The chart above, drawn from Everett Rogers, Diffusion of Innovations Fig. 7-1 (5th ed. 2003), shows the adoption of hybrid seed corn by farmers in two Iowa communities. The dashed line on the bottom shows the number of adoptions by year.  The solid line on top shows adoption on a cumulative basis.  The first farmer in the sample adopted hybrid seed corn in 1927. 15 years later, in 1941, the last four farmers made the switch.

The dashed line is a real-world example of a Rogers Diffusion Curve. See Post 004 (discussing curve); Post 007 (discussing adopter types).  Likewise, the solid line is a real-world example of the S-shaped curve. The farmers switched to hybrid seed corn because it was more bountiful, disease resistant, and drought resistant than traditional methods. The chart above is useful because it shows the common diffusion pattern of (1) a prolonged period of slow adoption, even for a highly advantageous innovation; and (2) a short period of rapid adoption. Cf. Post 016 (showing histogram with long innovator tail). Continue Reading Change Agents and Opinion Leaders (020)

If we categorize all of our business conversations into the above four buckets, which bucket is the fullest?

Unfortunately, I vote for bucket 4.  We end up in bucket 4 because we want to be perceived as being fully informed.  Yet, being fully informed takes a lot of solitary, uncompensated effort with no certain prospect of a return.  So in our business conversations with one another, we fudge how much we really know.  First to ourselves and then to others.

Everyone likely agrees that bucket 1 is where we need to be.  Yet bucket 1 is the endpoint.  We start in bucket 2 with something like this opening line:  “Our business relationship is not working as well as it should because we are not making decisions from a solid foundation of shared facts. I would very much like to change this.”  If we’re selective on how and where we begin the conversation, we have good odds at a substantive, ongoing dialogue about information gaps and how to jointly fill them.

During the spring and early summer, I wrote two pieces for that focused on the legal profession’s Last Mile Problem and Last Mile Solution. They presented examples of unproductive dialogue between clients and lawyers.  The unproductive conversations are no one’s fault, yet they are real and pervasive.  These two articles are now combine in a single PDF.  Below is a copy of a “Last Mile” slide deck that contains all the figures in the articles. Hopefully, a few innovators and early adopters use these materials for a “bucket 2” dialogue.  bucket 2 + time = bucket 1.

What’s next?  See Change Agents and Opinion Leaders (020)

Many lawyers are daunted by the prospect of data, process, and technology.  Yet, retooling might not be that hard.

Below is a list of knowledge, skills, and technologies learned this summer by three of my 1L Indiana Law students. The catalyst was a 3½-week program at the University of Colorado Law School in May combined with 10-week paid internships (still in-progress) at legal employers who value JDs with legal ops skills.

Legal Operations Knowledge and Skills Experience with Specific Software Technologies
1. Process mapping Visio PRO
2. Document automation Contract Express
3. Expert systems Neota Logic
4. Data visualization and construction of metrics dashboards Dundas BI
5. Database structuring and query writing MS Access
6. Artificial Intelligence (AI) — various types and use cases
7. Open source versus proprietary software codebases
8. Speaking parts on calls with firm clients

This is a lot of learning for a 1L summer program. In fact, this is just a lot of learning.   Because rising 1Ls typically lack useful knowledge and experience, they are at high risk of being underemployed.  Yet, therein lies the opportunity: With the right learning structure, these students can learn relatively rare and valuable skills very quickly.

Imagine the transformation of the legal industry if 20% of practicing lawyers acquired these same skills over a similarly short period of time.  The primary obstacles to this outcome may be psychological rather than a shortage of time, money, or ability.

The credit for this quantum leap goes to the Tech Lawyer Accelerator (TLA) at CU Law.  Originally organized by Bill Mooz as part of a practitioner-in-residence initiative funded by AccessLex Institute, the TLA is now in its fourth year.  Because I played a role in its formation, a small number of Indiana Law students get to participate each year. Sometimes the dividends of our work far exceed our contributions and expectations.  That certainly happened here.

Bill Mooz and I are currently working on plans to scale the TLA for the benefit of other law schools and legal employers.  Stay tuned for that.

Here’s a shout-out to my wonderful students at Indiana Law and their first-rate summer employers:   Ingrid Barce and Austin Brady at SeyfarthLean (part of Seyfarth Shaw); and Tony Schuering at Chapman & Cutler. Keep up the good work!

What’s next?  See Honest and Informed Conversations (019)

The graphic above reflects three different types of innovation “outcomes”:

  1. Initiation of an innovation adoption process that results in an organization making a decision to adopt an innovation. See Post 015
  2. Implementation of the adoption decision, which entails planning, change management, and redefining/restructuring and clarifying the innovation in the field so that it delivers its intended benefits. See Post 015
  3. Adoption Success, which presumes success in both initiation and implementation.

This is Part III of a three-part series on innovation in organizations.  In Parts I and II (Posts 015 and 016), we discussed how multivariate regression models are built around an “outcome” we care about, such as organizational innovation.  These models give us insight on how to influence the likelihood of the outcome. In turn, these insights become of the basis more effective strategies and interventions.

The graphic above, however, reveals a difficult organizational challenge.  Centralized management decision-making impacts the three innovation outcomes differently.  During the initiation phase, centralization has a strong negative correlation with the outcome (Panel 1). During implementation, the relationship is moderately positive (Panel 2). The two opposing effects are then netted out in Panel 3.  The result is a statistically weak and moderately negative relationship between centralization and overall adoption success.

So what does this mean?  If we want more innovation in our organizations, we need to forgo one-size-fits-all approaches to management in favor of a staged approach.

Post 017 is part of Legal Evolution’s foundational series on diffusion theory. Readers seeking to influence innovation within the legal industry will be more successful if they obtain and apply this background knowledge. Care has been taken to make this information non-technical and accessible.

The staged approach is necessary because several factors in Rogers organizational innovativeness model, introduced in Part I and reproduced below, have this peculiar flipping effect between initiation and implementation: (i) Centralization, (ii) Complexity, and (iii) Formalization.  This is one of the primary reasons that Rogers model has relatively low predictive power.  See Part I (Post 015) (“The predictive power of Rogers’ organizational innovativeness model is much lower than the Post 008 rate of adoption model.”).

Yet, we can adjust to these limitations through the application of our reasoning ability. See Part II (016) (noting that models are just guideposts for strategic thinking).

Consistent with the staged strategy discussed above, this Part III analysis assumes that organizational innovation requires successful initiation (agenda setting and matching) and successful implementation (redesigning/restructuring, clarifying, and routinizing). See Figure in Part I (post 015). This approach results in clear prescriptive guidance on how to increase successful innovation adoption in legal organizations. To the extent possible, this analysis uses specific legal industry examples.

Using the Rogers Organizational Innovativeness Model

Rogers models focus on applied research. This means we mine empirical models for usable insights while taking careful note of their constraints and limitations.  Thereafter, we use the resulting superior knowledge as part of a reasoning process to solve practical problems. See Post 001 (explaining difference between applied and academic research).

Below is the superior knowledge provided by Rogers’ organizational innovativeness model.

I. Individual (Leader) Characteristics — Champions

The first category of variables that influences organizational innovativeness is the presence or absence of innovation champions. An innovation champion is “a charismatic individual who throws his or her weight behind an innovation, thus overcoming indifference or resistance that the idea might provoke in the organization.” Diffusion of Innovations 414 (5th ed. 2003).

The champion could be a leader in formal position of authority (president, vice-president, manager, etc), but not always.  As Rogers notes, “The general picture of an innovation champion emerges not as a particularly powerful individual in the organization, but rather as someone particularly adept at handling people” (p. 415). Roger cites research showing the effective champions (1) tend to occupy a “linking” position in their organization, (2) possess analytical and intuitive skills in understanding various individuals’ aspirations, and (3) demonstrate well-honed interpersonal skills in negotiating with others.

It is easy to imagine how a smart, well-connected person with high EQ could be very effective in rallying enthusiasm during initiation and managing conflict and mediating solutions during implementation. Although the presence of such champions does not guarantee organizational innovativeness, Rogers suggests that their absence likely forecloses it, particularly in cases involving non-incremental change.  “The new idea either finds a champion or it dies” (p. 414, quoting Donald Schon, “Champions for Radical New Inventions,” 41 Harv Bus Rev 77, 84 (1963)).

II. Internal Characteristics of Organizational Structure

Various internal characteristics of organizational structure comprise the second category of variables that affect organizational innovativeness.

1. Centralization (-)

Centralization is “the degree to which power and control in a system are concentrated in the hands of relatively few individuals” (p. 412). As noted in Parts I and II, higher levels of centralization tend to have a negative impact on initiation. Yet, if centralized management can nonetheless manage to adopt an innovation, centralized decision-making can aid its implementation. The overall net effect, however, is negative. This is because senior organizational leaders tend to be too far removed from operational-level problems to identify relevant and workable innovations.

In my work with law firms, I have been surprised to find several examples of law firms that flourish economically because leaders have adopted a strategy of “letting partners do what they want.” In most cases, the resulting innovations take the form of specialized practices where partners command premium rates for providing fast, high-quality solutions that solve difficult client problems. The entrepreneurism consists of playing close attention to how substantive legal issues are impacting clients’ business needs and being the first to create a novel legal solution.  Although this decentralized approach can result in a sizable collection of lucrative niche practices, it likely undercuts potentially important firm-wide innovations such as project management and process improvement.

To cite another legal example, the decentralization of faculty governance in legal education results in many symposia to generate new ideas. However, we are completely lacking in effective central mechanisms for coordinating implementation. Hence our reputation for being stuck in the past.

2. Complexity (+)

Complexity is “the degree to which an organization’s members possess a relatively high degree of knowledge and expertise, usually measured by the members’ range of occupational specialities and degree of professionalism (expressed by formal training)” (p. 412). Rogers notes that a highly educated workforce is more likely to grasp the value of innovations. However, the higher levels of complexity make it more difficult to reach consensus on implementation.  Thus, the net effect of complexity on organizational innovativeness is positive but not particularly strong.

Below is a graphic that shows the complexity relationship by phase.

In law firms and legal departments, there is a strong movement to hire allied professionals trained in a wide range of useful disciplines.  This mixing of professional perspectives is bound to raise the quality of innovative thinking.  Translating these new ideas into effective action will be the core challenge of the next generation of legal professionals. See Post 005 (discussing growing size and complexity of corporate legal departments and the rapid growth of CLOC). To cope with the Panel 2 complexity challenge, the legal industry is undoubtedly headed into an era of standard-setting and standardization. This is going to produce a cultural sea change within the organized legal profession.

3. Formalization (-)

Formalization is “the degree to which an organization emphasizes its members’ following rules and procedures” (p. 412).  This internal organizational attribute has an impact that is very similar to centralization — strongly hindering initiation, aiding implementation, and overall having a net negative impact on successful adoption.

In the legal industry, we see the highest levels of formalization among the managed service providers. In this context, new entrants come on the scene with a core competence in designing and following process.  The high level of formalization results in legal work with fewer errors, lower cost, and faster delivery time.  Yet, the emphasis on process also enables more predictable schedules and greater work-life balance. This is a valuable differentiator to attract and retain talent. See Post 010 (“In addition to a professional wage, a collegial work environment, and freedom from business development pressures, lawyers in the managed service sector can refuse work outside the bounds of a 40-hour workweek.”).

4. Interconnectedness (+)

Innerconnectedness is “the degree to which the units in a social system are linked by interpersonal networks” (p. 412). The more interconnected the interpersonal networks, the greater the organizational innovativeness. This is because interpersonal networks tend to be very influential channels for sharing information, as trust and credibility levels are high. An organization can broaden and deepen these networks through the architecture of its office space and investing in regular inter-office meetings.

Interconnectedness is probably an attribute that legal service organizations tend to undervalue, wanting to avoid the lost time and expense of bringing professionals together for learning and socializing. Yet, I was recently surprised to learn that one of the major benefits of Milbank@Harvard, an intensive annual business training program for Milbank associates that lasts for several years, is that associates in the U.S., Europe, and Asia offices get to know one another in ways the spur trust, collaboration, and innovation. Ironically, these benefits were not part of the original business case for the program. They are just a welcomed second-order effect.  For additional information, see “An Update on Milbank’s Big Bet,” LWB, Nov. 13, 2013.

5. Organizational slack (+)

Organizational slack “is the degree to which uncommitted resources are available to an organization” (p. 412). The greater the organizational slack, the higher the level of organizational innovativeness, “especially for innovations that are higher in cost” (Id.).  Rogers speculates that larger organizations may be more innovative because the aggregate levels of downtime are bound to be greater. To use a sports metaphor, more shots usually result in more baskets.

Companies like 3M, Google, and HP have all adopted innovation strategies based on unstructured free time for knowledge workers. However, in most of the legal world, 100% utilization is the perennial holy grail. Exceptions are hard to find.

That said, the law firm Bryan Cave is an interesting accidental example. In the late 1990s, John Alber, the firm’s longtime innovation partner, returned to the firm after the sale of his logistics company. After fixing the firm’s failing IT system, Alber assisted on a client request for an expert system on international trade regulations (albeit no one called it that at the time). Although Alber had no formal staff, he found someone in the IT department with free time to help. The client was very happy with the resulting technology-based solution, thus starting a John Alber/Bryan Cave winning streak that lasted 17 years and resulted in numerous industry awards for innovation.  The IT staffer with free time was Chris Emerson, who went on to get an MBA. Emerson now runs Bryan Cave’s renowned Practice Economics Group (or PEG).

Another law firm example (from India, not the US) is Nistith Desai & Associates (NDA), a firm with numerous FT Innovative Lawyer awards in the Asia-Pacific bracket.  See long list .  Founded in 1989, the 200+ lawyer firm is based on the principle of continuous learning. Every lawyer, including the firm’s founder, is expected to be involved in the firm’s daily hour-long educational programming, both as a student and content provider. NDA essentially mandates slack time in service of creative solutions.  While virtually all law firms are reactive to client problems, NDA’s model is based on the proactive anticipate / prepare / deliver model show below. Not surprisingly, NDA uses value-based billing.

In late 2017, NDA will unveil a new R&D facility on a four-acre, state-of-the-art campus located on the outskirts of Mumbai. The new facility is referred to as the Blue Sky Thinking Center.  The founder of the firm, Nistith Desai, claims to have built NDA based on a composite of the very best professional services firms, including Wachtell Lipton. For an interesting discussion of the firm’s origins and operating principles, see Nistith Desai, “Management by Trust in a Democratic Enterprise: A Law Firm Shapes Organizational Behavior to Create Competitive Advantage,” Global Bus & Org Excellence (Sept/Oct 2009).

6. Size (+)

Part II of this series (Post 016) focused on the relationship between an organization’s size and organizational innovativeness. Roger viewed size as mostly a proxy or surrogate for other important factors, such as overall resources, complexity, and organizational slack.

Although increased size means additional layers of bureaucracy and higher communication overhead, the benefits can often outweigh the costs.  The highly innovative Corporate Legal Operations Consortium (CLOC) was certainly enabled by the size and scale of modern legal departments. See Post 005 (observing that many legal departments have become “the equivalent of a specialized law firm embedded inside a large corporation”). Likewise, Part II (016) presented compelling evidence that larger firms are ahead on AI and other practice management innovations.  This is almost certainly the result of more resources.

To drive home this point, imagine a firm allocating 2% of revenues to invest in people, process, technology, and data. In a firm with $1.7 billion in revenues (the average of AmLaw 1-20), that amounts to $34 million.  In a firm of $100 million (the average of AmLaw 181-200), 2% equals $2 million. Whatever the benefits of being smaller and more nimble, smaller firms are not well-positioned to attract and retain a critical mass of specialized talent. See, e.g., Update from Baker & McKenzie’s Chief Strategy Officer in Germany (during a day of onboarding, welcoming a “diverse group of lawyers, paralegals, business professionals, economists, data analysts, data visualizers, digital marketing experts”).

Yet, in my experience, size very much interacts with firm scope.  Specifically, when a firm narrows its areas of substantive practice, the innovation quotient can skyrocket despite not having AmLaw 1-20 revenues.  Littler Mendelson (labor & employment), Fragomen (immigration), and Chapman & Cutler (financial services) all fit this profile. Higher levels of innovation are enabled by focus and partner alignment — the firm rises and falls by its dominance in a single practice area. Cf. “Fragomen to Launch Unique Tech Development Center in Pittsburgh,” Leg Intelligencer, July 3, 2017 (suggesting that all companies, including law firms, are destined “to become a tech company in some capacity”).

III. External Characteristics of Organization — System Openness (+)

This category of variables is very simple conceptually: Does the organization proactively open itself to new ideas that could solve or mitigate important strategic problems? Compared to other industries, legal service organizations score low on this dimension.

Roger writes, “[m]ost organizations engage in an opportunistic surveillance by scanning the environment for new ideas that might benefit the organization” (Id. 422). When it’s working well, “Answers often precede questions” (Id.) What Rogers is getting at is awareness-knowledge, defined as information that an innovation exists(p. 173).  Awareness-knowledge is obviously impeded by closed systems.  Lawyers are disadvantaged here on several fronts:

  • Ban on outside investment. The Rule 5.4 prohibition on non-lawyer investment means that lawyers cannot co-venture with other professionals, thus cutting lawyers off from valuable perspectives and learning.
  • Culture of immediate productivity.  The legal industry, particularly in the US, is strongly oriented toward production. As a result, eclectic reading, conference travel, and sustained high-level training and programming is often viewed as extravagant, as budget targets are high and the time is non-billable. Unfortunately, this ethos carries over to many legal departments. In-house counsel are largely firefighters. All too often, they lack the time, resources, and mindset to prevent fires.
  • Lawyer-centricity. All too frequently, lawyers refuse to accord legitimacy to the views of people who don’t possess a JD (and hence are “non-lawyers”). This is a recurring theme among allied professionals who work in the legal industry. Pros: high pay. Cons: routinely ignored or dismissed by lawyers.

If a legal organization wants to be more innovative, it can change some of these factors through enlightened leadership. In the long run, lower levels of innovations are ruinous to entire organizations and industries. A fiduciary cannot responsibly ignore these issues.

Finally, whatever I’ve just written about law firms and legal departments (the topic is organizations) applies to legal education.  To this day, I am struck by the lack of academic participation in organizations and events on the front lines of change.  E.g., CLOC, ILTA, LegalWeek. The economic rules of modern practice are poised to get rewritten. Once this happens, a lot of cheese is going to get moved.

Relative Importance of Rogers Organizational Innovativeness Model

Assuming you’re an innovator or early adopter who wants to use Rogers’ models to improve your organization, the following question is relevant: “What is the relative importance of the organizational innovativeness model (analyzed above) compared to the rate of adoption model in Post 008 [see thumbnail to right]?”

We don’t have systematic empirical data to answer this question, but we do have one article worthy of mention.  In a study of 25 hospitals that were adopting 12 new technologies in a midwestern city,  the dependent variable (outcome) was a nine-point scale ranging from “staff being awareness of an innovation (1 point) through adopting and using the innovation regularly (8 points) to expanding and upgrading the new technology (9 points)” (p. 414).  In effect, the scale is measuring the progression through the entire innovation adoption process, see Figure in Part I (post 015), from the early stages of initiation to complete implementation success. This is an ideal dependent variable.

The study authors found:

  • 40% of the variance explained by the perceived attributes of the innovations,  with observability, low risk, and low complexity being key.
  • 11% of the variance explained by organizational innovativeness factors, with CEOs as innovation champions and larger hospital with more aggressive marketing strategies being the most influential attributes.

(p. 412, citing Meyer & Goes, “Organizational Assimilation of Innovations: A Multi-Level Contextual Analysis,” 31 Acad of Mgmt J 897-923 (1988)).

What’s my advice? In both models, systematically explore cost-effective ways to influence every variable in the direction that will make success more likely.  This is how applied research works.

What’s next?  See Legal Operations Skills During Your 1L Summer (018)

The graphic above, adapted from Rogers, Diffusion of Innovations (5th ed. 2013), shows the distribution of innovativeness among 324 German banks.  The innovativeness scale is a count of innovation adoptions from a universe of 12 interactive telecom innovations that were diffusing through the German banking sector during the early 1990s. To help distinguish the early adopters, more recent innovations were weighted more heavily.  The distribution is a textbook example of the Rogers Diffusion Curve. The long innovators tail exists because innovators are typically 2+ standard deviations from the mean on innovativeness.

Rogers uses the German bank study to illustrate numerous factors associated with higher levels of organizational innovativeness.  One factor is size.  Specifically, the largest German banks accounted for a large proportion of the innovators and early adopters.  In Rogers’ dataset, the correlation between innovativeness and total assets was a remarkable .75 (p < .01). Likewise, the correlation between innovativeness and employee headcount was an equally stunning .70 (p <.01). If readers are wondering why I am surprised, it is because the results are contrary to the standard trope that larger, more mature, and more financially successful companies — be it manufacturing, pharmaceuticals, or technology — struggle with innovation.  Indeed, this is the very problem Clayton Christiansen is trying to solve in the Innovator’s Dilemma (1997).

Post 016 is part of Legal Evolution’s foundational series on diffusion theory.  Readers seeking to influence innovation within the legal industry will be more successful if they obtain and apply this background knowledge. Care has been taken to make this information non-technical and accessible.

This post is Part II of a three-part series on innovation in organizations. See Post 015 (Part I of series).  The goal in this post (016) is to unpack the counterintuitive relationship between size and innovativeness, as the strategic takeaways are far from obvious.

Deft Minds and the Size Effect

Everett Rogers had a remarkably deft mind that could puzzle through seemingly contradictory data and, with enough time and reflection, derive the most plausible causal story. Chris Zorn, my fellow co-founder at Lawyer Metrics (now LawyerMetrix), has a similar rare ability, which is to say I have some hands-on experience in this area. Drawing upon this experience, let me gently set reader expectations: What is important in Posts 015-017 is analytically subtle in a way that is not intuitive for most lawyers.

Let’s start with the size effect, which is present in Rogers’ study of German banks.  The size effect is relevant to lawyers because (a) there is credible, recent evidence that size is correlated with innovativeness in law firms; and (b) as Rogers acknowledges, the higher levels of innovativeness are, in most cases, substantially driven by the “covariants” of size, rather than size itself.  It is this second point (b) that requires the deft researcher’s mind, albeit it can definitely be grasped by patient smart people. So hang in there.

(a) The Altman Weil Law Firms in Transition Survey

The recent credible evidence of the size effect comes from the Altman Weil Law Firms in Transition 2017 survey, The survey polled managing partners and chairs at 798 US law firms with 50 or more lawyers. The response rate was 48%, including 50% of the NLJ 350 (ranking based on lawyer headcount) and 50% of the AmLaw 200 (ranking based on gross revenues).

Ron Friedmann in his post “Law Firm Profitability + Service Delivery: What the Altman Weil Survey Says,” Prism Legal, June 21, 2017, conducted a masterful secondary analysis of the survey results. One of the survey questions asked law firm leaders, “Technology tools that incorporate artificial intelligence (AI) and machine learning — like Watson and Ross — are beginning to be adopted by some law firms.  What is your firm’s stance on the use of legal AI tools?”  From the respond data, Ron generated the chart below:

This graphic shows a very strong relationship between law firm size and the use of AI.  Over 50% of the 1000+ lawyer firms claim to have begun adoption. Further, the effect is clearly linear, with the level of use and exploration steadily declining with firm size. Drawing upon what we learned in Part I (015), the orange bars reflect the “initiation” phase and the blue bars reflect “implementation.”  (Keep in mind that the implementation phase is fraught with difficulties and often ends in failure. See Post (015).)

Further, the relationship between size and innovation is not limited to AI.  We observe the same size/innovation effect in results that show the linkage between alternative fees and changes in how work is being staffed and delivered.  The graphic below is also courtesy of Ron Friedmann:

[Query: Why is linking AFAs to staffing and service delivery so innovative? Because the real value of alternative fees is to incentivize a re-design of workflow that (i) increases quality, (ii) speeds up delivery, and (iii) decreases cost. Otherwise, alternative fees become either a price discount or a gamble with poor or unknown odds. Stated another way, there is no point in hiring a pricing specialist unless you’re also going to hire specialists in project management and process improvement.]

(b) Covariants to size, not size itself

The graphics above reveal a clear and meaningful relationship between size and innovativeness. Yet, it does not necessarily follow that increasing size will increase innovation.  Correlation, as they say, is not causation.  Instead, it may be the case that other actions or activities need to be taken to improve or enable innovation; and for a variety of reasons, those actions or activities are more likely to occur in a larger firm.

To illustrate, let’s return to Rogers’ Organizational Innovativeness model, which is reproduced below:

In category II, Internal Characteristics of Organizational Structure, there are six factors (i.e., independent variables) listed, with size being number 6.  In Diffusion of Innovations, Rogers asks the question, “Why do researchers consistently find that size is one of the best predictors of organizational innovativeness?”  The first reason, writes Rogers, it that size is easy to measure with precision and thus “is included for study in almost every organizational innovativeness investigation” (p. 411).  Rogers continues:

Second, size is probably a surrogate measure of several dimensions that lead to innovation: total resources, slack resources (defined as the degree to which an organization has more resources than those required for ongoing operations), employees’ technical expertise, organizational structure, and so on. These unidentified variables have not been clearly understood or adequately measured by most studies. These “lurking” variables may be a fundamental reason for the common finding that size and innovativeness are related (Id.).

These “lurking” variables are covariants — i.e., attributes that generally move in a linear relationship with one another, either positively (height and weight) or negatively (age and memory).  Thankfully, when we have a lot of potentially meaningful variables that are correlated with one another, we can sort out what matters, by direction of effect and magnitude, through multivariate models.  In this case, factors 1-5 in Rogers’ model reveal the more valuable insights. We will carefully review those factors in Part III (017). But before we do that, let’s make sure we know enough about the underlying statistical models to avoid very serious errors in judgment.

Size is not a strategy

In the quoted paragraph above, Rogers is describing what statisticians call “omitted variable bias.”  This occurs when we leave something out of a multivariate model — like factors 1-5 above — and get a result that inflates or deflates the predictive power of the remaining variables (like size of firm).  The risk here is that folks running and interpreting the models are not sophisticated enough to know that they might have left something out and, if so, how to correct for it.  In turn, they drawn incorrect inferences that could form the basis for disastrously wrong strategy.

An example of the subtleties at play here can be seen in a law firm profitability model that Evan Parker (Managing Director of Analytics at LawyerMetrix) and I published in The American Lawyer. See “Playbook: Top 5 Strategies of the Most Successful Firms,” January 2017. As a first-cut analysis, size is positively correlated with average partner compensation: .53 with revenues, .28 with headcount.  And among many lawyers, there is a reflexive view that bigger is better, particularly in uncertain economic times.  See, e.g., Laurence Simons, “Number of US law firm mergers rockets,” Oct. 14, 2015. Yet, many other factors are bound to matter as well, such as (a) geographic presence in particular markets, (b) geographic concentration, (c) specific practice areas, (d) practice area concentration, (e) client concentration in specific industries, and (f) measures of reputation in lucrative financial services markets.

The graphic below shows the results of a model that includes all the factors just listed.

When reliable measures of these additional factors are included in a multivariate model, size (in this case, headcount) becomes a negative predictor of profitability at a level that is statistically significant.  In other words, when all these other levers of strategy are factored into the analysis, more lawyers means lower average partner compensation.  Further, the model explains approximately 80% of the variation in average partner compensation, which makes it highly unlikely that many firms can thrive using strategies significantly at odds with the model’s results. (For the prescriptive advice that flows from this model, please read the full article.  H/T Chris Zorn and Erik Bumgardner, both PhD social scientists, who helped build the model. )

I show the profitability model to make a simple but important point:  The use of statistics to guide strategy and operational decisions only becomes valuable when deep contextual knowledge of an industry and its problems is combined with quantitative competence and the ability to effectively communicate results. By dint of his deft mind and an amazing work ethic, Everett Rogers developed this ability in the realm of diffusion theory.  Outside my former colleagues at LawyerMetrix and a few others, this combination remains all-too-rare in the legal field.  Over the next generation, this gap is destined to close.  In the meantime, beware of charlatans selling into a naive and fearful market.  Also, don’t expect an internist to perform surgery.

Strategy that works = models + reasoning ability

For lawyers, there is a silver lining to all of this complexity: High quality empirical models — like the Rogers’ rate of adoption model (Post 008), the organizational innovativeness model, or the profitability model above — are nothing more than signposts that communicate what is more, or less, likely to matter. They don’t, by themselves, produce fully baked strategy.  Rather, strategy based on models requires the application of additional reasoning ability, of which lawyers have no shortage. Fortunately, sophisticated quantitative analysis is itself an innovation that is starting to diffuse through the legal industry social system.  See Post 004 (“Rogers’ core insight – one that is absolutely foundational for Legal Evolution readers – is that the diffusion of innovation is a process that occurs through a social system” (emphasis in original)).

In Part III (017), we can finally dive into the Rogers organizational innovativeness model with confidence that we can draw the right inferences and, in turn, use the model to set and execute sound organizational strategy.

What’s next? See Innovation in Organizations, Part III (017)

Every legal innovatorearly adopter and change agent shares a common, unifying desire: To speed up the pace of innovation within their organization.

This statement is true whether the context is a law firm, legal department, government agency, bar association, or law school. Over the years, I have commiserated with them all. Although they don’t know it, their disappointment is rooted in the fact that organizations are much harder to influence than individuals. See foundational posts 007 and 008 (discussing complexity and challenges of successful organizational adoption). For better or worse, organizations are everywhere within the legal ecosystem. Thus, it would be extremely useful to understand what levers to pull that can make them more innovative.

Post 015 is part of Legal Evolution’s foundational series on diffusion theory.  Readers seeking to influence innovation within the legal industry will be more successful if they obtain and apply this background knowledge. Care has been taken to make this information non-technical and accessible.

Rogers Organizational Innovativeness Model

The model above, drawn from Everett Rogers’ Diffusion of Innovations Ch. 10 (5th ed. 2003), summarizes several factors that positively or negatively affect an organization’s level of innovativeness.  The model aggregates the results of numerous empirical studies that utilize multivariate regression analysis. However, just like the “rate of adoption” model discussed in Post 008, Rogers conveys the key findings using words rather than numbers. This is because, as an applied researcher, Rogers wants his analysis to be understood and used by a smart lay audience. See Post 001 (explaining difference between applied and academic research).

To illustrate, a multivariate regression model has some number of “independent” variables that predict some outcome we care about. We call that outcome the “dependent” variable. In the graphic above, the left side lists several independent variables while the right side contains a single dependent variable.  Thus, it can be said that the level of organizational innovativeness depends upon the values of several specific independent variables. In very practical terms, the model tells us what categories of change we should focus on to increase innovativeness within our organizations. And, by implication, it tells us what not to do.  It is very hard to overstate how useful this is. In the early days of any innovation, Rogers’ models (above and in Post 008) are both map and compass. It is just plain foolish not to learn how to use them.

That said, to have a fair chance of success, readers need additional background knowledge on the challenges of organizational innovativeness.  Thus, I am breaking this topic into three parts. Part I (Post 015) reviews the reasons why organizations tend to become bottlenecks for innovations that are crucial to their long-term survival. Part II (Post 016) discusses a very counterintuitive fact — that organizational innovativeness is strongly correlated with size, even in law firms. With this background information in place, Part III (Post 017) dives into the details of Rogers’ innovativeness model (above) with special emphasis on how it applies to legal service organizations.

Brief Review of Diffusion Theory

Innovators and early adopters are very interested in speeding up the rate of adoption of innovations. Everett Rogers’ rate of adoption model in Post 008 sets forth many factors that positively or negatively influence this outcome. The model groups these factors into five distinct categories: (I) Perceived Attributes of Innovation, (II) Type of Innovation-Decision, (III) Quantity and Quality of Communication Channels, (IV) Nature of Social System, and (V) Efforts of Change Agents.

As noted in earlier foundational posts, the first category, “Perceived Attributes of Innovation,” contains the most biggest levers for change. This is because the five attributes identified in the research — higher relative advantage, lower complexity, greater compatibility, use of pilot trials, and increased observability for prospective adopters — explain the majority of variation in rate adoption.  With sufficient quantities of time, money and effort, innovators, early adopters and change agents can alter these factors in the right direction. See Post 008 (urging those favoring innovation to “focus your attention on these five factors”); Post 011 (explaining “slow innovations” based solely on these five factors).

Yet, for those of us working in the legal industry, “Type of Innovation-Decision” is equally important. This is because Type of Innovation-Decision is essentially distinguishing between individual and organizational adopters. And the latter are (a) much more common and economically influential within the legal industry, and (b) more likely to result in adoption failure, particularly in the absence of significant planning and intervention.

Innovation in Organizations

As noted in Post 008, there are three types of innovation adoption decisions: (1) optional, (2) collective, (3) authority.  If the adoption decision is optional, it’s akin to market forces: individuals are free to take it or leave it (think Smartphone, Uber, or wearables). In contrast, when an organization is the adopter, either collective or authority adoption decisions apply.

Collective is the most problematic decision type, as a collective adoption decision requires some level of group consensus (think law firm partnership or law school faculty).  Authority adoption decisions are, in theory, easier because a single authority can decide (think CEO or GC). But successful implementation still depends upon overcoming the opposition of the laggards and late majority. See Post 007 (defining adopter types).  Indeed, “massive passive resistance” (MPR) awaits the executive who underinvests in team buy-in. See Post 008 (defining MPR and discussing its pervasiveness in corporate legal departments).

In summary, if you work in the legal industry and want to bring about beneficial change, your success largely depends upon your ability to work with, or within, organizations.  This is because good ideas, unsheltered by a well-informed sponsor, are no match for the strong anti-change headwinds created by organizational decision making. This is a structural feature of the industry that consistently impedes organizational innovation, albeit innovation is never foreclosed — not unless you and others give up. For this ultramarathon journey, Rogers’ models are essential survival tools.

That said, an important caveat is in order.  The predictive power of Rogers’ organizational innovativeness model is much lower than the Post 008 rate of adoption model.  One of the main reasons for the lower predictive power is that factors that make an organization more likely to innovate are simultaneously factors that tend to undermine successful implementation.  Specifically, the likelihood of an organization deciding to adopt an innovation is positively correlated with (i) lower centralization of authority, (ii) higher complexity of work, and (iii) less formalization of procedures. Yet, these three attributes are negatively correlated with successful implementation.

Obviously, very few organizations have the level of self-awareness necessary to make appropriate mid-stream adjustments.  Instead, leaders try to power through obstacles with a one-size-fits-all management approach. In legal organizations in particular, when an innovation fails, we place the blame on lawyers’ contentious, skeptical, autonomy-loving nature. This is a bogus uninformed analysis.  Fortunately, this pathetic cycle can be broken through careful planning and leadership.

Initiation versus Implementation

Below is a graphic that summarizes the five stages of an innovation adoption process in an organization. Notice that the adoption decision is made only after a period of agenda-setting (Stage #1) and matching (Stage #2). Thereafter, the painstaking work of implementation begins.

Note also that the model above essentially assumes that the innovation process is managed by an existing bureaucracy, ostensibly just one of many managerial duties.  The process begins with “Initiation,” which consists of “all of the information gathering, conceptualization, and planning for the adoption of the innovation, leading up to the decision to adopt” (pp. 420-21). After the leadership makes the adoption decision, the organization commences the “Implementation” phase. This consists of “all the events, actions, and decisions involved in putting the innovation to use” (p. 421).  When the innovation is so integrated in the organization that it becomes routinized, it “loses its identity” as something new. In essence, the innovation has merged into the status quo.

As noted above, several organizational attributes that support successful initiation become sources of weakness during implementation. This should be very humbling to legal innovators and early adopters who likely excel at initiation but are prone to underestimate the hardships and complexities of successful implementation. This tendency is explicitly discussed in the Silicon Valley classic Crossing the Chasm by Jeffrey MooreMoore’s solution is simple: when the time comes, replace the innovator/early adopter management team with more mainstream operators whose skill set is execution rather than ideation. For the opposite situation — when an organization is very good at setting and following procedures but struggles to innovate — Rogers suggests a skunkworks as a potential solution.

Unfortunately, there is good reason to believe that law firms, the longstanding cornerstone of the legal industry, reflect the worst of both worlds. The partnership structure hinders both successful initiation and implementation, not to mention making a timely adoption decision. Cf. Bruce MacEwen, Tomorrowland: Scenarios for Law Firms Beyond the Horizon (2017) (discussing at length the business liabilities of governing a law firm as a partnership; suggesting that the partnership model will become a source of numerous law firm failures). Yet, this is less a reason for hopelessness than cause for careful study and preparation, at least among those who intend to stay in the industry beyond the short to medium-term.  Society has many hard problems. This one belongs to lawyers.

There is more to unpack in Parts II (016) and III (017), which I’ll post shortly.

What’s next? See Innovation in Organizations, Part II (016)

The global law firm Gowling WLG has just launched a platform that automates document production for a private placement offering.  The video above does a remarkably good job of explaining how the product (called Smart Raise) works.  Far from scary and technical, the innovation comes across as simple and inviting. Quite an accomplishment in two short minutes.

Gowling WLG is a global law firm that operates in Canada, the UK, Continental Europe, the Middle East, and Asia. Although it doesn’t have a US office, US firms ought to take notice, as the Gowling’s rollout is a good illustration of two trends starting to take hold in the legal ecosystem:

  1. The use of complex technical sales methods that include market preparation activities as part of a long-term strategy;
  2. New pricing models that connect together commodity and bespoke offerings in ways that thin out weak competitors.

Complex Technical Sales

This sounds like an oxymoron, but complex technical sales is about simplification. For example, when a new innovation is launched, prospective clients don’t understand its technical aspects. Thus, they have a reasonable fear of making an expensive mistake.  Closing this knowledge gap is costly, particularly in the B2B space, because it takes time and cognitive effort.  Showing the product in action in often the best way to reduce this load. Cf. Post 008 (explaining how lower complexity and higher trialability and observability increase innovation adoption).

In contrast to the rest of Law Land, Gowling WLG has head start. Its Leader of Innovation Initiatives is Mark Tamminga (pictured right), a long-time partner who pioneered the use of practice automation tools in building the firm’s Recovery Services practice. Through automation efforts that began over a decade ago, Mark and his colleagues built a series of products and services that captured the Canadian market. The practice has become very profitable and highly defensible.

One of the things that Tamminga and his colleagues understand is that you start the sales process by emphasizing simplicity and ease of use rather than technical prowess. This is hard for innovators because it requires extra steps.  The natural tendency is to jump to the most advanced features in an attempt to impress prospective clients. The result is typically confusion. Yet legal entrepreneurs make this mistake over and over again. See Post 008 (discussing how immersion in technical details makes it difficult to see the world through the eyes of the end user).

Finally, a short video can be an extremely effective sales tool because it is asynchronous and puts the viewer in control. If it’s done well, qualified buyers find you.  I first watched the video via a LinkedIn post.  In the year 2017, LinkedIn is a very important “communication channel.”   See Post 008 (discussing knowledge awareness and the adoption decision; discussing how more and better communication channels speed up adoption).


Smart Raise reduces the volume of hourly work. It then seemingly compounds the financial hurt by showing the ease of the new process. Skeptical lawyers are bound to ask, “How does this support revenue production?”

The answer is that it probably doesn’t, at least not directly or in the short-term.  Instead, it signals expertise.  If Gowling WLG is smart enough to automate a substantial portion of the private placement offering process, it’s likely they’re experts on the remaining complex issues.  “Perhaps we would give them a call.”  This is a market positioning strategy based on a realistic assessment of where the legal market is headed.  As Susskind has written, “If [cannibalization of legacy offerings] is going to happen, you should be one of the first to the feast.” See Tomorrow’s Lawyers 128 (1st ed. 2013).

What’s next?  See Innovation in Organizations, Part I (015)

alanbryanfutureoflitigAs a law professor, I worry about my students’ job prospects.  One way to manage this worry is to study clients and to work backwards from their needs.  Opportunities tend to find lawyers who follow this discipline.

Yet, making generalizations on law clients in the year 2017 is surprisingly difficult. This point was recently driven home by the juxtaposition of two “voice of the customer” examples at the Ark New Spectrum conference in Chicago last month.  The first example came from Aric Press, longtime editor-in-chief of The American Lawyer, who now spends a good portion of his time doing client feedback interviews through his consulting firm, Bernero & Press.

Example 1

Do law firms need to embrace sophisticated tech-based solutions to retain their largest and most important clients?  Aric put some variant of this question to a senior in-house lawyer who controls tens of millions of dollars of legal spend at a client we’ve likely all heard of.  The response was surprising, even to Aric. “I only need two pieces of technology. Email and my phone. And both work fine.”  This same in-house lawyer praised the firm being reviewed for cultivating a relationship of trust that felt personal. That’s comforting feedback for the service providers.

Example 2

The second “voice of the customer” came from Alan Bryan, Senior Associate GC of Legal Operations and Outside Counsel Management at Walmart. Alan presented the chart above, which graphically summarizes some of his views on the evolution of litigation [click on image to enlarge].

Caveat:  Alan Bryan is skilled and careful legal operations professional, which means he understands the range of interpretations that lawyers assign to graphical information.  A major caveat Alan made during his remarks is that the arrows above “are not to scale” — i.e., they do not reflect the quantum of hours worked or dollars spent. The chart instead shows a likely directional change in the relative mix of service providers, including in-house counsel.  The growing green arrow includes, at least in part, non-traditional legal service providers of the type profiled in “Efficiency Engines,” ABA Journal (June 2017).

So what’s the takeaway?

The nature of legal work among the nation’s largest corporate clients is simultaneously changing significantly and not at all.

On one level, this is frustrating because it means any generalization is vulnerable to the killer counterfactual anecdote. Within firms, this means strategy setting can veer toward melee.  The broader “profession” will also struggle to plan and adapt.

On another level, however, these two voice-of-the-customer examples reveal large client segments that are operating on different time tables. Alan Bryan feels sufficiently strongly about the changing nature of law practice that next year he will be teaching the first second full-semester* “Introduction to Legal Operations” course at an ABA-accredited law school. The course will be offered at his alma mater, University of Arkansas-Fayetteville School of Law.

The legal world is changing, albeit unevenly and in ways that defy simple generalizations.  That said, I would be comfortable wagering that over the course of a 40-year career, taking Alan Bryan’s legal ops course will, in cumulative effect, open as many professional doors as a degree from Harvard Law School, albeit HLS appears to be hedging itself in a very prudent way.  See Underestimate Harvard Law’s New Admissions Strategy at Your Own Risk.  As a field, legal ops is disruptive because it focuses on measurable results. See Post 005 (discussing rise of legal ops and CLOC).  You either have the knowledge, skills and experience to deliver, or you don’t.  Credentials and pedigree can’t fill that gap.

 * Since the fall of 2015, legal innovator Ken Grady has been teaching “Delivering Legal Services” at Michigan State University College of Law.  This is a 2-credit course that functionally covers the terrain of legal ops, including, per Ken’s email, “project management, process improvement, technology, metrics, design thinking, and a few other topics.”  Since January 2016, Indiana Law has been offering a 1-credit Legal Operations course during our January Wintersession. If your school also offers a “legal ops” course, please let me know and I’ll amend this post.

What’s next?  See Example of Automating Private Placement Documentation (014)

Glass Half Full: The Decline and Rebirth of the Legal Profession
Benjamin H. Barton, Helen and Charles Lockett Distinguished Professor of Law at University of Tennessee-Knoxville College of Law.
New York: Oxford University Press, 2015. 305 pp. ISBN: 978-0-19-020556-0.

The laws of supply and demand have finally caught up with the modern U.S. legal profession, yet the lawyers that preside over the decaying hierarchy – law professors, BigLaw partners, bar associations, and state and federal judges – are substantially in denial. Why? Because the old order has been too good for too long, blinding its beneficiaries to the core ideals that make a life in the law worth living. But there is good news—those now entering the legal industry will have an opportunity to return to those ideals, albeit this renaissance is borne more out of necessity rather virtue.

This is the core storyline of Ben Barton’s thoughtful and comprehensive book Glass Half Full. The turmoil engulfing law schools and the legal profession are widely known, thanks to numerous stories in the New York Times and Wall Street Journal. Other contemporary authors have offered commentary on its causes (e.g., Trotter 2012; Tamanaha 2012; Harper 2013), though not with a wide-angle view that could plausibly tell the story as part of a broader historical cycle. A handful of capable legal professions scholars have attempted such treatments in the past (e.g., Friedman 1973; Auerbach 1976; Stevens 1983; Abel 1989; Galanter & Palay 1991; Morgan 2010). Barton synthesizes this vast amount of information into a digestible narrative that encompasses the post-2008 crisis. To his credit, it also has a substantial ring of truth.

Trying to Solve a Non-Academic Problem

This was not a conventional scholarly project for Barton, who is a chaired professor at the University of Tennessee College of Law. As a fellow tenured professor who earns a good living teaching law at a flagship public law school, I can attest that this is a topic where a little bit of honest reflection can prick your conscience and cause you to lose sleep (primarily due to the debt loads taken on by our students; more on that below).

Many of us who feel this way (and not everyone does) write articles about it or organize conferences or develop new courses that fit the times and are designed to create employment opportunities for our students. One of Barton’s solutions was a write a book that combines a deep factual analysis with a humane, measured tone. As a work of pure scholarship, the book may be judged differently by those in the academy. This is because the unstated purpose of Glass Half Full is to generate acceptance and hope within a community of professionals prone to skepticism, pessimism, contentiousness and overconfidence. Yes, that’s right: lawyers.


Barton’s analysis is organized in three parts: The Market for Lawyers (Part I), Law Schools (Part II), and Big Picture and the Glass Half Full (Part III). Part I is the most substantive, original, and scholarly and develops the core theme of the book: that American lawyers are, as an historical matter, a profoundly resourceful and resilient profession that can ride out waves of crisis. The reason is that lawyers, at least in America, are too valuable for building and maintaining our institutions.

The ultimate purpose of Glass Half Full is not to develop this thesis, but instead to apply it to the crisis at hand. Thus, the threshold task is to swiftly yet credibly summarize nearly 200 years of history on the U.S. legal profession. And on this very difficult task, Barton largely succeeds.

Part I. The Market for Lawyers

Most lawyers (and citizens) know that lawyers were the primary architects of the American system of government. As De Tocqueville observed in 1831, lawyers were the closest thing in America to an aristocracy. Yet, it is less widely known that lawyers of that same vintage were trying to permanently secure their advantage by increasing educational requirements. This resulted in a backlash during the Jacksonian Era, which dismantled barriers to entry and crushed the earning power of lawyers.

After the Civil War, lawyers rebounded by playing an integral role in the nation’s transition to an industrial economy. With the formation of bar associations, including the ABA, new momentum gathered for minimum levels of education and mandatory bar exams. These barriers to entry proved to be far more enduring because state supreme courts began to assert control through a series of constitutional decisions that claimed inherent authority over the regulation of lawyers. The first inherent authority decision came from the Illinois Supreme Court, which mandated, as a condition of practice, a three-year education minimum plus passage of a bar exam.

Disenfranchised lawyers from two-year law schools managed to successfully petition the Illinois legislature for a law exempting them from these requirements. Yet, in In Re Day, 54 N.E. 646 (Ill 1899), the Illinois Supreme Court invalidated the law, reasoning that the legislature had assumed power that properly belonged to the courts. In Re Day subsequently became the topic of favorable commentary in the Harvard Law Review, touching off imitation by other state supreme courts and erecting separation of power as the primary bulwark supporting lawyer self-regulation.

The Great Depression once again decimated lawyer incomes, but by this time, the profession itself had the power to further ratchet up entry requirements (eventually reaching the four-year undergraduate degree plus a three-year JD from an ABA accredited law school just to sit for the bar) and aggressively pursue unauthorized practice of law actions against those who encroached upon the lawyers’ monopoly. Thus, when prosperity returned to the nation during the post-World War II years, lawyers were among the biggest beneficiaries, enjoying rising income, influence, and stability.

This mental frame of lawyer influence and prestige has been reinforced by several decades of popular culture. Although this frame is diverging more and more from the facts on the ground, its influence persists because (a) it is a coherent narrative that is attractive to young people entering law school, and (b) it benefits those in positions of power. Part I of Barton’s book makes a powerful case that this version of the American legal profession is in the process of steady, irreversible collapse. In other words, the jig is up. If we (the beneficiaries of the old order) deny it much longer, we will only look more and more foolish to young people entering law school and to the public at large.

Barton identifies four “deaths” of the modern legal profession, each getting its own chapter.

  1. Death from Above (Chapter 4) focuses on the relentless consolidation of BigLaw driven by individual lawyers seeking to maximize their income. This model does not benefit clients, so clients are slowly finding substitutes, such as bringing work in-house or hiring managed services providers like Axiom.
  2. Death from Below (Chapter 5) is occurring because poor and middle-class citizens cannot afford lawyers to solve their legal problems. This has opened the door to venture capital and private equity-backed companies like Rocket Lawyer and LegalZoom that specialize in self-service legal forms with a user-friendly interface similar to Turbo Tax.
  3. Death from the State (Chapter 6) includes several decades of tort reform and packing the judiciary with judges hostile to consumer rights, class action litigation, and federal fee-shifting statutes. The State has also cut back on legal aid and general funding of the courts. In effect, the State is controlling legal costs by knocking out grounds for relief and undercutting the economics of plaintiffs’ work. This hostile environment has given rise to settlement mills that focus on speed and volume rather than quality.
  4. Death from the Side (Chapter 7) is the consequence of an oversupply of law school graduates, thus depressing wages and causing many to leave the profession. Trend lines spanning more than 50 years provide persuasive evidence that it is getting harder and harder to make a living as a lawyer.

Part II. Law Schools

Part II (Chapters 8-9) focuses on law schools. If the temperature was slowly getting turned up on the practicing bar over the course of several decades, it wasn’t until recently that legal education felt the heat. Barton suggests that the demand for law school is substantially driven by a pop culture that consistently portrays lawyers as attractive, articulate urban professionals making a good living doing interesting and meaningful work. In 2010, a large counterweight arrived in the form of relentless negative news coverage on law schools and the entry level market, thus pushing applications down to levels not seen since the mid-1970s.

Yet, this market correction is probably not what is bothering Barton. More likely, it is the unprecedented debt loads taken on by the smaller number of students who do enroll—debt loads with relatively high interest rates set by the federal government. The high interest rates are designed to finance relatively generous Department of Education programs that cap monthly payments based on a law grad’s earnings. They also include loan forgiveness after 10 years for public sector workers and 20 to 25 years for those in the private sector.

Barton questions the morality of loading up young people with large debt balances that may not go away until late middle-age. He is also skeptical (as am I) that this financing model is sustainable. Why? Because there is a large, unhedged risk that the volume of loan forgiveness will exceed the amount of loans that get paid in full with interest, thus putting law schools on a collision course with the federal deficit. That time of reckoning is likely a decade or more off, but history will harshly judge a learned profession that failed to head it off in a timely and responsible way. In fairness, this same problem is endemic to all of higher ed. Barton quotes his Tennessee Law colleague Glenn Reynolds (author of the Higher Education Bubble (2012)) that “law school is the canary in the coal mine” for the rest of the university (p. 22). So for anyone working in higher education, this may be more than academic reading.

Part III. Big Picture and the Glass Half Full

Part III (Chapters 10-13) pulls back for the wide-angle view. In Chapter 10, titled “Big Picture and Parallels,” Barton asks the question, “Why have BigLaw and law schools pursued the same self-destructive strategies” (p. 218)? He is referring to the relentless pursuit of higher profits by large law firms (as ranked by The American Lawyer) and higher prestige by law schools (as ranked by U.S. News & World Report). Barton writes:

[In reading this book,] you have probably noticed some similarities in the self-destructive behavior of Big Law and legal academia. You have also probably wondered by judges, law professors, or bar associations have not stepped in to ameliorate the situation. There is a simple reason for both of these trends: all of these institutions are dominated by roughly the same people, trained and selected from the top of the class at the same elite law schools (p. 218).

If one combines a lifetime of academic privilege with decades of institutional prosperity, the result is an inbred way of viewing the world that is incapable of seeing its own foibles. As Barton points out, this is not an unusual storyline. This is Kodak. This is General Motors. Now hubris is claiming elite lawyers as its victim. Barton makes this point, but not in a heavy-handed way, as his goal is not to judge or blame but to bring about self-awareness and acceptance among those clinging to a dying model.

Alas, Part III also covers the rebirth of the legal profession, but here I think Barton’s relentless focus on facts gives way to some wishful thinking. The primary evidence of rebirth is LegalZoom and many other tech-enabled new entrants who are lowering the per-unit cost of solving or preventing legal problems. Yet, members of the organized bar have had precious little to do with these innovations. This is, in fact, a venture capital and private equity-backed legal industry that is growing up around, and potentially crowding out, the traditional legal profession. In Chapter 13, Barton asks, “Whither American lawyers?” The answer is no because “lawyers have faced much worse and triumphed” (p. 293). Well, this time might be different.


A close reading of Barton’s analysis suggests that the rebirth of the legal profession is not based on lawyers changing their views. In fact, Barton is arguing that the next generation of law school graduates—whether they be licensed lawyers or legal professionals working for a company like LegalZoom or Axiom—are going to rediscover the power and joy of focusing on clients and the public interest. This is going to happen, at least in part, because the seductions of the old order are fading away. Regardless of its cause, however, this new ethos will embrace technology for the benefit of clients and will vanquish the billable hour for most legal work, enabling lawyers to sell solutions rather than time. So yes, the glass might very well be half full.

An earlier version of this book review appeared in Law & Politics Book Review, Vol. 27 No. 2 (February 2017) pp. 28-31.

What’s next?  See Generalizing about Clients (013)

glasses_diffusionAre rapidly adopted innovations more valuable and important than innovations that take a long time to take hold? Not necessarily.

Post 011 is part of LE’s foundational series on diffusion theory.  Here’s the key point:  Speed of adoption is not a reliable guide for an innovation’s importance. In fact, competitive advantage is much more likely to lie among slower ideas where innovators focus on several key factors to accelerate the rate of adoption.

It is difficult to accept an insight this counterintuitive. Thus, we need an illustration. Continue Reading Fast versus Slow Innovations (011)