Hot! The next job bubble to burst may be yours, professionals

TheGlobeandMail.com – news/opinions/opinion
Published Saturday, Mar. 12, 2011.   Margaret Wente

A university professor and I were sitting around the other day, pondering the challenges of our professions. He was wondering whether he should ban laptops in class – because most students use their laptops for everything but taking notes. I was wondering whether I should tweet and Facebook so as not to be rendered hopelessly obsolete. We’re both relieved to be at the far end of our careers. Both higher education and the media are facing profound and wrenching transitions. As our successors struggle with less job security and tougher working conditions, we’ll be collecting our guaranteed pensions (something they’ll never get). We’re grateful to have had the best of it.

Not so long ago, everyone believed knowledge workers were generally sheltered from the more dramatic upheavals of the economy. In the past few decades, as middle-class incomes stagnated and good blue-collar jobs disappeared, the professional class did extraordinarily well. Lawyers, accountants, tenured university professors, architects and even the ink-stained wretches of the press have had pretty good lives.

But now, global competition, relentless cost pressures and technological change are hitting the professional class, too. Few will be left unscathed.

Remember when outsourcing meant call centres in Mumbai? Now it means lawyers in Mumbai. Last November, Thomson Reuters, one of the biggest information companies in the world, bought Pangea3, a legal-process outsourcing firm with most of its lawyers in India. These lawyers do the grunt work traditionally assigned to junior lawyers in North America – document review, due diligence and contract management. Prestigious North American law firms charge $300 an hour for this kind of work. Lawyers in India charge $30 an hour. These services have been slow to catch on. But now the toothpaste is out of the tube, and revenue at India’s legal outsourcing firms is soaring.

That’s the outsourcing piece. Here’s the technology piece. Thanks to advances in artificial intelligence, armies of expensive lawyers hired to analyze complex documents are being replaced by software. Legal software has become so sophisticated that it can search documents for concepts as well as specific keywords, and can even detect patterns of communication that point to white-collar crime. Who needs lawyers when your software can whip through millions of pages of paper in a couple of days, and never get sleepy?

Because of the recession, companies have slashed their legal costs. Young lawyers today are far less likely to make partner, and the market for new junior lawyers has tanked. It may never recover. Debt-burdened law students are rightly worried they may never get a decent return on their investment.

Thankfully, computers can’t write opinion columns yet. But they can do far more useful things. Last month, I watched Watson run rings around the human contestants on Jeopardy. Watson isn’t just a stunt. IBM is now collaborating with Columbia University and the University of Maryland to create a Watson-like resource that will summarize a patient’s medical records and help with diagnoses. Doctors are notoriously resistant to the idea that anyone else can do their jobs as well as they can. But do you really need a doctor to renew your Lipitor or tell you that you have the flu? As health-care costs rocket to the moon, family doctors could be replaced by lower-cost physicians’ assistants, drawing on the matchless expertise of Dr. Watson.

As skills once considered exclusively human are offered by machines, the potential for widespread job dislocation is immense. Remember how fast ATMs replaced bank tellers? Meantime, smart and well-trained people around the world are moving up the job chain. In Sri Lanka, best known for its bloody civil war, accountants are doing financial work for some of the world’s biggest companies. And it’s not just payroll and bookkeeping – they’re doing things such as derivatives pricing and risk management for hedge funds. English is widespread, and the literacy rate is more than 90 per cent. The average annual wage for a Sri Lankan accountant is $5,900.

The “creative” industries are vulnerable, too. Canada is tops at computer animation. So is Singapore. Five years ago, George Lucas, the genius behind Star Wars, set up an operation there, and now they’re cranking out top-quality children’s programming for the U.S. market. Then there’s my husband, a highly creative (if I do say so myself) television director. When he began his career in the 1970s, he made impressive dough. That was when we only had three channels. Now we have 300, and they’re all full of dirt-cheap reality-TV programming. Unlike many of his contemporaries, he’s still working. He works twice as hard for half the money. TV production – once glamorous and highly paid – has become a sweatshop for knowledge workers.

As for my friend the university professor, he’s certain that the good times of tenure, moderate teaching loads and sabbaticals are gone. The current university model is financially unsustainable, and the students want more value for their time and money. The professors’ unions have made reform nearly impossible, and professors still deliver services much as they did in the Middle Ages. New technologies, new demands and worsening cost pressures will shake these places to the core.

In the long run, none of this is bad. Who misses lining up for bank tellers? But if your kid thinks a law degree will make her rich, you might encourage her to think again.

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