Legal Disrupted. A Case of the Innovator’s Dilemma

lawyer-450205_150 Scales of JusticeNo profession is immune from disruption. A business with a value of $400 billion per year is a attractive target for newcomers, ranging from financial institutions to startups. Can legal ward off its challengers? Not without changing.

“The Innovator’s Dilemma” refers to Clayton Christensen’s theory that successful companies are too focused on customers’ current needs and that they fail to adopt technologies that will fulfill customers’ future or unspoken needs. When the goose is laying the golden eggs, it can be challenging to focus on what happens after the goose is gone. Think of Blockbuster’s collapse to Netflix or Amazon’s decision to develop the Kindle. The question for the mammoth book retailer was whether they should dig in their heels and fight ebooks which threatened to cannibalize their hard copy book sales. Jeff Bezos was savvy to the Innovator’s Dilemma and chose to lead in ebooks. Today Amazon controls 67% of the ebook market.

But the Innovator’s Dilemma pertains to technology. The legal profession is not about technology…or is it?

For context, let’s look at the thoughtful internet debate over the past few weeks. The catalyst was the post, “The Profession is Doomed,” by Toby Brown, published in 3 Geeks and a Law Blog. Toby had participated in a National Conference of Bar Presidents panel on the future of the profession.

One of the panel members described a change coming in Washington State where the first licenses to Limited Licensure Legal Technicians (LLLT) will be granted this spring. An LLLT is a new non-lawyer legal professional who may advise and assist clients. An LLLT must meet certain criteria but can qualify with an associate level degree. Approval of LLLT was opposed by the Board of Governors of the Washington Bar Association but was approved by the Washington Supreme Court. Brown writes that the focus of the conference presidents and executives was on finding ways to kill the LLLT.

Brown left the conference that day convinced that the profession is doomed because those in power in the profession won’t drive change, leaving it open to disruption from without.

Another compelling post on this topic, “Big Law as Legal Fiction and the Lack of Innovation,” is written by Ron Dolin who is with the Stanford Center on the Legal Profession. Dolin looks at how Big Law firms make decisions and how they decide to innovate, or not.

Dolin points out that the stagnant growth in 75% of the AM100 contrasted with the rapid growth in lower margin legal services startups such as LegalZoom and Rocket Lawyer is evidence that change in Big Law is needed.

Dolin references Prof. William Henderson of Indiana University Law School who commends the innovation of Bryan Cave, Seyfarth Shaw, and Littler Mendelson, yet estimates that “only 10-15% of large law firms have embarked on strategic initiatives that take into account the ‘New Normal.’” Henderson has warned of a train wreck along the lines of the Innovator’s Dilemma coming in Big Law in the next 5 to 10 years.

So why are Big Law firms moving slowly? Per Dolin, Big Law grapples with various paralyzing questions: Is change really needed? Would it best to see if a few firms fail before action is taken? How significant will the costs be? It’s easy to see that PCs make sense, but how does one know how far to take new technology? And, will the benefits of these new potentially expensive changes be realized after current partners retire? Dolin points to the partner system as deterrent to innovation in Big Law.

Our view is far brighter. Today’s solutions can enable traditional legal to become more nimble and cost-effective. As a matter of disclosure, our company, Mobile Helix, provides a mobile app designed specifically for lawyers which allows lawyers to work with DMS, files, SharePoint and email from anywhere. In essence, we enable lawyers to be more responsive to clients and to get greater value from their time.

Mobility is a huge gift to lawyers. Every day we support firms which are earnestly working to provide more productivity to their lawyers. As one legal IT director stated, the ROI on any ten or fifteen minutes which a lawyer can recoup on the go is high and the personal satisfaction is great.

Mobility reduces costs because time is used more productively. Lightweight mobile solutions are a very effective way for law firms to drive efficiencies. There are technologies, including ours, which can be adopted today without massive investment. The ROI begins on the first day, not years from now.

Toby Brown did legal a service by raising the flag on this subject. Legal need not be doomed. But innovation and action is required…and the clock is ticking.

–Maureen

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