Legal Productivity Problem

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Winter is coming and many legal departments will be left in the cold.

Let’s get a difficult conceptual issue out of the way. This is a long post that some might construe as a criticism of large corporate legal departments. It’s also a preview of LexFusion’s Second Annual Legal Market Year in Review. See Post 280 (First Annual Review). So it’s fair to ask, “why is LexFusion’s Chief Strategy Officer spending so much time delivering a difficult set of truths to his company’s largest category of customers?”

My answer is two-fold. First, the LexFusion model does not work over the long run, or nearly as well as it could, unless we are helping solve significant operational and strategic problems. See Post 203 (discussing LexFusion business model). Second, as a lawyer counseling other lawyers, I owe them my honest assessments. And more so than any of my prior legal jobs, the LexFusion perch, with literally thousands of industry meetings per year, lends itself to root cause analysis. Root causes can be difficult to communicate and even more difficult to hear, but they’re also the ground floor of virtually all sustainable solutions.

With two years under my belt at LexFusion, I have more to say than last year. Hence, Bill has been kind enough to publish this preview essay. Taking advantage of the elongated Holiday weekend, tomorrow we’ll publish our co-authored Second Annual Legal Market in Review. See Post 348. Many thanks for your readership.Continue Reading Preview of the LexFusion Second Annual Legal Market in Review (347)

“Firms outside the Premier and Championship leagues are playing a different sport.” Thus, the winning strategies are different.

Jae Um, in her bracketing exercise for The American Lawyer magazine, arrays the 2022 AmLaw 100 based on the structure of the English football league system. At the top are 22 firms in the Premier League. Next is the Championship League, with 23 firms focused intently on getting promoted to Premier.  The third group is “Everybody Else,” which includes all the corporate law firms playing in lower-tier leagues.

Yet, as Jae Um pointed out during her visit to my Law Firms class, “it’s a mistake to extend the soccer metaphor to all 300 US/UK law firms that are doing significant amounts of corporate legal work.”  Jae explains that Premier and Championship League firms have some combination of practice areas (type, quality, depth), sector focus, and geographic footprint that enable them to attract price-insensitive work from the world’s largest and wealthiest clients. See Part II (332) (discussing market power of these firms).

Jae continues, “The 250+ firms outside the Premier and Championship leagues are playing a different sport.”
Continue Reading Learning about law firms, Part III: Innovation at “Everybody Else” firms (335)

Source: Jeff Carr

A framework for making the legal delivery system better

Hello – I’m Jeff Carr and I am not a lawyer.  Now, I was licensed to practice law in Texas and the District of Columbia and was responsible for the delivery of legal services at two Fortune 500 companies. And I’ve been doing this legal delivery thing for almost 40 years, albeit most of that time spent being pretty lonely out on the radical fringe.  Perhaps this is because, at my core, I’m a business person.  A member of the company’s executive team.  A manager.  And yes, at times, a consigliere.  But despite a JD on my resume, I don’t do interesting questions of law.

I am writing this essay because two colleagues whom I like and respect — Jason Barnwell and Bill Henderson — badgered me to do so, see Post 281, claiming that the legal profession stands to benefit from my experience and perspective.  Although this sounds very lofty, I’m willing to give it a shot.
Continue Reading Four waves of change in #LawLand (282)

An honest and candid assessment of corporate legal, circa 2021

Several months ago, before we had even completed our first year of operations, Bill invited us to write a legal market year-in-review.  His reasoning was simple—our business model entails a lot of listening.  Over the past twelve months, we heard the hopes, dreams, and fears of 240 law firms and 327 law departments (corporate legal) spread over 2,600 meetings.

Perhaps you’re anticipating a conversation about what’s hot in Legal Tech and NewLaw.  And back when we accepted Bill’s invitation, that seemed like a logical direction.  Yet, much to our own surprise, we find ourselves writing a year-in-review essay that focuses on the primacy of culture and cultural adaption.
Continue Reading LexFusion’s Legal Market Year in Review (280)

Somruthai Keawjan via Unsplash

I get a lot of questions about legal market data.  Today I attempt to explain one of the most frequently asked questions: why demand and pricing seem to be uniquely uncoupled in legal markets.

By and large, 2021 was a year of anticlimactic letdowns.  In a sloggy, tiresome, gradual sort of way, most of us realized that the ravages of COVID would not be defeated in one fell swoop.

One exception has been the trade news coverage on Big Law’s bonanza.  In August, Thomson Reuters Peer Monitor rated Q2 of 2021 a record-breaking quarter in its proprietary index of law firm performance.  (Notwithstanding the battery of disclaimers and historical context provided in the fine print, many industry observers decided that this misleading picture is indeed worth a thousand explanatory words.)
Continue Reading #BadData, Part I: (Topsy Turvy) Demand for Legal Services (279)

How can we keep up with exponential increases in demand and complexity?  Invert the pyramid.

Bill Henderson once advised me not to use the term “industrialization” to describe changes in the legal profession to attorneys. It offends us, and we disengage. But I titled this field note “industrial evolution” because we must embrace industrialization as a necessary and valuable part of our transformation that will elevate the value of our profession in a digital age. Cf. Post 231 (Henderson breaking his own advice for the same reason, comparing legal to the early days of the auto industry).

This post is part of a series that reflects my legal industry learning journey, building upon my career journey (080), professional evolution (143), focus on knowledge work (159), and future practice design theory (210). This installment examines the changes happening now that require us to evolve to serve a civilization experiencing exponential change powered by the fourth industrial revolution, and how we might get there faster, together. See Erik Brynjolfsson & Andrew McAfee, The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies (2016) (cognitive automation will produce creative destruction).
Continue Reading Legal evolution is industrial evolution (277)

Layering in a new set of skills and know-how in an already crowded law school curriculum.

Last week, the Law School Admission Council (LSAC) acquired the Institute for the Future of Law Practice (IFLP).  From far away, many lawyers, law professors, and law students are bound to ask, “Why is the maker of the LSAT, which has been part of the legal education landscape for 70+ years, acquiring a fledging nonprofit start-up focused future of law practice?”

The answer is that LSAC and IFLP saw a clear pathway to benefit future generations of legal professionals in their work with clients and broader society.  Although some readers may question such a lofty purpose, we believe that as a self-regulated legal profession, it is our obligation to foster and maintain a legal system that works for all citizens and upholds the rule of law.  Only then is lasting prosperity possible, both for lawyers and broader society, and the promise of equal justice more within reach.
Continue Reading Special Post: LSAC acquisition of IFLP explained (275)

Photo by Maarten van den Heuvel on Unsplash

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?
Continue Reading When is a generational strategy the best strategy? (235)

Preliminary thoughts on our next paradigm.

In Post 231, I presented a crowded and chaotic market map as evidence that the legal industry is the early days of a revolution in which the center of gravity is shifting away from one-to-one consultative services toward a new model that includes legal products and services. Further, I suggested that the auto industry circa 1905 provides the best metaphor to convey the breadth and depth of the change that is coming our way.

Another fruitful lens for analyzing the tumult in the legal market is the Kuhn cycle (see above graphic), which is the leading framework for explaining large-scale changes in science. See Thomas S. Kuhn, The Structure of Scientific Revolutions (4th ed. 2012).
Continue Reading Does the Kuhn cycle apply to law? (233)

Lawyers are trained to be good at what machines can’t do.

Will the world still need lawyers once AI gets really good?

The short answer is yes—and I believe it will still be yes no matter how good AI gets.  My view is not universally accepted, so I will need to lay it out, and that will involve some claims about what humans are and whether a machine can ever be like that.  This will shed considerable light on what lawyers essentially do, and help us to see how machines can help us to be better lawyers.
Continue Reading Legal’s AI rocket ship will be manned (book review) (232)