Dear Legal Innovators: This is Normal

[Note: this article appeared in Legal Business World (pg 25)]

Whenever I tell my friends that I work on bringing law into the present day, they all say “well, it can’t be as bad as {my profession}”. I know this is purely anecdotal, but they all say it. It doesn’t matter the industry: the latest technology is not being used, the business models are out-dated, and nobody is willing to take ownership over making a change. These sentiments are so ubiquitous that casting aspersions on the legal profession as if it’s “so far behind” is not only counter-productive, it’s inaccurate. The so-called laggardness of law is not an industry-specific problem. It is a common challenge of human nature.

The legal industry is not facing something unique. Countless industries have gone through technology-influenced upheavals. They have faced disruption. Great companies have fallen. This is business. This is normal.

These challenges are new to everyone involved; so how about we all take a slice of humble pie. It is the too easy and too unproductive to label those who don’t see your vision as “not getting it”. The notion that legal innovation is only difficult “because lawyers” is not merely unhelpful, it assumes that legal innovators hold all the answers. One always goes from unconscious incompetence, through conscious incompetence, before arriving at conscious competence.[1] So given the relatively new existence of serious legal innovation, we’re probably entering the conscious incompetence phase. [2] Yes, certain aspects common to the stereotypical lawyer can be deemed counterproductive to innovation. But there are just too many examples of professionals in other industries behaving the same as lawyers to (1) say that struggling in changing marketplaces is a law-specific problem and (2) blame lawyers for said struggle. Are you telling me that accountants – who are presently crushing lawyers at their own game – are inherently more innovative and risk tolerant?

Our ignorance regarding technology and business causes us to mistakenly assess our ability as being greater than it is. As regulations and technology open up the legal profession to those with ruthless business acumen, lawyers must not only own the fact that they are running businesses, but stare down a stark reality: that there can be wholly distinct levels to competition – levels so distinct that what’s being played is in essence a whole different game.[3] Such a skill gap might seem hyperbolic, so allow me to try to illustrate the point:

I have a friend named Charlie. By amateur standards, he is mediocre at squash. But to his fellow law students who had never played before, he was unstoppable. Instead of recognizing their own incompetence, these students assumed Charlie must be some kind of squash phenom. “You should play against Jack,” they told him. Charlie, knowing that Jack was a former varsity squash player and that even stepping onto the court with him would be obscene, tried to explain how there was no point to him playing Jack. But these students were not good enough at squash to perceive the skill gap between Charlie and Jack, so they continued to insist the two play each other.

The whole “you need to be better” aspersions must be incredibly frustrating for lawyers who genuinely care and who, by the way, typically have zero prior business experience. In a short amount of time, they went from total self-regulation to being constantly compared to those who have spent their entire careers focused on business skills.

It’s hard to blame partners for tuning out. Why, Mr. Susskind, should we be running around to tell a roomful of millionaires that their business model is wrong?[4] You could consider that, in 2018, 59% of law firms are still not feeling economic pressure to change.[5] Or consider that, if you were a millionaire, would even be willing to listen to little-old-me poke holes in the thing you’ve slaved away at for twenty-five years? Before even coming to grips with the responsibility they’ve inherited, and that the ground is shifting under their feet, partners are already being told they’re doing it wrong. Lastly, consider that the way to virtually guarantee some one will not change is to flat out tell them they’re wrong.

Beyond lawyers struggling to develop newly-demanded business skills, the legal market is undergoing changes that any business leader would find difficult to navigate. In fact, Clayton Christensen provides a long list of industries – from excavators to motorcycles, from hard drives to printers – wherein disruption toppled virtually all of the leading companies. Navigating disruption is really, really hard. These industries all made the textbook mistakes that, at the time, didn’t feel like mistakes: (i) kept current practices until their top customers outgrew them, (ii) inaccurately assessed emerging markets and disruptive competitors, (iii) painted themselves into corners of “focus on high value”, and (iv) didn’t understand the threats their businesses were facing.[6]

It is hard to wrap your head around disruption. In a nutshell, it’s hard because the usual answers to companies’ problems – planning better, working harder, becoming more customer-driving, and taking the longer-term perspective – all exacerbate the problem.[7] Furthermore, waiting to see how a market disruption goes makes you too late to do anything about it. Instead, we can look to industries where disruption has occurred and learn from the winners and losers.

The criticism of lawyers as somehow uniquely change resistant or technologically stunted is misplaced, and prevents people from learning the lessons from the other industries. So far, much of the legal profession’s response to disruption is utterly typical – and that is a bad thing if you want your firm to stick around. If more law firms fall it won’t be for lack of examples we could have learned from. We just need to stop looking for an easy explanation on why change is so difficult, accept that it is difficult, and go from there.

“The impediment to action advances action. What stands in the way becomes the way.”

― Marcus Aurelius

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[1] Dunning-Kruger effect https://en.wikipedia.org/wiki/Dunning%E2%80%93Kruger_effect

[2] The only exception I can think of is if they successfully managed a company through an industry that underwent similar changes to law before transitioning to the legal industry.

[3] Wallace, David Foster. “The String Theory” https://www.esquire.com/sports/a5151/the-string-theory-david-foster-wallace/

[4] Brown, Jennifer. “Susskind on Tomorrow’s Lawyers”  https://www.canadianlawyermag.com/legalfeeds/author/jennifer-brown/susskind-on-tomorrows-lawyers-surely-our-generation-will-redefine-the-way-that-law-is-practised-7429/

[5] Altman Weil, “Law Firms in Transition 2018”  http://www.altmanweil.com//dir_docs/resource/45F5B3DD-5889-4BA3-9D05-C8F86CDB8223_document.pdf

[6] Christensen, Clayton. The Innovator’s Dilemma.

[7] Christensen, xviii