Tuesday, August 4, 2015
In a recent post, I urged readers to visit a legal department with a large legal operations staff. The goal? To see the future of modern corporate law practice. Fortunately, Bloomberg Law recently videotaped a legal ops panel moderated by Amar Sarwal of the ACC. It contains a conversation rarely if ever heard in law schools or bar associations.
The three legal departments profiled are AIG (insurance), Marsh & McLennan (diversified financial and professional services), and GlaxoSmithKline (pharma). Note the enormous emphasis on metrics, data, and technology. Note also how the services of law firms are being put through a procurement process.
Thursday, September 4, 2014
Plexus, a NewLaw law firm based in Australia, has just released a new legal product that purports to apply artificial intelligence to a relatively common, discrete legal issue -- detemining whether a proposed trade promotion (advertisement in US parlance) is in compliance with applicable law.
In the video below, Plexus Managing Partner Andrew Mellett (who is a MBA, not a lawyer), observes that this type of legal work would ordinarily take four to six weeks to complete and cost several thousand dollars. Mellett claims that the Plexus product can provide "a legal solution in 10 minutes" at 20% to 30% of the cost of the traditional consultative method -- no lawyer required, albeit Plexus lawyers were the indispensible architects for the underlying code.
From the video, it is unclear whether the innovation is an expert system -- akin to what Neota Logic or KM Standards are creating -- or artificial intelligence (AI) in the spirit of machine learning used in some of the best predictive coding algorithms or IBM's Watson applied to legal problems. Back when Richard Susskind published his PhD dissertation in 1987, Expert Systems In Law, an expert system was viewed as artificial intelligence--there was no terminology to speak of because the application of technology to law was embryonic. Now we are well past birth, as dozen of companies in the legal industry are in the toolmaking business, some living on venture or angel funding and others turning a handsome profit.
My best guess is that Plexus's new innovation is an expert system. But frankly, the distinction does not matter very much because both expert systems and AI as applied to law are entering early toddler stage. Of course, that suggests that those of us now working in the legal field will soon be grappling with the growth spurt of legal tech adolescence. For law and technology, it's Detroit circa 1905.
Friday, November 8, 2013
Clayton Christensen is the Harvard Business School professor who wrote The Innovator's Dilemma, the seminal book on why successful businesses so rarely stay on top over the long term. Although focused on the tech industry -- where product cycles are very short -- Christensen's framework has a much wider application, including legacy industrial enterprises and countries. In 2011, Christensen published a book called The Innovative University, which applied the Innovator's Dilemma framework to higher education.
Below is a YouTube video of Christensen explaining his thesis to a conference in Dallas organized around the future of public universities. His talk is very long by online video standards (80 minutes) but worth the time of anyone who wants to understand the Christensen framework and its application to higher ed. At approximately minute 45, Christensen specifically mentions law schools. Below the video is some additional context on Christensen.
Remember that near presidential coup at University of Virginia, which was reported in the New York Times Magazine last fall (link)? Well, Christensen's ideas had begun to propagate within the university trustee community, thanks in part to a letter than Christensen and Henry Eyring had recently written to the American Council of Trustees and Alumni (ACTA).
As discussed in the New York Times article, the coalition that was animated by Christensen's ideas was ultimately defeated by the palace guards. But that was the first attempted coup at a major research university, not the last. As Christensen points out in the video, universities are feeling pressure from innovative models that "compete against nonconsumption." In other words, lots of people would like the knowledge taught in the great universities, but that demand goes unsatisfied because of selective admissions requirements, tuition, and geography.
MOACs are the first volley in figuring out this untapped market. Those that dismiss MOACs as irrelevant are missing the bigger picture of what early stage disruption looks like.
Specifically, according to Christensen, here is the recurring dynamic: the new entrants siphon off work from the bottom-end -- work that the high-end says it does not want anyway. The cycle repeats itself a few times until, much to the incumbents' surprise, the bottom-end becomes more economically relevant and powerful. Why does top-end let this happen? Because the incumbents have come to view success as elite status and high margins, which is an unrealistically high long-term bar unless you are continuously innovating. Eventually, the so-called high-margin niche becomes insufficient to sustain the enterprise, and giants fall -- see the automotive industry, steel, computer hardware, televisions, consumer electronics, etc.
That said, does the university model of education have a life cycle, or is it above these coarse market considerations? I think it probably does.
In the year 2013, lots of knowledge is free or incredibly cheap. Next year, even more, and so on for the foreseeable future. As a result, many people are able to become astonishingly knowledgable and skilled because of the sheer joy of learning and becoming more competent. It turns out that university credentials are a pretty noisy signal for knowledge and competence -- a small positive correlation, yes, but not much more. This is an information gap problem.
In terms of sheer productitivity, most employers would prefer the folks who are driven to learn and continuously improve. Google has already figured this out, as a substantial portion of their high-end workforce has never completed college. Google employs them for their abilities, not their degrees.
When opportunity is unbundled from university credentials -- i.e., the information gap problem described above becomes cost-effective to solve -- the demand for university education as it currently exists (expensive and in limited supply) will go down. From a social perspective, this is a good thing. But it means that universities will have to innovate in the years to come in order to justify our tuition and fees.
Sunday, October 20, 2013
I would. The best example of ODR I have come across is Modria, who's tagline is "Any issue, resolved."
Before dismissing Modria as a trivial Internet parlor game, consider this: The technology and process at work here got its start at Paypal and Ebay. Why did Paypal and Ebay become so good at dispute resolution? Because their goal of becoming mega-volume businesses depended on it. If you have millions of transactions daily, a huge volume of low-stakes complaints is inevitable. If dissatisfied customers stay dissatisfied, they don't come back. Worse, they'll talk to their friends.
Now watch is video. Note that the target audience is businesses who (a) feel disputes are a drain on their time and energy, and (b) want happy, loyal customers who vouch for them to friends and family. A prompt, fair resolution to a dispute actually deepens the trust relationship. That's not speculation. That's science. And Modria, and it investors, know that.
In this book, Tommorrow's Lawyers, Richard Susskind talks about ODR as a highly disruptive innovation that will fundamentally alter the legal landscape. It is hard to fully appreciate that claim without seeing concrete example, like the Modria business model, up and running. Many businesses could be drawn to Modria, but so could/would many smaller governmental units. Indeed, several (progressive) county governments have become clients (e.g., on property assessment appeals).
Modria is disruptive because so many forums for resolving disputes, such as courts, repeat-player arbitrations, and various government boards, are not perceived as prompt, fair, and/or just, often times because costs of dispute resolution are so high. So even if the dispute is resolved correctly on the merits--for the subset who can pay the cost--there remains a large residue of dissatisfaction.
This is fundamentally a problem of institutional design. (The ReInvent Law folks understanding this.) The goal, or ought to be, a speedy, low-cost, resolution that is maximizes on the uumber of user who perceived the outcome as fair. Does any state or federal court think this way? In Tomorrow's Lawyers, Susskind asks whether "court is a service or a place" (p. 99). Alas, this is a staggeringly very large market.
Check out the management team of Modia. These folks come primarily from the dispute resolution programs in business and public policy schools. It is worth noting, however, that Modria's Board and its big-time investors include several lawyers, including Jason Mendelsohn, a former lawyer at Cooley who now works as a venture capitalist. Jason has invested in other businesses in the emerging legal vendor space.
Times are changing. And the pace of that change is picking up.
October 20, 2013 in Cross industry comparisons, Current events, Data on the profession, Important research, Innovations in law, New and Noteworthy, Structural change, Video interviews | Permalink | Comments (4)
Thursday, October 17, 2013
That is the message of Larry Richards, a JD-PhD consultant who runs a company called Lawyer Brain. At the 18th Annual Law Firm Leaders Group Conference here in NYC, Larry made this point with the video below. Very effective.
Five years ago, Larry told me to read Daniel Pink's book, A Whole New Mind. (Daniel Pink, by the way, is a lawyer by training.) The message of that book is developing the right side of brain (emotive, aesthetic, storytelling) with our left side (analytical, quantitative). That was very good advice. Thanks, Larry!
Wednesday, September 25, 2013
Somehow I missed this interesting Bloomberg Law interview of Mark Harris, CEO of Axiom Law. Anyone interested in the future of the legal industry ought to be watching and listening to Mark. Why? Because his company -- which now grosses north of $150 million per year -- has the ear and the pocketbook attention of the general counsel of the world's largest companies.
In the 15 minute video interview below, Mark answers several hard questions:
- Is Axiom Law a law firm? No. That is why it can take outside non-lawyer investment.
- Is Axiom Law competing with BigLaw? In some contexts, the answer is clearly yes.
- Is Axiom Law considering an IPO? Not now, but perhaps someday in the future. "There would be some advantages to being a public company."
All of this adds up to a lot of potential disruption. Mark uses that very word. For additional background on Axiom Law, see American Lawyer story, "Disruptive Innovation."
Saturday, April 27, 2013
Below is 1972 video of Viktor Frankel, a renowned psychologist and author best known for his book, Man's Search for Meaning. Frankel's greatest accomplishment was becoming an unflinching realist and idealist -- a person who simultaneously sees what is and what could be. To my mind, it would be impossible to get both concepts into proper focus without reading Frankel's book, which I found to be one of the most emotionally jarring and difficult, yet necessary and valuable, experiences of my life. If you are wondering how this could be, read the book.
In the rare footage below, Frankel explains how we harm the world by not hoping for and expecting the very best in others.
I think the point Frankel makes here has special significance for educators. [posted by Bill Henderson]
Tuesday, April 2, 2013
by William Henderson
A good friend of mine, Ed Reeser, who is a lawyer, sent along this video on the "Wireless Medicine" movement, which is apparently led by Dr. Eric Topol, one of the nation's leading cardiologists, author of the book, The Creative Destruction of Medicine. Its subtitle is, "How the Digital Revolution Will Create Better Health Care."
Seeing a connection to the burgeoning intersection of law and technology, Ed wrote:
"I don't send videos like this around, especially to busy people like yourselves. But this is a much better way to make a point on how technology is totally changing the landscape, and why it is so critically important to understand where it is going and why. .... The prospect for massively improved capabilities for quality service at lower cost are just beginning to emerge, and this is where the early adopters of the right approaches will have advantage. Understanding which will be right......is just the beginning of the game. If you think law is being impacted by technology.....watch this. Then, go back to your reflections on law and rethink the possibilities of where technology is going to impact law and how to become a positive driver of change with it, rather than roadkill in resisting it. "
Saturday, February 9, 2013
That is the title of this video interview of law firm consultant Kent Zimmermann of the Zeughauser Group. In the interview, Zimmermann relates a story from a recent large law firm retreat in which one of the partners raised her hand and said that one of her major clients in the healthcare industry recently used Axiom in an M&A deal. Not for due diligence. They used Axiom for the whole deal.
For what it is worth, I think we have a language / perceptions gap at work here. At least in the winter of 2013, the phrase "Legal Process Outsourcers" tends to connote masses of low-level attorneys toiling away doing low-level work in India, the Philippines, South Africa or in small or middle market cities in the U.S. -- i.e., a simple labor arbitrage play.
But Axiom's competitive advantage is in understanding the clients' needs and working backwards to a solution. The value here is in (a) listening carefully to the client (e.g., "we want the same or better quality but lower and more predictable pricing"), and (b) in designing and building a system that delivers that outcome.
For background on Axiom, read this eyeopening article, "Disruptive Innovation", from The American Lawyer. Axiom has backing from Sandhill Road venture capital and Wall Steet private equity. One of their investors is quoted, “Axiom has an opportunity to disrupt an industry that hasn’t materially changed in a century. ... With a worldwide legal market that is a trillion dollars each year, there is plenty of running room to build a successful business."
Water runs downhill. There is a lot of money to be made by making law more efficient and affordable. Lawyers need to facilitate this outcome, not obstruct it, as society needs and wants better, more affordable access to legal solutions. Process-driven legal services and legal products are the future. Indeed, as the cyberpunk science fiction writer, William Gibson, once quipped, "the future is already here — it's just not very evenly distributed."
For my own views on the incipient revolution that threatens 100 years of established hierarchy, see "Losing the Law Business," Cayman Financial Review (Jan 2013); for the implications for legal education, see Section II.C of A Blueprint for Change.
[posted by Bill Henderson]
February 9, 2013 in Blog posts worth reading, Current events, Data on the profession, Innovations in law, Law Firms, Legal Departments, New and Noteworthy, Structural change, Video interviews | Permalink | Comments (3)
Sunday, December 2, 2012
Saturday, November 24, 2012
Law firm consolidations are in the air. Over the last couple of weeks, two major Canadian law firms have entered into combination agreements with U.S./UK counterparts.
- Norton Rose (a British firm with a major Canadian presence) is merging with Fulbright & Jaworski, creating a firm with 55 offices and 3,800 lawyers. Details here.
- Fraser Milner Casgrain is combining with SNR Denton (US-UK firm that swallowed up the legacy Sonnenschein law firm in 2010) and Salans, which is a European law firm original formed in France. The resulting firm will have 2500 lawyers in 79 offices and 52 countries worldwide. Details here.
In the video interview below, Jordan Furlong, a Canadian lawyer, journalist and consultant (Law21), views these developments as the beginning of a major sea change.
To my mind, the consolidations we are witnessing have a lot to do with flat worldwide revenues. Law firms become uncomfortable places when they are not growing. Yet, really big law firms seldom fail because failure requires that a large number of partners vote their feet. A 30-partner defection can be a lethal blow to a 500-lawyer firm, but not so much for a 2,500-lawyer firm. The larger number of lawyers provides managers with more time and latitude to figure out a longer term strategy. Big feels safer. Further, once the consolidation is complete, the firm managers can thin the ranks of weaker partners, producing a stronger overall firm. (That is the theory, anyway.)
[Posted by Bill Henderson]
Tuesday, October 23, 2012
Have your heard of "Big Data"? Basically, it is the mining of large existing datasets to make better business decisions. There is a lot of discussion on this topic in the business world. See, e.g., Big Data: The Management Revolution, Harvard Business Review (Oct 2012); The Age of Big Data, New York Times (Feb 11, 2012).
The first signs of Big Data in the law firm world are the companies that provide electronic billing platforms for large corporations. These companies have all the data needed to discern the relative efficiency of various service providers -- name of firm, title of lawyer, practice area, billing rate, office, and a large portofolio of matters uniformly coded by subject matter and discrete technical tasks. Clients, of course, know the outcomes of matters, which provides the last piece of missing information to not only calcuate cost and efficiency, but also value delivered to the client.
What I love about this video is that the reporters are outsiders to the law world. They note that the "transparency" and "information" these companies provide are wonderful developments for clients -- and, of course, they are 100% right. Nobody wants to overpay, so tools to eliminate this problem are going to be widely embraced.
The obviousness of this point is why the legal services industry is at the beginning, rather than the middle or end, of a massive structural shift that will be wonderful for legal consumers but profoundly disruptive to law firms and law schools. In the years to come, we will have fewer lawyers and generally flat or declining incomes within the profession.
The real money will be made at the intersection of law and technology, which has the potential to scale legal work so it can be better, cheaper and faster. This is the road to commodification of law. It is good for society, but bad for those of us wedded to a traditional model where lawyers enjoyed more market power. Those days are fading into the horizon.
[posted by Bill Henderson]
Sunday, October 14, 2012
By Bruce MacEwen, of Adam Smith, Esq., a well known blog on law firm economics. What Bruce is talking about is going to have major fallout for legal education.
[posted by Bill Henderson]
Saturday, September 22, 2012
From our UK colleagues, specifically the lawyers at Riverview Law, which is a new-breed British law firm that does things exclusively on the flat fee model. Check it out:
Riverview's advantage may be more than its ability to produce funny videos that ricochet into the inboxes of inhouse lawyers. (I was alerted to this video via Twitter from Patrick Lamb, one of the ABA New Normal guys and a principal at Valorem Law, a Chicago-based flat-fee shop. Pat recieved his link from a client.)
Lawyers from Riverview Law were at the Legal Tech Camp that I have discussed in prior posts (here and here). To my mind, Riverview's greatest advantage is focus -- they want to do the same work as other corporate law firms at the same quality level or higher, but also at a signficantly lower, fixed fee price. The firm appears to work backwards from the price to make process-design and sourcing decisions. The result, plain and simple, is innovation. Long term, that is the only way they can make money.
Here is how they explain just one of their services, called Legal Advisory Outsourcing -- again, in a well produced video.
If you think Riverview Law is no big deal, this may get your attention. The flat-fee shop is partially owned by the mega law firm DLA Piper. Earlier this year, they opend an office in New York City.
[posted by Bill Henderson]
Sunday, September 2, 2012
That is the message delivered by Patricia Milligan, president of Mercer's human capital business. Who are the workers she is talking out? Managers, technicians and executives working inside the world's biggest companies.
I realize that many lawyers and law professors are likely to be skeptical of the pronouncements of human capital consultants.
But for a moment, let's take Milligan at face value. So, what are the skills in short supply? Milligan does not answer that question in the above video. But in the video on this webpage she suggests that such skills are a combination of communication, colloboration, and data analytic skills.
Note that Milligan thinks the talent shortage problem is too big for employers to solve on their own. This is leading to collaborations with academic institutions. Are law schools ready for such a step?
[posted by Bill Henderson]
Saturday, September 1, 2012
For the Labor Day weekend, I thought I would post this video of Henry Rollins, an American singer and artist who has continually reinvented himself since he left his job as a manager of a Hagen-Daaz ice cream store in 1981 to become the lead singer in Black Flag.
The point of posting this video is not to glorify Henry Rollins, but to consider, on its own terms, the life narrative of one interesting person. Rollin's formula of "application, discipline, focus, repetition" sounds a lot like deliberate practice. Based on my own research, I have broken this process into two steps:
- Identifying the core elements needed to be become an expert or master in a specific domain -- Jeff Lipshaw was alluding to this in his post on Donald Schon and reflective practice;
- Practicing, through thousands of hours of effort, on elements that one lacks in order to move along the continuum to mastery. Number 2 works best when the person has the benefit of feedback and coaching. Of course, they also have to be willing to do the work.
For an individual, it may not be necessary to formally break down the core elements into specific pieces. Instead, these pieces can be obtained iteratively through trial and error and reflection. I think this is what Rollins has done. It is a formula that works for one highly determined person. But can it be scaled?
As an educator, I am interested in making the components of practice mastery more explicit and transparent--this is step #1 above. To accomplish step #1, we still need to do foundational research that deconstructs the careers of outstanding lawyers into sets of specific skills, abilities, and competencies--i.e., the things to be practiced. (Notice I said "sets" -- outstanding lawyers often master different domains.) At present, the Shultz-Zedeck Effective Lawyering study is the only solid published research that is even adjacent to this topic.
Once these components of effective lawyers are identified--i.e., a law school identifies the skills, abilities and competencies it wants to develop over the course of three years--we move to step #2. This step raises complex questions of order (which competencies first, which come second, etc.) and pedagogy (best and most cost-effective methods) and measurement (how do we know we have made progress?). I think the answers would have to come iteratively, through trial and error.
Any educational institution pursuing this strategy would have to commit itself to studying and continuously improving the educational process. For law schools, this would be new. At the vast majority of law schools, we mostly teach legal knowledge, we don't articulate our intended educational outcomes, we let students pick their courses ala carte with minimal guidance, and we don't engage in serious measurement. But we could. I think this is the next great frontier--an enormous opportunity for any law school willing to think for itself, to experiment and to change. The data needed would come from one's own alumni, ideally supplemented with data sharing within a law school consortium.
[posted by Bill Henderson]
Wednesday, August 15, 2012
Over at the Volokh Conspiracy, Orin Kerr (GWU Law) links to a fascinating interview with Tom Goldstein, the Supreme Court advocate who started the SCOTUSblog many years ago in the early days of the blogosphere.
Goldstein's comments on the evolution of SCOTUSblog throw into sharp relief how the online world is gradually creating new institutions that chafe against established conventions of what is professionally or academically serious. I am not kidding -- 50,000 visitors to the site a day, including hundreds or even thousands from inside the Supreme Court itself. In comparison, Harvard Law Review has an annual subscriber base of 2,000 total. (Goldstein mentions this in passing--the absolute pitch perfect way to deliver news like this.)
Another interesting point made by Goldstein was how SCOTUSblog was originally started as a vehicle for marketing Goldstein's firm. Yet, as readership took hold, he completely abandoned any attempt to directly advance the interests of his firm through editorial content--the benefits of cultivating a perception of objectivity were very indirect but ultimately much greater. So journalistic firewalls have been erected. If his firm is handling a case before the Court, or making a filing, it not discussed on the blog by anyone from the firm. Outside commentators handle any relevant commentary. Objectivity and thoroughness are the goals.
SCOTUSblog has also gravitated away from analysis done by students at Stanford and Harvard, where Goldstein runs Supreme Court clinics, to analysis by leading subject matter experts. (In the legal academy, we are often clamoring for peer review -- well, Goldstein has acheived it.) SCOTUSblog now runs well-attended symposia.
Folks, SCOTUSblog has become a highly influential institution that is closely followed by the Supreme Court itself. And it started as a blog. In fact, it still is a blog. Based purely on reach and influence, it is more serious than any center operating out of a law school.
Perhaps it is time for us to be more openminded about what "counts" as serious. What Goldstein has created looks very serious to me. (H/T to Orin Kerr for directing me to this excellent video.)
[posted by Bill Henderson]
Sunday, July 8, 2012
The Big Think just posted a wonderful video of Slovenian philosopher Slavoj Zizek, who describes himself as a "complicated Marxist" because he holds in his mind simultaneously the virtues of individual capitalists with the problems of domination and inequality that are endemic to the capitalist system.
I am posting the Zizek interview here because many of the problems currently afflicting legal education and the legal industry that I write about here are, more formidably, mere symptoms of broader problems that flow from a rapidly globalizing world economy--a topic so complex that we seldom acknowledge it. That said, Frank Pasquale, in a post called "Jobless Futures," does an admirable job of cataloging our collective confusion.
Zizek suggests that the solution to engage in serious thinking rather than misguided, ill-conceived activism. Ah, now this should be the competitive advantage of a university-based graduate-level law degree--in addition to practical lawyering skills, we should be practicing with our students the science and art of critical thinking. The best lawyers sidestep ideology and can think through issues on par with Zizek, whom we don't have to wholly agree with to admire.
[posted by Bill Henderson]
Friday, June 29, 2012
Ignite rules are simple: a talk with 20 PowerPoints that advance automatically every 20 seconds. Six minutes to make your point. It you don't know your material, it's a disaster. If you are prepared and you understand how to connect with your audience, you educate and inspire -- in a word, you ignite the audience.
Below is an example of Ignite done very well, by Michael Bossone (Miami Law, co-founder of Law Without Wall). This presentation just got a rousing ovation at the Law Tech Boot Camp in London. I saw it happen live. It was awesome.
[posted by Bill Henderson]
Sunday, May 20, 2012
Entrepreneur Peter Thiel (Stanford Law '92) is financing twenty $100,000 scholarships for young people who agree to "stop" their formal education for two years to pursue or join a real world project broadly related to some aspect of business, innovation or technology. See Thiel Foundation's "The 20 Under 20 Fellowships."
Thiel is a former federal judicial clerk turned securities trader turned entrepreneur (founded PayPal) turned hedge fund manager/venture capitalist (he bet big on Facebook and won). Thiel believes that the key skills for innovation are not taught very well in universities. Further, because Thiel believes we are in the midst of a serious higher education bubble, he argues that the debt incurred by students only hobbles their ability to pursue activities that would redound to the benefit of the U.S. economy. Thus, as a nation, we are stuck in a very unhealthy spot.