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Summary: Transactional law may not be long for the world of modern law, and here are 3 reasons why.
Transactional law is slowly declining in today’s legal world, and experts cite 3 reasons.
Technology, client value, and the overall costs of a practice field that may not be necessary to people or companies.
Keep reading to find out how these 3 aspects of transactional law can make for a less than stellar practice field to be involved in.
Some practice areas of law are more popular than others, and much of that has to do with client demand.
For instance, if you’re an attorney in Los Angeles, it is more likely you will be involved with entertainment or real estate law than other types of law that aren’t as popular within the region.
As for transactional law, this type of legal practice takes place nationwide, and according to a recent Above The Law article, transactional law across the board in the U.S. is sharply declining as a practice field. Here are the 3 reasons:
Technology or Artificial Intelligence
Much of the redundancy that you will traditionally find in a law practice has for the most part been taken over by artificial intelligence.
According to Law Technology Today, the introduction of AI has vastly shortened the attention, not to mention the billable hours that an attorney would have to devote himself to, and subsequent cost of those hours that the attorney would ultimately push onto the client.
Some of the actions that AI has simplified for attorneys, particularly in transactional law are:
Legal research and due diligence: Programs such as ROSS can read millions of legal documents in a few seconds, and from there find the exact passage or quote an attorney might need. A machine performing legal research this quickly effectively factors out a lawyer’s billable hours, which can save clients thousands of dollars and eliminate research costs. Additionally, lawyers can use AI for the discovery phase. AI’s ability to rapidly confirm facts expedites the process of finding background information, which can accelerate arbitration and litigation proceedings.
Review documents and contracts: A recent Forbes article states AI “can review documents and flag them as particular to a case. Once a certain type of document is denoted as relevant, machine learning algorithms can get to work to find other documents that are similarly relevant.” This takes a load off of lawyers, but also reduces that lawyer’s billable hours and the law firm’s overall bottom line, which is why many firms are moving away from transactional law. In the transactional law field, AI makes contract revision more efficient by highlighting standard clauses for different applications.
Predict legal outcomes: Another aspect of transactional law AI takes over is the ability to store years’ worth of legal data and sift through it all to tell lawyers their chances of winning relevant cases. AI can provide lawyers with insight on similar cases and help them accurately answer client questions like, “Should I settle?” Again, human interaction, which is the lion’s share of transactional law, is rendered moot due to AI.
And because much of transactional law entails humdrum tasks involving analysis, counseling, negotiation and court visits, to have more of the routine steps taken over by robots makes the transactional practice cost less as well as have less relevance.
Transactional law holds less value for the client.
Little to nothing really changes in transactional law. Other than a contract here or there that needs adjusting, transactional law is truly a repetitive practice area that clients have increasingly found to be not worth their time or money, especially if they aren’t involved in a law suit.
In fact, today many clients either can’t get involved or care not to be involved in the minutiae that makes up transactional law. Even more clients – individuals and businesses alike – have found that the practice does little to nothing for them on a day-to-day basis, and with that will balk against their legal issues being handled in a transactional manner.
The overall cost of transactional law simply isn’t worth it.
Today’s legal client has become quite savvy, which has invariably put the transactional lawyer on notice.
Gone are the days of the old school client with deep pockets who likes to know he or she has an attorney on a leash, ready to attack (or defend) at a moment’s notice due to the client’s retainer agreement.
These days, fewer people or companies keep lawyers on retainers. For one, there are many legal services that don’t require the expense of monthly charges due to attorney retainers.
With that established, transactional law falls even more out of favor since it is a practice field that a client can conceivably be charged a fortune for yet yield such small increments of daily change or progress regarding a client’s legal issue.
In a sense many clients feel that at the cost/performance ratio, transactional law is not worth it.
While it once was anything from prestigious to comforting for a client to have an attorney “always on call” for them because of the transactional nature of their legal needs, clients now understand that anything accomplished in the transactional legal world is both incremental and increasingly expensive.
Simply put, clients from individuals onward to large businesses don’t see the merit or the value in this particular practice field.
This in turn has attorneys either leaving the practice field for another field, or quitting law altogether if they can’t do the former.
As to any advice these lawyers can give to younger lawyers just starting out in the field, the foreshadowing from one transactional attorney who appears in the Above The Law article is blunt but clear:
Due to the decline in popularity with and need for transactional law, when that attorney was asked if he would still be practicing law in five years.
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