Over the next month, members of the American Association of Law Libraries will vote on whether to change the name of the organization to the Association for Legal Information.  I will be voting yes, and I encourage all members to take the time to research and think about what the rebranding and renaming initiative means for the association, the profession, and yourself. This is important, and no member should stand on the sidelines and let others cast votes in your absence. The rebranding effort is a huge undertaking by the leadership of the association, and is step one of many in helping the association change to meet the needs of current and future members.
Nearly six years ago, I penned a post called “This Isn’t Your Daddy’s Law Library! – Time for a Law Library Revolution.” In that post, I point out the new and creative ideas and services created by law librarians, and the desire of those who wish to steer the profession back what they believe to be the core function of law librarians in acquiring, storing, cataloging, and distributing legal information. Here is a sample of my thoughts on what happens when the library pendulum shifts toward new and progressive ideas, and the desire for some to move that pendulum back to the center.

Whenever the law library gets progressive and starts promoting new ideas, those ideas get spun off into their own departments and the creative law librarians leave the library field to join these departments. Things like Knowledge Management, Competitive Intelligence, and even some Marketing and IT ideas that were created in the library now exist outside the library. So it seems that the general direction the law firm libraries have taken in the past 15-20 years is to get us back to what we were doing in the 1980’s.

My thoughts back then were focused on the moves by law firms to place library functions under the IT and/or Marketing departments. My thoughts now are that six years have nearly passed and while this is still a conversation within the industry, the next wave of change is already taking place. A new outsourcing movement is occurring in the Northeast where entire law library functions and personnel are not only removed from a Library Department, they are being removed from the law firm completely and now work for a Library Consulting company. We are still arguing about where we exist within the firm, while the leaders of the firm have moved on to deciding if we even belong in the firm at all.

The only thing harder than adjusting to change, is pretending that the change hasn’t already happened. As General Shinseki so eloquently stated, “If you don’t like change, you’re going to like irrelevance even less.” The Law Librarian profession has changed, and is continuing to change. That is not a bad thing, it is just the reality of the profession. It is up to the leaders within our profession to position the association, and prepare its members to lead and direct the changes, rather than react when it is too late.

During this decade, the corporate law firm libraries have vanished, the private law firms have undertaken massive changes in structure, and the government law libraries have transformed themselves into a new function surrounding access to justice. The academic libraries haven’t had the drastic changes in structure, but they are not immune. We saw hints of change at Harvard with John Palfrey’s brief reign, but not nearly what I envision will happen over the next ten years to what the pain of decreased admissions and the burden of student debt brings to the entire law school organizational structure.

Times for law libraries aren’t simply changing — they have already changed, and the next wave of change is already upon us. It’s time that all of us understand that, and stop thinking of ways to move the library pendulum back to center. That pendulum no longer even exists for many of us in the profession.

This brings me to why I am voting “yes” on the initial phase of rebranding AALL by changing the name to the Association for Legal Information. The profession has changed and it is time for the association to lead and prepare its members for the next round of changes, rather than lag behind and react after the fact.

The profession’s core functions are still based on acquiring, storing, cataloging, and distributing legal information. However, those functions will be more of a commodity than an added value. It’s all those other functions that we as librarians have produced over the years that will create the value the profession produces. Information to Knowledge, and Knowledge to Intelligence, and Intelligence to Experience, and Experience to Expertise are the key factors going forward. It starts, but does not end with the information we gather and maintain. The association needs to position itself to lead on developing these value added functions, while continuing to support the core functions.

The Association for Legal Information is where we start with the rebranding of our association and profession. This will be the springboard to help us leap to the next iteration of what being a law librarian and legal information professional means, and the value we bring to the legal industry as a whole. The rebranding is not about leaving law librarians behind. Far from it. It is about augmenting what we do, and bringing new ideas and new experts into the field to use as specialists, and for us to learn from them in return. It is about Law Librarians being the change and leading the way into the future.

Regardless of whether you love this concept, or hate it, the University of Michigan’s Medical School may have just laid out the future of the Librarian as “Informationist.”

In its announcement regarding the opening of the new A. Alfred Taubman Health Sciences Library (THSL), U-M Med School removed all of the books, and bookshelves, and created a 137,000 square foot “natural light-filled medical education hub that supports in-person, collaborative, active learning.”

Books are off-site and available via “rapid delivery upon request.”

The Library is staffed by “Informationists” that serve the University and general public to access the “stored knowledge of medical and health science.”

Space is for learning, training, teaching, connecting, simulation, and collaboration. Not simply for housing “stored knowledge.”

I, for one, like this concept. I like the idea of having Informationists. I like storing massive amounts of books off-site and focusing more on digital access, and quick retrieval of information from a stored location. I like the idea of using the space for hands-on training, collaboration, and interaction.

I know that there are some things that are missing. The happenstance of browsing the shelves and coming upon the one book that has the answer that you would have missed online. The ability to sit in the middle of a quiet area of the library and study without people having a disruptive discussion. The ability to find a spot deep in the shelves and hideaway from the rest of the world.

All of that has been replaced with digital catalogs, and study rooms (probably with big glass windows and lots of outdoor lighting.)

Despite this, and other things that may disappear with this style of library, I think this is the future. If we do not embrace this, or something similar that creates a more interactive space, then libraries will not evolve, they will shrink and disappear. Traditional Librarian roles will struggle to maintain, but Informationists or the next iteration of engaged and interactive Librarian will thrive and innovate their way into the future.

Watch the video of the ideals behind the new library design. As you are watching it, think about how the concepts apply to your library space and service strategy. Replace “medical” with “legal.” Replace “school” with “court” or “firm.” Think big and imagine what you could do beyond storing and retrieving knowledge in your own library.

When students come to the University of Michigan, they don’t just think about becoming a doctor, a medical scientist, or a health professional; they think about making the world a better place.

Now we’ve created a better place for them. A place to learn, to connect, and to grow.

Welcome to the new, vastly improved Taubman Health Sciences Library.

What was once a traditional library has been transformed into a light-filled, technology-driven, dynamic learning space. Our students envision a future where learning, technology, and passion combine to help patients, and enhance the public’s health. So we designed the renovation with those same ideals in mind.

Now students and their professors can connect and learn in dozens of classrooms, small group rooms, simulated patient care rooms, and an all-digital library environment. 

The building allows students from different health profession programs to come together in new ways. To learn how to care for patients as a team. To problem solve. And, to learn from one another, as well as faculty. 

For our medical students, the renovation means a quantum leap – as big as their innovative new curriculum. Here, they will learn the core principles of doctoring to prepare them to become members of outstanding patient care teams at the University’s nearby hospitals and clinics. The walls and tables will become canvases for their ideas and questions. They can even spend time in the new medical student lounge. 

Rows of bookshelves may have vanished from this library building, but the vast holdings of one of the nation’s best medical libraries are still available for rapid delivery upon request. 

The Library’s Informationists are still here to help the university community and the general public access and use the stored knowledge of medical and health science. For those who learn and those who teach it’s all about making the world a better place, one place at a time. [emphasis added]

Image [cc] photologue_np

Over the past few years I have been less than impressed with the types of new research tools that have entered the legal market. Especially from the major players. In the past five years, all of the major vendors have re-vamped their flagship products, or have merged with other companies and have updated the interface, and the back end. This makes for a slicker look and feel and some enhancements on the user’s experience, but when you really break it down, it’s really just the same concepts with a few new features and (hopefully) better functionality. When I worked for the Oklahoma Supreme Court Network, way back between 1999 and 2002, I felt like the legal technology field was on the cusp of something really great. Thirteen years later, I feel like I’m still waiting on that greatness to actually arrive. It’s been over a decade of technologies just not quite reaching that threshold, but maybe my wait is finally over.

In the past week I’ve talked with a number of people that have come out of Stanford University’s CodeX, the short name for The Stanford Center for Legal Informatics program. It may be the first time in a decade that I’ve actually gotten excited enough about legal information technology that I thought I need to quit my job immediately and find a way to get involved in these start ups coming out of California. The ideas coming out of CodeX are actually novel concepts, rather than what we’ve seen for many years of simply repackaging old ideas into cheaper, better, easier, or more accessible platforms. CodeX is having a FutureLaw Conference this week, and I’m sorry that I’m not going to be there to see first hand what is the latest technology being incubated in CodeX.

I want to touch on three products, not as a full product review of those products, but rather just from the idea of how they are looking at things differently. All got their start through the Stanford program, and all have some truly unique and original concepts of how to pull relevant information from legal documents.

First up, Lex Mechina.

Lex Machina isn’t new on our radar. We did a bit of a review on this last year. The idea comes from what they call “Legal Analytics” of parsing large amounts of information about judges, lawyers, and other points of data regarding IP Litigation. The concept of analyzing the data to help “predict the behaviors and outcomes that different legal strategies will produce.” The most impressive review of Lex Machina came from an attorney that told me he was tired of getting beat by opposing counsel because they had this product. That is perhaps the best quote to ever hear from your attorneys when you are contemplating buying a new product. It’s hard to argue against.

Second is Ravel Law.

Jean O’Grady has reviewed and talked about Ravel Law, so there’s no need for me to rehash that here. As with many law librarians, sometimes we have to see with our own eyes before we actually “get it” when it comes to new products. I have to admit that happened to me with Ravel Law. I saw Ravel Law’s Co-Founder and CEO, Daniel Lewis, present alongside Fastcase’s Ed Walters at the ARK Group’s Law Library conference back in February, and have to say it was at this time that the “light went on” in my head that we were looking at a different approach. Information laid out in a readable and effective method, along with visual representations that allow a researcher to quickly spot the relevant information quickly and move in a non-linear method toward additional information. The Judge Analytics is one of the most interesting ideas I’ve seen in a while.  It was pretty amazing to watch it all unfold, and come to realize that they were definitely on to something with this product.

Finally, there is Casetext.

Just as with Ravel Law, I just didn’t immediately “get it” when it came to Casetext. However, after having a two and a half hour long call with Pablo Arredondo last week, I immediately became a fan. Just as with the other products, the information is compiled and displayed differently than we typical researchers are use to seeing. Heat maps and summaries and context and innovative citing methods are used to create visually stimulating and logical organization of the information all within the visible screen area. Add to this the ability for users to add in relevant information, upload briefs, and join communities, it just shows the potential of this platform and a truly novel approach at leveraging a community of legal researchers and practitioners.

Are We Seeing the First Steps Away From Keywords?

This is something I think I will come back and visit in later posts, but I wanted to touch on it here. It is my belief that in the next five to ten years we will no longer look at keywords as the primary way to research legal information. I think we are seeing the genesis of that concept here with these three products. In a way, we are looking at a high-level of compiling documents, information, topics, and insights through advanced algorithms or crowd sourced trends and actions. Think of it as the traditional digest system, only automated and always morphing as new information is added or the actions of individuals change throughout the research process. It is a fascinating idea to contemplate, and I really think that we are on the edge of a monumental change in how we typically “find the law” in legal research.

Content Is Still King

What I’m seeing with these product is that we are simply scratching the surface of what is coming next. Lex Machina is taking a tiny slice of the legal information world with its IP Litigation docket process. Ravel Law and Casetext are doing great things with a core set of case law. Imagine what would happen if these and other products start parsing larger amounts of data. No one seems to be touching statutes and regulatory information. Dockets are a logistical mess, but the potential is huge. News, law reviews, blogs, internal documents, state, federal, and foreign and international information are ripe for exploitation from these new thinkers. It will be interesting to see if there are ways that these powerhouses of idea generations will be able to team up with the mega information holders, whether that be governments or private holders, and really test the limits of how we conduct legal research in the future. I, for one, am excited to see what’s next.

Ryan has previously waxed poetic about how some mandatory bars are imposing odd and counterproductive ethics rules and opinions.

This topic resurfaced for me recently as I have been asked to present to a futures committee of a mandatory bar in November. They are wanting me to give them a picture of all that is going on with pricing, legal project management and numerous other developments in the market.

This is an opportunity to share my thoughts in a neutral environment – where I can speak quite freely. I had been giving some thought to how to best utilize such an opportunity. My mind wandered through various subjects and how I can best educate them on the realities of this changing market. My mind then shifted to what can a bar do to help its members. A lot of this thinking was around how the bar can provide resources to help its members do better pricing and bring efficiencies to their practices.

And then it hit me: Those Stupid Rules.

Oh opportunity.

Having previously worked for a mandatory bar, I have more knowledge than I care to on how ethics rules and opinions are generated. The core question at the base of every issues is “Could a client be harmed?” or some variation on that theme. On the surface this sounds perfectly reasonable, since protecting the public is part of a mandatory bar’s charge. In practice however, based on lawyers’ risk averse natures, this unit of measure is usually taken to an extreme.

Take for example Ryan’s target; the Texas Bar Ethics Opinion 642. I can predict how the discussion went around this issue. The core question was: Could a client mistake someone with an “officer” title working at a law firm to be a lawyer? At the extreme the answer is: Yes. Someone, somewhere could make that judgement. And if that’s the case, there is a concern that using those titles could be interpreted as holding oneself out as a lawyer. And we all know the danger in that. (For normal people out there, the danger is that someone might pay this ‘non-lawyer’ for legal advice.) Given that string of logic, it makes perfect sense to issue an ethics opinion prohibiting law firms from using that title.

Back in reality – this type of rule actually inhibits a law firm’s ability to better serve its clients. Professional CIOs, CFOs, CMOs and others bring an expertise that adds to the abilities of firms and lawyers to serve their clients. Inhibiting the ability of firms to attract such talent is running in the wrong direction.

The straw that pushed me over the edge (metaphor blender engaged) to write this post was visiting a law firm’s web site and seeing the words “This is an Advertisement” prominently displayed on their homepage. Of course they felt compelled to include this since some ethics rule requires it.

Seriously?

I know – I know. Someone, somewhere might confuse a website as legal advice. Right.

So … mandatory bars, here’s my top recommendation. Stop it with the stupid rules. They are not protecting clients. They are doing the exact opposite. Restrictions on advertising limit the information avilable to clients about the value and need for legal services. So in addition to asking “could a client be harmed” ask some follow up questions, like: Will these restrictions hurt clients? If clients are not aware of the value of estate planning, will they be harmed? Not only is the answer yes, but last check 50% of adults in the US do not have wills in place. Enough said.

1974 was 40 years ago. Try implementing some rules suited for today or better yet, tomorrow.

Rant Complete (for now).

The following is the final part of a 4 part post expanding on my short introduction to an ILTA session entitled, Do Robot Lawyers Dream of Billable Seconds? If you have not yet listened to the full session (and you have nothing better to do for the next 90 minutes), you should go listen to it now. If you would like to download and read the entire 4-part post you can get it here.



What does an Exponential Law Firm that can survive in this type of environment look like?

I would be lying if I said I knew for sure, but I think we can look to a number of trends and begin to get a fuzzy picture of the future.

More Legal Processing will be passed off to computers

We like to pretend that everything we do is custom tailored for every client, but it is simply not true. We are already past the point where we need to improve efficiency in order to provide a better price to our clients. In the near future, we will need to improve efficiency in order to make a profit. That means we will need an honest assessment of the work that can be automated, or performed by algorithm, and the work that will require custom analysis by specialized attorneys. Then we will begin pricing that work accordingly.

The rise of the Legal Processing Engines

This obviously goes hand in hand with the above, but one of the implications of this change is that the output of biological legal processing units (most attorneys) will shift from customized legal work, to engine building and maintenance. The focus of many firm attorneys will no longer be on individual clients, but on entire types of matters at once. Attorneys will no longer slave over a single contract, but over the engine that builds that type of contract.

Engines will manage as much work as they can and spit out any unique or unusual work to be reviewed by senior attorneys. That “unique” work will be analyzed and evaluated to determine whether it can or should be incorporated into the engine for future use. Over time the engines will do more and more complex work.

The rise of the Legal Engineer

Inherent in the rise of the Legal Engine is the role of Legal Engineer. We are already seeing this role pop up at many firms. These are people with legal training and technology “know how”. They are equally comfortable analyzing contracts and programming new applications. There are very few people who fit this role today in big law firms, but firms who want to survive post disruption will hire these people by the truckload. The engineers will be responsible for creating and maintaining the firm’s engines. As laws change, or interpretations change, the engineer will modify the engine appropriately.

Machine Readable Documents

Once we are using engines to process legal matters anyway, it will make sense to just go all the way and make all legal documents machine readable. Gone are the fuzzy shades in meaning between contains and includes, or the differences between shall and must, to be replaced by the definitive ⊇ and =.

Proactive Practice of Law

In this world, firms will stop being reactive. The idea of waiting for a client to approach the firm before working on a matter will be unthinkable. Legal engineers will build engines based on legislation and firm sales associates (or Partners) will pitch those engines to potential clients.

Is this Science Fiction?

Simply put: computers process information more consistently, accurately, and faster than people do. They are networkable, scalable, and manageable in large numbers by relatively few administrators. If I am right in my assessment that what we actually sell to clients is Legal Processing, then no, this is not science fiction. In order to compete in an exponentially changing industry, we will have to move the bulk of our processing from biological to digital processing units.

If Diamandis’ exponential framework is correct, then we are approaching a digital disruption that will fundamentally change our industry forever. The players will change. New firms will quickly morph from newcomers into industry leaders. Many of the old guard will fail to change and will subsequently fail entirely. And a few will probably stick around, doing things much as they always have for a very select, demanding, and equally slow to change clientele. At least until those clients also get disrupted.

Whether or not I am right about what we sell, or that the framework directly applies to the legal industry, is almost irrelevant. The 6 Ds Framework provides a useful model for imagining the kinds of changes that could take place in our industry, based on the kinds of technological changes that have already upended other industries.

The only thing of which I am absolutely positive is that both lawyers and IT personnel, as a general rule, do not think much beyond the next immediate hurdle. They approach the world linearly, solving problems as they arise, and planning for a steady progression of linear events. But if we are already on a path of exponential change, then our standard linear approach to managing firms will be our demise. A purely linear response to an exponential threat is the equivalent of no response at all.  

The following is the 3rd part of a 4 part post expanding on my short introduction to an ILTA session entitled, Do Robot Lawyers Dream of Billable Seconds? If you have not yet listened to the full session (and you have nothing better to do for the next 90 minutes), you should go listen to it now. If you would like to download and read the entire 4-part post you can get it here.


What does this mean for legal service delivery?

The examples above are not directly comparable to the
legal services we provide. I deliberately did that to illustrate the 6 Ds
concept before completely confusing the issue by describing how it applies to
our industry. As it is, I’m sure more than a few of you have read the examples
above screaming, “Yes, but that has nothing to do with us! What the hell are
you talking about?”

I am more than willing to concede that I may be wrong
about the legal industry passing a threshold of digitization in any way similar
to the entertainment industries or physical goods manufacturers. Or, that
Diamandis may be wrong about industries passing that threshold and then
necessarily conforming to his exponential framework. But for the sake of
argument, let’s say that Peter and I are not wrong. We are definitely passing a
threshold, an industry wide digital disruption will eventually take place, and
we will begin to conform to the exponential framework just as others have. That
begs the question, what does a dematerialized, demonetized, and democratized
legal services industry look like, and how could a law firm survive in it?

The Dematerialized Practice of Law

It’s likely that the first complaint against applying the
6 Ds framework to the practice of law will be that we are not a material
industry, and that we therefore have a distinct advantage over manufacturers or
sellers of things. We don’t produce material goods, unless you count mountains
of documents, and even if we become entirely paperless there will be no change
in our service.

That might be true, but let’s think about a service
provider who has already gone through this digital threshold: travel agents.
Travel agents still exist of course, although in nothing like the numbers they
did 20 years ago. They provided a service, with almost no material aspect and
yet they were one of the first industries to be decimated by the rise of the
internet. It turns out most people were happy to book travel themselves as long
as it was easy and inexpensive. How many people or companies would gladly
handle their own legal services if they had access to resources and knowledge,
for a low price, and they didn’t actually have to deal with a real live
attorney?  If such a thing were possible,
how many attorneys could the industry continue to support?

The Demonetized Practice of Law

We have seen downward pressure on legal prices since the
downturn of 2007.  That has mostly come
in the form of clients demanding discounts on hourly rates or fixed fee
arrangements. But suppose clients, even large corporate clients, had a new option:
they could pay a monthly fee for unlimited access to a firm sponsored set of
expertise engines that handled much of their routine legal needs. They could
pay month to month for this a la carte service, or they could sign a 2 year
contract which also entitled them to steeply discounted hourly rates for legal
services not covered by the engines. Setting aside for the moment, whether such
a thing is possible, or more to the point, whether the bar associations would
allow it, what would that do to legal service prices?

The Democratized Practice of Law

This is the good news, if the prices of legal services
decline precipitously and the delivery of legal services becomes much more
widely available, then the pool of potential clients will be significantly
larger than today’s client pool. Smaller companies and individuals who
currently choose to do without external legal counsel and instead turn to
LegalZoom or other form providers, could suddenly be approaching big firms to
handle their legal needs.

Some of you are thinking, “But that’s not the kind of law
we practice, we do big law for big corporations.” To which I will respond, look
around you. The era of the big corporation is ending. The average lifespan
of a company
on the S&P 500 has fallen from 60+ years in 1960 to just
over 15 years today. There will probably always be some big corporations, but I
don’t think they will be the norm.

Relatively small companies like AirBnb (600 employees) and
Uber (~1,000 employees) are taking on much larger and more traditional service
providers, and they are having success. AirBnb and Uber are valued at $10Bn and
$15Bn, respectively. These are new types of companies that grow quickly, by
connecting people who have services to offer to those who need them, and taking
a percentage. This is relevant to us on two fronts: 1) If given the choice of
monthly subscription fees for access to legal engines or more traditional legal
services, which do you think these startups would choose? AND, 2) How long
before the law firm equivalent of AirBnb or Uber start selling them these
services?

(Tomorrow: What does an Exponential Law Firm that can survive in this type of environment look like?)

The following is the second part of a 4 part post that expands upon a short introduction I gave to an ILTA session entitled, Do Robot Lawyers Dream of Billable Seconds? If you have not yet listened to the full session (and you have nothing better to do for the next 90 minutes), you should go listen to it now. If you would like to download and read the entire 4-part post you can get it here.


The 6 Ds: An Exponential Framework

Image from Peter Diamandis’ presentation to ILTA.

On the first day of this year’s ILTA conference, I attended the keynote session presented by Peter Diamandis. Diamandis is the founder of the X-Prize and Singularity University. In corporate-speak, Diamandis is not just an “outside the box” thinker, he tore the box apart, set the pieces on fire, and urinated on the flames. I watched his speech in rapt attention, increasingly fired up by what he was saying. I imagined the headlines that would appear in the news the following day, “Angry Nerds burn down Gaylord Opryland Hotel!” or, “Diamandis Sparks Legal Geek Riot”. But strangely, at the end of his talk he received polite smattering of applause and the assembled nerds quietly stood and shuffled out of the ballroom toward the first coffee break of the day.

It was clear that not everyone heard what I heard. Because I heard Diamandis say, “Most of your firms will not exist in a few years. Much of this conference is a waste of time. You should all go find new jobs.” Of course, he didn’t put it that bluntly, but if you pull his remarks together and add up all the pieces, I think that was the underlying message.

One slide in particular had a profound effect on me. So much so that I scrapped the introduction I had written for my session later in the week and instead talked about this one concept: The 6 Ds.

Diamandis calls the 6 Ds an Exponential Framework. I struggled with that name for a long time, but I couldn’t come up with a better one either. It’s not a process; the Ds don’t necessary happen sequentially. It’s not a workflow, or an organizing principle. Model, pattern, and path don’t quite fit either. It’s just a framework that industries begin to take on once they cross the threshold of the first D.

Digitization

Perhaps you can begin to see why I needed such a lengthy preamble to this post. We have already crossed, or we are at the very least currently crossing, the digitization threshold in the practice of law. Diamandis’ framework suggests that crossing that threshold has entirely foreseeable consequences and that if we want our firms to survive, we must prepare them to exist in a completely different industry than the analog one we have lived in to this point.

The premise is that digitizing a product or a service throws an entire industry onto the Moore’s law bandwagon. Change within that industry immediately becomes exponential as processing power doubles and prices halve every 18 months.

I will cover each of these in turn, but the remaining 5 Ds that follow from this initial act of Digitization are:

  • Deceptive (initial change)
  • Disruption
  • Dematerialization
  • Demonetization
  • Democratization

Deceptive

This D is tough because it is the only one that describes a state of being rather than an action or direct change. The idea is that even though change immediately begins to happen exponentially, it still appears to be slow or even non-existent. This mis-perception is a product of our human inability to intuit exponential change. In real terms, even exponential growth appears static at very small levels. For example, without a high powered microscope, you would have a difficult time recognizing the initial exponential growth of bacteria in a petri dish. One cell becomes two, two become four, eight, sixteen, thirty-two, and so on.  For a long period of time, you would swear nothing is happening at all, and then BAM! an obvious explosion of growth. The rate of growth in that example is constant, but our perception of it is that it happened all at once; out of the blue.

Arguably, this is where we currently are in the legal industry. We are digitizing our practice and we have begun the process of exponential change, but that change is still small and very hard to see.

Disruption

Disruption is the elbow in the graph; the point at which change goes from near horizontal to near vertical over a very short period of time. That’s the point at which it becomes impossible for anyone to seriously argue that a significant and industry altering change has not occurred. The horizontal underline that turns into the letter L in the word “exponential” on the image above was created in Excel. It is an actual graph of steady exponential growth. You can see conceptually how deceptively small change can sneak up on an industry and give way to massively large disruption.

Diamandis argues that we have seen many industries crossing the digital threshold and that they all begin to follow this same framework. The last 3 Ds represent the post-disruption world.  They don’t necessarily happen in any particular order; they are more like directions that a digitally disrupted industry begins to head.

Dematerialization

Once a product or service is digitized, the materials (physical goods and associated services) begin to disappear. Kodak learned this the hard way when most people decided that the crappy digital camera attached to their phone was good enough. They stopped carrying dedicated cameras, and buying and processing film. Sales of physical books are down since the Kindle debuted. Who buys CDs or DVDs anymore? Physical media is wasteful, and expensive, and unnecessary. Just enumerating the physical goods that have been supplanted by the “phone” in your pocket would take pages.

Demonetization

Disrupted industries have seen the total amount of money that customers are willing to spend for non-material goods decrease significantly post-disruption. That is not to say that there is no money to be made, simply that the players who survive are often fighting over a smaller pool of available revenue or they have to grow significantly in volume to make up for the decrease in per unit cost. For example, digital music and movie downloads can no longer command the same premium prices that CDs and DVDs once did. Entire secondary industries based on distribution of physical media have dried up. Virgin Mega Stores and Blockbuster Video, once multibillion dollar juggernauts have disappeared and been replaced by digital distributors, like Spotify and Netflix, selling monthly unlimited access to entire libraries of media for the former price of a bargain bin album.

Democratization

Finally, the 6th D follows naturally from the 4th and 5th. If a good or service is now digitized and available online, and its price is now affordable to most people, then it is democratized.  Everyone can have access to it. This is the digital publishing revolution of which we at 3 Geeks have taken terrific advantage. Fifteen or 20 years ago, we could have published a newsletter that might have reached a couple of hundred people within a small region of the US. We would have had publishing and distribution costs. We would have probably charged a subscription fee. We would have needed someone to manage all of that for us, because frankly, we’re too lazy to do those things ourselves. Today, however, we have readers all over the world who read our non-sense daily and it costs us nothing but our time.

(Tomorrow: What does this mean for legal service delivery?)
The following is the 1st part of a 4 part post expanding on my short introduction to an ILTA session entitled, Do Robot Lawyers Dream of Billable Seconds? If you have not yet listened to the full session (and you have nothing better to do for the next 90 minutes), you should go listen to it now. If you would like to download and read the entire 4-part post you can get it here.



Computers

During World War II, a “computer” was a person who
calculated ballistic trajectories and published the results in books and sets
of tables that were given to artillery units and battle ship commanders. These
computers were mostly women who manually processed the calculations applying
complex mathematics and their substantial brain power to the task. They worked
in teams, checking and quadruple-checking each other’s work, as incorrect
results could quite literally affect the outcome of the war and lead to the
deaths of many soldiers on the front lines.

After the war, many of these computers were instrumental
in programming and debugging their brand new, building-sized, electronic
namesakes. Today, the term computer is never used to refer to a person.

These women were certainly not the first laborers to lose
their jobs to machines. The industrial revolution had seen many manual labor
positions replaced by newly developed engines, from coal powered steam shovels,
to electric sewing machines. But these “computers” were probably the first
knowledge workers (people that rely on their brain processing power rather than
their physical skill) to lose their jobs to machines.

Over the last seventy years that process has continued
unabated, with ever smarter electronic computers tackling more complex and
complicated knowledge work. And at every step of the process the next
profession in line had a million and one reasons why “a computer could never do
what they do.” But today we live in the world of IBM’s Watson. Watson is not a
miracle, it’s the natural progression from those World War II era computers, to
ENIAC, to the Personal Computer revolution, to the Smartphone, and eventually
to a computer that beats the best humans at the most difficult of human games;
Chess two decades ago, Jeopardy a few years back, and Settlers of Catan every
night on my iPad.

More impressive than my iPad beating me at a popular
German board game is the Watson victory on Jeopardy. Computers are now exhibiting
what were once considered uniquely human abilities: parsing and processing
natural language, understanding puns, and double meanings, and then determining
the intention of the questioner in order to select a correct solution from many
plausible answers. That is not terribly far removed from parsing the exact
meaning and intention of legal documents and then determining an appropriate
course of action based on precedent and prior analysis. The legal profession
should be on notice: the computers are coming.

What do we sell?

A few years ago I asked a number of my friends and
colleagues from other firms three questions:
  1. What do
    Lawyers think they sell?
  2. What do
    Law Firms think they sell?
  3. What do
    Clients think they are buying?
While none of the respondents gave the same three answers,
they all agreed that there were separate answers to each question. That kind of
confusion leads to all kinds of marketplace chaos and I tried to suggest a
common answer, that we were selling “access to the collective knowledge and
expertise of the firm.” That was not a satisfying answer to me, even then. The
question has continued to nag at me ever since, and after much consideration, I
am ready to suggest a new answer: We sell Legal Processing.

That doesn’t feel emotionally satisfying either, but the
more I think about it, the more convinced I am that that should be the simple
answer to all three questions. Clients typically come to us with legal problems
and we run those problems through our legal processing engines (attorneys,
established workflows) to produce advice, documents, in person counsel, or any
of the other things we commonly produce for clients. So, my original answer
wasn’t wrong, it just didn’t go deep enough. Lawyers are selling their legal
processing time, law firms are selling their collective legal processing
ability, and clients are buying the legal processing that they cannot or do not
want to do internally.

Much like the computers of World War II, the lawyers of
2014 continue to do most of that processing using their biological processing
units. These brains, as we call them, are extremely energy efficient and fast,
but are slow to train, prone to fatigue, often make mistakes, and are
notoriously difficult to network (not to mention the hardships of managing
them).

Digital Legal Processing

In recent years, we have entered a new era for the
practice of law, the digital era. The digital era probably began in earnest
with the explosion of e-discovery solutions in the last decade. These tools
were not simply technological means of improving the analog workflow, like a
Document or Contact Management System, these applications were beginning to do
the actual work that previously required lots of young associates with a great
deal of management supervision. With predictive analysis, many fewer associates
could do the same work in much less time, more accurately.

I have seen no fewer than 5 contract review applications
in the last few months that promise to reduce processing time and to increase
accuracy by large percentages. Eventually, these tools will most likely replace
biological processing units entirely. Even now, a large document review that
relied entirely on human ability, engaging no computer assistance at all, would
most likely leave a firm open to a malpractice suit. It is not a huge stretch
to imagine a time in the near future, when biological processing interference
of any kind, might do the same.

E-discovery and contract review applications are one type
of digital legal processing. They are essentially highly skilled and ever
improving pattern recognition tools, but obviously the practice of law does not
boil down to simply better pattern recognition. It also requires an
understanding of current laws, an ability to apply a client’s particular
circumstances to the current laws, and to make inferences, calculations, and
recommendations based on that understanding of the law. This is where Expertise
Systems enter.

Expertise systems allow firms to capture an individual
lawyer’s (or an entire practice group’s) knowledge and understanding of a
particular law, in a way that allows other lawyers or clients to use that
knowledge, even if they do not have access to the original lawyer(s). In other
words, with an expertise system, it is possible to build legal processing
engines that handle the routine aspects of practicing law, leaving the novel
and unique to be handled by the firm’s biological legal processing units
(attorneys).
Everything to this point is preamble to the next concept.

(Tomorrow: The 6 Ds: An Exponential Framework)

Gendarmenmarkt - Glaskugel
Image [cc] delpax

Many of you may have seen Jeff Bezos’ interview this weekend on 60 Minutes where he discussed the next phase of Amazon’s delivery process is looking to using drones to deliver products and remove third-party delivery services altogether. It is an interesting concept, and one that focuses again on streamlining the process of moving physical products from the manufacturing process to the consumer in the most efficient (cheap and fast) way. This will put a scare in the UPS and Postal Service delivery people. I guess the next progression in the Amazon process will be to sell consumers devices that will simply manufacture the desired product directly in the consumer’s home. That will scare the Foxconn folks. Like it or not, the whole business model is to remove the human from the process as much as possible, and link the customer with the product as quickly, often, and cheaply as possible.

Information Professionals like Librarians, Analysts, and Researchers are very familiar with this process because the information we deal with everyday has already gone through a transition that Bezos is attempting to do with physical products. So, for us, what is the next step? What is the equivalent to Amazon’s drone that will be the next driver in information delivery? I think the answer to this question lies in the advancements we see taking place in e-discovery products, specifically in the predictive coding methods that are becoming common place in that market, and using those tools along with research savvy to create products/results that are much more analytical.

For Information Professionals, we will need to start pivoting away from being the ad hoc researcher and shift over to more predictive analysis processes. In fact, as I was drafting this post, I serendipitously received an invite to a training conference specifically on “Predictive Analytics & Business Insights.” Within the description of the training are specific concepts that we should begin assembling into our customer service models:

  • Predictive Analysis – harnessing predictive capabilities to optimize business operations and develop an analytics culture
  • Risk Analysis – leveraging the wealth of organizational data, in real time, to predict risk and respond accordingly
  • Marketing Analytics – how analytics impact and optimize marketing planning, operations and performance
  • Customer Analytics – customer-driven analytics that encourage innovation, enhance engagement capabilities, enhance retention and loyalty, and promote growth

The past twenty-five years of information has produced a process that has removed much of the human from the process. Lawyers directly receive their information from the producers of that information. The Information Professional’s job has been more and more of vetting all of the different products out there and helping to make sense of it all. The value has shifted away from our ability to find the golden nugget of information within a mountain of data, and has been focused on getting our customers access to the best products, in the most efficient manner, all while maintaining costs. This will continue to be a valuable service, but we have a strong talent pool of researchers, analysts that we need to transition away from the traditional research model and over to areas of predictive analytics to help drive new business to the firm.

Predictive Analysis may not be as cool or flashy as Amazon’s drone idea, but for those of us looking for the next big idea in the Informational Professional market, this may be what helps keep us relevant in a market that is needing us to step up and fill this need.

This post originally appeared on the LexisNexis UK Future of Law Blog under the title Stealing the market: The degree that now has infinite value.

Image [cc] – doozle

On 17 October I saw Daniel B. Rodriguez, Dean of the Northwestern University School of Law, speak at the ARK Knowledge Management in the Legal Profession conference.  His presentation explained how some of the challenges that we are experiencing in law firms have trickled down to the law schools, and he gave some examples of how they are adjusting their approach and curricula to better prepare their students for the “new normal”.  One of the solutions he described was partnering with other schools to provide joint degrees. Since the economic downturn, Northwestern has reduced the number of traditional JD-only students, but has increased the size of their JD/MBA dual degree program. He also expressed an interest in partnering with a medical school to develop a JD/MD curriculum, and he made a passing mention of possibly doing something with “the humanities”.

I wholeheartedly applaud the joint degree approach. In my opinion, there is a severe lack of basic business understanding among lawyers. The fact that the phrase “not all revenue is profitable” often requires a lengthy explanation is a good indication that attorneys need more business training.  The JD/MD seems a little less immediately applicable, except of course to medical and health care law, but anything that gets attorneys to see how other people think is probably a good thing.  Which brings me to “the humanities”.  As a former music major, I can say the JD/MFA in vocal performance, or piano pedagogy, will probably have limited application; however, there is joint degree program that I believe could provide infinite value to attorneys, firms, and clients: a JD/MA in Design.

In BigLaw, the phrase “Who else is doing this?” is so common a response to any new idea, that it has officially become cliché.  We have a tendency to focus heavily on what our competitors are doing. Unfortunately, we only perceive other BigLaw firms as our direct competitors.  We benchmark our businesses against similarly sized firms that think, act, and are run, very much like we are.  Meanwhile, there are a number of firms, and non-firms, providing legal services that are so far beneath our radar that they might as well be underground and they are beginning to get traction with our client base.  Unless we are careful, they will eat away at that base from the bottom, until we are fighting over the last scraps of global legal work that these smaller firms can’t handle.  But of course, by that point, they’ll be able to handle the big global work too.
There are numerous precedents for this kind of race to the top of the ladder, while an unexpected or unrecognized competitor dismantles the ladder from the bottom up.  Most famously in the US airline industry, where traditional airlines bench-marked exclusively against each other while low cost airlines like Southwest and JetBlue stole their market from the bottom.  

Incidentally, the epithet “low cost airline” is a bit of a misnomer.  While these companies do indeed offer lower priced tickets than traditional airlines, they have stolen much of the market by out-designing their predecessors. They designed new customer experiences, and new business models, while the old guard was focused on what all of other big airlines were doing.  Frankly, these “low cost” airlines have a better product that many consumers prefer, and they happen to deliver it at a much better price. And today, there are only two US airlines bigger than Southwest. They are the last two standing after a series of bankruptcies and mergers.

I think BigLaw faces a similar fate – not tomorrow, or next week, or next year, but that future is out there waiting for us – unless we begin to design new legal products, new customer experiences, and new business models that make those products and experiences profitable. We need to fight for the bottom and the middle of the market, if we hope to continue to provide our premium services at the top. I would probably start by hiring people with joint JD and design degrees, or even, maybe just the design degrees.