**4. The New Challenges Posed by the Rise of Digital Capitalism and the Gig Economy**

From the discussion conducted above, it emerges that the rise and fall of large law firms is inherently linked to the development of both the contemporary nation states and financial capitalism. These links are the most evident when analyzing the rise of the Wall Street law firms, which operated in symbiosis with the financial drift of capitalism. The model, with some twists and turns, was then exported to other geographical locations, contributing to a global marketization and commodification of the practice of the law. If anything, the developments described above have been accentuated by the recent entrance of new technologies in the legal field and by the consequent adoption by lawyers of the dynamics of digital capitalism and the gig-economy.

Broadly defined, digital capitalism is the latest transformation of the capitalist system of production in which digital technologies constitute "the central production and control apparatus of an increasingly supranational market system."<sup>68</sup> In other words, capitalism becomes digital when the production process of certain commodities is performed by and through privately owned digital technologies.<sup>69</sup> In this light, digital capitalism constitutes the collection of processes through which digital technology mediates the structural tendencies of capitalism. In this, I follow the dialectic approach of Johnathan Pace in defining how digital processes actualize capitalism. Firstly, digital capitalism is a property type, as digital networks are increasingly becoming an important part of capital assets worldwide (i.e., meta-data collected though internet platform; digital currencies such as Bitcoin, and so on).<sup>70</sup> Secondly, digital capitalism provides for the opening and creation of new market types, as digital technologies have become circulation infrastructure for the exchange of goods, service, and money (i.e., online exchange platforms such as Amazon and Alibaba). Thirdly, digital capitalism entails new work types, as digital technologies serve as labor tools and infrastructure (i.e., smart-working, work oriented around information technology, and/or the possibility for storing records and worker performance online). Fourthly, digital capitalism plays an increasingly central role in certain production styles, as digital media are today both productive technologies and methods. Fifthly, and finally, digital capitalism produces new managerial styles, as digital technologies are often developed as managerial tool within firms.

All of the above has important consequences for the legal field. For the purpose of this paper, I emphasize two aspects of digital capitalism that are particularly relevant for large law firms. To begin with, the rise of digital capitalism allows for a different organization of labor (through, for instance, remote access), which allows for transnational production chains, also known as post-Fordism.<sup>71</sup> Perhaps the most significant recent development in this regard, especially in the period that followed

<sup>67</sup> (Dezalay and Garth 2011, p. 40).

<sup>68</sup> (Schiller 1999, p. XIV). The other historical manifestations of capitalism are: agricultural capitalism (Aston and Philpin 1985), merchant capitalism (Braudel 1982), industrial capitalism (Hobsbawm 1999), and financial capitalism (Lapavitsas 2014). The author is aware that there are numerous, and at times conflicting, theories of capitalism. These include, among others, classical political economists (Smith, Ricardo, Mills, Marshall), 20th-century economists (Keynes, von Mises, Friedman, Stigler, Hayek), Marxist economists (Mandel, Kalecki, Baran, Sweezy), and heterodox economic thinkers (Schumpeter, Polanyi, Wallerstein).

<sup>69</sup> (Pace 2018).

<sup>70</sup> (Pace 2018, p. 263).

<sup>71</sup> (Pace 2018, p. 255) See also, (Fuchs 2013).

the 2008 financial crisis, is the coupling of digital capitalism with the rise of the so-called "gig economy". The latter is part of a shifting cultural and business environment, in which traditional employment relationships are fragmented into "short term, intermittent work for multiple engagers ("gigs")."<sup>72</sup> The relationship between digital capitalism and the gig economy is that digital platforms often play a central role in allowing individuals to organize themselves as independent contractors, and work remotely as freelancers or through temporary jobs and projects, while employers select the individuals that best fit their need from a larger pool than that available in a given area. While this phenomenon was often considered to be almost entirely the province of low-skilled and low-paid workers, other professionals have increasingly organized their work along these lines.<sup>73</sup> In relation to the legal field, the coupling of digital capitalism and gig economy has allowed for the rise of a number of legal platforms connecting lawyers and clients online. These platforms are, not only challenging lawyers' monopoly over legal practice of the law, but also constituting new players that legal actors must interact with. Well-known examples of such platforms are Legal Zoom<sup>74</sup> and Rocket Lawyer<sup>75</sup> in the Anglo-American world. In Denmark, the legal-tech start-up Legal Hero fits within this model.<sup>76</sup> Related to this is also the notion of virtual law offices, which are law firms delivering legal services exclusively online, such as DirectLaw<sup>77</sup> and Synchlaw.<sup>78</sup>

The second relevant consequence of the rise of digital capitalism for the legal field is linked with the property regime and a management style that characterizes the former. In terms of property regime, digital capitalism is characterized by private ownership of digital networks, while for management styles it entails the employment of digital networks for expanding intra-firm activities.<sup>79</sup> Applied to the legal field, these dynamics signify the introduction of private owned, market oriented, companies in the legal field, and, thus, of profit-driven processes of outsourcing, automatization, dispersion, and commodification in the practice of law.<sup>80</sup> These processes take various forms, such as the above noted creation of a platform of lawyers in different geographical locations,<sup>81</sup> computer programs able to assist and even substitute lawyers in their work,<sup>82</sup> and the deployment of artificial intelligence, machine learning, natural language processing, and big data to perform legal tasks.<sup>83</sup> Although the technology behind many of the presently available tools is still underdeveloped, this will inevitably cause important changes in the structure of the legal profession. First, as software and programs refine their technology, the more routinized forms of legal practice are increasingly automatized. Thus, those today performing repetitive tasks in the legal world, such as journeymen lawyers, and paralegals are likely to face large challenges. Others sectors of the profession, however, are expected to gain from these innovations. Among some top-tier law firms and elite lawyers, new technologies are increasing their potential market share, allowing them to reach far more clients with a smaller work force. The essential service they provide in terms of advice and argumentation on behalf of clients based on high-level legal understanding is, in fact, not easily replaced. Finally, new technologies are challenging the traditional control (and monopoly) of jurists on the production of law in the legal field. In particular, as the production and application of law becomes increasingly intertwined with digital

<sup>72</sup> (Adams et al. 2018, p. 475).

<sup>73</sup> (Thornton 2019).

<sup>74</sup> https://www.legalzoom.com/.

<sup>75</sup> https://www.rocketlawyer.com/.

<sup>76</sup> https://legalhero.dk/.

<sup>77</sup> https://www.directlaw.com/.

<sup>78</sup> https://synchlaw.se/da/.

<sup>79</sup> (Schiller 1999).

<sup>80</sup> These are often triggered by an increased push from clients to lower the costs of legal services (Bruck and Canter 2008). In this work, the authors listed the escalating billable hours requirements, a lack of diversity, and high associate attrition rates as the main issues of criticism raised by clients.

<sup>81</sup> (Noronha et al. 2016; Ribstein 2012).

<sup>82</sup> (Granat and Lauritsen 2004).

<sup>83</sup> (Ashley 2017).

media, privately owned non-legal companies are making their way into the market of legal service providers. This may hold significant consequences for the legal field's own socio-political dynamics and power relations, especially in terms of cultural, organizational, and societal implications for the practice of the law and the work environment.<sup>84</sup>

At the moment of writing, three categories of legal tech start-ups can be distinguished. The first category includes those companies that offer a number of online legal services, while the second involves online "matching" platforms that connect lawyers with clients. Examples of these two kinds of new technology based companies are provided above in this section. In general terms, these platforms basically replicate the business model of companies such as Uber and Airbnb. They provide lawyers with online visibility and access to clients that they would not have been able to reach otherwise. Like Uber and Airbnb, they also allow the clients to share their views on the lawyers and their performance. The third category, which is arguably the more disruptive, entails start-ups that use AI tools to perform time consuming and expensive legal research activities such as reviewing, understanding, evaluating, and reapplying contracts. In relation to this, we can differentiate among three kinds of technologies: (I) those that store and distribute knowledge; (II) those that extend the human mind; and (III) those that perform autonomous work.<sup>85</sup> Tools that store and distribute knowledge are the so-called Document Information Systems and Work Flow Management Systems. These databases either locate documents within an organization or support processes within an organization or administers deadlines.<sup>86</sup> For instance, *CaseShare*<sup>87</sup> and *LextraNet*<sup>88</sup> offer online repositories of pleadings, decisions, exhibits, transcripts, and other materials in pending cases. *Intelligent Legal Searches* instead are systems that review and categorize large bodies of documents, thereby allowing lawyers to retrieve information in a very efficient way. This technology has implications for legal practice as it is claimed to clearly outperform paralegals and junior lawyers.<sup>89</sup> For instance, the online platform *Justis* offers legal analytical services, such as identifying leading authorities, discovering relationships between cases, searching between more than a hundred legal databases, exploring and categorizing precedents and citations, just to name a few.<sup>90</sup> By drawing on large extensive online databases of judicial decisions, this technology helps lawyers to make informed judgements about risks, costs, and litigation strategies in their cases.<sup>91</sup> Finally, among the tools that potentially can perform tasks autonomously we have *IBM's Watson*; a system able to answer (legal and other) questions. A similar technology is developed by the Toronto-based Blue J Legal, a start-up developing an AI-powered legal prediction engine with an initial focus on tax law,<sup>92</sup> and by Luminance, which is capable of rapidly analyzing and forming an understanding of documents, combining a number of disciplines within the field of machine learning, natural language processing, and pattern recognition.<sup>93</sup>

In relation to this, the digitalization of the legal field is accelerating already on-going processes of change with regard to the legal profession. This includes the above noted economization and commodification of the practice of law, whereby lawyers are decreasingly disinterested brokers in society and defenders of the public good, but increasingly service firms at the cutting edge of the capitalist economy.<sup>94</sup> This has also resulted in an important shift in the power dynamics at the top

<sup>90</sup> https://www.justis.com.

<sup>92</sup> https://www.bluejlegal.com/.

<sup>84</sup> Similar to what is generally claimed in, (Boltanski and Chiapello 1999; Sennett 2006).

<sup>85</sup> (Lauritsen 2006).

<sup>86</sup> (Lodder 2006, p. 5).

<sup>87</sup> www.caseshare.com.

<sup>88</sup> www.lextranet.com.

<sup>89</sup> (Susskind 2013).

<sup>91</sup> (Gerami 2017).

<sup>93</sup> https://www.luminance.com/.

<sup>94</sup> See, (Caserta and Madsen 2019) It must be mentioned that the entrance of economic and commercial rationalities in the practice of the law has also important positive aspects. For instance, as argued by Bruck and Canter: "If mobilized properly, the consumers of corporate legal services can use their new market power to address some of the most critical problems facing

of elite law practice, with clients and other legal service providers placing a lot of pressure on large firms to modify their way of providing legal services. Hence, the developments discussed thus farpose important challenges to the present organizational structure of the large law firms. In particular, they put a particular strain on the core dynamic of the tournament of lawyers, most notably on the implicit social and professional contract between the partners and the, now varied categories, of junior lawyers in such firms. While the tournament of lawyers was already put into discussion by the increased deployment by large firms of staff attorneys, contract hires, and foreign lawyers that occurred in the last decades,<sup>95</sup> this process has only been reinforced by the development of legal software, which can perform independent legal tasks, such as writing of standard contract, discovery of documents, prediction of outcomes of future cases, and similar. This, in turn, will alter the dynamics of competition which today allow junior lawyers to climb up the ladder to become partners. For this reason, it is crucial that large law firms must rethink their organizational structure in order to face these challenges. It is to this topic that the paper now turns.
