Lawyers and the red balloon

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Like many parents of small children, I’ve gotten to know Thomas The Tank Engine, and the peculiar universe he inhabits, far too well. As an example, I’ve now read the story James and the Red Balloon so often that I’ve begun to draw lessons for the legal profession from it.

To summarize: among the trains that work the Sodor Island Railway is James, a generally decent but often fussy and sometimes belligerent engine. On this occasion, James is unhappy to learn that a new mode of transportation has come to the island: a big red hot-air balloon. While the other engines admire the new arrival, James is peeved. “Taking vacationers around the island is our job,” he complains. “What if the balloon takes our passengers away? What will happen to us then?” By the end of the (admittedly brief) story, James has brought his grievances to rotund railway boss Sir Topham Hatt:

“But now the passengers will ride in the hot-air balloon.”

Sir Topham Hatt laughed.

“You’re right, James,” he said. “But they will need a ride home — in a train!”

James was delighted.

Sir Topham Hatt was right. The engines were busier than ever taking vacationers to and from the airfield.

On Sodor, as the Thomas stories bear out, change is rarely welcomed — but once everyone understands the situation better, change is accommodated and in the end, usually turns out to provide a net benefit. This is a message aimed at children but that resonates in the grown-up world, where we all tend to resist change despite the fact that eventually, it usually makes things better for everyone.

Few grown-ups resist change as staunchly and successfully as lawyers, of course — we’ve always shot down red balloons as soon as they appear in our sky. That doesn’t just apply to new technology, where we were among the last professionals to adopt email and where many of us still insist that Facebook is just a fad about which 500 million people are sadly misguided. And it doesn’t just apply to new ways of doing business, where we still reflexively feel that selling our work in tenths of an hour is natural and sensible or that 1,000 lawyers in 20 law offices worldwide can call themselves “partners” with a straight face. It applies above all to our approach to the legal marketplace over which we maintain, in most jurisdictions, strict regulatory control.

Lawyers, as a matter of course, restrict the supply of legal services and enforce Unauthorized Practice of Law provisions. We rail against title insurers and do-it-yourself will kits and independent paralegals and downloadable contracts and legal process outsourcers and a host of other low-cost competitors. We say (and we often believe) that we do this to protect the interests of clients and the public — but outside the soundproof walls of the profession, we come across more as protectionists than as guardians with a selfless concern for the greater good. We come across as hostile to change simply because it’s different and threatening.

My point is not that all these new providers and approaches are inherently trustworthy and high-quality. My point is that we won’t so much as let them make their case — even if, over time, they could introduce changes and innovations that make the pie bigger and better for everyone. Take, for example, LegalZoom. Richard Granat at the E-lawyering Blog gives us one of the most arresting titles in recent law blog history: Will LegalZoom become the largest law firm in the U.S.?

LegalZoom has been beta-testing a concept which links its marketing capabilities to a network of law firms that offer legal services under the LegalZoom brand. With some state bar associations accusing LegalZoom of  the unauthorized practice of law, it might make sense for the company to seek deeper alliances with networks of attorneys who are able to offer a full and ethically compliant legal service. Solos and small law firms, leveraging off the visibility and prominence of the LegalZoom brand, could reduce their marketing costs and enable these firms to better capture consumers who are part of the “latent legal market”  on the Internet.

Richard goes on to list the challenges that this concept likely would encounter, and suggests a “safe harbour” provision that would allow experiments like this to operate on a pilot basis in a specific jurisdiction to test their application. Another approach might be to simply launch the service, await the inevitable regulatory challenge, and let the courts decide whether the legal profession’s anti-competitive rules really serve the public interest. But for me, the lesson here is that LegalZoom, a company regarded with contempt by many lawyers, could end up using its considerable brand power to work with law firms, reduce their marketing expenditure and increase their business (not to mention, as Scott Greenfield points out, doing something to improve access to justice). That looks to me an awful lot like a red balloon bringing more passengers to the railway.

Smart companies in mature industries encourage red balloons (new competition and innovative technology) because they see them as a way to enlarge the market, reach more customers and increase everyone’s bottom line. The people at Amazon could foresee the day when Kindle users began swapping their books much like music listeners once traded tracks on Napster. Rather than fighting the trend, they’re now leading it by allowing users to “lend” an e-book to a friend for two weeks. Isn’t Amazon cutting its own throat by encouraging people to read books without buying them? On the contrary, says the founder of a Facebook lending book club: it will increase sales because people will want to own the book they borrowed (e-books can only be loaned once, ever) or weren’t able to finish in the two weeks. Libraries didn’t exactly kill the publishing industry when they first opened up, either.

It’s a pretty sad comment on the legal profession to say that publishing has become a more mature and forward-thinking industry than law, but that’s where we appear to be. If we want to change that state of affairs — if we want to grow up as a market and as a profession — then we need to stop thinking like a selfish train in a children’s story, viewing new arrivals as a threat to our narrow, entrenched interests. We need to find ways to welcome and accommodate the red balloons that are now floating, in growing numbers, into the sky above our heads. Chances are, at least some of them will end up bringing more passengers our way than we think.

Jordan Furlong speaks to law firms and legal organizations throughout North America on how to survive and profit from the extraordinary changes underway in the legal services marketplace. He is a partner with Edge International and a senior consultant with Stem Legal Web Enterprises.

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2 Responses to “Lawyers and the red balloon”

  1. Fred Krebs

    Excellent article–a bit disheartening if the legal profession is behind publishing in innovation.

  2. shg

    As I’m sure you know, I’m in favor of developing new paths toward our door, primarily for the benefit of clients, but which should also serve lawyers. That said, I continue to be troubled by comparisons with products rather than professional services.

    Lawyers aren’t fungible (though some clients would argue the point), and the barrier to entry is rather steep. It takes more than volume to address the needs of both lawyers and clients, unless the solution (as viewed from the marketer’s perspective) is to merely crank up numbers and homogenize quality to the extent that it’s not terrible, though never very good.

    One can bring plenty of diners into restaurants, but if they will never pay more than $20 per meal, there will never be another Bouley and they will eat nothing better than diner chow. Is that our future, mediocrity and plenty of it?

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