper consideration,” Lavesen says.
So, liberalisation could be the solution?
“No, I believe that society has an interest in safeguarding that the lawyer remains independent and trustworthy. I am much in favor of competition, but this should not be at the price of the rule of law. Obviously, we will have to align and adjust to the development of society – including legal tech – but this should be within the existing framework.
In the report, you also mention that the Gig economy may have an impact on the education of partners. What is that about? “Today, a traditional career in a law firm starts with clerking for three years in a form of apprenticeship, where you as a junior associate learn the trade of being a lawyer. With the rise of legal tech, it must be assumed that more and more tasks that traditionally has been solved by a junior associate will be automated. Thus, this education of talent must be done in a different way. Furthermore, looking at other businesses, people in the gig economy is focused on being “lonely rangers” and thus it might be difficult to see education of the next generation coming from this group working from their homes. As partners in law firms usually at least initially is promoted internally, the gig economy might not only change the way of working, but also impact the partner recruitment,” concludes Lavesen.