The Coronavirus Recession, Tech, and the Market for Legal Services

Post-2008, it quickly became conventional wisdom that technological innovation, including artificial intelligence, was going to transform both the practice of law and legal job market. The promised changes didn’t materialize. Will they now, amid twin imperatives to cut costs and avoid physical contact, and with tech more advanced?

The specific claim was that the 2008 recession strengthened the bargaining power of clients, who were long unhappy with footing the bill for training junior lawyers, at a time when innovation offered a plausible alternative: substitution of technology for human labor.

Tech tools have long assisted law practice. But tech was now said to be “transformational” because it would substitute for, not merely complement, law jobs. The government labor analysts dismissed this, but the nature of the claim made it just the kind of thing they’d miss.

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Is Online Education Likely to Prove a Complement or Substitute for In-Person?

With educational programs from K-12 to graduate school nationwide going online nearly instantly in the midst of a devastating pandemic, a vigorous debate has begun over whether, post-COVID-19, education will go back to being an in-person activity or will remain online, especially at the postgraduate level. My focus here will be on the latter, in particular law schools.

Prof. Josh Blackman writes, “This is the new normal. We are not going back.” Prof. Howard Wasserman believes students hate it and is in general more bearish on total transformation. My views here are very much subject to revision—events are moving fast, and more evidence will become available—but for the time being what I hope to contribute to the discussion is a framing device: the economic distinction between complements and substitutes. Coke and Pepsi are substitutes, keyboards and mice are complements, and bicycles and buses (and bourbon and soda) can be either complements or substitutes, depending on circumstances. We do ourselves a disservice when we assume online teaching and conferences are in competition with their live counterparts—in other words, that they are only, or mostly, substitutes.

Most innovations are complements, not substitutes. Online classes and conferences are, right now by necessity, substitutes for their traditional live counterparts. The extent to which they are perfect substitutes is highly contingent on other factors, on both the creator and consumer side as well as external factors. At some point, the necessity will end (we hope). I am skeptical online will end up being deemed close to the perfect end of the spectrum, but of course that conclusion is debatable.

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