The “Creative Destruction” Impact of Coronavirus on the Practice of Law

BAD NEWS ALL OVER

The destructive impact of COVID-19 is undeniable. Virtually every industry in the American (and possibly worldwide) economy has been negatively impacted. The practice of law is no exception.

According to a recent report, 64,000 legal jobs were lost in April 2020. This was on top of an even larger dispatch of legal sector employees in March. Overall, the COVIOD-19 crisis can be accurately characterized as “sector antagonistic.”

Here in San Antonio, many law firms — irrespective of size — shuttered their doors or were forced into remote work for much of March and April. Even by this writing — in mid May 2020 — many law practices are operating at less than full capacity.

Yet, from this obvious destruction has come innovation, resiliency and adaptation. Indeed, the destruction of government-imposed shutdown  has brought about creative solutions to how we advance cases,   attend court, communicate with clients and generally “practice” law.   This creativity is good news for those work in the legal industry, and ultimately, for our clients.

THE THEORY OF CREATIVE DESTRUCTION

The principle of “creative destruction” is borne of instability and profound change. The economic theory has been characterized as “a process in which new technologies, new kinds of products, new methods of production and new means of distribution make old ones obsolete, forcing existing companies to quickly adapt to a new environment or fail.”

Creative Destruction is the brainchild of Joseph Schumpeter of Austria. Schumpeter was a political economist, economic historian and capitalist who viewed the entrepreneur as the cornerstone of capitalism.

Traditionally, the theory of creative destruction has been referenced in relation to “disruptors” or innovative technologies that threaten to upend business as usual in a given industry.  

In the legal field, companies that offer “menu-based legal services” or “assisted do-it-yourself” forms have been accused of disrupting the traditional legal services industry.  In the real estate context, companies like Zillow and other “Prop Tech” outfits are supplanting traditional brokerages. 

But the disruption caused by COVID-19 was like none other. It is not borne of innovation, but rather, the father that spawned it.

THE LEGAL INDUSTRY WILL BE BETTER

I believe that the legal industry will be better, leaner and more efficient when the current health crisis is over. The strides that we have made during these dark days are far too great for us to ever go back. 

Unlike some commentators, I’m not entirely convinced that our field will be “turbocharged” into transformation. Yet, I also, don’t see us re-living “the way things were.”  And we shouldn’t.  Change is coming. It will be slow relative to other industries, but still profound.

Our Office of Court Administration, Texas Supreme Court and local judges have worked hard to keep the wheels of justice turning. Court reporters and mediators have managed to handle their affairs through video conferencing. Law firms have managed to keep the doors open, even when their employees could not be in the office. 

Justice has been administered slowly, but the legal system never stopped in the chaos. And as the crisis and resulting shutdown have been repeatedly extended, we have gotten far better at making things work in the “new normal.”   

This improvement is a creation of destruction of the traditional manner of work in the legal industry. And once all of COVID-19’s destructive energy has been spent, the improvement and innovation of our field will continue on its current trajectory.  The momentum will drive the legal sector forward.

MY PRACTICE and I WILL BE BETTER

Like many of my colleagues, I, too, enjoyed a culture of insulation from the market forces that impact most industries daily. I was entrenched in an antiquated way of doing things –  not by conscious decision, but by happenstance.

After all, I have been practicing law in San Antonio for almost a quarter century. The last several years, my chosen field – real estate law – has been booming. This is the case because San Antonio has suddenly become one of the “places to be” on the national scene.  When a community is growing by leaps and bounds, its real estate sector is typically robust. Perhaps it was luck that put me in the right place(which just happens to be my hometown) at the right time.

I have a stable of long-term clients, and the referrals I receive from existing clients, real estate professionals, lawyers and my online presence generate many leads from prospective clients every day.  The phone rings non-stop, and we are blessed with the opportunity to pick and choose the engagements we accept. All of this sounds great.  In reality, it had allowed me to become complacent and oblivious to readily-available technological capabilities.  

Before the worldwide meltdown I had never used ZOOM, attended a governmental meeting or court hearing on YouTube. Likewise, the idea of letting my employees work from home never sat well with me. In a word, I was unprepared for COVID-19. 

Fortunately, however, I was not under-resourced.  My employees, technological capabilities and flexibility allowed us to escape the crisis relatively unharmed.  But unharmed is not the same thing as unfazed. Like millions of others, I am forever changed in my approach. I will be better, do better, and never be caught surprised again.

From the destruction has come a new world full of opportunity to serve our clients better. We will not squander that opportunity or become oblivious to the possibility of that wold changing in the blink of an eye.