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Stormy predictions for the legal industry in 2016

Opinion

What’s in store for South Australia’s legal profession and industry in 2016? InDaily’s legal commentator Morry Bailes makes his forecast, which includes a few storm clouds.

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Low growth or contraction

2015 was the first year in recent memory that the number of practicing certificates issued to lawyers fell. A practising certificate is a lawyer’s ticket to practise. We can conclude from that statistic that we are not a growing sector and that will not change in 2016. This is a reflection on the poor state of our local economy. With economic activity comes commercial transactions feeding work to lawyers. The reverse occurs in poor economic times.

This trend as also been caused by recent changes to civil law, with government taking away people’s right to claim much of the compensation that previously existed for motor accident injuries. Without an entitlement to claim, not only do injured people miss out but, naturally, they do not instruct lawyers to act for them. The government might be pleased with its Motor Accident Commission treasure trove but injured punters and lawyers both lose.

Aggravating all this is an oversupply of legal graduates. For universities, law is a relatively cheap degree course to run, and it remains a highly desirable undergraduate degree to applicants, no matter that the majority of them will never practise as a lawyer. None of that will change in 2016. If anything, the situation will become aggravated.

In summary the profession in 2016 will not grow and will not contribute any increase toward job creation or economic growth, indeed likely the reverse.

Changing practice

My second forecast is about the changing nature of law practice. I am hardly alone in my prediction of change, with a body of literature on the subject led by British academic Richard Susskind, whose seminal treatise The End of Lawyers has had a huge impact on future thinking. He has published several books, including the most recent, The Future of the Professions, late last year.

In short, smart lawyers are deconstructing the job of the law and outsourcing, off-shoring, automating and applying other techniques to cut down costs, including that of human labour. This is a strong emerging trend and will accelerate in 2016.

Project management of legal cases and processes has arrived big time for the law. Watch this space.

Rising fields of practice

There are a couple of rising areas of legal practice that will continue to grow in 2016.

Family law is an expanding area as people separate and deal with the fallout that follows; division of property, who has the children, when, and so on. The rise in work in family law I put down to a number of factors. First the instance of separation has risen dramatically over the years. Second, people, particularly women, are now far more aware of their legal rights so are more likely to seek legal advice. Put bluntly, “lawyered up” you are likely to do better out of a property settlement than trying to negotiate it alone, with pitfalls too numerous to mention. Lastly, we have more to argue over: we are now an affluent society with individuals standing to lose much without proper representation and legal advice in cases of legal dispute.

The other rising area of the law is estate planning and estate disputes. Everyone is now encouraged by their financial advisor, banker and a myriad of others, including lawyers, to have the common sense to draw a will. However, it does not stop there. With an ageing and affluent population broader estate planning may be needed and can be complex, requiring expert legal advice. Then there is the rising trend of inheritance disputes sometimes ending in litigation. As one barrister remarked to me, “it’s like family law for the dead”.

These are both areas of law that will continue to grow in 2016 as law firms and courts re-shape to meet the community need.

A source of seemingly perpetual complaint is the under-resourcing of the Family Court and, in particular, the Federal Circuit Court that bears the brunt of day to day family law matters. A continuing hallenge for both state and federal governments in 2016 is adequate resourcing of our courts which are quite plainly insufficiently resourced, most particularly in areas of growing legal practice.

A shake-out in small firms

Fourth, there is the continuing trend of the division of the profession. At one end we have national and international firms servicing governments, publicly listed companies, private enterprise and individuals of means. Their turnovers are vast by comparison to most legal firms. At the other end the sole practitioner or small firms, many of whom earn a pittance doing underfunded legal aid work barely making more than a subsistence living. True, there are many mid-sized firms, however there is plainly a sense of big business at one end of the scale and cottage industry at the other. This is clearly a trend which will continue in 2016 as the legal profession either retracts or does not grow, and the number of unemployed lawyers proliferates.

The dichotomy between the top end of town and bottom dwellings in the law is vast. There is a real question as to whether some will remain in industry.

The failure of the criminal courts

My last prediction goes to our state criminal courts. There is no end in sight to the woes of our criminal jurisdictions. Under-funded in every respect, the criminal justice system is groaning with the weight of its own failure. With a national emphasis now on domestic violence, that pressure now looks set to grow. Intervention orders have multiplied exponentially, often despite the absense of a criminal charge of assault. Family lawyers are increasingly referring clients with intervention orders made against them to their criminal law brethren, and it is inevitable that an already strained criminal court will feel the ramifications, as will police.

The speed of the criminal justice system therefore is unlikely to be improved in 2016 despite all the talk. This will spell the death knell for many criminal lawyers and barristers who, underpaid by legal aid, frequently receive little or nothing for adjourned trials not reached due to court inadequacy and listing practices.

Our criminal justice system will continue to languish in 2016 and only proper monetary investment by government will do anything to change it. My sympathies go to many of my criminal law colleagues for whom 2016 will yield little if any change in their already difficult existence. We should count ourselves lucky that members of the profession actually continue to practise in this area to the benefit of the whole community, notwithstanding their difficult circumstances.

Draw what you will from my forecasts. For lawyers in business it is a matter of staying nimble and re-inventing both their mode of practice as well as their areas of practice. For legal professionals to succeed in 2016 resources must be rationalised and hard choices need to be made about what to do and for whom.

For the public, love or loathe us, one day you may need us. In the words of The Cruel Sea, ‘better get a lawyer son, better get a real good one’. That is one thing that 2016 will not change, and happily there are many good lawyers out there.

Morry Bailes is the managing partner at Tindall Gask Bentley Lawyers, Member of the Executive of the Law Council of Australia and immediate past President of the Law Society of SA. The opinions expressed in this column are his own.

His column appears every second Thursday.

 

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