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Leading Legal Innovation conference
USC Gould School of Law

Monday, January 5, 2009

Event for business and legal scholars explored reform of legal markets

—By Gilien Silsby

The Southern California Innovation Project organized a major conference recently on Leading Legal Innovation.

The event, which attracted legal and business scholars from around the country, was organized to generate an agenda for changing the way legal services are developed, priced and delivered to business clients in the increasingly competitive global environment.

“U.S. legal markets need to be reformed to better meet the needs of an innovation-driven economy,” said Gillian Hadfield, director of SCIP and a USC Law professor, who co-organized the conference with Prof. Stephen Burbank of University of Pennsylvania Law School.

“In the highly regulated environment that characterizes U.S. law markets—regulation controlled by the profession itself—we have seen corporate legal markets exhibit high and increasing demand, generated in part by increasingly complex business relationships and regulatory regimes.”

To date, this increased need for sophisticated legal inputs has yielded primarily increased legal fees. Overall legal complexity continues to grow and finds expression in more complex legal rules, litigation, and regulatory regimes.

“We believe it is critical to put the need for reform of legal markets on the national policy agenda if U.S. businesses are to have the legal infrastructure needed to support continued success in a rapidly changing world,” Hadfield said.

Leading Legal Innovation was held in San Diego and brought together leading members of the legal profession, business, the academy and the policy community. Participants included practitioners from Morgan Lewis, Orrick, Wilmer Hale, Drinker Biddle and Reath and Shearman & Sterling, law firm management consultants from Jomati and Hildebrandt, general counsel from large US firms including Google, Shell Oil, Mozilla, Cisco, Millennium Partners and ACE Insurance, academics from Harvard, Penn, Columbia, Indiana, Emory, Northwestern, New York, Tennessee and USC, former state Supreme Court Justice Rebecca Kourlis and Congressman Jim Cooper. In addition, several innovative legal providers participated, including Fred Bartlit, Scott Gilbert, Alan Wernick, Axiom, Practical Law Company United States, Virtual Law Partners and Legal OnRamp, economist Preston McAfee of Caltech and Yahoo Research, former chair of the Association of Corporate Counsel, Michael Roster and Robert Mundheim, currently chair of the ABA’s Standing Committee on Ethics and Professional Responsibility.

Sessions included Current Regulation, which evaluated the state of current regulation of legal markets in the U.S. and how well it serves the needs of the large enterprises that consume the bulk of legal services; and Regulatory Options, which looked at how current U.S. legal markets are largely regulated on a state-by-state basis by the judiciary and, through delegation, state bar associations and the ABA.

Other panel sessions included Possibilities of the Status Quo, in which participants were asked to imagine what is possible without meaningful regulatory reform of U.S. corporate legal markets; and Strategies for Achieving Reform, which considered strategies appropriate to effect reform.

“This was a very lively and open set of discussions in which most people agreed to leave their priors at the door and we were able to generate some fresh thinking about where legal markets and institutions need to go,” Hadfield said. “There was a widespread sentiment that much change can be generated now, with little change in regulatory structures, with revitalized law firm structures and more strategic buyer behavior on the part of large in-house law departments and governments. But we also saw significant support for the idea that legal education needs to fundamentally adjust to meet the needs of new markets and in part this requires change in the ABA control over accreditation, that the cost of litigation needs to be brought down by procedural reform and that generating significant new investment in new forms of legal service providers probably needs a relaxation in the current restrictions on the financing and ownership of legal providers and relaxation of licensing barriers to non-lawyer providers.”

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