Law firm innovation: From idea to implementation

I was honoured to deliver a 20-minute TED-style presentation last week at the 2013 Futures Conference, produced by the College of Law Practice Management and hosted by the University of Chicago-Kent Law School. I was hardly the main attraction — Ann Lee Gibson and Bill Henderson gave tremendous presentations, and people are still talking about Stephen Mayson‘s extraordinary keynote address. If you want to view any or all of these sessions, they’re available online (Stephen’s is especially recommended, despite its length). if you’d like to hear my thoughts and you’re short on time, please feel free to view the video.

But if you’re interested, I also prepared a companion article for the presentation, which I’ve reproduced below. As the title of this post suggests, the object of both my presentation and paper was to get us talking about actual, practical ways to make innovation happen inside a law firm. Please share your thoughts and your own recommendations for achieving this daunting task in the comments below.


The great actor lay on his deathbed, and his friends gathered close to him. His best friend, holding his hand, leaned in and murmured, “You poor man. Dying is so hard.”

The actor’s eyes shot open and he glared at his friend. “Dying is easy,” he snorted. “Comedy is hard.”

In much the same vein, we can freely admit that the idea of innovation is easy — it’s the work of a moment to imagine any number of ways in which law firm operations could be improved. Implementation — the successful, sustainable execution of the innovation — that’s what’s hard. And the law firm landscape is littered with the remains of many failed innovations that couldn’t cross the bridge from idea to implementation. So how can it be managed?

To my mind, there are five steps in this process — and I’m sorry to report that each step is more difficult and challenging than the previous one. But it seems to me that the successful implementation of a legal innovation requires most if not all of these elements, in roughly this order. This is no small challenge — in fact, as we’ll see at the conclusion of this article, it’s literally an existential challenge for law firms today. But it can be done. And right now, in this environment, it has to get done.

1. Facts. Start with data. Evidence. Verifiable information. Business intelligence. We have a truckload of myths about lawyers and the legal profession, and we have no shortage of opinions and assertions masquerading as law firm strategies. What we need are facts. Specifically, you need facts about your law firm, data about your business. Most law firms know astonishingly little about themselves beyond what they spent, what they billed, and what they made last year. We need to know our firms inside out financially and structurally, both retrospectively and prospectively.[do_widget id=”text-8″ title=false]

Here’s an easy example: “What’s your cost of doing business?” What do you spend, what resources do you consume, to run your business and deliver your services? What did it cost you to serve this particular client or provide this particular service last year? What will it cost next year? We are barreling towards a legal services market where fixed prices for products and services will dominate. But without precise knowledge of your costs, and without a workflow process that ensures those costs are sustainable and predictable, you cannot name a fixed price that will generate a profit.

Here’s a harder one: “What do you actually sell?” I don’t mean that in the abstract sense of “value to clients” and so forth, although that’s obviously important. I mean: what, precisely, is your inventory? What do your clients actually give you money to accomplish? What are your deliverables? Not just: “Conducted a merger: $500,000.” What were the specific elements? Who or what did them? How long did they take? How much did they cost? Break down everything you do. No other business with the annual turnover of a law firm is so ignorant of its own inventory.

You need facts in order to properly diagnose your firm, to choose the right activities and make the right decisions for its future. But more importantly, you need them to get the attention of your partners. Show them that you have evidence for what you’re saying and doing. We’ve had more than enough faith-based decision-making in law firms. It’s past time to start making reality-based decisions instead.

2. A Catalyst. You need some sort of outside intervention, something to introduce a sense of urgent change. Law firms are not, shall we say, naturally given to proactive self-improvement. Most are what you might call “steady state”: self-contained environments, sealed off from outside influences. It takes a lot of pressure to break that steady state. Fortunately (for our present purpose only), you can have your pick of high-pressure catalysts right now. Falling revenue. Declining profits. Loss of a key client, partner, or practice group — choose one or more.

If you can’t find a catalyst, consider making one: Invite senior representatives of your five biggest clients, and the relationship partner in charge of each one, to a discussion panel in your office. Ask the clients to talk about the pressures they’re under, or the three things your firm could do that would make them break off the relationship, or three things they would handsomely reward your firm for doing. Bring the crisis home to the partners with the most to lose.

3. A Process: If you hope to actually accomplish something big and disruptive in a law firm, you need to have a clear, detailed process in place. How to do this? I say, start with a basic legal project management (LPM) template. Fire up those Gantt charts and lay out the following: “This is the goal. These are the steps. These are the milestones. This is the timeframe. This is the budget. These are the people. These are the performance expectations. These are when the expectations will be tested. This is the nature of the commitment we’re all making to this project.”

And then follow up, all the way through to the end. You don’t launch an innovative change process in a law firm the same way you launch a ship. You don’t smash the champagne bottle on the hull, call out “Bon Voyage,” and look forward to its arrival on the other side of the ocean. You walk it through, every step of the way, and see it safely through the storms. And that brings us to the next tough step:

4. Leadership. I don’t necessarily mean leadership from the top, the managing partner or CEO, although you certainly do need that. In my experience, though, these are usually the most forward-thinking, change-amenable people in the firm.

I’m talking more about the formal or titular leaders, the practice area heads and industry group chairs, as well as the informal ones, the heavyweights with the biggest books of business. In many firms, those people are not actual managers with leadership skills, and they have the most vested interests in the status quo. When they see change buzzing in from any direction, their first instinct is to grab a very big flyswatter.

What do you do in that situation? If and as possible, get those people out of formal leadership positions any way you can, and replace them with people who possess actual leadership skills and/or are on board with the change process. Buy the incumbents off with a bonus for retiring the leadership position, or give them a fancy title, “Strategic Counsel” or “Chair Emeritus” or some such. Lawyers love titles. I’d like to also suggest inspiring them to join the cause and help lead the change process, but I’m afraid my view of the average law firm partner is too jaded to allow for that.

There’s a larger issue here, however. Projects that ask lawyers to do something new, that require non-billable effort, and that will change the way they do their jobs, have a very high mortality rate in law firms. The reason is simple: non-performance by lawyers of requested or assigned duties is common, and few if any consequences flow from that non-performance. True law firm leadership is evidenced by both a willingness to place oneself at the collision point between what the firm needs and what its individual partners want, and an ability to survive that collision. And that brings us to our final ingredient: [do_widget id=”text-7″ title=false]

5. Courage. Here’s the crucible. If you seriously want to get an innovation from idea to implementation in your law firm — no matter the size of the innovation, no matter the size of the firm — you must have courage. You must be ready and willing to absorb criticism, complaints, threats, and tantrums, and you need to be equipped to deal with them swiftly.

If you want to lead a law firm innovation, I recommend this thought experiment: fast-forward to the day, several months down the road, when the process is starting to really dig in and true change looks like it might actually happen. One of your key rainmakers walks into your office, closes the door, and says, “Let me make something clear. You can have all the fun and games you want. You can introduce as many little innovations as you like. But not in my department. Not in my practice. Try to push me on this, and tomorrow I’ll walk right across the street to our biggest rival, and I’ll take my top five clients with me, and the first you’ll hear about it is when you get their press release announcing the move.”

What do you do? Well, if you’re like most people in that situation, then it’s quite likely that — let’s put this delicately — you’ll cave. “I understand,” you’ll say placatingly. “I know how disruptive this is. We’ll exempt you and your department from this process.”  But I’ll tell you: if that’s going to be your response, you might as well have never even begun the process. You’ll have flushed away huge amounts of time, energy, resources and goodwill, while simultaneously poisoning the well for future innovation efforts, because you’ll have acknowledged openly that around here, innovations apply only to those without the power to evade them.

If you’re serious about innovation, and if you have the leadership and the courage on hand, here’s how I think you should — how you must — reply: “Thank you for coming to me with this. And thank you for all your valued contributions to this firm and its clients. But this is a law firm, and we’re a team. We want you on that team, but if this is how you feel, then you don’t need to wait until tomorrow. You can leave right now.”

I know that this is “unrealistic” and “impossible” and other terms people use to describe something they don’t want to do. The other partners will come screaming in, of course. “You can’t let him go. He’ll take X clients, deprive us of Y money. You’ve got to keep him here.” And you need to respond, “He’s never really been here. If he’s ready to walk out over this today, then he’ll walk out next week over something else, or next month when he gets a better offer, or when he retires next year, having mentored no one and developed no one to take over his practice. He’s going to leave someday; it might as well be on our terms.”

That’s a highly dramatic example, obviously. But implicitly or explicitly, that’s the threat (and the fear) that poses the biggest obstacle to change in many law firms. And it at least serves this purpose: if you have an idea for an innovation in your firm and you really want to see it happen, fast-forward several months after the launch, to the moment when that partner is in your office, issuing his ultimatum. If you don’t think you can stand up to that lawyer — if you or your partners lack the courage and leadership to draw that line — then I would recommend postponing any innovative efforts until you can.

But this is exactly why you need to start with facts, to make clear just what’s at stake; why you need a catalyst to demonstrate that the time is now; why you need a process to get the wheels moving and generate just this sort of crisis point. This is how you gain the commitment of leadership to put the interests of the firm ahead of the interests of its individual partners.

Because really, at this stage of the game, this isn’t just about innovation anymore. This is really about explicitly deciding a long-simmering, implicit debate over whether you’re running a farmer’s market of sole practices under one roof, or whether you’re running an actual law firm. Firms have put off dealing with this painful question for as long as they could, but the pain has only gotten worse the longer they’ve waited. The time has now come to finally deal with it.

Marshal your facts; identify your catalyst; lay out your process; call on your leadership; and summon your courage. That’s how innovations get done. It’s also how law firms survive, or don’t, in this environment.

Jordan Furlong delivers dynamic and thought-provoking presentations 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.  

Why lawyers don’t innovate

“How can I get my lawyers to change?” This might be the question I hear most frequently from managing partners and law firm CEOs who are trying to help their organizations innovate and adapt to the new marketplace, but who are frustrated by the fierce resistance they encounter. The conventional culprit is lawyers’ bullheaded refusal to countenance any sort of change, driven both by an inherent attachment to the status quo and by the comfortable livelihoods that many lawyers make and see no need to disturb.

But that’s only part of the story. The main problem with the question above is simple: You can’t make people change. You can’t really make people do anything, short of using a weapon, a court order, or post-hypnotic suggestion. Human behaviour is ridiculously complicated and, based on Daniel Kahneman’s work at least, driven to an alarming extent by unconscious habits and urges.

People do what they feel like doing, and most lawyers feel like doing today what they did yesterday. David Maister’s final book, Strategy And The Fat Smoker, made this point very clearly: No matter how sensible and positive a particular change might be, lawyers (like everyone else) will change only if they want to change. And very rarely do they want to do that.

So how can law firms evolve — specifically, how can they innovate and reconfigure and adapt to new circumstances — when their owners, managers and workers don’t wish to do so? Law firm innovation is clearly possible — there are plenty of examples out there to inspire us — so it can be done; but how?  [do_widget id=”text-8″ title=false]

A good place to start is a terrific article published in a recent edition of The New Yorker by Atul Gawande, the medical doctor whose book The Checklist Manifesto should be required reading for all managing partners. Gawande’s magazine article, “Slow Ideas,” explores the complex and seemingly random nature of innovation, using examples from the history of medical advancements. Surgical anaesthesia and antiseptics (Listerism) were both discovered in the 19th century, for example; but while the former caught on almost immediately, the latter struggled to gain acceptance for decades. Why? Gawande suggests a couple of reasons:

First, one combatted a visible and immediate problem (pain); the other combatted an invisible problem (germs) whose effects wouldn’t be manifest until well after the operation. Second, although both made life better for patients, only one made life better for doctors. Anesthesia changed surgery from a brutal, time-pressured assault on a shrieking patient to a quiet, considered procedure. Listerism, by contrast, required the operator to work in a shower of carbolic acid. Even low dilutions burned the surgeons’ hands. You can imagine why Lister’s crusade might have been a tough sell.

That second reason certainly resonates in the legal market. Courthouse security, to draw a parallel, is pretty airtight, because failing to ensure it would threaten judges, lawyers and litigants alike. But our failure to ensure access to justice continues to be a scourge, in no small part because although it’s terrible for members of the public, it’s not really much of a problem for lawyers at all.

But difficulties around innovation aren’t restricted to doctors and lawyers; they’re universal. It’s not that we don’t know how to make a process better, and it not that the people in charge of a process don’t want things to be better. It’s that getting people to do things differently, in order to achieve that better outcome, is incredibly hard.

Consider the three most common methods cited by Gawande that are traditionally used to change behaviour:

1. Politeness: You ask people nicely to do things differently. But only some do, and not all the time, and the whole process collapses if the kindness of others is absent or withdrawn. Asking lawyers nicely to change the way they do business does not have a long and notable record of success.

2. Force: You punish people for failing to do things differently. But if the threat of force outweighs the rewards of the job (or if people have other options), they’ll quit rather than risk the penalty. In the law firm context, lawyers threatened with penalties take their books of business across the street to rival firms.

3. Incentives: You provide money or other rewards to motivate people to do things differently. But as any managing partner will tell you, this cure is often worse than the cause. What metrics do you choose? How do you track compliance? How do you keep the system from being gamed? Worst of all, how do you actually allocate the rewards among numerous participants? Veterans of partner compensation committees know these questions all too well.

Politeness, force, and incentives constitute 99% of the methods used in law firms to try to effect change and encourage innovation. Few of these efforts succeed, and many of those successes prove to be only temporary. But there’s another, better way identified by Gawande: much simpler, much easier to understand, and much easier to train people to do. The only problem, from lawyers’ perspective, is that it requires them to do something most of them don’t like. It requires them to take enough time and care to talk with each other and build trust with each other — and through these efforts, to change “the way we do things around here.”

[N]either penalties nor incentives achieve what we’re really after: a system and a culture where X is what people do, day in and day out, even when no one is watching. “You must” rewards mere compliance. Getting to “X is what we do” means establishing X as the norm. … To create new norms, you have to understand people’s existing norms and barriers to change. You have to understand what’s getting in their way. …

Technology and incentive programs are not enough. “Diffusion is essentially a social process through which people talking to people spread an innovation,” wrote Everett Rogers, the great scholar of how new ideas are communicated and spread. Mass media can introduce a new idea to people. But, Rogers showed, people follow the lead of other people they know and trust when they decide whether to take it up. Every change requires effort, and the decision to make that effort is a social process.

This is something that salespeople understand well. I once asked a pharmaceutical rep how he persuaded doctors — who are notoriously stubborn — to adopt a new medicine. Evidence is not remotely enough, he said, however strong a case you may have. You must also apply “the rule of seven touches.” Personally “touch” the doctors seven times, and they will come to know you; if they know you, they might trust you; and, if they trust you, they will change. That’s why he stocked doctors’ closets with free drug samples in person. Then he could poke his head around the corner and ask, “So how did your daughter Debbie’s soccer game go?” Eventually, this can become, “Have you seen this study on our new drug? How about giving it a try?” As the rep had recognized, human interaction is the key force in overcoming resistance and speeding change. [Emphasis added]

People change their behaviours when encouraged to do so by someone who has earned their friendship and trust. That’s all. It’s just that simple — but in many law firms, it’s also just that difficult.

Law firms have become extremely low-trust workplaces, and the larger and more diffuse the firm, the lower the trust.

  • National and global firms are overflowing with “partners” who have never even spoken to each other, and never will.
  • The gap between the highest- and lowest-earning members of a partnership is at least 10 times in many firms, much higher in others — and those gaps grow every time a new partner is “recruited” with the promise of money siphoned from less powerful colleagues.
  • Many law firm partners (and not just in large firms)  find themselves in direct competition for business with lawyers in their own firm.
  • Many law firm partners have little to no information about the real state of their firm’s finances.
  • Even in smaller firms, lawyers fight each other for origination and billing credit in a zero-sum game where every gain is a “partner’s” loss.
  • As client business continues to shrink, the growing threat of de-equitization hangs over every seat at the partnership table, save those few within the inner circle of management — and the skulduggery employed to remove seats from some of these tables would impress a Machiavellian prince.

This cultural crisis in traditional law firms is full-blown, and I don’t see any way for it to end happily. But even in well-adjusted law firms, you’ll still find a certain reluctance among many lawyers to develop with their colleagues the kind of friendship and trust that makes possible the innovations Gawande describes. Why is this? I can think of a few reasons:  [do_widget id=”text-7″ title=false]

  • Higher productivity expectations: Lawyers at many firms are under constantly rising pressure to bill hours and justify their continued presence on the roster; this priority shoves aside more pedestrian matters such as conversations with colleagues (the non-billable kind, anyway).
  • Increased lawyer mobility: Why invest time and effort building relationships with colleagues who could be competitors tomorrow? Why open up to someone who could eventually exploit the vulnerabilities you provide them?
  • Lawyers’ personal conservatism: (In other contexts, it would be called shyness), rooted in our risk-averse nature: trust is built by extending confidence before it’s been fully earned, a leap of faith that helps grow a relationship — but lawyers have a near-pathological aversion to risk, and risk is at the heart of trust.
  • Lawyers’ antisocial tendencies: David Maister tells another story, of a law firm whose partners asked him to build a sort of automatic compensation system; when he told them that successful compensation systems were personal and were built on trust, they replied, “But we don’t want to have to trust each other; that’s why we want the system.”

So when managing partners ask me, “How can I get my lawyers to change?” I have to respond: You can’t make your lawyers do anything they don’t want to do. They’ll do something only if they decide they want to do it, and they’ll want to do it if encouraged by those they like, respect and trust. In a number of law firms, I’m sorry to report, building a culture of “like, respect and trust” among lawyers can be considerably more difficult than getting lawyers to adopt a new innovation. It requires a level of effort and openness and generosity that many lawyers these days feel they can’t afford. But I’m coming to think it’s the key to successful, long-term, sustainable law firm innovation. And it can be done.

Gawande ends his article by relating the story of a trainer in India trying to get a rural birth-delivery nurse to adopt simple yet critical steps to increase newborns’ odds of survival and good health. It took numerous visits and the slow establishment of a friendship between the two professionals before the nurse’s behaviours began to change. Gawande later interviewed the nurse.

“Why did you listen to her?” I asked. “She had only a fraction of your experience.”

In the beginning, she didn’t, the nurse admitted. “The first day she came, I felt the workload on my head was increasing.” From the second time, however, the nurse began feeling better about the visits. She even began looking forward to them.

“Why?” I asked.

All the nurse could think to say was, “She was nice.”

“She was nice?”

“She smiled a lot.”

“That was it?”

“It wasn’t like talking to someone who was trying to find mistakes,” she said. “It was like talking to a friend.”


Jordan Furlong delivers dynamic and thought-provoking presentations 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.  

Your future legal survival kit: Another Law21 survey

I have a new survey for you to complete, similar to my previous questionnaire about building your own law firm — except that today’s quiz looks like a lot more fun. But first, some background as to what prompted this one.

Five years ago this month, I posted a short entry here at Law21 called “Core competence: 6 new skills now required of lawyers.” I identified six attributes that the legal profession has traditionally valued, the ones we’ve always assumed are the most important assets for a lawyer to possess (e.g., analytical ability, logical reasoning, persuasiveness). I then suggested that these skills, while still necessary, were no longer sufficient — that tomorrow’s lawyers will require new abilities such as financial literacy, emotional intelligence, and project management. I thought it was an interesting post, but to be honest, not much more than that.

In fact, however, “Core competence” turned out to be far and away the most popular post I’ve ever written on this site. It’s among the most frequently accessed posts every day of the year, and often this five-year-old article is the top daily entry.

The popularity of that post just underlines for me the tremendous demand, both from within the legal profession and among those who wish to join it, for information about what kind of abilities — practical, functional, and performance-based — you need to be a successful lawyer. This is a question that ought to be occupying virtually everyone with an interest in the practice of law over the next decade:

  • Current or potential law students (there are still a few out there) who want to know what attributes they’ll need to compete in a tough market with a heavy debt load;
  • Law school administrators who want to know what kinds of pragmatic, professional courses they should be offering to attract those students and impress employers;
  • Managing partners and law firm hiring directors who want to know what aptitudes should inform their recruitment, training and retention efforts;
  • Clients who want to know what characteristics they should require of both their outside counsel suppliers and their own growing ranks of inside lawyers; and
  • CLE directors who want to know what training and educational opportunities they should offer in order to maximize market interest and curriculum effectiveness.

Over the course of the last five years, however, I’ve found my own thinking on this subject has evolved. I’m still interested in skills — the ability to effectively execute important tasks will always be highly coveted — but a focus on skill that underplays other characteristics will result in a work force too heavily reliant upon technical abilities and shortchanged on the kind of dynamic talents that separate the merely good from the truly great. Not only that, but over-emphasizing skill ignores the reality that some people are simply born with innate talents that give them an advantage over others. Charisma, for example, is a talent, a remarkably effective one (especially for trial lawyers and rainmakers), but like speed, it simply can’t be taught.

So that got me thinking: if we were to expand our repertoire of potential abilities and advantages for lawyers — if we thought more broadly about what lawyers require to be successful in the coming years — then we could start to assemble a more diverse and well-rounded inventory of market-centred attributes for 21st-century lawyers. And that leads me to my new survey.

This survey, like my new book Evolutionary Road, was co-created with my friends at Attorney At Work, and it touches on the same basic issue: the future development of the legal marketplace (if you haven’t checked out the book yet, please click through to learn more). Evolutionary Road posits five stages in the transformation of the legal market and recommends ways in which firms can adapt.

But what about individual lawyers? What can they do to adjust their own inventories of market offerings? The answer to that question depends on another one: what precise individual skills, talents and resources will maximize lawyers’ odds of success in the coming years? I have my own answers to that question, but I’d like to find out yours first. So I’ve put together a survey that tries to elicit your responses, and in an innovative way.

Have you ever taken one of those survival quizzes, like Survival At Sea or The Sub-Arctic Plane Crash Survival Test? The idea is that an accident has stranded you in a harsh and desolate location, and you must choose, from among a small array of remaining supplies, the items most important to your survival. In some tests, you can only take a limited number of items with you; in others, you can take them all, but you must prioritize them in order of importance. These quizzes test, to a certain extent, your knowledge of basic wilderness survival techniques — but also, and more importantly, your ability to think creatively and cleverly about how you can use the tools and resources available to you.

Using these tests as inspiration, allow me to present: Your Future Law Survival Kit Quiz:

Evolutionary_Road_takeTheSurvey (1)

You’re stranded in a future legal market, vast and unfamiliar, and you need to launch a new legal career. Luckily, you get to start off with several skills and talents — but it’s a limited supply, and you’ll need to choose carefully. Which ones will help you most? Below you’ll find 15 resources that seem like they’d be useful, including innate abilities and valuable skills. You have 100 points to assign among these resources, according to how important you think they’ll be.

And here are the 15 attributes (listed here in alphabetical order, but randomized in the quiz):

  • Connections: Strong and productive relationships with clients in your chosen field.
  • EQ: Your emotional intelligence fosters great relationships, especially with clients.
  • Famous Brand: Start off your new career widely known and respected in your field.
  • Financial Facility: You have a business background and a great head for figures.
  • Innovation: A talent for and enthusiasm about improving upon current practices.
  • Legal Knowledge: Good old-fashioned legal know-how, the black-letter kind.
  • Moral Fibre: You’re renowned for strength of character and high levels of integrity.
  • Nice Niche: Start your career with a strong grasp of a narrow but very promising field.
  • Pricing Strategies: You know how to price your work effectively and profitably.
  • Process Mastery: A knack for developing systems, procedures and efficiencies.
  • Recruiting Prowess: You easily attract talented colleagues and collaborators.
  • Risk Acceptance: You’re not averse to risk; you’re confident about taking chances.
  • Solutions R Us: A gift for solving seemingly intractable challenges, legal and non.
  • Techno-Wizardry: Facility with programming, web design, apps and all things tech.
  • War Chest: A bank balance to help finance many (but not all) of your future needs.

Which of these would you choose to launch a legal career in the future legal market described in Evolutionary Road? How much weight would you give the attributes you choose? As with the previous test, you’re given 100 points, which you must distribute throughout the list according to which features you think will prove most important; you will almost certainly have to leave some out, and you will have to award some choices more points than others.

Here’s the link to the survey — it’s open as of today, July 22 , and will stay open until August 12 (or until I have enough responses to draw some conclusions). Please take the survey — Note: print out your choices before pressing “Done,” so that you retain a copy — and forward it to your friends and colleagues. And then check back here next month to see how your answers compared with your fellow readers — and with mine.

Available now! My first two published books: Content Marketing and Publishing Strategies for Law Firms (co-authored with Steve Matthews, published by The Ark Group) and Evolutionary Road (e-book published by Attorney At Work). Click the links to learn more and order your copies today.

Jordan Furlong delivers dynamic and thought-provoking presentations 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.  

Transforming Bar associations

So I’ve been busy writing again, this time about what the changing legal marketplace is doing to two longstanding members of that market: law librarians (for Thomson Reuters’ Legal Solutions column) and bar associations (for the ABA’s Bar Leader e-magazine). The latter article, co-authored with the great Fred Ury, prompted a post by Sam Glover at Lawyerist: How Can Bar Associations Stay Relevant? Sam was skeptical about our prescriptions for bar associations and suggested one of his own:

In addition to offering free forms and CLE, I think what would get me most interested in my bar association would be a return to basics: building relationships among members. This could be especially valuable for solos. I get the best forms from my colleagues, but I wish I had an easier time finding mentors when I moved into a completely new practice area. I like to learn about technology and marketing and stuff, but I always find that the people doing the most interesting things in their law practices are in the audience at CLEs, not on stage. And, perhaps most crucially, I can get CLE credit just about anywhere, but I don’t have a local softball team to join.

I left a comment on Sam’s post, which I’d like to expand upon here, since this whole question is drawing a lot of attention — and rightly so. Bar associations are facing some existential challenges right now, and I wouldn’t want to see them just disappear beneath the waves without trying to extend a hand.

Many bar associations find, when they do a sober inventory of their true assets, that they have fewer than they supposed, especially in terms of the relevance and distinctiveness of their activities and services. Almost everything they offer to lawyers can be replicated in some way by other service providers, most of which have neither the overhead costs nor the organizational slow-footedness that hamstring associations. Like law firms, these are legacy organizations with legacy costs and legacy thinking, and they find adjustment to be a very difficult process.

But what most bar associations can still boast, the one legacy holdover that’s helpful to them, is their reputation: the brand recognition and authority they can still muster among lawyers. These assets have been developed over the course of many years of service, albeit service to a very different profession in a very different market than this one. But the respect survives as brand awareness, legitimacy and trust — much as it does for many historic law firms whose name partners died a long time ago.

Legitimacy is not a standalone asset, of course: what matters is what you do with it. And if bar associations are going to survive, they need to apply that legitimacy by providing lawyers with services that have one thing in common: they are distinctive. Bar services have to differentiate themselves from similar services available elsewhere. Here are a few examples that expand upon the points Fred and I made in our article:

Forms: It’s not enough simply to stick the association’s logo on a boilerplate legal document and suppose that that will carry the day. The document has to be distinctively different and better: assembled by leading practitioners in a given subject area, subject to scrutiny by blue-ribbon oversight committees of judges and lawyers, approved by the local professional insurance provider (ideally, a bar-affiliated one). Create forms and documents like these, demonstrably and qualitatively better than what other providers sell — and then provide them for free solely to members. That has value to the lawyer and will help set the association apart.

CLE: Bar association CLEs often are no different than what private providers offer, while association annual meetings have tended to become exercises in both self-absorption and self-congratulation. But what Fred and I proposed is distinctive CLE: extremely practical and law-business-oriented programs would stand out all on their own (most CLE offerings are retrograde black-letter law-based), while (as I wrote two years ago) fresh new formats would invigorate attendees: un-conferences, speed-roundtables, micro-panel discussions for small, specialized groups, and so forth.

Relationships: Sam emphasizes this, and it’s true that building relationships among lawyers has real value. But most lawyers now have multiple channels for facilitating relationships (both old and new), and importantly, they don’t need an association to help maintain them. A good route forward here would be to affiliate relationship-building with the distinctive CLEs mentioned above: get lawyers out of their seats and walking around, talking to other lawyers about practice and business issues. Associations could also host “private study groups” that give lawyers the opportunity to interact, come to rely on each other, and build distinctive networks available nowhere else.

Advocacy: Again, as I’ve written before, “lobbying” doesn’t exactly have a inspirational ring to it, and issues activism can be highly divisive and detrimental to member retention. So I think lawyer associations should transform themselves into lawyers’ marketplace evangelists. They should adopt as their mission a sustained campaign to trumpet the unique advantages of choosing lawyers over the many other options spreading throughout the legal services market. Advocate to clients why a lawyer is better than the “non-lawyer” alternative. Nobody else is carrying out that kind of lobbying, and bar associations are perfectly placed to do so.

Associations should recognize that the residual (and in fairness, often continuing) level of recognition, trust and respect they command among members of the profession is their most outstanding asset — but it’s an asset with which to start the reinvention process, not end it. Maintain that recognition and respect, seek always to improve them, and most importantly, find ways to leverage them. But along with the process of identifying that value comes a recognition and acceptance of some tough choices about who you are as an association and what you stand for.

A bar association that tried taking the steps I outlined above would immediately run into stiff opposition, both internally and externally, from people who resist change and prefer the longstanding ways of doing things. It’s my belief that sticking with traditional services delivered in traditional ways inevitably will result in gradual, relentless attrition for the association and ultimately, a smaller organization. But making the tough choices and radical changes described above will deliver much the same result, albeit far more quickly. Either way, associations are going to experience member loss. So the questions become: (1) If you’re going to lose members anyway, don’t you want to lose them in service of being the organization you want to be? And (2): As between these two paths forward, which do you think holds more promise for renewal and revival down the road?

I addressed the National Association of Bar Executives (NABE) a few months back, and one of my messages to them was this: you need to get used to the idea of being smaller. Associations (like many other entities in the legal market, such as law schools and legal publishers) have long been accustomed to equating size with success: if you have lots of members and are always adding more, then you’re winning. I suggested to these bar leaders that they abandon the idea of growth for growth’s sake and start aiming to become focused, distinctive groups that, yes, might be smaller, but that have very high levels of satisfaction and loyalty, because they do things differently and they do them extremely well.

The legal market now and in the future is too fractured and specialized for an all-purpose, general-interest association to adequately and comprehensively serve — especially if it looks and feels like every other service provider out there. Decide what you want to be, and who you want to be for: that’s good advice, as far as I’m concerned, for both bar associations and the lawyers they hope will join them.

Available now! My first two published books: Evolutionary Road (e-book published by Attorney At Work) and Content Marketing and Publishing Strategies for Law Firms (co-authored with Steve Matthews, published by The Ark Group). Click the links to learn more and order your copies today.

Jordan Furlong delivers dynamic and thought-provoking presentations 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.  

Book No. 2: Evolutionary Road

And now, presenting …. my second book! I’m the sole author of this one, but it’s not a solo effort by any means — it’s a co-production with my great friends at Attorney At Work: Merrilyn Astin Tarlton, Joan Feldman and Mark Feldman. I’m very proud to announce the publication today of Evolutionary Road: A Strategic Guide To Your Law Firm’s Future.                                                              Print

This 40-page electronic book, based on a series of posts here at Law21 last fall, lays out the future of the legal marketplace through the year 2020 and beyond, in the context of what lawyers and law firms must do today to prepare for what’s coming. Here’s how Attorney At Work describes it:

In this new ebook from Attorney at Work, Furlong envisions and details five distinct stages of development for the legal profession:

  • The Closed Market
  • The Breached Market
  • The Fully Open Market
  • The Expanded Market
  • The Multi-Dimensional Market

He teams discussion of the evolutionary timeline with essays on Regulation, Law School, Competition and Pricing to deliver the mind-bending whole in the context of an easy-to-use Strategic Discussion Guide. Smart law firms large and small will use this 40-page downloadable book to tee up effective strategic planning and market innovation. 

Evolutionary Road is an ideal blueprint for annual retreats and partnership planning meetings. The book includes specific facilitation exercises and discussion starters prepared in collaboration with Attorney at Work.

As the foregoing implies, Evolutionary Road goes beyond my original blog post series. New features exclusive to this book include:

  • Standalone analyses of changes in legal education, legal regulation, competition, pricing, and law firms themselves.
  • A Top 10 list of steps law firms can take today to begin transforming themselves for the coming legal market.
  • A blueprint for using this guide to plan a strategic retreat at which your law firm can chart its own future.
  • Brainstorming and challenge questions to galvanize your strategic retreat and produce actionable outcomes by your partners.

All this, plus handsome custom illustrations by Rob Johannsen — and the price is just $19. Visit Attorney At Work’s bookstore to learn more and to purchase your downloadable copy today (and while you’re there, check out the many other great legal publications AAW has made available).

I’m really proud of Evolutionary Road — it represents my complete vision of the evolving legal market and what I see as the imperative for lawyers to adapt their practices while retaining their professionalism and value(s). In my 5+ years at Law21, this is the first product I’ve ever developed solo for sale, and I’m hoping that it will find an audience with which it truly resonates. My sincere thanks to Merrilyn, Joan and Mark for helping make this vision a reality.

Available now! My first two published books: Content Marketing and Publishing Strategies for Law Firms (co-authored with Steve Matthews, published by The Ark Group) and Evolutionary Road (e-book published by Attorney At Work). Click the links to learn more and order your copies today.

Jordan Furlong delivers dynamic and thought-provoking presentations 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.  

What disruption really means

You keep using that word,” said Inigo Montoya. “I don’t think it means what you think it means.”

“That word,” in the current legal marketplace, is “disruption,” a terrific word that’s instrumental in understanding what this market is going through, but one whose overuse is generating a growing backlash. The tipping point might have been the ReInvent Law Silicon Valley conference, or it might have been the wave of updates from ABA TECHSHOW that seemed to feature “disruption” every few tweets. Any buzzword, if adopted too widely and too quickly, risks burning out its meaning simply because people get tired of hearing it all the time, and “disruption” is at risk of that outcome right now. Sam Glover at Lawyerist put the sentiment best in a post last week:

Here’s the thing: disruptive innovation is not coming to the law. At least, not quickly. …

LegalZoom and Rocket Lawyer are not disruptive innovation, either. They are basically just selling forms and pre-paid legal services, which have been around forever, in one form or another. People who think this is disrupting the legal industry do not have a very good grasp of the legal industry. Customers of LegalZoom and Rocket Lawyer were never your potential clients. They may have been Office Max’s, or Hyatt Legal‘s, but they were never yours.

So far, the only disruption to the practice of law has happened around the edges. Sure, Rocket Lawyer and LegalZoom may have siphoned off a few clients. And predictive coding will put some contract lawyers out of their jobs (although doc review is only “legal work” due to a technicality), but can anyone point to an imminent threat of disruption to the legal market? I don’t think so.

So who is actually threatening the legal market for lawyers representing clients? I’m not sure. In fact, I’m not sure anything is going to.

I’m in qualified agreement with Sam on this, as I responded in a comment on his post that I’m expanding upon here. What I really want to do is help establish some specific parameters around the use of “disruption” in the context of the current legal market. I summoned Inigo Montoya to this discussion because I don’t think “disruption” is the empty vessel its critics believe it to be. Disruption is real, and it’s a contributing factor to change and upheaval in the legal market; but not every change or upheaval is an example of “disruption.”

When we talk about disruptive innovation, then we’re squarely in Clayton Christensen’s territory, because he gave us the idea of “sustaining technology” vs. “disruptive technology” in The Innovator’s Dilemma. Sustaining innovations (we can safely substitute “innovation” for present purposes) provide improved delivery or performance of an established product or service, “along the dimensions of performance that mainstream customers in major markets have historically valued,” in Christensen’s words.

Most innovations are sustaining, and while incumbents might struggle with them a little at first, they can and usually do handle and implement them. Sustaining innovations in law firms include email (a more efficient communication medium than letters or faxes) and time-and-billing software (a more efficient docketing methodology than making hand-written entries on timesheets).

Under this definition, LegalZoom and Rocket Lawyer are actually sustaining innovations: they are providing a more efficient and accessible method of acquiring legal documentation. Any law firm in the world could do what these companies are doing right now — offering legal documents over the internet — without having to completely re-engineer their operations. (That they’re not bothering to do so says more about lawyer intransigence and biases about “low-value” products than about these companies’ offerings). Incumbents eventually find an answer to sustaining innovations: they can adjust to them without tearing apart their basic structure in the process.

Disruptive innovations are different: in Christensen’s words, “they bring to the market a very different value proposition than had been available previously.” Disruptive innovations normally offer worse, not better, performance or quality than the incumbents when they first arrive. But they arrive at a time when the market is ready for something smaller, cheaper, easier, or more convenient than what’s already out there. They almost always start out at the lowest level of the market, or even tap into markets that have previously been invisible. Most importantly, they offer something that the incumbents can’t replicate, even if they wanted to, because the attempt to replicate would require such a radical reconfiguration of the incumbent’s business and production model as to cause it to be fundamentally undermined.

Neota Logic, to take an example, is disruptive technology: it guides users through an automated process of data gathering and analysis, based on a powerful legal KM engine, and produces an answer to a legal, regulatory or compliance question. Neota cannot replace a lawyer — yet. But it is going to displace lawyers, to start taking on some of what lawyers now do. What Neota wants to do is provide a way in which legal questions can be answered more efficiently and cost-effectively than the standard law firm model allows. It is being picked up first at the market’s edges — law students, in this case, in Georgetown Law’s Iron Lawyer competition, are using Neota to create apps that can address legal needs for people who don’t want to or can’t use lawyers. Disruptive innovations never start at the top. They start at the bottom and work their way up.

Here’s what’s important: The vast majority of law firms cannot replicate this type of innovation, because it would essentially destroy their businesses. This is because law firms are not in the business of solving legal problems; they are in the business of billing hours devoted to solving legal problems. That’s a key distinction. Law firms don’t really sell legal solutions — if they did, they’d price everything on a flat fee or as a percentage of the value of the solution. They sell hours, and if you’re in any doubt about this, pick up a law firm invoice and see what’s actually being charged out. Neota, however, is in the business of solving problems, quickly and efficiently. These are two quite different production models.

A law firm that integrated this kind of disruptive program into its operations, and contributed to the ongoing expansion of its capabilities, would soon find itself cutting loose many of its associates, because they would no longer be necessary: the computer would be performing tasks they previously undertook. In most business models, this would create greater efficiency and drive profits up; but in law firms, reliant upon leverage for profit, creating greater efficiency drives profits down. If you make money by selling inventory, and if your inventory is billed hours, reducing your inventory is going to kill your revenue stream.

This returns us to the original question: can law firms employ disruptive innovation? If we use the strict definition we discussed above, then the answer is no. Disruptive innovations start at the bottom of the market and introduce offerings that are inferior in quality, but that engage the market on new criteria such as price, portability or accessibility. Law firms, by their nature as incumbents, are bound to be the high-quality disruptees, not the low-quality disruptors. They’re destined to be the ones from whom market share will be taken, as the disruptors get traction in the new market and move steadily up the food chain.

If we’re true to Christensen’s definitions, in fact, then almost the only true disruptors among law firms are the likes of Berwin Leighton Paisner’s Lawyers On Demand and Pinsent Mason’s Vario, contract lawyer agencies that run parallel to the incumbent firms and essentially compete with them for the attention and affection of clients. Christensen taught that companies seeking to “disrupt themselves” cannot do it within the incumbent enterprise: the cultural inertia will be impossible to overcome. The disruptive forces must be housed in a separate location and allowed to chart their own course. Extremely few law firms have the intestinal fortitude to take those steps, not least because of the possibility that the parallel disruptor might actually succeed.

All that said, I do think it’s possible for law firms to introduce changes and innovations within their own operations that qualify as at least quasi-disruptive to their status quo. For an excellent example, consider the two winners of last year’s InnovAction Awards, handed out by the College of Law Practice Management: Littler Mendelson’s CaseSmart knowledge management system and the firm-wide implementation of Lean Six Sigma at Seyfarth Shaw.

In both cases, these firms ripped out their internal machinery, rewired and re-engineered the way they did things, and ended up with better procedures and more efficient systems that delivered improved results for clients and increased revenue for the firm. It wasn’t easy and it wasn’t overnight, but these firms recognized an opportunity to work differently in ways that mattered to clients. They no longer work the same way they did before, and that’s as close to pure disruption as you can ask from market leaders in a conservative industry like law. We should welcome and encourage these innovations, while recognizing that they don’t quite strictly qualify as “disruptive innovations” for the legal market as a whole.

The thing about truly disruptive innovations is that you can’t forecast them. Show me any futurologist who, when we were all making millennial predictions back in 1999, predicted the smartphone. All you can do is watch the market and identify the disruptors when they appear. If you want to know what they look like, ask yourself:

  • Does this innovation deliver a decrease in quality, rather than an improvement?
  • Does it interact with the bottom or periphery of the market, rather than the top?
  • And if a law firm tried this, would it drive itself to the brink of breakdown, having to partly or even completely reconfigure its financial, procedural and cultural infrastructure?

If the answers to these three questions are yes, then what you’ve got there is a disruption. If not, then, as Inigo advises, it might be best to stop using that word.

Jordan Furlong delivers dynamic and thought-provoking presentations 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.          


The evolution of the legal services market: Stage 5

In the four previous entries in this series, I’ve sketched out what I see as the decline and subsequent rise of the legal profession over the next 10-15 years as a direct effect of rapid evolution in the legal market.

My fundamental premise throughout these posts has been that the emergence of new competitors and new technology, along with regulatory reform, will deprive lawyers of many of the low- to medium-value tasks they perform today, but that this change will also expand and reconfigure the overall market for legal services in ways that eventually drive a resurgence in lawyer employment and the more valuable applications of our skills. This will be a roller-coaster ride, not just for lawyers but for all the industries, organizations and suppliers that grew up around our profession during its 20th-century heyday.

Today’s final entry is kind of a postscript to Stage 4, and maybe something of a thought experiment too. I’d like the legal profession to start thinking more creatively and laterally about exactly what lawyers could be in the future.

Stage Five: The Multi-Dimensional Market

Lawyers, contrary to popular belief, are highly creative and innovative — but only on behalf of our clients. When we turn the focus on ourselves and our own profession, we seem to lose our creativity and ambition — we narrow our vision, think small, and cling to “what we’ve always done.” Almost all the discussion of lawyers’ economic prospects (and there’s plenty in the news every day) proceeds on the assumption that lawyers only perform a limited number of strictly defined functions, a slim portfolio of roles that has hardly changed at all for decades.

We cast our careers in linear terms, and we only see change of the negative kind — work that we lose to others. We don’t think about work that we could take from others, or work that we could create altogether new. We don’t give ourselves enough credit for what we could be and what we could do.

Recall what happened to accountants when the first wave of technological advancements in the 1970s and 1980s rendered many of their traditional balance-sheet offerings obsolete. They were faced with a stark choice: evolve upwards and outwards, or fade away into history. They chose to evolve, reinventing themselves as business advisors, market analysts and process consultants — tasks for which they were certainly not educated and for which they could claim no special pedigree. They reached for this work because (a) they needed it, (b) nobody else was doing it, and (c) their core skills and competencies qualified them to at least try it. And they succeeded, in no small part because they thought they could.

A simular choice is at hand for lawyers: move up the value ladder, or climb off it altogether. Many lawyers today make a living off the legal equivalent of  accountants’ “balance-sheet” work; that work, as I hope this week’s series has persuasively argued, is going away. What will replace it? Where will we find new engagements of similar or greater value?

Answering those questions is a two-stage process. The first stage is the hardest: it involves screwing up our courage, building up our confidence, and letting our imaginations roam over the possibilities of 21st-century lawyering. It requires lateral thinking and creative brainstorming, anchored by a clear-eyed assessment of both our own strengths as professionals and the evolving needs of a globalized society. Once we’ve done that, once we’ve cleared that enormous (for us) hurdle, then the second stage is not only easy — it’s almost fun. What could we do? What might we be? There’s a vast, uncharted and unclaimed territory out there — what could we build on that new landscape?

Stage 5 of the evolution of the legal market is the only one in which lawyers are the ones bringing the change. In all four previous stages, we’ve either been helpless bystanders or market responders; in this era, we get to make the first moves. This era might very well overlap with Stage 4, and it’s possible we could see some early examples even in Stage 3 — but it’s all up to us.

Stage 5, if and when it happens, is when lawyers reinvent themselves. We evolve beyond our long-standing self-identification as document approvers, transaction facilitators, and dispute resolution shepherds. We saw our traditional inventory taken away by competitors, so we seek out new functions, new social and business purposes.

This process begins when we return to our roots. Lawyers will ask, of themselves and each other: Why do people turn to us?  What do we bring to the table? With which traits and skills are we associated, and for which of these are we most valued? What do we offer that matters in an interconnected, unstable, and hopelessly complicated world? Here are some of the answers we’ll come up with:

  • Accuracy
  • Analysis
  • Authority
  • Calmness
  • Communication
  • Connectivity
  • Creativity
  • Drawing Distinctions
  • Facilitation
  • Fairness
  • Honesty
  • Independence
  • Logical Reasoning
  • Order
  • Pattern Recognition
  • Persuasion
  • Representation
  • Rigour
  • Rules
  • Solutions

When we finish assembling this list and test-driving it with our clients, we then ask: to what new roles and positions could these characteristics and values lend themselves? We know what we used to do in the past; what might we do in the future? Here are some possible answers.

  • “Amazon.Law” Provider: Sharp, focused, legally trained mind sifting through and analyzing clients’ vast storehouses of data to anticipate legal needs they don’t even realize they have.
  • Civics Trainer: Roving instructor retained to inculcate the rule of law, rights and responsibilities, and other fundamental legal principles to students, employees and citizens.
  • Competitive Analyst: Provider of sophisticated business intelligence operations, infused with deep knowledge of laws and regulations and employing rigorous organizational analytics.
  • Freelance Fact-Checker: Trusted independent authority retained by governments, media and organizations to reliably separate fact from fiction in a truth-challenged society.
  • Judicial Subcontractor: Dispute resolution expert deputized by judges to go out and “bring courts to the community,” increasing access to justice and clearing court backlogs.
  • Mobile Arbiter: Conflict resolution facilitator called in to troubleshoot everyday disputes at homes or in the workplace before they become full-blown fights: “preventive ADR” on a moment’s notice.
  • Social Connector: Using deep networks that range across business, government and private individuals, connecting people, organizations, ideas and initiatives that will complement each other, solve problems, and create opportunities.

These seven possible legal careers of the future complement seven that I suggested in a post earlier this year. You can come up with more, if you open your mind to the possibilities on offer.

Where do you start? Go ask your best clients what they think — but don’t ask them about “lawyer of the future” jobs, because they won’t be able to tell you. Henry Ford famously said that if he’d asked his customers what they wanted, they’d have told him “faster horses.” Instead, ask your clients: what do you value about me, and about lawyers generally? What do we have that inspires your confidence and fulfills your hopes? What needs do you have, even subconsciously, that no one has offered to meet? If you had all the time and money and information you needed, what would you set out to create? Help them envision their own future, and then find ways to get them there.

The near-term and mid-term future of the legal profession will be largely dictated by external forces. But throughout that process, and especially as we draw towards the end of that period of upheaval, we will gain growing amounts of control — not just over our own destiny, but also over the future course of the entire legal market and of the whole definition of what we mean by “legal” and “lawyer.” Stage 5 will mark the end of the legal market’s evolution — but for the legal profession’s own evolution, it will be just the beginning.

Jordan Furlong delivers dynamic and thought-provoking presentations 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.

The evolution of the legal services market: Stage 4

This series hasn’t exactly been a joyride so far, has it? Following the complacent satisfaction of Stage 1, the legal profession is not currently enjoying Stage 2 and will be even less fond of what Stage 3 is likely to inflict. You can be forgiven if this feels like a movie you’d like to leave halfway through. But while this might seem to be a depressing tale of lawyers’ relentless decline and eventual extinction, that’s not the actual story.

Lawyers, we need to keep in mind, really matter. We serve critical functions in society: we provide dispassionate representation and advocacy in dispute resolution; we facilitate countless significant social and business transactions; and we’re capable of providing tremendous and unique value to clients of all stripes — value that commands a premium price. Law, along with medicine and ministry, are the three original professions: the highly esteemed servants of the community and the building blocks of a meaningful and civilized society. No one is going to outsource or automate a way around that.

It’s my belief that, as a profession, we’ve lost sight of these facts. We’ve been distracted by the easy money to be made through providing essentially clerical tasks and conducting low- or middling-value transactions — tasks that we took on simply because the market lacked other providers whose skills and sophistication were better aligned with this kind of work. Our monopoly on the legal market narrowed our vision, fogged up our priorities, and misdirected our talents. We became myopic and even selfish, believing that we were entitled to exclusive access to any work that was law-related.

I think that lawyers in the future will, in a strange way, come to appreciate that the disruptive forces currently sowing chaos in our lives actually did us a favour. By taking away work that doesn’t require our expertise, they’ll prevent us from punching below our weight and force us to go pick on challenges our own size. Not only that, but by breaking through the pricing floor and lowering the financial threshold for consumer access to the law, they’ll do something lawyers have never been able to do: they’re going to grow the legal market.

By the time Stage 4 comes about — and I believe parts of it could start emerging during Phase 3 — lawyers will be surprised and delighted to see a much larger and more dynamic market emerge. And in those circumstances, we won’t really mind having more people digging into what will have become a much bigger pie.

Stage Four: The Expanding Market


(a) The Market:

  • Combination of multiple providers and affordable prices opens up huge, previously latent legal market.
  • Innovation in legal services, driven now by both lawyer and non-lawyer providers, greatly increases range and depth of accessible legal work.
  • Market expansion accelerates rapidly; legal job growth returns, demand for lawyers increases (although not often in traditional roles).
  • Systems and IT advances achieve unprecedented levels of accuracy and efficiency in basic legal documents and processes.
  • Routine and straightforward legal work is subject to fierce competition by warring national and global franchises, including legal publishers, accounting firms, software companies, and even a few “white label” law firms.
  • Commoditization of legal product is widespread; industry norms and standards are established for basic products and services.
  • Concept of “legal insurance” becomes more commonplace, often as part of homeowners’ policies or corporate benefits, creating more legal opportunities.
  • A new legal service ecosystem grows up, one in which individual lawyers and non-lawyers temporarily collaborate on projects under the direction of senior project-managing counsel.
  • Civil court system is transformed into smaller but more prestigious entity, with lawyers and judges handling complex, high-stakes, or socially significant civil disputes; parallel “private” courts and ODR providers oversee adjudication and resolution of other civil matters.

(b) Lawyers:

  • Elite law firms, from solos to global giants, thrive by handling high-quality, highly remunerative, mission-critical work: they are strategists, counsellors, and trusted advisors to individuals, businesses and institutions.
  • “Preventive law” emerges as a viable legal career: managing risk and avoiding legal troubles for corporate and consumer clients on a monthly retainer.
  • Lawyers become increasingly integrated within diverse corporate and social enterprises; higher evolution of “in-house” lawyers.
  • Just three types of “outside counsel” dominate the private bar: mobile virtual solo, boutique specialist, and global corporate problem-solver and value-provider.
  • New lawyer organizations evolve, replacing the associations of the past, using online platforms to create fluid, collaborative, job-sharing, skill-building networks.
  • Legal education is transformed by emergence of “specialist” law programs focusing on specific industries and “bridge” providers linking formal education with practical training. Online legal education becomes ubiquitous.
  • A few elite lawyers continue to bill by the hour, the last holdouts in a market where pricing is almost entirely predictable, cost-aligned, value-based and market-driven.

Era: 2019-?

Every period of creative destruction comes to an end; every process of renewal eventually completes itself. After many difficult years of contraction and frustration, lawyers finally see a change in their fortunes.

By Stage 4, the ongoing process of competition and innovation has greatly reduced the internal cost and external price of many legal products and services. Lawyers who had been bemoaning this trend are happily introduced to the economic principle that lower prices expand markets. More people and businesses can now afford more legal services than they could before: the latent legal market is finally cracked. Moreover, thanks to the attrition of the past few brutal years, the number of lawyers in the profession is much reduced, setting up a new supply-and-demand dynamic.

Only a handful of companies worldwide now provide legal knowledge, documents and processes, and like the Amazons and FedExes and Wal-Marts of the past, they rely on extreme efficiency, standardized production, cutthroat pricing and just-in-time delivery to compete for market share. No 20th-century law firm could survive in this market, and few 21st-century lawyers want to do this work anyway. They have other, better pursuits.

This is where lawyers see their resurgence. As Clayton Christensen points out, efficiency innovations destroy jobs, whereas truly disruptive innovations create jobs. Stages 2 and 3 gave us “efficiency innovations” in law, at the cost of many lawyer positions; but Stages 3 and 4 usher in the “disruptive innovation” era, during which lawyer employment opportunities return, stronger than before. Preventive law — Richard Susskind’s famous “fence at the top of a cliff, rather than an ambulance at the bottom” — is an excellent illustration of this trend: proactive lawyering that manages risk and reduces problems discovers its market value.

High-level, highly demanding and highly compensated legal work experiences a renaissance in this era. The world has gotten no simpler in the last 10 years — in many ways, it has become far more complex and confusing. Anonymity and relativism undermine social and business bonds, technology and big data create powerful and frightening new social forces, shades of grey are everywhere in public and private life. The authority, clarity and precision of lawyers now become a necessary and valuable presence in the market. Freed from our previous dependence on paper and product, we return to our higher purpose and our more valuable business and social roles.

The industries and specialties that grew up around the old legal profession undergo similar transformations in Stage 4. Lawyer associations survive by becoming lighter, quicker, more businesslike and more aspirational, representing lawyers’ newly redefined interests and repositioning themselves as networkers, connecters, trainers, R&D providers and thought leaders. Legal education is still uneasily re-engineering itself, but a new balance is emerging between educators focused on classical jurisprudence and legal philosophy and trainers focused on professionalism, ethics and business acumen for both initial and continuing professional development. Legal publishers have become legal software developers and knowledge management engineers.  Everyone has had the opportunity either to raise their game or leave the playing field altogether.

A word about litigation. I gave a presentation earlier this year to Canada’s chief judges and chief justices, wherein I advised that their traditional role as private dispute adjudicators was at risk. The soaring costs of court litigation, in terms of both time and money, had placed it out of most people’s reach and had encouraged the development of less formal but more accessible dispute resolution providers. I expect that the majority of disputes currently pushed through the court system will eventually be privately resolved (and perhaps even privately enforced, although I’d prefer to see the state continue in that role). The civil justice system may simply be too big and too brittle to survive the change to a new legal marketplace.

Civil litigators, in turn, will have to adapt to a market in which the traditional sources of litigation revenue are routed out of the legal profession (towards e-discovery providers, game-theory bargaining systems, data-crunching prediction systems, etc.). Lawyers’ competitive strengths in dispute resolution reside in negotiation and advocacy skills, especially the latter; these are what make great “trial lawyers.” There will be a role for skilled barristers, perhaps as advocates in the traditional court system, perhaps as adjudicators in new private court systems. I expect there will be, on a volume basis, less civil litigation work, but it will be more demanding and fulfilling work of higher quality, and it will pay more handsomely than all the endless hourly-billed tennis matches that now bog down our courts.

It’s quite possible that Stage 3 painted too dark a picture of lawyers’ position, and that Stage 4 paints too brightly. Certainly, what I’m outlining here are the most positive outcomes for everyone — lawyers, non-lawyers, and most of all, clients. There are bound to be stumbles, breakdowns and various crises — revolutions rarely deliver a universally happy ending and they rarely wind up where the first revolutionaries intended. But what I do believe is that this future is possible and plausible — and if things break right and the market responds rationally, even likely. We’ll need luck and leadership, to be sure — but then, when haven’t we needed those things on our side?

I have one more post in mind for this series, Stage 5. Like Stage 4, it could run concurrently with other stages, and it could arguably be considered part of this legal market expansion period. But there are elements of it that deserve more attention than today’s entry can accommodate. It goes beyond expansion, all the way to transformation.

Jordan Furlong delivers dynamic and thought-provoking presentations 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.

The evolution of the legal services market: Stage 3

In the first two parts of this series, we looked at the traditional legal marketplace that held sway for many decades and the current disruption in the market caused by new technology, new competition and new regulation. Today I want to extend the time horizon a few more years and suggest what Stage 3 of the market’s evolution will look like.

Stage Three: The Fully Open Market


(a) The Market:

  • Multiple legitimate providers now fully active in legal market. Lawyers battling many competitors for market share.
  • Regulatory reform eventually sweeps away most remaining barriers to competition; only a small, high-value portion of legal work is reserved exclusively to lawyers.
  • Legal knowledge and tools are almost universally available and adaptable through the internet. Emergence of first industry standards in these areas.
  • Many consumer legal services shift from lawyers to non-lawyer providers; closure of numerous solo and small-firm law practices that cannot adapt.
  • Much corporate/institutional legal work shifts from law firms to non-firm providers; most midsize and large law firms downsize dramatically, some close.
  • Extreme efficiency: systems and software take on most paper, process and product work, plus growing amount of legal reasoning and analysis work.
  • “Non-lawyers” evolve rapidly to fill in new gaps in the market and serve clients directly; development and enforcement of non-lawyer standards and protocols.
  • Competition drives systemic improvements. Both surviving law firms and new legal enterprises make routine use of outsourcing, unbundling, software, project management, etc.
  • Golden age of legal technology: unprecedented volume and breadth of both individual and enterprise applications disrupt even innovative law firms.
  • Client access to legal services has never been greater. Prices for most services drop to their lowest levels in recent memory, some to true commodity levels ($0).

(b) Lawyers:

  • Growth of the legal profession stalls, then reverses for the first time in memory.
  • Traditional volume-based lawyer organizations (bar groups, publishers, CLE providers, etc.) either radically reinvent themselves or close.
  • Substantial number of law schools close or dramatically downsize; many adopt practical training offerings to compete for new students or serve practicing lawyers.
  • Lawyer self-governance survives, albeit with stricter standards for admission, discipline, and continuing competence.
  • Lawyer governance of the legal market comes to an end; governments or government agencies take over legal services regulation.
  • Legal jobs do disappear, even from outsourced destinations. Machines and systems partially or fully displace many lawyers from tasks they have traditionally performed.
  • The first new solo and small-firm practices begin to emerge: mobile, virtual, highly specialized, systematized, collaborative, and project-based.
  • The first truly global legal providers emerge on a scale not seen before (10,000+ employees, lawyers and non-lawyers). Massive law firm merger activity.

Era: 2016-2024

This stage is the logical conclusion of the period of creative destruction that began in Stage 2. The legal market is long overdue for some serious disruption, and much of this pent-up activity should be released late this decade and early next. Again, the key elements driving change are the lowering of barriers to non-lawyer ownership capital and competition, and the explosion of technology that displaces, or occasionally fully replaces, lawyers. Incumbents will have a hard time of it.

There is a steep price to be paid by lawyers during this period of market evolution: work that we had always assumed was within our exclusive bailiwick falls increasingly to providers outside our profession. Lawyers feel under siege on all sides, unable to rely on traditional defences supplied by governing bodies (many of which no longer regulate the market) and bar associations (many of which will lose critical masses of members and be unable to perform traditional professional advocacy functions). Many lawyers find themselves adrift in the market, in search of a purpose: what value do we provide? What tasks will pay the rent? Lawyers who graduated into the chaos of the 2010s are especially hard-pressed. This is one of the major factors that will drive an eventual widespread forgiveness of law school debt (part of a society-wide student debt forgiveness movement).

This is probably the nadir of lawyer employment, and there is much talk of a “lost generation” of lawyers who enrolled in law school just as Stage 1 was drawing to a close. In Stage 2, law firms downsized, but at least there were opportunities for contract work or entry-level tasks with LPOs or other low-cost providers. During Stage 3, however, even many of those jobs disappear into algorithms, software packages and artificially intelligent online programs. In addition, for reasons of both advancing age and shrinking opportunities, the Boomer generation finally departs the scene. The result, over time, is a smaller legal profession.

By this point in the market’s evolution, the supply curve has responded to the change in demand: law school enrolment is a shadow of its former volume, and schools are forced either to severely reduce their class sizes, merge with other faculties, or, in many cases, simply close their doors. This period sees the emergence of “non-school” legal education providers: private corporations that buy struggling law schools from their universities and turn them into training centers for both pre- and post-call lawyers, absorbing many CLE providers along the way.

The news is not all grim for lawyers. Stage 3 also gives us the first signs of the new law firm world — mobile virtual solos and streamlined mega-firms, to name two of the first species to emerge.

“Sole practice” has long been virtually synonymous with “general practice,” but solos in this era develop niche practices and hone unique skills in order to serve very specific markets over a wide geographic area. Small law firms also collaborate extensively with other solo and small practices, often coordinated by a  “general contractor” who assembles mix-and-match teams of solo specialists for specific one-off projects. What was once referred to as “general practice” work is more often the purview of large corporate entities that employ both lawyers and non-lawyers (criminal defence work remains the exception: matters of life and liberty still belong to lawyers).

Large law firms also adapt to the new ecosystem. The generic national or international “one size fits all” full-service firm is largely a thing of the past. Successful mega-firms are now truly gargantuan, growing to levels that make even the Big 4 accounting firms take notice. They are certainly not partnerships, vulnerable to the whims of powerful individual lawyers; they are businesses whose employees (many lawyers, but not all) support a defined culture of expectations and performance and adhere strictly to systems and management designed to maximize productivity and minimize waste. Super-boutiques also emerge to dominate particular practice or industry areas, also with a strong corporate infrastructure. Lawyers do not just lose control over the legal market; increasingly, they lose control within law firms.

The end of lawyers’ monopoly over legal services comes as something of a shock to everyone. This is not an easy or a clean transition: regulatory oversight of non-lawyer providers struggles in its early years, and there are some notable scandals whereby clients are systematically abused by unscrupulous providers. Many lawyers cannot resist the temptation to say “I told you so” when professional standards are seen to slip.

Significantly, however, despite some high-profile incidents of malfeasance among non-lawyer providers and the predictable failures of some ABSs, the new market dynamics work well. Regulation of the legal market hits its stride. Consumers of legal services, offered more choices, also become better-informed and more sophisticated. Lawyers, freed from paperwork, focus on higher-value tasks that better engage their talents. More people have more access to legal services appropriately aligned to their circumstances than ever before.

Once again, the dates suggested for this era are mostly guesswork. The real question is timing: How long will lawyers be able to maintain ring-fenced protection of the legal services market from outside intervention? The longer we can hold out, the longer this process will take, and it could be delayed for several years beyond this estimated timeline. But the end result will be the same. The “non-lawyer” genie is out of the bottle and it is not going back in.

But just as importantly, the world is not standing still while all this happens. Years of slow growth will come to a sudden end with a roar of renewed economic activity towards the end of this decade. Lawyers have not been idle, simply standing in the middle of the road waiting to be run over; they have been adapting as well.  These fallow years, as we’ll see in tomorrow’s instalment, are also setting the stage for the dynamic legal market and resurgent legal profession to come.

Jordan Furlong delivers dynamic and thought-provoking presentations 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.

The evolution of the legal services market: Stage 2

In yesterday’s entry, we painted a portrait of a closed legal marketplace long dominated by lawyers, and we considered the positive and negative results of that state of affairs. Today, in the second of five stages of legal market evolution, we’ll look at current events and forecast the likeliest path those events will take in the immediate future.

Stage 2: The Breached Market

  • Macro-economic upheaval shatters previous steady state of legal market.
  • Legal work, formerly indivisible, starts breaking into mission-critical, ordinary and commodity tranches.
  • Multiple new providers enter legal industry, aiming at second and third tranches of legal services; legal work starts to leave law firms and go to these new providers.
  • Growing access to legal knowledge enables more “do-it-yourself” law among consumer law clients.
  • New options and financial pressures spur both insourcing and outsourcing of legal tasks by corporate law clients.
  • Lawyers find they have limited regulatory options against emerging competitors, which become legitimized and start to mature.
  • Prices for lawyers’ services fall; in absence of workflow innovation or infrastructure improvements, lawyers’ costs continue to rise; ergo, lawyer profits stall out or decline.
  • Law firms cut positions to preserve profits; employment rates for new lawyers plummet; pool of unattached legal talent grows.
  • Legal technology becomes more disruptive, displacing lawyers from traditional roles.
  • Law schools start to experience pressure from lower enrollment, tuition resistance, extreme bad publicity.
  • In some jurisdictions, lawyers lose power to regulate the legal market and/or themselves (most notably England & Wales).
  • Lawyer jobs, for the most part, do not disappear; they relocate (to small centers, non-lawyer companies, India). Movement, not elimination, of labour.

Era: 2008-2016

This is more or less where we find ourselves today. The end of the Boom And Bubble Era (roughly 1985-2008) creates a lengthy period of de-leveraging and tepid economic growth that (a) forces clients to cut back on legal spending generally and (b) gives them the opportunity and ammunition to renegotiate terms with their legal service providers. In some respects, clients become lawyers’ main competitors: by keeping work in-house or doing it themselves, they deprive lawyers of a previously steady supply of activity and revenue.

Simultaneously, rapid technological advances (especially online) lower barriers and create numerous entry points into the market for providers previously unable to access legal customers. Lawyers find it difficult to battle these new competitors, in two ways.

First, as market regulators and UPL enforcers, we find ourselves stymied by the unconventional nature of new providers. Some are based outside our physical jurisdiction (LPOs), some are arguably not “practising law” (e-discovery providers), and some meet latent market needs to an extent that we might find politically risky to shut down entirely (LegalZoom). Mostly, though, there are just too many new entities to deal with all at once. It was one thing for a regulator with limited funds to prosecute a single paralegal or self-help publisher at a time; it proves another to take on entire, multi-jurisdictional, investor-powered industries.

Secondly, as practitioners, we suddenly recognize a wide range of vulnerabilities in our businesses. Our internal inefficiencies bloat our costs and therefore (thanks to our cost-plus business model) our pricing; our new rivals use streamlined operations and low overheads to undercut our prices and still turn a profit. Our rigid business models keep us from embracing online service delivery or 24/7 availability; our high-tech competitors make these two features the foundation of their market strategies. After watching us and looking for weaknesses to exploit, the new providers move into our traditional market space; we lack the ability to respond aggressively.

Together, these two forces — a decline in overall legal spend and innovative new options for legal services — combine to reduce demand for the services of lawyers. This is not a monolithic process: some areas of law are hardly affected at all during this time, while others are slowly eviscerated. The change also takes effect at different times in different jurisdictions, making it difficult to discern big-picture trends from isolated events. Many lawyers continue to believe that “this won’t affect me,” “this is just the recession” and “things will soon be back to normal.” But even those lawyers who understand the new market dynamics find it hard to change long-established habits.

Declining demand for lawyers rapidly leads to over-capacity in law firms, which in turn leads to falling lawyer employment rates, especially among unskilled new graduates. Simultaneously, at the other end of the generational spectrum, the economic difficulties of the past several years encourage many older lawyers to delay retirement and keep working for as long as they can. This one-two punch produces a large and growing pool of unemployed and underemployed lawyers, downward pressure on lawyer incomes (especially among inexperienced practitioners), and succession crises at law firms in which senior partners who control client relationships grip the reins of power ever tighter.

This era marks the beginning of the end of the traditional “BigLaw” business model, whose fundamental premises prove incompatible with emerging market realities. Many large firms find themselves trapped by two opposing forces: cash crises brought on by lower effective rates and declining business, and confidence crises brought on by flat or falling PPP numbers and the pressure of actual or anticipated rainmaker defections. Several very large firms fail to make it through this crucible.

The legal education crisis also traces its origins to this period: decades of strategic somnolence by law schools, combined with a popular belief that these institutions have been gouging their students and given them worthless degrees in return, creates serious blowback for schools and helps push down law school application rates. By the close of Stage 2, several law schools find themselves in more dire circumstances than they could have imagined a few short years ago, and as with their BigLaw buyers, some do not survive the crisis.

The most important development of this period, however, is the arrival in 2012 of Alternative Business Structures: non-lawyer ownership and capital in legal enterprises in England & Wales (building upon Australia’s trailblazing efforts a decade earlier). Starting with the consumer market, but eventually spreading to corporate and institutional work as well, new participants find willing buyers for their products and services. This development, while spawning the usual troubles of any startup industry, does not produce the widespread disastrous impact on professionalism and the public interest that some had predicted. The longstanding presumption that only lawyers could be trusted to offer legal services is called into question, and officials in other jurisdictions start considering more closely the possibilities of regulatory reform to open the market.

It’s important to note that final entry in the foregoing bullet-point list of features. The work that many lawyers once performed (especially new lawyers in large firms) is relocating to lower-cost or higher-efficiency providers elsewhere, but it is not yet being eliminated altogether. New people in new places are doing essentially the same work that lawyers here once did. This new state of affairs, however, is also a temporary one.

Again, the start and end dates are approximate; I chose 2016 as the back end of this period largely because it feels, in 2012, like we’re about halfway there. This mix of past and future history seems to me the likeliest model to explain and predict current and future events. For many lawyers, this is not a fun time. Unfortunately for them, as tomorrow’s entry suggests, things are about to get considerably worse in Stage 3.

Jordan Furlong delivers dynamic and thought-provoking presentations 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.