Over the past month I have given about a dozen talks in large conference settings with hundred of people, or at smaller intimate partner/ counsel lunches, or for people spanning the globe via webinar. The discussions have ranged in content and theme but all were legal industry favourites including:

  • the state of the legal industry 10 years out from the great recession of 2018;
  • the seat change from Baby Boomers to Millennials in firms, and what that means for the way work is done, how people are motivated and what success looks like;
  • competitive intelligence – what is means in and for the legal industry right now;
  • personal branding for lawyers and non lawyers and why it matters; and
  • emerging legal technology tools, adoption techniques, use cases and efficiency plays;

In each room and with each discussion, there have been those who have heard it all before, who are frustrated by the inertia of the industry and who bristle at hearing it all again. But the majority of the market whether in house or outside counsel, senior partner or fresh faced associate, law clerk or technologist are very much grappling with what to do and how to make sense of all of the changes happening in the industry. The proverbial “they” suggest that the only constant is change.  And the legal industry is very much in the middle of it. There are changes to the way the law is practised, with more and ever changing legally focused technology, reduced hourly billing in face of less demand and more alternatives to traditional firms, predictive analytics around litigation, artificial intelligence supporting contract review and the list goes on. These are changes unique and special to the legal industry, whereas the need to define a personal brand, to provide the right kind of feedback to engage millennial employees and stay one step ahead of the market, are universal business concerns not unique to the legal industry at all.

When taken together, it is not just the pace of change that seems overwhelming but also the various types of change that are making moving ahead a daunting task. Should the focus of industry training be on soft skills like communications or harder more disciplined skills like the rule of law? Should we teach coding to lawyers or law to coders? These are tough questions, questions with no definitive answers for the moment. We need the legal industry to adapt to the ways of the post internet/AI world with new business models, new compensation and reward models and much more client focus. This we know. How each firm or department gets there – will be entirely culturally specific and one organization’s first move may be another’s crowning jewel.  Just as every firm was created to fill a specific void and found its own niche, so too will each firm find its way to adapt.  Or it won’t, and some firms will go the way of the dinosaurs….but maybe there is another way. A differed approach to thinking about the industry change.

Along with all my own speaking opportunities and sharing of thought leadership, I also had the honour of being a guest at the Toronto Agile Community Conference. The conference was fascinating and what I thought would be a purely tech show turned out to be so much more. Most of the sessions I chose to attend were on Leadership or Culture related to Agile Methodology. One of the insights I gained was around the notion that to be truly agile, one needs to embrace learning, be open to and know how to learn, for true agility comes from the ability to morph and change as needed to meet the demands of a particular moment in time.  While it relates primarily to programming and the building of technology, the methodology underscores the notion that in today’s tech driven world, we should think in terms of job security over role security or place over task. To learn how to learn is where the magic that happens between function, being and makes for a genuinely agile and fulfilling experience.  Wow.

When I think about the legal industry (who are we kidding, I think about the legal industry more than the average person), there is much happening at the intersection of technology, process and people and yet it feels sometimes like we are standing still and not agile at all. What would happen if we took some of the typical industry discussions and applied an Agile lens. How might it all look different, for example might we really be making iterative progress – a key principle of Agile. For example:

  • the state of the legal industry 10 years out from the great recession of 2018;
    • In the last 10 years, law firms have become lean, iterative in their approach to pricing ranging from flat fees to AFAs and even hiring pricing people, law firms and alternative providers are flexible in the way they approach clients with bundled services, new offerings and expert advice…that’s pretty agile for an industry that spent the last several hundred years billing exclusively hourly, rarely ever bidding on work and maintaining large staffs of people at all levels of the organization.
  • the seat change from Baby Boomers to Millennials in firms, and what that means for the way work is done, how people are motivated and what success looks like;
    • Firms have embraced VPN technology, many lawyers work from home, their cottages or their client’s offices. Non-partnership track streams are popping up at many firms, as are insourcing offices, diversity and inclusion initiatives all with a healthy dose of pro bono work all in an effort to make a new generation of lawyers feel happy and fulfilled;
  • competitive intelligence – what is means in and for the legal industry right now;
    • Firms and lawyers have acknowledged that the legal industry is a competitive business. Investing heavily in business development and client account management is driving priorities in firms. A recent BTI report even suggested this will be an area of continued investment in 2019 and beyond. The last decade has solidified the shift from focusing only on the practice of law to a focus on the business of law.
  • personal branding for lawyers and non lawyers and why it matters; and
    • If job security rather than role security are part of the new Agile world, then you need to be able to sell your capabilities not your function. Know who you are and be able to adapt, think about your genuine self as you would role models like Ellen DeGeneres, Oprah, even Snoop Dogg who have reinvented themselves time and time again in a effort to stay relevant and be successful. Lawyers and non lawyers in the industry now need to do the same.
  • legal technology tools, techniques adoption, use cases and efficiency plays.
    • With all the talk of lawyer robots taking over the world, I feel like this bullet is already Agile. Firms and departments are starting to embrace design thinking and agile methodology into their processes and ways of thinking about technology adoption, they are hiring Chief Innovation Officers and building out think tanks and tech incubators. That’s meta. That’s agile in action.

The industry is a buzz with change, new tools, new techniques and new ideas, of that there is no doubt. There is some sense that we have seen it all before, and we know how this movie ends, but I don’t think we do. I also think that we are moving things along at a pretty rapid pace when you consider where the legal industry was just 10 years ago and where we are today. Sure, there is SO much more we can and should be doing, and if you are unsure what I am referencing here, just read all of the 3 Geek Posts prior today or listen to The Geek in Review podcast.  Instead of continuing to lament the rate of change, we need to embrace the new status quo – and help our firms and departments make the most sense of what is happening in a way that aligns best with strategic goals, organizational culture, appetite for technology and general market savvy.  Technology is here to stay, and we need to continue to learn how to use it best for the sake our clients and our industries.  I know there are many 3 Geeks readers and contributors that are willing to help too if you need it (just ask!).  Part of being Agile, is knowing what you don’t know, failing fast and finding new answers. So while you may feel like the record is skipping, I promise its just making a new agile sound.  So sit back and enjoy the record.

 

I live in an environment which there is a passion to drive innovation. We want to make things better, cheaper, faster, seamless, more intelligent, and a hundred other adjectives to support our goals. When I read an article this morning from Mark A. Cohen on Forbes’ website this morning, I felt like he was speaking my language. Cohen starts off by saying that one of the reasons law firms struggle with keeping pace with business innovation “is that there are too many lawyers involved in legal delivery and too few logistics, supply chain, and management experts, technologists, project managers, data analysts, and other professionals/paraprofessionals.”

Operations is where it’s at! Right? Just ask a group like CLOC. Operations is in the title for Pete’s sakes.

Then I saw Jeff Carr’s tweet regarding the article, and it got me thinking in a completely different direction. Continue Reading Law Firm Innovation: When the Client is Not the Customer

Marlene (@gebauerm) and Greg (@glambert) talk with Legal Rebel, Jae Um (@jaesunum), Founder & Executive Director at Six Parsecs, about her unique writing style (it involves the use of emojis), and her ideas behind her series on Legal Innovation Woes.
Greg breaks

down a conversation which amplified the idea of why it’s important to be seen as a driver for the firm’s bottom line, and how he deleted Facebook and twitters apps from his phone, as well as how didn’t melt while in Arizona over the weekend.

Marlene talks about CIVIL, a new cryptocurrency model helping to rebuild trust and integrity in journalism. Marlene also needs some suggestions on multi-player mobile games. Ones in which she can win.

Continue Reading Podcast Episode 11 – Jae Um on Legal Innovation, Emotions, and Emojis

I had the opportunity to speak at the CodeX, FutureLaw Conference at Stanford Law School last week.  Its my second time attending, and I continue to be impressed with the diversity of topics, professions and people who participate.  One of the presentations to catch my attention was conducted by Professor Daniel Linna, from Michigan State University.  Professor Linna is the Director of LegalRnD, the Center for Legal Services Innovation, and gave a presentation showcasing an index he has developed to measure legal innovation in law firms and universities.  The measurement of innovation adoption is challenging.  Casey Flaherty established test criteria to grade lawyer’s mastery of technology, and Jeff Ward at Duke Law has spoken at the AALL conference about innovation levels students reach as they progress in law school.  I think even Professor Linna will be the first to say his index is version 1.0, and there is much room for further development (OK, he did say that actually), but the point is all these people are trying to tackle the measurement and data presentation challenge.

Continue Reading Is Measuring Legal Innovation Adoption a Thing Now?

Innovation is hard.  Despite how easily the word gets tossed around, like a “bong at a frat party” as a friend likes to say, but to truly innovate, to truly change a process, a culture, a product is one of the most difficult things to do. 

Many legal industry pundits call for law firm innovation, and us non-lawyers have been called out as the gatekeepers of innovation because we are not moving mountains, challenging the status quo faster or with enough chutzpah.  There may be some truth to those claims, we do get frustrated, our ideas can be difficult to implement in the highly matrixed world of law firms and we can get stymied by politics.  Often we give up and retreat into the comfortable,  “we’ve tried that before” type excuses.  But we have to keep trying, use different approaches, find new language and keep repeating the cost benefit of not changing.  If we don’t innovate or transform what and how we do things, we may see more of our roles outsourced or vanish entirely as has been the trend. Today, I pulled out a report I created back in 2008 as an example of what firms could and should be doing for CI and practice strategy.  At the time, the report was shot down for a variety of reasons but as I resurrected it from my “precedents” folder today, and blew off the dust, I still saw its brilliance.  It would have been easy to walk away and not keep trying to innovate in the space given that set back. I was crushed to be honest and wondered why I was working in the industry when what I was hired to do was not welcomed with open arms.    The report was and still is a perfect example of CI innovation in firms. At the time, no one was talking about insights or big data.  But the report pulled together internal insights with external data, it combined form with function. It’s a beautiful report and it lives in my file cabinet to this day.  A pretty picture of what could be. 

I didn’t walk away from the legal industry or my craft, I kept at it and eight years later I have a well respected and culturally ingrained version of that would-be quarterly report going out daily in my firm.  The insights may not be as bold but the delivery is faster and tailored to the individual user.  It’s a baby Pheonix rising from the ashes.  There is still work to be done to truly innovate in the legal space, much of that innovation and change is culturally and client dependant.  But that doesn’t mean that we should give up, walk away or ignore the hard.  Embrace the hard, chip away at it day in and day out.  Instead of focusing on what we can’t do in our firms, finding that report today inspired me to think about what I have accomplished and to change the narrative.  We have to focus on what we can and do change, and keep pushing through the hard to make things happen.  Celebrate the small wins and open the proverbial gates that’s we are accused of keeping closed by finding ways to get through to challenging professionals and business owners, whether on a CI project, a profitability and pricing analysis or a library resource that can increase a firm’s efficacy.  Innovation is about changing a culture, about upending what is into what can be and sticking with it.  Innovation is hard. 

As I drove home tonight thinking about this post, Fleetwood Mac’s Landslide came on the radio and I had to smile.  Time does make you bolder. And time sometimes it is exactly what you need to innovate too.  Its time to be bold. 

 

This is the (much belated) final talk from the ILTA Session – Legal Technology Innovation – Bolstering and Destroying the Legal Profession. This post is from Noah Waisberg, CEO of Kira Systems.  See other related posts from Michael Mills, Stuart Barr, Joshua Lenon, and myself by following the links on our names.   – Ryan

Law practice today is a land of opportunity. This is due to the combination of

  1. underserved legal consumers, and
  2. technologies and processes that make legal work more efficient, which make serving these consumers possible.

Lawyers who embrace efficiency have the opportunity to do more law for their clients. And make more money in the process.

We lawyers sell to a market that is not getting anywhere close to all the legal services it needs.  Underserved legal consumers fall into three categories:

  1. Access to Justice. People without means to pay premium prices for a lawyer needing access to legal services.
  2. Middle class legal needs. Many decently-well-off people don’t spend money on legal services that would help them. How many people use lawyers to resolve their disputes, negotiate their employment contracts or write their wills?
  3. Corporates. Most companies, even the biggest ones, do not obtain anywhere close to all the legal services they need.[1]

This spread between latent demand and supply represents opportunity to sell more. Unfortunately the current techniques for delivering and selling legals services are so expensive and inefficient that these underserved consumers can’t or won’t pay for them.

On 3Geeks, I shouldn’t need to detail ways to practice law more efficiently. There are heaps, some more impactful than others. Processes. Using the right people for specific tasks. Expert systems. Contract analysis software. Machine learning. Collaboration systems. And so much more. With some effort, law firms could do much of their work at higher quality, at significantly lower costs (i.e., 50–75%).

Doing work more efficiently opens up two types of opportunities:

Do More of Current Work. Sure it’s possible to steal work from less-efficient competitors, but another interesting possibility is to upsell clients to more work by offering better value. Here’s an example from the contract review world I know best. In a typical mid-market M&A deal, with a company getting bought for  $200 million, law firm due diligence contract review would cover 75–200 contracts. But most $200 million companies don’t have 200 contracts, they have more like 5,000–10,000. That means counsel reviews under 5% of the target’s contracts. Is this limited review because diligence doesn’t matter? Well, no: due to the inefficiency of current approaches, even that scoped-down contract review is likely to eat up 30–60% of total legal fees on the project (arguably demonstrating importance).  But a missed restrictive covenant or bad indemnity could be crushing for the buyer, whether it’s in the twentieth-most-important contract, or the thousandth.[2] Clients would mitigate more risk if they reviewed more agreements. Why don’t they? Well, as above, status quo contract review can cost thousands of dollars per document. What if lawyers pitched clients on reviewing twice the materials for 20% more money than the last review they did for them? Might that be appealing to clients? Would lawyers be able to sell clients on this? Well, selling risk is something successful rainmakers do. What if clients buy this proposition? Can a law firm profitably deliver on 2x the work for 120% of the money? Yes! It’s easy to do more efficient due diligence contract review. We have seen Kira’s customers review contracts in 20–90% less time using our contract analysis software, and they tell us they are at least as accurate as without the software; we have started seeing transactional reviews in the tens of thousands of contracts, using our tech to filter where to look. Firms also have lots of opportunity to improve their diligence efficiency through streamlining processes and staffing matters differently (e.g., using less expensive people for parts).

Do New Work. There are lots of opportunities to offer new legal “products” that clients will pay for. Create new options leveraging efficiency to offer clients services they need but currently can’t get. Offer your clients a contract management system. Help clients prophylactically determine whether their contracts have FCPA compliance language. Build them a tool that will allow them to evaluate whether their team members are employees or independent contractors. Come up with other useful ideas!

Embrace efficiency to grow the pie and DO MORE LAW! Law today is the land of opportunity, but the opportunity is only there for those who seize it.

  
[1]    This runs like a #dolesslaw checklist. Options include: Have lawyers go through a company’s processes to spot risk. Set up a contract management database listing important dates (term, renewal), price increase calculations, rights, and obligations. Redo contract templates to be simpler to negotiate and use modern drafting language. Ensure legacy contracts meet company standards. In house lawyers at large corporates can tell you about how they are pulling back from using outside law firms but don’t have the personnel to meet their legal needs. This is not the behavior of people who think they are getting good value from their current legal spend. This is a contract law heavy list because of what I am most familiar with. Suffice it to say there are a lot more opportunities than these for corporates to spend money on.

[2]    Clients, perhaps rightly, might be willing to take the risk of missing a change of control clause in the thousandth contract, but how about an exclusivity or MFN clause that binds affiliates?

This is the fourth talk from the the ILTA Session – Legal Technology Innovation – Bolstering and Destroying the Legal Profession. This is from Stuart Barr, COO at HighQ.


A lot has happened in the AI world in the last year. Robots can now create art, learn how to play computer games, categorise buildings and even determine how creative a painting is. But I think we can all agree that the most exciting development in computing this year has to be the IBM food truck, which combines cognitive computing, big data and the cloud to invent delicious new food. The perfect combination for us techies 🙂

However, no one has taught a computer how to be a lawyer just yet. They’re working on it and as we discussed last year, I think it’s only a matter of time before we do eventually create machines that can learn how to be lawyers and they will replace many functions in the legal sector. In my mind there is no doubt about that. White collar jobs will be taken by machines in the same way that many blue collar jobs have been. It’s just a matter of when, not if. Arguably it’s already happening.
The famous economist John Maynard Keynes popularised the term “Technological unemployment” in the 1930s to give a name to the process of losing jobs to technical innovations. This is a problem that humans have been wrestling with for centuries, since we started using tools to help us become more efficient and there have been many examples of it in the past.
The Industrial Revolution is a great example of technical innovations having profound effects on jobs and on wider society. It was brought about by a combination of three primary innovations in textile manufacturing processes, steam power and iron founding. Together, innovation in these three sectors acted to transform what were traditionally specialised, cottage industries into highly industrialised, automated, mass production processes, displacing many highly skilled workers, such as artisan weavers and cotton spinners, in the process. Their skills had been commoditised by machines that were faster, more efficient and cheaper.
More modern examples of technological unemployment include self-checkout kiosks in grocery stores and biometric scanners at checkpoints in airports. So I think it’s clear that the incredible pace of technological advancement definitely has an effect on jobs and entire industries. 
But it’s not all bad news. Technology also creates new types of work and new jobs. All of the panelists at the ILTACON session “Legal Technology Innovation: Bolstering AND Destroying the Legal Profession” where I spoke about this subject were only there because our jobs and our companies have arisen out of technological advancements and we’re trying to apply them to the legal sector. Think about the “App economy” created by the boom in smartphones. In 2007 it didn’t exist and in 2015 it’s expected to be a $100 billion industry. Literally millions of jobs and massive wealth is created as a result of these innovations. Have workers had to adapt and learn new skills? Absolutely, but the overall amount of work in the world economy continues to grow, not shrink, as technology advances.
So in the short to medium term, I think technology will create at least as many jobs as it destroys. But skills will shift and people will need to become more technical in order to stay relevant. Some jobs will completely disappear but new ones will emerge to take their place.
In the legal sector this means many legal processes, such as contract reviews, to pick one example, are being automated and optimised. We will get to the point in the not very distant future where junior lawyers will not need to sit and wade through thousands of contracts in a due diligence process; a machine will do it for them. But new opportunities will arise for hybrid “legal engineers” who will need to understand law AND technology in order to best utilise those machines and leverage their capabilities to gain a competitive advantage for their firms.
So I can see that, in the short term, basic legal processes will be automated and then, gradually, as machines become more sophisticated, they will be capable of performing more complex legal functions and there will be a shift from being “lawyers” in the traditional sense, to being legal developers or technicians. At this point though, we will still need the most bespoke and sophisticated legal work to be carried out by humans. Indeed, the very concept of machines taking over more and more human work may actually increase the demand for lawyers to sort out the societal complexities and disputes that will inevitably arise.
But what about the long term, 30-50 years from now?
Last year I talked about the “technological singularity” which is the theory that the exponential growth we are seeing with technology will ultimately lead to artificial intelligence exceeding human intelligence.

There is a general consensus among futurists that this will happen sometime in the 21st century, probably in the next 50 years or so. At this point, the question is no longer about whether lawyers will still have a job, it’s about what will happen to society. Will it be a Star Trek-like utopia where man will leverage machines to better themselves and explore the Galaxy? Or will it be a Terminator-like dystopian nightmare? Who knows. But one thing is is for sure, technology is changing everything and it will happen in our lifetime.

This is the third talk from the the ILTA Session – Legal Technology Innovation – Bolstering and Destroying the Legal Profession. This is from Michael Mills, Co-Founder and Chief Strategy Officer at Neota Logic.

Clearing Department, woman sorting cheques and using adding machine - 1960s

I decided to come at the technology question from the human side, to speculate about what humans are still good for in a technology-saturated world of legal services.

I concede. I am obsolete. The robots are winning.

Fastcase is a better legal researcher than I am—despite a University of Chicago law degree, a federal court clerkship, and a hand in hundreds of briefs and memos.

Recommind Axcelerate is a better document reviewer than I am—despite tutelage by demi-gods of the American bar, and years of experience, some of it in unheated warehouses and abandoned salt mines.

And of course Google is a better driver than I am.

Nonetheless, for a while, I have work to do.

Kira is not a better contract analyzer than I am—my pattern-recognizing brain is more precise, more adaptable, and faster than Kira’s algorithms. And the algorithms need training, so I can have a job as an algo trainer—like a dog trainer, but without a whistle or a biscuit.

But … Kira’s algorithms are getting better and its computers are getting faster. My brain is not, alas.

So, one day . . . poof! ZMP for me—that’s Zero Marginal Product, the economists’ term for adding no value at all.

As Harvard professor Bill Bossert said many years ago—“If you’re afraid that you might be replaced by a computer, then you probably can be—and should be.”

Or, as I say to law firm partners who worry that Neota Logic expert systems will cannibalize their billable hour work—“If your business model is to do work that my software can do … you’d better get a new one.”

So what’s left for me? For us? We went to law school, we’re nice people, we’re pretty smart.

Fortunately, there are some things for us humans to do:

Geoff Colvin of Fortune Magazine just published a book with a great title “Humans are Underrated.” (In some contexts, one might argue that he has that backward.)
He writes that the right question is this:

“What are the activities that we humans, driven by our deepest nature or by the realities of daily life, will simply insist be performed by other humans, regardless of what computers can do?”

He then says that the foundation of all the other abilities that make people valuable as technology advances is … empathy.

Yes, empathy.

Discerning what some other person is thinking and feeling, and responding in some appropriate way.

We have evolved to do that—collaboration was essential for survival, in hunter-gatherer and then in agricultural economies.

As Colvin puts the point:

“We want to work with other people in solving problems, tell stories to people and hear stories from them, create new ideas with people. We want to follow human leaders. We want to negotiate important agreements with people, hearing every lilt or lament in their voices, noting when they cross their arms, looking into their eyes.”

We, both individually and as members of groups and organizations, keep changing goals, purposes, understandings, directions, conceptions of the problem, interests—software simply can’t keep up.

People can, groups can.

One might say, then, that what humans will continue to do, so as not to drown in the rolling wave of technology, is what we do best in groups:

  1. Idea-generation, problem-solving, strategy
  2. Persuasion, argument, storytelling
  3. Collaboration

So … if groups are essential to our economic survival in a world eaten by software, to use Marc Andreessen’s phrase, how do we know an effective group when we stumble into one?
Cambridge University psychologist Simon Baron-Cohen developed in 1997 a simple test, the RME—Reading the Mind in the Eyes. Participants are asked to choose a word that best describes people’s thoughts or feelings based only on photos of their eyes.

Group members’ average score on RME has proven to be an excellent predictor of group effectiveness.

More recent research supports a much simpler test—no advance testing required. Just count the number of women in the group. More women, more effective. Period.
Another reason for diversity in STEM disciplines!

MIT professor Alex Pentland invented the sociometric badge, a little tag that hangs around your neck and tracks how you work with others—the amount of face-to-face interaction, conversational time, prosodic style, physical proximity to other people, and physical activity levels.

After sociometrically measuring many groups with his little badges, Professor Pentland found that groups do their best work when the participants:

  1. Generate many ideas in short contributions to conversations. No one natters on.
  2. Constantly alternate between talking and listening, encouraging, and reacting.
  3. Take turns.

It does sound a bit like the prescription for a good kindergarten, but it works. These 3 factors are as important to group effectiveness as all others together—individual intelligence, technical skill, personalities, and so on.

Interestingly, and here we technophiles should take note, this research suggests that online, technology-mediated collaboration is far less effective than we think.

Apple agrees—their new headquarters is gigantic, in order to bring people together, physically, to do the empathy thing, to do the human thing.

Google agrees—they engineered the cafeteria (it’s a metrics-driven company) – optimum wait time in line 3–4 minutes, table spacing to encourage bumping, long tables to encourage sitting with people you don’t know.

So, even at Google, there is room for us humans.

But … and here I think we come to the rough reality of the legal services industry (and others too, which raise profound long-term questions about the civic compact)—technology is pushing the performance bar for humans ever higher, chopping off the bottom tail of the bell curve, shrinking the space in which “just OK” is OK, in which being “pretty good” is good enough. It isn’t any more.

This is the second talk from the the ILTA Session – Legal Technology Innovation – Bolstering and Destroying the Legal Profession. This is from Joshua Lenon, Lawyer in Residence at Clio.

Technology is No Threat to Lawyers

A while back, NPR’s Planet Money show issued a nifty interactive tool indicating whether or not certain employees would be replaced by technology in the future.  If you looked up lawyers, you’d see the following result:

(Image from NPR.org)

The calculations that determined this statistic included such issues as:

• Do you need to come up with clever solutions?
• Are you required to personally help others?
• Does your job require negotiation?
• Does your job require you to squeeze into small spaces?

It turns out that lawyers rank high in each of these categories in favor of not being replaced by robots.

This result was pretty shocking, as most online discussion list the chances of a robot replaces lawyers as somewhere between “I, Robot” and “The Terminator.” Both movies have robots taking over, but one follows the Steve Jobs’ school of design.

Research the matter further, I delved into the U.S. Bureau of Labor Statistic’s (BLS) historical data on employment for providers of legal services.  Did the history of technology development result in a decrease in jobs for lawyers?

When plotted from 1997 to the latest data in 2014, both paralegal and lawyers showed substantial growth in employment over that period.  Lawyer employment grew 42% and paralegal employment great 111%! This represents an expansion of 320,000 jobs.  Even if you only look back to 2006, the last great year of legal hiring by Big Law, you still see 10% growth in lawyer jobs since then.

Why is this growth during this time period important? It’s because it happened during one of the great expansions in human productivity in the workplace.  The Bureau of Labor provides the following chart that shows the years 2000-2007 to be the second highest increase in productivity in the work place every recorded.

While the BLS did not publish productivity gains specifically for the legal service industry, other industries tracked alongside legal in the professional services category, like bookkeeping and accountants, saw productivity improvement from 2.1 to 5.0 percentage change.  That’s huge, with the only greater period being the post-WWII boom that industrialized most of North America.

If lawyers and paralegals can still grow their employment levels during huge rises in productivity, that means that technology is not replacing these employees, but instead is supplementing them.

How do we know that technology is supplementing lawyers, rather than replacing them?  Because the same BLS tracking data shows that other employees in the legal sector are being replaced.

Legal secretary employment has fallen from 277,000 jobs in 1997 to 212,000 in 2014. This is a 23% change, and not for the better. Legal Support Workers, Other is currently growing, but only after losing 30,000 jobs from their high in 2005.

Technology is not replacing lawyers, but is replacing the employees that support lawyers. This is akin to the change in the Industrial Revolution when plow horses were replaced with tractors. Farmers continued to exist, just now with tractors doing a lot of the hard labor for them. Lawyers continue to exist, but they are not using the tools of the past.

This change is creating large changes in the way law firms hire as well. In ALM’s  2015 report, “Law Firm Support Staff: How Many are Enough?”, 62% of law firms surveyed have decreased legal support staff levels.  At the same time, 47% of firms increased their spending on staff. One conclusion is that these firms are hiring more highly trained and specialist staff.

Much like the industrial revolution decreased jobs for farriers and increased jobs for tractor engine repair specialists, law firms are now looking for support specialists in legal technology. Law firms are ditching employees that no longer fit into the new economy operating around law firms.

That’s why I think lawyers will work with robots, but will not be replaced by them.

Two weeks ago I spoke on a panel at ILTA in a session entitled, Legal Technology Innovation – Bolstering AND Destroying the Legal Profession.  Interestingly, the original title was Bolstering and Destroying Legal Work, which didn’t seem nearly as wimpy when we submitted it, as it did after the revised title was published.  We kept the new title.

The panel was a reunion of the Do Robot Lawyers Dream of Billable Seconds? panel I spoke with last year that included Joshua Lenon from Clio, Noah Waisberg from Kira Systems, Stuart Barr from HighQ, and Michael Mills from Neota Logic.

Rather than post the recording of the session as I did last year, I’ve asked my fellow panelists to submit their short talks in blog post format.  I’ve received a few of them and they will be published in turn over the next few weeks.

Today, I’ll start with a synopsis of my own talk:

The Napsterization of Legal Services.

The record labels used to sell plastic discs with data on them.

Today they sell nearly that same data over the internet, without the plastic discs.

On it’s face that seems like a relatively straight-forward, if not easy transition to make.  It’s the kind of transition from one media type to another that you would expect a mature business or industry to be able to navigate with minimal disruption.  But as we know, that transition was anything but straight-forward.  In fact it wreaked havoc on the recording industry for more than a decade and they are just now beginning to get back on track.

Why was this such a difficult transition?

I suspect there are many reasons that the record labels found it difficult to move from plastic discs to no plastic discs, but I think one primary reason is that in the late 90s, they were in the business of selling plastic in pretty packaging, more than they were in the business of selling the content on that plastic.  They could charge premium prices for discs and packaging and they had to to cover the manufacturing and distribution costs of discs and packaging. They were certainly aware of the internet, and probably knew that digital distribution was the future, but they had no urgency to change a model that was still largely working.

And then Napster exploded on the scene. 

Napster wasn’t a rival record label, or an upstart looking to upend the industry, in fact it wasn’t even a company originally.  Napster was a kid in his dorm room using technology that was widely available at the time to do something that kids had been doing for decades: sharing their favorite music with their friends. In my day we used cassette tapes.  Napster was the ultimate mix tape, and in a very short time, that mix tape was available all over the world.

This highlighted a clear discrepancy between what the record labels were selling (discs and packaging) and what their customers actually wanted and cared about (the music). Whenever such a discrepancy exists, technology will step into that gap.

What this has to do with legal services?

I think law firms, in particular, are in much the same position today that the record labels were in the late 90s.  We even have our own version of the ‘discs and packaging’ problem.

We sell our lawyers time – and that is true whether we’re talking about billable hours or fixed fees. We sell the time it takes our lawyers to manually perform various tasks, and produce outcomes for our clients.  When what the client actually cares about is the outcome, not the hours.

Historically, this discrepancy wasn’t a problem because the best way to deliver those outcomes was to have our lawyers manually perform the work and then bill for their time.  But today that is not necessarily true.  With machine learning algorithms, reasoning tools, and automation software, we can begin to replicate the work that our lawyers have always done manually with technology.  We can deliver a better, faster, AND cheaper solution to our clients.

Our lawyers are still compensated, and our firms are still structured, around ‘selling plastic discs and packaging’ (lawyers hours).  And yet the technology to give our clients the outcomes they want, with minimal manual labor is becoming widespread.  We are ripe for our own version of Napster.

We have an ever-shrinking window of opportunity from today until the Legal Services Napster Event takes place, when we can begin to manage the transition from one media type to another.  If we actively and intelligently manage that change, then it will be a bumpy ride, but we’ll come through it.  The alternative is to do nothing, keep selling our discs and packaging, and hope that nothing ever changes.

And thanks to the record labels, we have a good idea of how that will turn out.