What Every American Attorney Ought To Know About The Coming Legal Crisis
After working with attorneys for several years, generating over 1.5 million leads, and helping over 540 law firms grow, I’ve seen almost everything there is to see in this industry.
However, after doing some research I discovered something alarming.
Things are about to change for all attorneys in America.
The change is going to be swift. Most attorneys, even smart and successful ones, are unprepared for what is coming.
Since 1960 the IRS has collected and published income levels for solo-attorneys. Things are not looking good.
In 1988 the average attorney took home $70,747 per year in today’s money.
And by 2012 that figure had dropped down to $49,130.
That is a scary 30% decrease in real earning power.
When I discovered this shocking information, I decided put my research team to task.
And what came out of it what nothing short of a death sentence for the legal industry.
And some of my predictions in this article have already started coming true.
Whittier Law School in California is shutting its doors. And it is just one of many.
“We were completely caught off guard,” Kristopher Escobedo, a second-year student and incoming student body president at the Costa Mesa, Calif., school, told the Los Angeles Times. “It was almost like an ambush.”
Future lawyers, heed this. Whittier’s demise could be a sign of things to come.
The coming crises will hit in three waves:
WAVE #1: First it starts with law schools closing down or merging.
WAVE #2: This will hit the solo-practitioners (also known as solo-attorneys)
WAVE #3: This will crush the vast majority of attorneys that aren’t prepared.
Having said that, there will be a small percentage of attorneys who will use this new era of rapid change to their advantage.
They will become the super-attorneys of the future. Hogging all the income and clients.
So here, with all the dogmatism of brevity you’ll discover:
What the three waves are and how they are going to demolish the legal industry.
What you can do to position yourself to take advantage of this new change: Ignore this advice at your own peril.
The one simple solution that 99% of attorneys don’t even know about.
Put away all your distractions and read every word in this article.
The Chaos In The Legal Industry Will Come In These Three Waves
#1: Too few jobs, too many lawyers
The first wave is already here. At a quick glance you’ll probably conclude that it is “not that bad”.
Yet, if you read the words on this page carefully, you’ll see how the coming legal crises has already started.
According to Michael Horn from the Clayton Christensen Institute, Whittier Law School is not an isolated case.
Most non-elite law schools are hanging on for dear life to try and thin out the heard.
The reason is simple. The percentage of law school graduates in employment has dropped by 5% in the last few years.
That doesn’t seem too bad. However, when you consider that the economy has been expanding for almost 10 straight years, and unemployment everywhere has fallen to record lows, it is abysmal.
What is going to happen in the next downturn?
The rate of employment for attorneys doesn’t only effect law school graduates. They will soon effect everyone.
#2: The coming influx of highly trained attorneys who will try anything to steal your clients
Wave #1 will seem tame compared to wave #2.
Legal costs in the U.S. are staggeringly high compared to other countries.
Large corporations are well aware of that fact and are taking action.
The U.S. has the highest liability costs, as a percentage of its economy.
And even more startling it is 2.6 times higher than the countries within the Eurozone. An area deemed by many to be over-regulated.
Even though this is the case, I actually believe you should be charging more for your services.
In a minute I’ll show you how to do exactly that WITHOUT losing any new clients.
So whatever you do, keep reading this article.
The chart you see above was an international study published for corporations.
And according to Greg Toppo, from USA TODAY, corporate legal departments and law firms are under huge pressure to cut costs.
They are spending vast sums of money on automation technology to replace their more junior attorneys.
Not only are the percentage of attorneys employed falling in a growing economy, there is about to be a tidal wave of young, smart, and hungry attorneys coming after your clients.
As the corporate world starts to shed legal jobs, the average attorney is going to face stiffer competition than at any point in history.
The corporate lawyers who get laid off will become solo-practitioners who are used to working 18 hours a day without weekends. Many of them will quickly retrain.
However, this is only wave #2. Wave #3 will crush the dreams of attorneys who aren’t prepared for what’s coming.
Before I reveal what wave #3 is, just remember that there is a bright light at the end of this dark tunnel.
Attorneys who take the steps to prepare won’t simply survive, you will thrive in the coming chaos.
#3: Attorneys ‘Bread-And-Butter’ jobs will rapidly be eliminated
There is a flood of technology coming into the market that is designed to replace the activities of an attorney.
At first, this seems ridiculous. Yet, in San Francisco, there is a company that is teaching an AI (named iCEO) to replace middle management in large firms.
The AI breaks all of management’s tasks into smaller tasks, and outsources them to cheaper locations.
It then monitors the workers and learns how to do their job, eventually firing everyone and taking care of the tasks itself.
The same will happen to attorneys.
According to Dan Mangan from CNBC, lawyers could be the next profession to be replaced by computers.
Inside of the article he demonstrates how this is already happening.
For example, LawGeex is a computer program. It can take a new contract, one that it’s never seen before, read it and then compare it to a database of every similar contract that it’s seen in the past.
And this wave is just starting. A lot more is coming.
The legal sector has been slow to change and therefore the change will be rapid.
Ross Intelligence makes a legal research platform based on IBM’s ‘Thinking’ computer system called Watson.
It is being used by some of the world’s largest law firms, including Dentons and Latham & Watkins.
Andrew Arruda, ROSS Intelligence’s CEO and co-founder, said his company “is working with lawyers from every type of organization — in-house, big, medium, small, solo [practitioners] — as well as law schools and bar associations.”
So firms up and down the country are gunning for the jobs of ordinary attorneys. You may be one of them.
In a minute I’ll show you exactly how to insulate yourself from this coming wave of automation. In fact, you’ll be able to thrive while other attorneys go bust.
And they WILL go bust.
This Delloitte Insight report estimates 100,000 attorneys will lose their jobs. That includes small law firms too.
While that is going on, there will be a handful of attorneys who greatly benefit from this change.
This was confirmed by Sofia Lingos, an attorney and member of the board at Technology Resource Center of the ABA.
At a roundtable discussion she was asked if attorneys should be afraid of Artificial Intelligence, or embrace it?
She calmly stated, “Both.”
She continued to explain that some attorneys who embrace the changes coming to the industry will flourish.
Others will suffer.
How To Quickly & Easily Adapt To Thrive In The Coming Waves Of Change
Even though that feels like a lot of information, I only used a fraction of the research my team uncovered.
In order to thrive and become one of the super successful attorneys during this period of rapid change, we need to do the following:
Identify and simplify the problem.
Put together a list of solutions to each problem.
As we went through this exercise I was shocked. We discovered something very unusual.
One simple solution takes care of ALL of the coming problems.
Have a look at this:
Problem #1: People can’t afford attorneys. Problem #2: There are too many attorneys. Problem #3: Computers will replace the jobs of attorneys.
We promptly solved problem #1. It took less than an hour to come up with the solution.
And the side effects of solving that problem were huge. Before I get into that, first let me explain how to get clients to afford you.
Problem #1. How To Get Clients To Easily Afford Your Fees
In the early 1920s not many people could afford a car.
And then one innovative company came up with the idea of lending people money to purchase a vehicle.
The companies that adopted this new instrument thrived, and the others died.
The same is happening right now in the legal industry.
Smart and successful attorneys up and down the country are taking advantage it.
Imagine a client coming into your office and saying, “I can’t afford $7,500”.
Then presenting them with an option to pay a small monthly fee of $225.
Yet, YOU get all of the money up front. The financing company underwrites the loan.
OBSTACLE #1: The Bar
Attorneys are forbidden from taking legal action against clients who do not end up paying.
This has made it impossible to extend financing via an entity like a bank. Whereas houses, cars, and furniture can use financing all the time.
However, there is an easy way around this problem.
When the client applies for financing they have the OPTION to use that money for anything else.
The fact that they have that option means that it complies with bar rules.
OBSTICLE #2: Collecting payments
You don’t have to worry about it. Once the client pays you the money up front, you never have to worry about collecting payments again.
OBSTICLE #3: What if clients get declined
These companies specialize in financing even high risk clients. When a client gets declined it is a good indication that you probably shouldn’t take them on.
Of course, you can still extend terms and collect the payments yourself, however the is a good chance they won’t pay the full amount.
If you do not start offering financing you’ll lose out to your competitors.
You become more affordable so you will get more clients saying “Yes!”.
You save TIME because you don’t have to worry about collecting payments.
You get more money because you get it all up front.
Naturally you can see why this is becoming such a popular option.
And the first problem we identified has now been solved.