Quick Link—E-Discovery Software and the Luddite Fallacy

The Jobless Juris Doctor and EduBubble point us to a NYT article by John Markoff titled, “Armies of Expensive Lawyers, Replaced by Cheaper Software.”

Mike Lynch, the founder of Autonomy [a British e-discovery company], is convinced that “legal is a sector that will likely employ fewer, not more, people in the U.S. in the future.” He estimated that the shift from manual document discovery to e-discovery would lead to a manpower reduction in which one lawyer would suffice for work that once required 500 and that the newest generation of software, which can detect duplicates and find clusters of important documents on a particular topic, could cut the head count by another 50 percent.

The computers seem to be good at their new jobs. Mr. Herr, the former chemical company lawyer, used e-discovery software to reanalyze work his company’s lawyers did in the 1980s and ’90s. His human colleagues had been only 60 percent accurate, he found.

My opinion? This is good news, except for most law students and underemployed and at-risk attorneys. Corporations save money in massive litigation costs, meaning consumers and oftentimes the government will save money too.

Until the 1970s, there were about two million bank tellers in the U.S. Then ATMs came and the bank tellers started losing their jobs. If you look around though, you’ll find that there isn’t a persistent group of unemployed bank tellers—they found other jobs. This is an example of the Luddite fallacy: labor-saving technologies reduce the need for labor, but the laborers aren’t permanently unemployed. However, they may need extensive retraining for new jobs.

Here’s the rub: America didn’t have hundreds of bank teller schools training tens of thousands of new bank tellers each year after the advent of ATMs. The legal profession needs to get a hold on this reality instead of claiming that lawyer unemployment is merely the depression or endorsing recommendations from law schools that they mentor the next generation of lawyers for jobs they’ll never be needed for. The bar will also have to make peace with the throngs of juris doctor-holders who won’t be able to enter or reenter the profession.

Here’s the other rub: Productivity improvements aren’t distributed equally. Just because a technology saves labor doesn’t mean its benefits are shared equally between the laborer and management. I fear we’re rapidly approaching an age when the economy stratifies into three tiers: a majority of salespeople who aren’t paid enough to purchase their own wares, highly compensated managers, and shareholders.

2 comments

  1. The bank teller analogy is one of many that should be floating around the legal sector right now.

    It shows all the more need for urgent bankruptcy reform. Obviously, the parties to these student loan agreements entered into a contract on mutual material mistakes. To put the loss resulting from that mistake upon individuals as a non-dischargable debt strikes me as an inefficient and unjust result. Instead of putting the loss on the banks or spreading the loss to the public at large (bankruptcy), we basically are prohibiting a 10-15k bright, driven people every year from buying a house, ever starting a business, etc., all because two parties were duped into thinking the law was a long-term viable option for 2-3 times the students it actually is.

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