TRENDS AND PROPHECIES AS TO
“DISRUPTIVE” TECHNOLOGY AND INSURANCE LAWYERING

Michael Sean Quinn*

There is another way to think about what is becoming of the legal profession in general and therefore insurance coverage practice. An earlier essay of mine (paradoxically posted after this one on the same day) was mainly about new topics that have to be learned and new activities that have to be mastered. For a very different, and darker view, consider Richard Susskind, a well-known English cyber expert on some parts of the law and all parts of law firms, as well as a TV personality, and a handsome devil, judging from the photos he puts on the Net.  In any case, he has written at some length on the changing socio-economic-and-managerial world of law firms. He virtually opened the Preface to his book of his 2013 TOMORROW’S LAWYERS (“TL”) with the remark, “We are, I have no doubt, on the brink of fundamental change in the world of law. . . .”[1]

As Susskind observes, cyber components of the legal world have been growing for some time. There have been such things a “virtual hearing” for a while now, just as there have been telephone hearings for even longer, and there is “online dispute resolution[,]” accomplished, one might add by a variety of devices.  In my experience, there are also skype and skype-line depositions, and theoretically similar trial testimony is on the way.  Of course, the latter will lead to a whole new species of cross examination and during-trial document production and examination, not to mention ediscovery. 

         Of course, although Susskind says nothing about the following hypothetical deposition. all of the new electronic developments will have a tremendous impact on global insurance coverage and insurer-versus-insurer conflict litigation. (Imagine this: let L stand for lawyer and W stand for witness, deposing L is in Austin; W speaks only the language of Fracus, a small, secretive, and nearly unheard of finance country having syndicates of  reinsurers and high-level excess carriers,  but where, at the time of the deposition, W physically located in the sheep country of  New Zealand (or perhaps in it the national prison which is roughly in the same region); the translator for the contract of insurance is in in Moscow; L for the witness and his Panamanian company is in Singapore, the contract of insurance is in Chinese but the law of Mali applies; a professor of oriental and Islamic insurance history and practice is “present” from his office at U.Conn., as is the retired national  judge of Iceland, who is the agreed “ruler” on quarrels occurring during, in, near or about the deposition but who is at that moment in Patagonia playing golf; and so on. Now that you have  this configuration of the deposition in mind; think of it as an insurance case; and reimagine it as an actual arbitration hearing.) 

So far, all we have is a sustaining technological change.  Professional life will have changed a lot, but there  have been no revolution in day to day professional existence. There are new topics of negotiations; they are very difficult; they require enormous extra learning, etc., etc. But the lawyers are still doing what lawyers now do; for example, they negotiate. 

         So let’s talk about Susskind’s “disruptive” technological changes. Susskind observes several factors and trends leading to the “discontinuity” of the legal profession are occurring roughly now.  Only the cyber-digital factors will be discussed here.  Information technology and communication have allegedly taken over the world, as everyone more or less believes. I dare say that readers of this paper notice it every day.   It has also led, says the author to a certain standardization of most (or, at least, very many) tasks, such as those of lawyers that are routine. 

         This is not standardization in terms of how the quality of a performance is judged; it is standardization of how it is performed. (“All of you professionals,” says the ‘whoever,’ “Listen up! Do what you do this way[2] way every time.”)[3] The legal profession regards itself as a “learned professions” the members of which  prepare different work for different clients, keeping uniqueness and the idea of having a  special relationships as a central idea. The classical lawyer-client relationship was in some sense individualistic, personal, close, genuinely exemplifying loyalty, and a certain kind of intimacy (though, of course, not others)  According to Susskind, for most lawyer activities for clients those days are largely gone. Susskindean standardization is actually a kind of what used to be called  mechanization.” 

         Customized (or what he calls “bespoken” work—like a tailored suit—(already a somewhat mechanized kind of work) has, for a large part, given way to. and has been to some degree been replaced by, standardization, as I just described it.[4]  That has bred the use of widely distributed checklists—as opposed to individualized, and largely self-made checklists–as a key to managing lawyers. Of course the checklists are computerized, even as to creation and construction, and they are more and more used as a method of managing the lawyers working on standardized projects; this is done by more senior lawyers, project managers, and clients themselves, e.g., insurance claims examiners.  (They can even be obtained off computer sites, like forms, and this will be important for the  solo practitioners of the future.) This use of checklists, Susskind calls “systematization.” It’s like (or is a version of) a “procedure manual” (TL-26) or what is also called a “workflow system.”  If A (whether a computer or a person) makes a checklist for B and doesn’t teach B how to use it, the checklist is worth far less than if B has prepared his own.[5]

         Much of this work can be “packaged,” i.e., done on the internet, e.g., with in-house counsel or with certain kinds of executives. (TL 4-27). One can easily imagine computers sharing checklists so that clients could keep track of what the lawyers were doing according to the checklist every day. Welcome to the cloud; nothing cloudy here.

         “Standardization,” in Suskind’s sense has led to “systemization.”

         “Standardization” (TL 25) has also led to “packaging,” and it has given rise to “commoditization. I think the term “commodization must mean converting something into a commodity, or thinking of something as a commodity. It also seems to me that the term ”commodification” is just as good a word as “commodization.”  Now, commodities of a certain type, e.g., lima beans, are or are supposed to be pretty mu Gl ch alike.  I eat a lot of peanuts; they come in jars or cans; some of these groups are salted; others are not. I take “baby aspirin” every night as genuinely mature intelligent, and self-interested adult males are supposed to do. Some come from Bayer; some come from the “God-Know-Who” Company; some are flavored, some are not. All of these give you the idea of what a commodity is and how there can be minor variations amongst them. It gets harder when on be thinks about cars. In an important sense, they are standardized; they are all pretty much alike; and some of those ways are important, e.g., not of them is poisoned. 

         Most of us don’t want to admit that our Jaguars are commodities. And so forth.  Why? Because they are not consumed in mass and  masses do not consume them. But the point remains the same.  Susskind’s thesis is that the vast amount of legal work will become commoditized, i.e., recognized as what he thinks it already is. And of course, to a considerable degree he is right, although he uses stiff, rigid categories, phrases and words to describe the slope running down from the highly specialized to the much more mundane routine, e.g., the filling out of an administrative form.  In other words, Susskind believes that the world of the legal professional will become something like the world of the mass factory laborer, only in a nicer work facility and being paid more money.  

         (If the reader is wondering how to defined Susskind’s terms, “Relax.” Use them in a broad, undefined sense, and if you read that sort of thing, think how the term would be used in a popularized management manual. Use, embrace, and adjust to them you must, however, or you will end up as dispossessed and forgotten as coal miners or the recent past and Rust Belt former factory workers see themselves today. Feeling that the times have passed you by is an accursed state of mind. One thing for sure, however, he does not like the legal profession being a “closed” community. He thinks that the disruptive technological revolution will undermine the one-type-of-legal-services-producer that has structured the Anglo-American legal profession. According to him, the profession will become a patchwork of different specialities all highly regulated. See TL-5-6.)

         Moreover, Susskind sees the future of “BigWork” as involving “decomposed” work, by which he means that bigger jobs are systematically divided into parts and then divided up among different lawyers (or types of lawyers, semi-lawyers, or  quasi-lawyers, all reviewed by someone else, and recomposed by yet another lawyer.  Here is Susskind’s list of a decomposed set of tasks (TL 31, etc.—his boxes): 

LITIGATION

Document review

Legal research

Project management

Litigation support

(electronic disclosure)

Strategy

Tactics

Negotiation[6]

Advocacy

Consider, Susskind says, all the document review being done by cheap foreign 

lawyers in cheap foreign places, disbarred but rehabilitated former lawyer, all supervised and managed from a professional paralegal, say, from Houston.[7] In his imagination, Susskind pictures this organization as an orchestra. One wonders if this is the right image. One also wonders how the professional lives of coverage counsel fits into this. 
        

Now consider the same thing being done for transactions (TL 33): 

TRANSACTIONS, DECOMPOSING

Due diligence

Legal research

Transaction management

Template selection

Negotiation

[Unique/customized[8]] drafting

Document management

Legal advice

Risk assessment

And these various tasks can take place in all sorts of different venues or by means of quite different function, including, of course, “computerization (TL 34). (Susskind has a long list of venues and function in a “table,” but I am interested only in computerization, so the readers are spared another box. According to Susskind, computerization will be involved in standardization, packaging, and commoditization. How does the professional life of coverage counsel fit into all this?



         As noted several times, Susskind draws a distinction between two kinds of innovations. One of them is “sustaining,” as to the current business culture, and one of them is “disruptive.” He thinks that the innovations populating the current legal business culture are disruptive; here is his list (TL 40):

DISRUPTIVE LEGAL TECHNOLOGIES
Automated document assembly

Relentless connectivitry[9]

electronic legal marketplace

e-learning

Online legal guidance

Legal open-sourcing

closed legal communities

Workflow and project management

Embedded legal knowledge

Online dispute resolution

Intelligent legal search 

Big data

AI-based problem solving

         He also recognized that some “high ‘falutin’” activities of lawyers—for example, actually trying cases, negotiating enormous deals, drafting at least parts of very complex documents for individual transactions, and so forth, are unlikely to transported into new regimes where lawyer activities is computer regulated and highly repetitive. At the same time he suggest that so much work will be adapted to the new cyber world that there will be less than a lot left over for swash buckling (or exquisitely Ciceronian) trial rhetoric geniuses. Notice that the Susskind says there will be “some.” 

            However, insurance lawyers do not automatically fall inside the “some.”  There is a puzzle here. Most endorsements for most insurance policies do seem to be—or to have been–commoditized. But surely the writing of them was not. This is true even of form policies and form endorsements. Making recommendations to an insured—at least a large business insured—surely is not. Maybe that’s a hidden point in Susskind’s idea. Bespoken insurance legal services will be for the substantial (mostly company) interests only. The rest of the population is to get a commodity–advice and counsel included. 

 Given Susskind’s view of the disruptive impact of computerized innovation on the practice of law, one might expect that much coverage work will be broken down into standardized pieces which can be packaged and commoditized.  Most legal research for insurance coverage opinions has already been done in at least one different case.  Standardized paragraphs and topics can be stored in “coverage opinion archives” (electronic bins) with there being computerized indexes easily available to all relevant lawyers in a large firm, or set of non-conflicting large firms, or professional electronic archives available to all for a fee.  They may need to be adapted from state to state, to some degree, but often not, except for citation purposes. But a large firm, or group of firms from around the country (or from different countries) can assemble, get the cites updated. Others can pull together the facts as set forth in the claim files. The simpler the case, the easier all this is to do.  Even complex cases can be done partly in this manner. One can bet that financially disciplined insurance companies will be looking for ways to create
“Susskind County.” 

         In the area of insurance practice, most law firms will disappear. Most of the practice will be in hours in the offices of general counsel. There will, there, be electronic devices for “legal risk management” and for “knowledge management.” Most problems will be solved by AI-based methods. The concept of the law firm—as most of us know it–will be gone, except for a global elite, and they will be in large global law firms. 

         Susskind seems to know that there are many objections to law firms—especially large ones—based on their alleged impacts on the psychological well-being and emotional lives of young lawyers. Of course, this “truth,” to the extent that it is true, includes coverage lawyers. One has the impression from his book that Susskind believes that these problems will for all—Poof!—be made to disappear by the revolutionary technology of the new cyber age. Who else thinks so? For  a dissenting view, see Part II. 



[1] The actual title of the book is TOMORROW’S LAWYERS: AN INTRODUCTION YOUR FUTURE (Oxford U.P 2013). Among of his other accolades, in 2013, at least, Susskind was the President of the Society for Computers and Law. For those who have doubts about his views, keep in mind that a person’s having no doubt about a proposition he believes is not evidence that  true. Section V of  this paper might be regarded as a book report on those parts of TL which portray and predict the influence of IT on the legal profession.  (The page numbers of TL will be internal and will be noted only by the form “TL ___.) Another “doomsday” summary of some of his view were published recently in the HARVARD BUSINESS REVIEW. Richard & Daniel Susskind, “Technology Will Replace Many Doctors, Lawyers, and Other Professionals,” HARVARD BUSINESS REVIEW (October 11, 2016). It might be well to keep in mind that Richard has had a long career as a show business publicist and TV personality; his son Daniel is a Fellow in Economics at Balliol College, Oxford University. 

[2] Of course, at least some of the “this way” orders will have some alternatives built into them. 

[3] Who is the “whoever”? Boss? Supervisor? Master? Client? Client’s “emissary”? Industry “god”? Somebody or group of somebodies. 

[4] Special, high-end tailoring, at least for men’s clothing, is becoming more standardized while it remains tailoring preserves its high-endedness. This is done by a customer using his own smart phone as a way of doing the needed measuring, shipping the resulting specs off to somewhere (Paris? Singapore? Tomball?), and the new suit, or whatever, comes in the mail. The name of the tailor might as well be Amazon. Something is missing here. Who among us that has ever used the same tailor more than thrice without forming a real relationship with him? The same goes for high-end barbers as well, does it not?  Might not one think that what is good for the tailor-customer relationship (and the barber-buyer relationship) isn’t also applicable to the lawyer-client relationship? Susskind seems to say “No.”

[5] From this last remark, it should be clear that I have nothing against at least some kinds of  check lists but, in fact, value and embrace the idea of  them with enthusiasm, though I’m not sure what the role of a checklist is the creation of a sonnet. Of course, that last remark has almost nothing to do with an appellate brief or other lawyer work, even if it exemplifies a certain kind of artistry.    See Atul Gawande, THE CHECKLIST MANIFESTO: HOW TO GET THING RIGHT (2009)

[6] The Susskind includes mediations by implication. As a separate point, I must confess that I am not comfortable with Susskind’s beloved word “decompose.” For me, “decomposition” is what happens to a corpse over time, if it is not embalmed. When I try to think of “decompose” as a verb, I imagine taking pages of notes for a musical composition and shuffling them around. Thus would I decompose something that has been composed. Maybe the same idea could be made to work for poetry. Something like this is what I think Susskind actually had in mind. 

[7] Referring to  the use of non-lawyers Susskind called “de-lawyering.” (TL 33)

[8] Susskind’s actual word was “bespoke.”

[9] Given electronic mobile devices, etc., lawyers are almost always connected to their clients (or employees thereof) and to each relevant other. The idea of connectivity also suggests the idea I attribute to Susskind, namely, that of an orchestra.

*Michael Sean Quinn, Ph.D., J.D.1300 

West Lynn Suite 208

Austin, TX 78703 

512-656-0503
Fax: 512-344-9466
Email: mquinn@msqlaw.com 

Originally posted on 12/05/2016 @ 10:43 pm

Michael Sean Quinn, PhD, JD, CPCU, Etc

Michael Sean Quinn, PhD, JD, CPCU, Etc. (530)

One of Texas's leading insurance scholars, Michael Sean Quinn is a past chair of the Insurance Section of the State Bar of Texas and has a broad legal practice.

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