12-05-2025
Legal Transformation: Why The Stakes Have Increased Dramatically
Risk indicator dash board
The legal industry is in the throes of a 'gradually, then suddenly' transformation. The story has two central plot lines. The first involves the business of law and the second the profession. This article examines each thread separately, then explains why their convergence is the legal transformation story. The ramifications of its outcome will extend far beyond the legal profession and industry.
A Transforming Industry
Legal transformation is a business story that has unfolded gradually—until recently. Business is reimagining the legal function to meet enterprise and customer needs in the digital/AI-era. This entails the integration of legal into the wider enterprise transformation journey by leveraging its critical thinking, problem solving, data, and institutional/customer knowledge across the enterprise and customers. The process has taken root in the in-house setting but will soon extend across its supply chain. This is the transformation of legal delivery at scale (a/k/a 'the business of law').
The legal function is an enterprise strategic asset and a trusted advisor whose purview has become far broader than the narrow boundaries of its legacy role. Legal's value derives from various channels, including its intersection across multiple business units and its unique tripartite role as proactive enterprise defender, cross-functional value collaborator, and enterprise governance strategist, ethicist, and guardrail setter. The legal function carries out these duties internally within the business as well as externally with customers, regulators, and society at large.
Global instability, a convergence of macroeconomic forces, constant change, regulatory complexity, the speed of business, climate change, mass migration, AI governance, data, cybersecurity, and deepfake threats, supply chain disruptions, and qualified talent are among a growing list of new and existing enterprise risk factors. Legal's expanded strategic and operational roles navigating risk and seizing opportunity have contributed to the 'suddenness' of legal transformation. Complex times require creative, collaborative, multidisciplinary teams with technical and human skills and a unified purpose.
Astonishing advances in AI have further accelerated the pace and expanded the scope of legal paradigm change. AI's coming of age marks the beginning of the end for human hegemony of 'brain work,' research, critical thinking, and problem solving, among other cognitive skills. This will forever change work, the workforce, the workplace, and the human-machine relationship. So too will it fundamentally alter the role of professionals. AI will recast the delivery of legal services by exponentially increasing the speed, breadth, and output of 'legal' (and other professional) work. It will also fundamentally change delivery economics, alter the structure(s) of legacy providers, reconfigure linear career trajectories, and refashion the purpose and role of humans in the delivery of legal and other professional services.
The legal function will play an important role in AI governance, strategic implementation, guardrail setting, responsible use, and ethics. To do so, it must have a digital core. Tech advances alone will not transform the legal (or any) function. They must be accompanied by human adaptation, a holistic, scalable approach to problem solving, an agile workforce, and curious, creative, team- oriented, and cross-functional talent. AI, quantum computing, and other technological advances have garnered massive investment and captured headlines around the globe. Effective change management is less heralded but equally critical in maximizing technology ROI and creating a sustainable, competitive data-backed, AI-era enterprise.
Legal transformation has generally been associated with the business of delivering legal services, not the profession. That's because delivery is centered on the economic impact of law's transition from an artisanal, lawyer-centric, siloed guild to a scaled, data-backed, tech-enabled multidisciplinary, enterprise value driver. The business of law is about its bottom line, and that is the currency of our time.
A Splintered Profession; A Rule of Law Crisis
The legal profession's response to the multi-front assault on the rule of law and democracy is the other plot line of legal transformation. The purpose of lawyers qua professionals has been thrown into high relief as the profession is now in the crosshairs of the assault on governmental institutions, research institutions, and long-standing societal norms. While the rule of law has been eroding for some time in the US and across the globe, it is now a full-blown crisis. The US is a bellwether.
The legal profession has been put on trial in real-time, public view, and before the court of public opinion. It is playing defense, not offense. The attack on the profession has been on multiple fronts: judges, courts, lawyers, law firms, prosecutors, law students, professors, law schools, career Government attorneys and law enforcement officials. It has been institutional as well as personal. In the latter case, it has exposed individuals and their families not only to retaliatory lawsuits but also to verbal abuse and threats of violence. The legal process has been hijacked and used as a cudgel against those that have applied it for its intended purpose: to serve the body politic by advancing the rule of law.
The Executive Branch's divide and conquer campaign against lawyers and law firms has been extended beyond US borders. Executive Orders have been directed at foreign tribunals and individual lawyers representing clients whose positions the Executive Branch disfavors. See, EO 14203 'Imposing Sanctions on the International Criminal Court.' Executive overreach and disregard for the jurisdiction, independence, and Orders of courts is red meat for populist leaders and their followers. This has become a global phenomenon. The attacks on lawyers, legal institutions, the rule of law, and long-held social norms are right out of the populist playbook. The rule of law has been invoked and perverted in a concerted effort to undermine it. Shakespeare's Henry VI, Part 2 comes to mind: ''The first thing we do, let's kill all the lawyers.' That was written in 1591; it retains a contemporary relevance.
The legal profession and the wider industry have not kept pace with the speed of life, business, and information sharing. Law's language remains opaque, its institutions foreign and forbidding, and its cost an insurmountable barrier for most to engage counsel when it is desperately needed. It is ironic that lawyers are democracy's last line of defense, yet their languid response to socio-economic change and a rapidly shifting zeitgeist have contributed to the rise of populism, a democratic nemesis. Now, populist leaders are targeting lawyers.
Populist leaders have long conflated law with politics in an effort to destabilize the rule of law. Social media has weaponized this process. When, for example, populist leaders are brought to trial—whether in the US, France, Israel, Brazil, or elsewhere- the proceedings are often accompanied by a backlash against the legal system. Convictions of populist leaders and disqualification from seeking office no longer provide closure but, instead, often produce an increase in the defendants' poll numbers and campaign contributions. The defendants are viewed as victims and martyrs of a politicized judicial process, not as guilty individuals who received fair trials. This turns the rule of law on its head. It also frequently produces an uptick of threats, intimidation, and heightened social polarization. The court of public opinion, fueled by the global breadth and real-time reach of social media, is undermining the judicial process. The legal profession has failed to respond in a concerted, thoughtful, effective way to this problem.
A healthy legal system is one that is trusted by a substantial majority of the body politic. Political candidates and their parties in a healthy democracy, likewise, respect and honor the rule of law, even when judicial determinations go against them. Al Gore personified this in the aftermath of the 2000 US presidential election whose result was decided by a 5-4 Supreme Court decision rendered more than a month after the election. In conceding defeat and acknowledging the Court's ruling, Gore said he was doing so 'for the sake of our unity as a people and the strength of our democracy.' Those days are gone. The question is whether it is too late to turn things around.
The answer turns in no small measure on whether law is a business masquerading as a profession or a profession whose commitment to honor its Oath to uphold the Constitution and to defend the rule of law eclipses its (short-term) business interest.
The Business/Profession Question
The business/profession issue is neither new nor unique to law. A 1959 article in The New England Journal of Medicine provided this distinction: 'A profession is organized for service to humanity, whereas a business or trade is entered into for the sake of material profit.' Professions, to borrow from a famous Hebrew National hot dog slogan, 'answer to an even higher authority.' In the case of lawyers, that 'higher authority' is their compact to serve as officers of the court and to advance and protect the rule of law for society at large.
The business/profession question has been playing out in legal for decades. Lawyers have long used the cloak of professionalism to preserve self-regulation, thwart competition, and operate by their own rules. This has enhanced their business, but it has come at a cost to the rule of law. That debit is now coming due. The legal profession's focus on the business side of practice has contributed to the current toxic climate that is turning against it. Derek Bok, a lawyer and former Dean of Harvard Law School and President of Harvard University summed it up in a 1983 report to the Harvard Board of Overseers: 'There is far too much law for those who can afford it and far too little for those who cannot.'
Four decades on, Bok's socioeconomic legal divide has become a chasm. That is a reflection of the profession's values. 'Elite' has become synonymous with economic success, not fulfillment of professional purpose and advancement of the general welfare. Law's 'elite' are widely deemed to be equity partners in a cadre of the most profitable corporate firms that perform high-value work for powerful clients (see below). Elite also refers to CLO's and GC's of large corporate teams that frequently engage their law firm counterparts, especially on their most important matters. The most powerful in the private sector of the profession have long danced around the profession/business issue because they could.
What happens when the elite of the profession must choose between their professional and business interests? That time has come.
What's A Lawyer Now? A Reckoning With Profound Consequences
The legal profession is enmeshed in an existential battle to wrest the rule of law from rule by law. The urgency and stakes of this real-time Armageddon could not be higher for the profession, clients, society at large, US/global democracy, the US/global economy, and the post-World War II global order. Few foresaw the convergence of legal business transformation and the assault on the profession. It had long been presumed that the former would be supported by the safety net provided by the rule of law. That presumption has proved to be unfounded, if not naïve.
This is a moment of truth for the legal profession. It is confronting a formidable challenge to its independence, core purpose, resolve, ability and concerted willingness to defend the Constitution, rule of law, and democracy. The magnitude of the challenge presents an opportunity for lawyers to demonstrate their purpose and essential societal value at a time when so much rides on it. Will the profession unite and prevail?
The outcome will provide an answer to what a lawyer is—or is not—now. It will also determine whether legal transformation will be architected to support the rule of law or rule by law. Will the legal system leverage data, technology, and human resources to democratize legal access, promote free trade and provide safeguards that promote commerce as well as secure personal freedoms? Or will law be an enforcement tool of autocrats to advance their self-aggrandizement and suppress opposition?
If the legal profession loses this fight, it would result in the greatest legal transformation of all. Lawyers would be stripped of their independence, serve those in power rather than society at large, and function as bureaucrats, not strategists. But it is not just the legal profession that would be transformed.
The stakes to preserve the rule of law are far bigger than the future of the legal industry and the role of lawyers. The rule of law, healthy legal institutions, and free and fair elections are among the reasons why so many nations do so much business with the United States. That is now in jeopardy. The US bond market is a prime example. Tariffs, looming trade wars, the disruption of the post-World War II world economic and geopolitical Order, and the full-on assault on the rule of law by the current Administration have caused global investors to dump US bonds. This signals waning domestic and global confidence in the US and its economy.
The strength of the American economy is tied to the rule of law, checks and balances, and the orderly transfer of power. The interconnectivity of these societal threads—and the consequences of their unravelling—speak to the importance of preserving the rule of law. Business has a compelling interest in the outcome of the battle. It would be well-served not to remain on the sidelines, regardless of the blowback, This is a short-term battle with lasting consequences.
If the legal profession and industry of which it is a part fail to preserve the rule of law, the nation's business, economy, wealth, credit worthiness, credibility, and soft power would undergo a tectonic shift. The economy would be dealt a series of interconnected shocks-- the bond market would crater, inflation would be rampant, the stock market would tank, jobs would be lost, and the value of the dollar would plunge against foreign currencies.
Business would have a whole new constellation of risk factors to contend with. Consumers, already feeling the effects of an economic vise, would be further squeezed. The fraying social safety net provided by the government would be unlikely to help. The legal profession would be stripped of its power to help enforce commercial transactions and safeguard personal liberties. Perhaps only then would the public recognize why lawyers, for all their failings, have long served a critically important societal role.
Capitulation Is Not A Winning Strategy
A volley of Executive Orders (EO's) targeting several 'elite' corporate law firms has struck at the heart of the legal profession. It has also exposed a lack of consensus around what it means to be a practicing lawyer. The targeted firms were alleged to have 'weaponized' the legal system by representing clients at odds with the Administration. The firms' response to the EO's was as jolting as their issuance-or in some cases the mere threat. While a handful of firms elected to litigate, the majority quickly and quietly entered into multi-million dollar settlements.
Perkins Coie is one of a handful of firms contesting the EO targeting them. The New York Times reported not one of the AmLaw's top-10 law firms by revenue signed an amicus brief in support of the firm's resistance to the Executive Order. The silence of Big Law's 'elite' is deafening and speaks to the depth of the problem within the profession.
The capitulating firms' desire to 'protect' clients from the Executive's wrath, save their firms, and protect employee and partner jobs were among the settlement rationalizations. Little mention was made of the Oath all lawyers take to defend the Constitution and to uphold the rule of law. The business of law it would seem, is more important-at least among elite practitioners- than the profession. That is the wrong signal to send, especially from firms renowned for handling 'bet the company' litigation and high stakes commercial transactions. Vince Lombardi, the legendary football coach, famously said, 'When the going gets tough, the tough get going.' Big law is proving not to be so tough after all.
There has been some blowback from associates, a handful of partners, a smattering of corporate clients, the ABA, law school faculty, and the profession at large to the relenting firms. But 'the big capitulation' has dealt a blow to the profession and those that rely on it to uphold its purpose. It has also removed doubt that in the highest stakes matter of their careers, the bent-knee firm leaders settled by conveniently ignoring the principles upon which their profession is based. Appeasement is not a strategy when it involves forfeiture of purpose and principles.
Conclusion
Is it too late? It's not if the profession coalesces around its purpose, is guided by its core principles, and is prepared to face the consequences of a fight. This is not a matter of politics, punditry, or pedantry. It is about why we became lawyers and the social compact we made to serve clients that engage us and society at large. It is the most important challenge of our professional lifetimes. If lawyers fail to combat this existential threat, who will? And if not now, when?
Nietzsche observed, 'A crisis is an opportunity riding a dangerous wind.' The crisis is in plain view and the wind is ferocious. This is an opportunity for the legal profession to unify, marshal its considerable brain power and resources, and fearlessly respond to the enormity of the challenge and the stakes. By doing so, we might not only help save democracy but also remind ourselves and the world why law is a noble profession.
