For the legal industry, the answer is likely “now.”
Lawyers love the expression “better, faster, cheaper—pick two.” But what happens when there is a change in the state of the art such that gains in all three are possible and the only constraint is a workforce with the requisite state-of-the-art skills?
For the legal industry circa 2021, this is no a longer hypothetical.
In this post, I argue that the best adaptative strategy is to make large human capital investments in the most junior legal professionals. Specifically, create a generation of legal professionals who have the state-of-the-art skills to design, build, and run better, faster, cheaper solutions. Why? Because, by definition, these legal professionals will be unable to backslide to the comfortable and familiar model of their youth.
As discussed below, a generational strategy is very expensive and requires tremendous resolve and political skill. Thus, the only reason to wheel it out is when all your less expensive and less drastic options are unlikely to work.
This essay (235) is functionally Part III of my last two Legal Evolution posts, building on two of their key conclusions:
- Technological constraints on one-to-many legal products and solutions are falling. This is evidenced by the crowded and chaotic market map for the current legal ecosystem. Legal innovators—many of them lawyers—are quite literally betting their careers on the commercial viability of their own version of better, faster, cheaper. With the technological dominos falling, the next challenges are business models and acquiring, developing, and retaining the requisite talent. As this gets sorted out, a significant portion of legal work is going to transition from one-to-one to one-to-many. What is uncertain, however, is the timing of the transition, which creates difficult strategy issues for all stakeholders. See “The best metaphor for today’s legal market is the auto industry circa 1905 (231),” April 25, 2021.
- Learning a new paradigm is much easier than unlearning an old one. This is one of the principal observations of science historian Thomas Kuhn in his seminal book The Structure of Scientific Revolutions. Kuhn cites Planck’s principle that a new paradigm “does not triumph by convincing its opponents and making them see the light, but rather because its opponents eventually die, and a new generation grows up that is familiar with it.” Structure (5th ed. 2012) at 150 (quoting Planck). If Planck’s principle applies to physicists living through a paradigm change, it likely applies to other knowledge workers, including lawyers, facing structural shifts in how their work is organized and performed. See “Does the Kuhn cycle apply to law? (233),” May 23, 2021.
Post 235 starts with two historical examples of successful generational strategies in law. I then explore how a generational strategy can and should be used to aid the transition from one-to-one to one-to-many. Ideally, similar to the Restatement movement of the 1920s and 1930s, see Post 207 (telling this important and largely forgotten story), this is a strategy that could reorient and revitalize the entire legal profession.
Earlier generational strategies
Earlier generational strategies in law have been profoundly successful—so successful, in fact, that they have become invisible features of the practice of law that most of us take for granted.
Example 1. Cravath system hiring policies.
When Paul Cravath built the Cravath system, he was trying to solve a business problem: How could he cost-effectively hire and train enough sophisticated business lawyers to keep up with client demand? This is because in the early 20th century, the corporate law business was booming, as industrial and financial interests were grappling with near unlimited growth potential combined with the rise of state and federal regulation.
The first twelve pages of the Cravath Swaine & Moore firm history lay out in remarkable detail the Cravath system’s elegant business logic. Below is the passage that explains Cravath’s decision to hire lawyers directly out of law school rather than laterally from other firms:
Cravath believed that a staff trained within the office would be better adapted to its methods of work than a staff recruited from older men who, in practice elsewhere, might have acquired habits inconsistent with Cravath methods, and hence he insisted that the staff should be recruited, so far as possible, from men just out of law schools.
Robert T. Swaine, The Cravath Firm and its Predecessors Vol. II at 2 (1948) [emphasis added].
A related Cravath system innovation was the payment of a substantial entry-level salary. At the time, the prevailing practice was to give juniors a desk in exchange for assisting with office work. The juniors then scraped for a living by doing whatever business they could find on their own. According to Cravath partner and firm historian Robert Swaine, “Cravath could not tolerate the inefficiency and divided loyalty implicit in such an arrangement.” Thus, Cravath forbid outside work and business interests and committed to salaries and annual advancements “at least as high as those of any other office in the City.” Id. at 6.
This is no doubt that Cravath’s generational strategy was very expensive. Yet, whatever its cost, the return on investment was staggering, as it secured a steady supply of high-quality human capital that other facets of the Cravath system could forge into business lawyers with a well-rounded view of all aspects of corporate practice. Thus, the firm was amply rewarded through its ability to charge premium rates and promote the best associates to partners. This is how the Cravath system created the Cravath firm brand. It’s hard to imagine a more valuable intergenerational asset.
Prior to the innovation of the Cravath system, business law firms tended to be small and unstable, as senior lawyers lacked a cost-effective way to recoup the value of training someone who would eventually become their competitor. Not only did the Cravath system solve this difficult economic coordination problem, but it also became the template for the entire corporate law sector. For additional context on this remarkable story, see Marc Galanter & William Henderson, “The Elastic Tournament: The Second Transformation of the Big Law Firm,” 60 Stan L Rev 1867 (2008); William D. Henderson, “Three Generations of U.S. Lawyers: Generalist, Specialist, Project Manager,” 70 Md L Rev 373 (2011).
Example 2: WestLaw legal research
My second example of a generational strategy is Westlaw’s decision in the early 1990s to offer their electronic legal research products to all law schools free of charge, including on-site training and printing services.
Although this example is well-known to virtually all U.S. lawyers, a couple of years ago I had the benefit of getting additional color commentary from David Cambria and Mike Suchsland, two very accomplished legal executives who both worked at West during the early days of the law school legal research strategy.
In particular, Cambria, who was assigned directly to the law school immersion efforts, recalls internal discussions about the staggering cost of subsidizing law schools’ legal research efforts, as some insiders were skeptical of its ability to eventually produce higher sales. According to David, the head of his division waved off his peers, saying “wait, wait, it’s coming.”
The underlying logic was to get law students conditioned to the speed, efficiency, and comprehensiveness of electronic legal research so that when they started at their law firms, they would educate partners on the benefits of Westlaw. Further, if partners refused to buy the service, word would get back to the law schools about the reluctant adopter firm, thus putting them at a competitive disadvantage for talent.
I knew this strategy was something powerful when I heard it recounted by Cambria and Suchsland at dinner one night. Tears of laughter were streaming down their cheeks as they recalled the massive surge in electronic sales, which vanquished all skeptics. Once a law student had used Westlaw to efficiently get their work done in law school, it was near impossible to break them of the habit. Conversely, it brought to an end the long, fruitless process of educating old-school partners on the merits of electronic research. Cf. Planck’s principle.
When reflecting on this experience, Cambria offered a very interesting observation. David joined West Publishing while it was still a privately held company and a couple of years before it sold to Thomson Corporation, a large publically held information conglomerate. See Iver Petersen, “Thomson to Buy Legal Publisher in a $3.43 Billion Cash Accord,” NY Times, Feb. 27, 1996. Although West had developed a virtual monopoly on the publishing of court opinions, it had earned its monopoly by developing ingenious ways to categorize and navigate an extraordinarily complex array of legal information.
Drawing upon this background, Cambria commented that West had a deep understanding of the legal industry combined with the deep pockets to fund innovative new solutions. Further, as a private company that was family-controlled, they were inclined to take the long view. “I don’t think people appreciate how much that benefitted the legal profession,” remarked Cambria. “Who else had the resources, insider knowledge, and mindset to innovate at scale?” Managers who are held accountable for quarterly results are destined to make different decisions.
A generational strategy for one-to-many
The key point I am making in this essay is that when shifting to new methods of organizing and performing legal work—such as the transition from one-to-one consultative services to one-to-many products and solutions, see Post 231—it is far more effective to target the bulk of change efforts at the next generation of legal professionals, as the current generation will struggle to see the opportunity and properly weigh the benefits versus the costs, see Post 233 (discussing Planck’s principle).
I realize this might be construed as profoundly counterintuitive, as lawyers as a group are (a) very smart and (b) commercially ambitious. Nonetheless, conceding these points, a generational strategy is likely to move much faster and be much more cost-effective than a retooling or re-education strategy. In practice, the true decision point is rarely reached because consensus on a structural shift will always prove elusive.
Here, it is worth stepping back and gaining clarity on the problem, or set of problems, we are attempting to solve. In 2021, the following statements are all true:
- A large class of PeopleLaw problems can no longer be cost-effectively solved by the one-to-one consultative model that resolves disputes through recourse to the courts. See Posts 037, 042.
- In the Organizational Client sphere, corporate clients are clamoring for solutions that enable them to do more for less. See Post 035, Post 216.
- Solving the challenges in both the PeopleLaw and Organization Client spheres, or sectors, require law to be married up with a wide array of multidisciplinary methods. See Posts 027, 099, 174.
- Despite the importance of a multidisciplinary approach to law’s pervasive more-for-less imperative, there are no tenure-track teaching slots for legal operations professionals who know how to design and build systems for managing legal complexity. This is because the subject matter is part of a different paradigm and thus is fundamentally foreign to what law professors know and value. See Post 233.
- Job prospects for most law school graduates remain uncertain and precarious. See Posts 060, 182.
- Career paths into NewLaw and legaltech are, at best, ad hoc. See Posts 177, 183, 197.
Each of the above challenges is a business problem for one or more legal industry stakeholder. Thus, it is possible to sketch out a strategy to solve each one. But that is missing the bigger picture. By all counts, the self-regulation of the legal profession is not working—i.e., we are not working together to identify and solve our common problems that affect the quality and vitality of the legal system.
Does it make sense for all of us to go it alone in our own silos because industry collaboration is time-consuming, difficult, and comes with no guarantees? Or is the better path to find a way to spread the costs, and resulting benefits, of a generational strategy across a large number of stakeholders, thus taking advantage of massive economies of scale and derisking the strategy for everyone?
To the extent that we are looking for some type of precedent to point us in the direction of a solution, I believe the best model is the formation of the American Law Institute for the express purpose of “restating” the common law approach to lawyering, thus making its complexity manageable and saving the common law paradigm of lawyering. As discussed in Post 207, the ALI Restatements became indispensable “legal infrastructure” that dramatically improved the efficiency and clarity of law for judges, lawyers, bar associations, legal educators, law students, and the clients they served. Like bridge and tunnels that enable the flow of millions of commuters each day, the Restatements effectively set the legal profession up for several decades of stability and success. Also like bridges and tunnels, this infrastructure is eventually taken for granted. Nonetheless, its value several decades later remains indisputable.
The key to the Restatement effort was to build something that solved a problem and, in turn, make it widely available to the entire profession. It is noteworthy that the profession writ large did not agree to the wisdom of the project. Rather, one legal educator, William Lewis Draper, and one practitioner, Elihu Root, artfully engineered a funding mechanism (the Carnegie Corporation) and a governance structure that would eventually result in a self-sustaining nonprofit capable of carrying on the original vision.
Regular readers of Legal Evolution are likely to recognize that the Institute for the Future of Law Practice (IFLP, “I-flip”) has been pursuing the above strategy, albeit on a small scale commensurate with our small budget. See, e.g., Post 226 (discussing creation of our asynchronous Modern Law Practice course). Indeed, it is through my Legal Evolution research and writing that some of the pieces of this difficult puzzle have gotten organized and arrayed.
So, if we were going to use a generational strategy to simultaneously solve the disparate problems of affecting PeopleLaw, Organizational Clients, legal education, lawyers, law students, and other allied professionals seeking a career in law, what would it look like? Here a few ideas:
- Asynchronous learning modules that provide foundational knowledge in allied disciplines and, in turn, enable effective collaboration on one-to-many projects. Getting started should be as easy as logging onto a computer.
- Highly time-efficient format. Everyone working in the legal industry is starved for time. Thus, reduce the time span between learning and on-the-job application.
- Low per-unit cost. If the material is no more expensive than a law school coursebook, and the material helps law students get jobs, law schools will find a way to include it in their curricula.
- Academic rigor combined with a credible certification system. As discussed in Post 231, the emerging one-to-many legal ecosystem is constrained by a shortage of talent. These employers need reliable market signals to speed up their growth.
- A system of paid for-credit field placements—fully permissible under curren ABA accreditation standards, see Post 078— that (a) solidifies learning, (b) forges new career paths, (c) reduces student debt, and (d) builds a communication loop between law schools and modern practice.
The upside of a generational strategy is that it solves very difficult problems while minimizing intergenerational friction. The downside is the complexity and cost to carry out. Indeed, our best examples of success come from organizations—the Cravath firm when Paul Cravath had dictatorial control, and West Publishing when it was privately held—that had the resources and governance to make the requisite investment. A similar alignment of stars was necessary to create the American Law Institute.
Yet, in considering the generational strategy outlined above, I ask a simple question–why is it not worth pursuing? Until I hear a convincing answer, I’ll continue my efforts to bring it to fruition and encourage my fellow travelers to do the same.