Below are two beliefs I carried with me for many years.

  1. In all human endeavors, incentives exert a powerful effect on behavior
  2. Within the legal industry, the billable hour is the primary impediment to innovation and efficiency

efficiencyengines2Belief 1 still stands. But belief 2, which I viewed as a corollary of 1, recently fell like an oak tree. This shift in worldview happened during my research for Efficiency Engines, a story on rise of legal managed services.  During visits to several managed service facilities, I witnessed quantum leaps in legal productivity for relatively sophisticated legal work.  And in each case, the work was priced and sold by the hour.

The biggest value of visiting an innovator is the possibility of learning something that disconfirms one’s own belief system.  A character in a John le Carre novel once quipped,  “A desk is a dangerous place from which to view the world.” That’s good advice for those seeking to understand today’s legal industry.

A better theory

After the fall of belief 2, I needed a theory on innovation and efficiency that incorporated my new learning. Here is what I came up with:…

modriatylertechEarlier this week, Modria (mentioned in Post 008) was acquired by Tyler Technologies, a publicly traded company that specializes in information management solutions to local governments. See press release.  Tyler Technology is headquartered in Plano, Texas and has 3,800 employees. It’s total 2016 revenues were $776 million. See 2016 Annual Report. Modria’s founders, management team, and employees will all join Tyler Technology.  Per the press release, they will help build out Tyler’s “portfolio of courts and justice solutions, particularly for its Odyssey File & Serve™ solution.”

The sale price of Modria was not disclosed. Although I suspect that Modria netted a decent return for its investors, I think the financial details are a lot less significant than what the acquisition means for the future of state and local courts.

For readers unfamiliar with Modria, here is the essential background. Modria is an online dispute resolution (ODR) company founded by the technologists who created eBay’s and PayPal’s ODR systems.  In these early days, ODR has been targeted at disputes where the amount at stake cannot support attorneys’ fees, court costs, or travel.  …

Rogers Figure 6-1

If you have been readings the foundational posts for Legal Evolution, this installment (Post 008) will reward you with something of clear, practical value: An empirically grounded model that identifies specific factors that influence the rate of adoption of an innovation.

What is the specific practical value?

  • If you are an innovator, this model can be used as a functional checklist to assess whether your innovation is ready for market; and if so, where to focus your limited bandwidth to maximize the odds of successful adoption.
  • If you are an early adopter, this model helps you assess whether you want to cast your lot with a specific innovation or, instead, hold your powder until the innovation is more developed or another innovator produces something better.

More below the fold.…

Post 007 is another building block in our understanding of diffusion theory.  This sounds like the spinach of blog posts.  And perhaps it is. To make high quality decisions in a complex, rapidly changing legal industry, we need a high quality theoretical lens.  Others have done the hard part — building and validating a useful theory over a period of decades. The purpose of these foundational posts is to understand diffusion theory well enough to apply it to the legal context.

For background on Legal Evolution and a current listing of foundational posts, see the About page. Part I of this post covers units of analysis. Part II presents composite sketches of the five adopter types. Before getting to these new topics, however, let’s briefly review the previous foundational post.…

Six Types of Law Firm Clients
Six Types of Law Firm Clients

As the legal market remains flat for law firms, the focus naturally turns to clients.  How they think. What they care about. How they spend their budgets. Etc.  Yet, to the extent that clients vary in significant ways, the generalizations aren’t particularly helpful.

Six Types of Clients

There are many ways to categorize clients, but by my lights the most useful is size and organizational structure of the in-house legal department. As shown in diagram above, this metric varies from zero for individuals (Type 1) and business owners (Type 2), to the equivalent of a specialized law firm embedded inside a large corporation (Types 5 and 6).…

Legal Evolution is two things.  First, it curates successful examples of innovation within the legal industry, often relying on a simple narrative format.  This is because examples and stories tend to be the most effective way to understand and communicate inherently complex material.

Second, Legal Evolution is an experiment in applied research.  Yes, this sounds hopelessly…