I have said in the past that my job as a blogger is to get the conversation started.  By that measure, my last post was extremely successful.  Three bloggers, that I know of, felt compelled to write follow up posts to The Myth of Disruptive Technology,  and at least one commenter went so far as to “not suggest this post is without value”.

I think I agree with all of them, but I’m not sure I said anything they think I said.  🙂

Sam and I had a good laugh on Twitter about starting a conference to rival ReInvent Law called the Slow-Evolving Practice of Law Conference. Although, to be honest, I’m not against the idea of reinventing or disrupting law, in fact, it’s probably going to be the most outrageous and outlandish ideas coming out of ReInvent Law that will eventually be watered down and whittled away until they become the small incremental change that adds up over time. Big ideas most often lead to incremental change, while incremental ideas get swept away.

And I agree with Nina, Disruptive Technology and Innovation absolutely exist! The myth that I refer to in the title is “that you can buy, build, or imagine [a technology] that you can simply drop into your existing workflow and reasonably expect it to disrupt anything other than your existing workflow.” And I stand by that. I draw a distinction between technology that by its very existence will disrupt an industry (which does not exist) and a company that uses such technology to great effect in order to disrupt an industry (which happens all the time). Netflix, and other video streaming services, are the latter and, as Nina rightly states, they are continuing to disrupt other industries like cable television.  But again, it’s the business model that is disruptive, not the delivery mechanism. The delivery mechanism may make the business model possible, but on its own it’s of little additional value. It’s not the technology that’s disruptive, it’s how you use it.

And Steven’s post is fantastic, I went back and reread it three times. There’s some great stuff in there and some fascinating analysis, but my thesis was not that Blockbuster “failed by not responding earlier to Netflix”, but that Blockbuster “had no way to adopt streaming video without completely undermining the rest of their business.” They weren’t willing to undermine the good thing they had going, which was a rational, if ultimately fatal, decision.

When I first published the post on the LexisNexis Future of Law Blog, my good friend Ron Friedmann gave me a hard time on Twitter.

I joked that I couldn’t give everything away for free, but I actually alluded to the answer in the next sentence. “Now is the time to build a legal service delivery engine that can accommodate project management, automation, artificial intelligence, and extreme transparency to clients.” While that is definitely not a comprehensive list of the next great innovations in law, I think it’s fair to say that those four innovations are already happening. And those four innovations all point to one big historical change for the practice of law, process efficiency now matters. 

Maybe I should have said that efficiency is to law what streaming video is to the video rental industry?  I didn’t want say anything that concrete in the last post, because let’s face it, it’s ridiculous. Although, I can’t help but think there’s a parallel between Blockbuster not being able to stream video and remain profitable and some firms not being able to increase efficiency and remain profitable.  After all, profit has been based on inefficiency in law firms for a long time. Technology may be able to help, and some of those technologies could be called potentially disruptive, but technology alone will never make you disruptive, or efficient, or profitable.  I think my original point was something along those lines.  Although to be honest, this has been interpreted in so many different ways, I’m not entirely sure what I meant originally.

Still, I can take some solace in the fact that at the very least my original post made Byron think. And that’s good enough for me.

This post originally appeared on the LexisNexis Future of Law Blog under the title, Lessons from Blockbuster: re-engineer, don’t disappear

http://dealbook.nytimes.com/2011/02/24/blockbusters-fall-and-netflixs-rise-in-pictures/?_php=true&_type=blogs&_php=true&_type=blogs&_r=1

In a recent session at LegalTech NY, I spoke about what I consider to be the great myth of disruptive technology; that we need to be on the hunt for the next big thing to set our firms apart and leave our competition in the dust. This is a fool’s errand. As I said in my talk, there is no technology that you can buy, build, or even imagine that you can simply drop into your existing workflow and reasonably expect it to disrupt anything other than your existing workflow.

To illustrate my point I presented the old war-horse of disruptive technology fables, Netflix vs. Blockbuster. At the height of their success Blockbuster Video had 9,000 stores, 60,000 employees, and nearly 6 Billion US Dollars in revenue. Six years later they filed for bankruptcy, and in January of this year they finally closed the last of their US stores. Meanwhile, Netflix video streaming today accounts for more than a third of all US internet traffic during prime time hours, and Netflix is the darling of Wall Street. The moral of this story, as it is generally told, is that streaming video is a disruptive technology that brought down Blockbuster, catapulted Netflix to success, and up-ended the entire video rental industry.

But like most fables, that’s just a little too simplistic. In fact, far from being a primary disruptive force, streaming video was just the last piece of a large disruptive puzzle that Netflix had been putting together for years. The primary disruption actually took place long before streaming video across the internet was even a viable distribution method.

When Netflix burst on the scene in the late 90s they had a DVD rental by mail business. You went to their website and signed up for a monthly subscription that entitled you to a number of simultaneous movie rentals. Then you looked through their catalog of available movies, selected those you’d like to see and the order you’d like to see them in, and they mailed you the first few DVDs on your list. When you were done watching one, you slid it back into the envelope, mailed it back to Netflix, and they’d send the next movie on your list. The best part was that you could keep movies for as long as you wanted and there were never any late fees.

This was a huge departure from Blockbuster’s model of 9,000 stores and 60,000 employees, charging a fee at the point of rental, and collecting massive late fees when you forgot to return the movie by the time you promised you would. In fact, a substantial portion of that $6 billion in revenue was directly attributable to those late fees.

It was common knowledge in the late 90s that streaming video would one day be the norm, even if it wasn’t entirely clear exactly how it would work or what it would look like. The technology was out there; it was just waiting for bandwidth and computing power to catch up. While they were waiting, Netflix built a video rental engine that could accommodate a faster distribution method, or indeed, any distribution method that came along. And Blockbuster just kept raking in the dough with the old model that had served them so well for decades. That model continued to work beautifully, right up until it didn’t and Blockbuster went out of business.

The moral of the story is not to go out and find the next big thing before anyone else does, but to re-engineer your business now to accommodate what you already know is coming. We know what the next great innovations in legal service delivery are, even if we don’t know exactly how they are going to work or what they are going to look like. Now is the time to build a legal service delivery engine that can accommodate project management, automation, artificial intelligence, and extreme transparency to clients.

The sad truth of the Blockbuster tale is that despite their market dominance, and their vast resources, they had no way to adopt streaming video without completely undermining the rest of their business. Sometimes I wonder how many law firms are in the same position now.

Image [cc] libraryman

I know that others in the library world have talked about Seth Godin’s “Stop Stealing Dreams” book, but I just read over his section on The Future of the Library, and although it reads a bit like Seth is bipolar on some of the issues, there was one paragraph that stood out for me:

Want to watch a movie? Netflix is a better librarian, with a better library, than any library in the country. The Netflix librarian knows about every movie, knows what you’ve seen and what you’re likely to want to see. If the goal is to connect viewers with movies, Netflix wins.

Putting aside the “librarian” part, this made me think of some of the resources we use that could actually benefit from this type of knowing what you’ve done, and what you’re likely to want to do next…

Let’s take something like Westlaw, Lexis and even Bloomberg as an example. Could they adopt a more “Netflix” style of interaction with the user? They keep statistics on what the customer has already looked at; could they start offering additional user services like:

  • You Might Want To Read X article, case, law review, blog, etc., or 
  • Others who have read this, also read these… 
  • Here are the popular new items that others in your firm/office/city/practice are reading

Perhaps WestlawNext or Lexis Advance does this already (anyone that’s using either of them know if they do??)

Of course, this would come up against the old way we use these resources and how it affects recovery. If the Netflix-like services improve the lawyer’s ability to locate relevant resources for his or her research, and they were able to bill back for those resource, then we’d be happy to see them. However, if the Netflix-like services merely improve the lawyers ability to keep up with his or her area of law (practice development) and it caused a drop in recovery, then we’d be screaming to have them take it down.

When I talked with Bob Hopen from Bloomberg this week, he mentioned that the Bloomberg Law platform was supposed to be, not quite a Netflix style site, but more of a Google or Yahoo! News type of site for the user. Although I applauded him for that type of thinking, perhaps that should be the type of model that these types of resources become. I did mention that most of our users that access these services still use them in the old way of “get in, get what you need, get out” style of managing cost by limiting usage. Perhaps a new player, and a new pricing scheme like Bloomberg Law is attempting to do, may break that cycle of usage? I’m not sure. As long as we librarians have to focus on recovering costs from the clients, I don’t think so.

Sorry… I got a little off topic there. Anyway, my initial thoughts on this were that it seems very likely that online services and research tools will go the way of the Netflix like services.

In addition to that, what about our internal services? Could InterAction be tooled in a way to offer Netflix style services? Imagine the ability for a lawyer to look up a person in InterAction and see a picture and some type of bio, and then be given suggestions on “people who connect with Bob also tend to connect with Jane of ABC Corp.”

Or, how about services like a Library Resources Portal where it can pop up a “cover flow” set of “New Resources Available” or give the user suggested resources based on their previous usages (or the usages of others in their Practice Groups.)

Many of these services are what Librarians used to do, but may not do (and may not need to do) anymore because our clients are much more into self-help when it comes to striking out on their own and finding things. Some librarians will see this as eating away at the profession, while the creative librarians will see this as a way to restructure what they do and adapt to this inevitable change and take on the role that Godin suggests by becoming a “producer, concierge, connector, teacher, and impresario.”