The market doesn’t care

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Two of the smartest people writing on the web these days are Seth Godin and Scott Karp. They have an important message that everybody in the legal services marketplace, especially lawyers, needs to hear.

First, this is what Seth had to say in the course of a short but eye-opening interview about the book publishing industry, which is staring at hard times because of technology-driven upheaval:

First, the market and the internet don’t care if you make money. That’s important to say. You have no right to make money from every development in media, and the humility that comes from approaching the market that way matters. It’s not “how can the market make me money” it’s “how can I do things for this market.” …

The market doesn’t care a whit about maintaining your industry. The lesson from Napster and iTunes is that there’s even MORE music than there was before. What got hurt was Tower and the guys in the suits and the unlimited budgets for groupies and drugs. The music will keep coming. Same thing is true with books. So you can decide to hassle your readers (oh, I mean your customers) and you can decide that a book on a Kindle SHOULD cost $15 because it replaces a $15 book, and if you do, we (the readers) will just walk away.

Scott picks up this theme in a post about the newspaper industry, which is already deeply mired in Internet-induced hard times and has no clear way out:

[T]he web and the market don’t care. The web is the most disruptive force in the history of media, by many orders of magnitude, destroying every assumption on which traditional media businesses are based.

But the market should care, you say. What would happen if we didn’t have the newspapers playing their Fourth Estate watchdog role? Here’s the bitter truth — the feared loss of civic value is not the basis for a BUSINESS.

The problem with the newspaper industry, as with the music industry before it, is the sense of ENTITLEMENT. What we do is valuable. Therefore we have the right to make money. Nobody has the right to a business model. Ask not what the market can do for you, but what you can do for the market. …

I’ll repeat Seth: The lesson from Napster and iTunes is that there’s even MORE music than there was before. We’ve got highly entrepreneurial, creative, and driven people … working hard outside of newspaper company walls to invent new models for journalism. Journalism will find a way. Even if the industries that once supported it do not.

You can probably guess where I’m going with this: the legal services marketplace doesn’t care if lawyers make money. The irreversible changes that our industry is going through, the steady advancement of globalization and technology, the growing legions of competing products and producers — the earning expectations of lawyers and the atrophied business models of law firms mean nothing to them. What lawyers want is about as relevant to these forces as the farmer’s crop is to the tornado bearing down on him.

Let me rephrase some of what Seth and Scott have said specifically in the context of lawyers:

First, clients don’t care if you make money. That’s important to say. You have no right to make money from every problem or opportunity clients face, and the humility that comes from approaching clients that way matters. It’s not “how can the client make me money,” it’s “how can I do things for this client.”

The lesson from offshored lawyers and document management companies is that there are even MORE legal service providers than there were before. What will get hurt is law firms and the guys in the suits and the unlimited budgets for entertaining. The legal services will keep coming.

The web is the most disruptive force in the history of law, by many orders of magnitude, destroying every assumption on which traditional legal businesses are based. We’ve got highly entrepreneurial, creative, and driven people … working hard outside of the profession’s walls to invent new models for legal service delivery.

But the client should care, you say. What would happen if we didn’t have lawyers playing their role to uphold standards and protect the rule of law? Here’s the bitter truth — the feared loss of civic value is not the basis for a BUSINESS.

The problem with the legal industry, as with the music and newspaper industries before it, is the sense of ENTITLEMENT.

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4 Responses to “The market doesn’t care”

  1. Stephen Tiano

    Although my work is book design and layout, my job is court clerk. In 25 years there, I have seen the glut in attorneys cut into the livelihood each new wave of lawyers earned. Indeed, back when I started in the court system in New York in 1983, I was intrigued by the notion of practicing law, as there was a certain practical experience I had that it appeared new attorneys didn’t possess as they began to practice. This led me to start law school at night in 1985.

    I very quickly left, when I realized that the kind of life I needed to lead for the three years it would take to complete law school at night, the time I could expect to put in when starting out, and the employment and income picture that was beginning to frame up before my eyes, I would be happier in civil service. In short, the juice wasn’t worth the squeeze.

    I’m sure there are still attorneys doing very, very nicely, but it’s no longer a license to print money. Nor do I now see as many attorneys who express happiness at practicing law as I did in 1983.

  2. Daniel

    While I understand the philosophy of the argument, do you have specific examples you can point to?

  3. Jordan Furlong

    Daniel, thanks for your comment and question. The quickest way I can respond is with an excerpt from a comment I made at Scott Greenfield’s blog on much the same topic:

    I do think the traditional lawyer and law firm business model has fundamental flaws that technology will help expose. It’s not that technology can replace a lawyer or turn a client into a de facto lawyer — the lesson of the self-educated and self-represented client invariably is that this law stuff really is hard, and you really do need someone to help you navigate it. But technology and the Web can create, or facilitate access to, non-lawyer competitors that can do a lot of what lawyers now do more efficiently and much more cheaply.

    We’ve already seen basic technology like do-it-yourself will kits and online divorce services take chunks out of lawyers’ markets. Are these services as good as what lawyers do? Absolutely not. But a lot of clients, who don’t want or can’t afford to pay what lawyers charge, figure they can live with that. And there’s no reason to think these services will sit still and never get better than they are now. There are numerous things for which you absolutely need a lawyer’s expertise — but not everything lawyers sell falls into that category, and technology is helping make rapid inroads into this non-exclusive territory.

    Then you look at client work outsourced to lawyers in India and other common-law countries with English-speaking lawyers, made possible by the Web. Not all work can be offshored, and certainly none of the demanding, high-end tasks (yet) — but most law firm business models are based on charging for both the high-end and the low-end stuff. Offshore lawyers don’t need to take most of or the best of law firms’ work. They just need to take enough of the due-diligence document-review type of work for which overqualified associates now churn out scads of billable hours. And it’s not just lawyers in India (who are now tackling and getting better at the mid-level tasks) — US companies like Novus Law will happily do the same with algorithms and automation.

    I do think that a client is almost always better off with a lawyer than with a facsimile of one. But lawyers have never bothered to make that case to the market, relying instead on the exclusivity that comes from self-regulation and UPL rules and building business models around the unspoken presumption that clients need us more than we need them. Technology is one of the forces changing that, and I think responding to this development is going to be a major challenge for the profession.

  4. Kim

    So true. The sense of entitlement in the legal profession, as well as others, such as the health care industry, is blinding. In fact, it’s so blinding that the higher “entitled” persons don’t even see how their continued sense of entitlement at a certain level squeezes blood from the ones “beneath” them.

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