Count the Cost: The Crisis, the Causes, and the Consequences

Too many “C's”? Perhaps. But alliteration is statistically proven to help retain attention.

This blog will be an examination of the modern legal landscape through the lens of cost accessibility. We'll begin by venturing back to Ancient Greece, where it was frowned upon and even illegal to charge for legal services (could you imagine…), fast-forwarding to the 21st century where escalating legal fees have become an unfortunate status symbol among attorneys. Our central theme is that the chief culprit in America's access-to-justice crisis is the prohibitive cost of quality legal services. Along the way, we'll dissect the crisis, dig into its causes, explore its consequences for the lower-income population, and argue that the advent of Artificial Intelligence could be the turning point the legal industry desperately needs.

Ancient Greece to Wall Street

In Ancient Greece, legal representation was considered a civic duty, and charging a fee for it was not just frowned upon—it was illegal. Fast forward to modern-day America, and the landscape couldn't be more different. Lawyers and law firms pride themselves on astronomical fees, almost as badges of prestige rather than a measure of the service provided. The drastic shift begs the question: What happened to the ethos of providing a vital public service?

As we approach the 50th anniversary of the passage of bipartisan legislation for the Legal Services Corporation Act of 1974, let’s reflect on President Nixon and Senator Taft Jr.’s remarks—both of whom were attorneys. Upon signing the legislation into law, Nixon described the legal industry as “a workhorse” in the effort to secure equal rights in America. In support of the legislation, Taft Jr. stated: “I feel that our society today has come to recognize, on a far broader basis than ever before, the desirability and necessity of providing adequate legal remedies to all our citizens.” And while the LSC continues to strive toward honoring the pledge of justice for all, more can be done, especially with the accelerated implementation of AI.

The Crisis

There's no soft way to put it: America is facing an acute access-to-justice crisis. According to the American Bar Association, an estimated 80% of civil legal needs among the low-income population go unmet. The reason? Staggering legal costs, fueled by antiquated practices like exorbitant hourly rates, incremental billing, and minimum billable hour requirements that price out the average American.

The Causes

Why have legal costs reached such astronomical heights? For starters, the legal industry has been slow to adopt technological advancements that could streamline operations and reduce overhead. Additionally, there's a significant inertia to change, motivated by fears of job displacement due to automation and AI. Firms are locked in a tradition of elaborate legal processes, which often serve more as barriers than as enablers of justice. 

Now, to be fair, there is a component of education costs to factor into the equation. According to an ABA study, most law school graduates enter their careers with an average of over $160,000 in debt. Compound that with staggering spikes in the cost of living, especially in metropolitan areas, and one can argue until their blue in the face that the hourly rates are fair and necessary. But only if that is the extent of the complexity of the equation. 

If you ask me, the standard equation used by attorneys omits, intentionally or otherwise, one critical coefficient: Rule 5.4. See Bridging the Divide blog for more on that. The monopoly issue of Rule 5.4 is essential to the equations’ answer because it unambiguously stifles competition, the very engine of innovation and price reduction in the marketplace. No competition = monopoly; and we’ve all played that game before. How many winners are there? 

The Consequences

The result of this ever-increasing cost barrier is a justice system that largely serves only those who can afford it. And just like in the game of Monopoly, that’s usually the smartest folk. For lower-income individuals, the lack of access to affordable legal services can lead to a snowball effect of complications. From inadequate representation in civil and family matters to lost job opportunities due to minor legal obstacles, the impact is broad and deeply troubling.

Artificial Intelligence: The Beacon of Hope

Enter Artificial Intelligence, a technology poised to disrupt this status quo. Contrary to fears of making human lawyers obsolete, AI can and should serve as a powerful tool that enhances legal work. Whether it's automating the drafting of contracts, improving legal research, or crafting precise pleadings and motions, AI can augment the day-to-day tasks of an attorney, offering higher quality service at a fraction of the cost.

Some forward-thinking firms have already begun embracing AI for tasks ranging from predictive analytics to document review. These early adopters are not just cutting costs—they are also improving the quality of their service, thereby making excellent legal advice more accessible to people from all walks of life. A burgeoning field of legal-tech startups is focused on developing AI-powered solutions designed to close the access-to-justice gap. By focusing on the integration of cutting-edge technology, these startups aim to drastically reduce the cost of legal services while maintaining, or even increasing, their quality.

If you need an example of this, look no further than the list of accomplishments from Orrick’s Global Operations & Innovations Center (GOIC ). For example: “In the litigation context, culling data reduces the volume of documents to be reviewed by attorneys by an average of 96.7 percent. This saves our clients an average of $58,000 per matter. Equivalent savings are reflected in our transactional work. Applying our analytics tools to a recent due diligence review for a major software company that was contemplating an acquisition reduced lawyer time on the engagement by 60 percent.” That’s remarkable stuff!

Call to Action: Be the Change

It's high time for a paradigm shift within the legal fraternity. The reluctance to change age-old practices must be overcome for the greater good. If the legal profession is truly about justice for all, then embracing AI to disrupt outdated models is the way forward.

So, to all within the legal industry and to our tech-savvy pioneers, let's be part of the solution. There's a saying that the best time to plant a tree was 20 years ago; the second-best time is now. Let's take the initiative and make quality legal services not a luxury for the few, but a basic right for all. 

We must have the courage to face our biases as attorneys and remember why we endured the gauntlet of law school to begin with. Was it really just about the money for you? Have you found yourself blinded by the big checks? Think about it. Count the cost (for everyone you serve and those your firm “can’t help”). And join me in honoring the pledge until justice is av{AI}lable for all.