Why I went on the IFLP journey.


If you’ve read Legal Evolution Posts 154 and 155, you know that the Institute for the Future of Law Practice (IFLP, “I-flip”) is at critical juncture.  On Friday, we launch our third year of boot camps (a special Coronavirus version for 48 terrific law students from the US, Canada, and Europe).  Unless we get funding sufficient to scale, however, this will also be our last boot camp.

This possibility flows from our original strategic plan, which contained two parts:

  1. Build a program that demonstrates the tremendous value of T-shaped curriculum for law students and employers;
  2. Use the resulting proof of concept to attract funding for more scalable offerings that will benefit both law students and mid-career legal professionals.

Well, Step 1 is complete. See Post 118 (student and employer feedback, net promoter scores, diversity data). Our volunteer army is driven by a desire to improve the legal system for all stakeholders, not to provide subsidies to a failing status quo.  Step 2 is our goal. If we get there, we’ll all be a part of a true transformation. Otherwise, it’s time to go home.

Of course, we still have time to bring in the necessary funding.  See Post 154 ($500,000 is absolute minimum nut). In service of this goal, Bill Henderson, our interim director of development, asked me to document why I’ve spent the last 2+ years of my career with the IFLP and what the experience has meant to me. It’s really hard to say no to anything that Bill asks you to do. Thus, it’s with pleasure that I write about my perspectives on IFLP.

Forward-thinking change agents

First and foremost, the people who are committed to IFLP are some of the most forward-thinking change agents in the legal profession. Co-founders Bill Henderson, Bill Mooz, and Dan Linna have a vision that IFLP will transform legal education and the legal profession through modern practice skills training. The innovators on the IFLP board of directors have bought into this vision and they are working to make it a reality.

The organization has an A-team of well respected leaders. But what compelled me to jump into this new start-up was that they have big hearts 💗. The IFLP leadership team is mission-driven and they want to leave the world in a better place than they found it. And that is a very worthy endeavor.

Building something in the public interest

I became involved with IFLP shortly after it formed as an independent non-profit in early 2018. I was looking for my next career adventure after serving for nearly 17 years as Executive Director of Illinois Legal Aid Online. As someone who is a builder and a life-long learner, this was an attractive challenge that I couldn’t pass up. Given my public service orientation, I envisioned IFLP bringing modern practice training to the government and public interest sector. Perhaps even more than their private sector colleagues, government and legal aid lawyers need to upskill in allied disciplines like project management, technology, data, process improvement, and business operations. IFLP can provide that opportunity. 

As in any start-up, there has been chaos and unexpected unknowns, along with struggles to secure sustainable funding for the enterprise. All of that comes with the territory. What I didn’t know I would encounter was a growing collaborative community focused on changing the profession. It has been really fun to work with so many people who want to blaze new paths and make the profession better. It is the 200+ volunteers I’ve  had the pleasure to work with that have made this journey special. 

Cutting-edge employers

Dozens of legal employers of all stripes, in the U.S.,Canada, and Germany, have jumped on the IFLP bandwagon. Big, medium, and small firms, corporate legal departments, legal tech companies, alt legal services providers, and yes, public service organizations. They understand that today they need to hire based on skills and experience instead of pedigree, GPA, and whether or not someone made law review. They have come to trust the training that IFLP provides and they hire IFLP alumni because they have the skills that are required for today’s practice. These employers get it, and they will lead the profession into the future.

Progressive law schools

This year 31 law schools became IFLP partners, which means they want their students to have access to IFLP’s skills training programs and the above-mentioned employers. These law schools range from T-14 to unranked, and all have in common a desire to give their students opportunities to succeed in a fast changing practice landscape. Faculty and career development professionals at these law schools are working to change institutions and colleagues that don’t want to change. They are building tomorrow’s legal workforce, and it has been a thrill to work with them in that pursuit.

Motivated, diverse, talented students

Hands down the most fun group to engage with have been the law students who participate in IFLP’s Modern Practice Boot Camp and Internship Programs. They are some majorly impressive folks who must jump through many hoops in a very competitive application process in order to get into the program. They bring with them a wealth of skills from past education and employment, and understand the need to differentiate themselves by learning the skills that today’s employers want. They are a diverse and motivated lot. One of the best parts of my job is getting to know our students. I am so looking forward to seeing what this year’s cohort of 48 students can do in IFLP’s first online-only Modern Practice Boot Camp.

The people who have been involved with and supported IFLP have inspired me to dream of a better legal profession. Here’s to all of those people – you have made a wild ride a lot of fun! 🎢

Ways you can help IFLP continue

There are four:

  1. You personally have the capacity, affinity, and propensity to help fund the IFLP build. If so, please email Bill Henderson.
  2. You potentially know someone one with the capacity, affinity, and propensity to help fund our cause. If so, please forward a link to this post along with a brief personal note.
  3. Donate any amount you can afford. For any amount in excess of $20, you’ll receive a personalized IFLP Patron Card. See Post 119.
  4. Share this post on social media (LinkedIn, Twitter, your own blog), briefly describing why you and others should support this build.

Thank you!  Lisa Colpoys


We have a rare opportunity for a large immediate impact on the legal sector. Let’s not miss the boat.


It’s now ten years since I became aware of Professor Bill Henderson and his efforts to evolve the legal profession, and roughly eight years since Bill invited me to join a small group called the Skin in the Game Club. And while it was only briefly active, the Club’s members continue to live out our overall ethos of – well – a willingness  to put careers, reputations, and economic security at risk to meaningfully impact aspect(s) of the profession that are ripe for improvement.

The ensuing eight years have seen a torrent of voices, individual and collective, bringing countless ideas to the table.  A good chunk of these ideas have entered “Skin in the Game” territory, typically triggered by two distinct risk-taking acts: (1) a personal and absolute commitment to the idea (e.g., leaving a secure job) and (2) a financial commitment to the idea by the individual(s) and/or third parties (e.g., private equity).

That is the legal profession as I have seen it for 15+ years, since I first put skin in the game.  Until an idea is accompanied by #1 and #2 above, it is largely noise.  Well-intended, perhaps thought-provoking, but noise nonetheless.

The case for right now

Here in May 2020, we are in the midst of what many in legal agree is a brightline moment that will catalyze evolutionary activity in countless aspects of the  profession–from how courts operate, to how machine learning is leveraged, to the economics of litigation, to ensuring that all are provided with competent, affordable access to the legal system, etc.

Doesn’t it feel like everything is on the table and the time is now?

Yes, it does feel that way.  But thinking and feeling aren’t enough to turn the crank.  In the absence of taking action, thinking and feeling are just noise. That may be a hard truth to some but this is where we are right now, in a host of aspects of modernization, innovation and the overall evolution of the profession.

One exceptional example of the pressing need to take action is in legal education. Before Bill introduced me to the topic, I hadn’t considered whether legal education needed updating. But his passion and dedication to modernizing how law students are trained for their careers was and continues to be something that cannot be ignored (the same is true for many in the academy who I’ve come to know, e.g., Bill Mooz, Dan Linna, Dan Rodriguez, etc.). See, e.g., Post 46 (legal academics grappling with the future of legal ed).

What’s most compelling about the opportunity to evolve legal education is the immeasurable, and often immediate, downstream impact on the overall legal sector.

Simply stated: even in the absence of any other evolutionary strategy, providing law students and recent grads with the practical skills and knowledge to be better prepared to operate in the 21st century business climate itself sets the table for countless other initiatives about which so many are so passionate.  Access to Justice? Effectively incorporating technology into one’s practice? Diversity & Inclusion? Efficient delivery of legal advice? Alternate careers? Working alongside Allied Professionals?  The list goes on.

The story so far

Three years back, Bill and his cohorts created the Institute for the Future of Law Practice (“IFLP”).  Its non-profit mission is simple: Close the gap in the traditional legal education model by working with industry-leading practitioners to distill their know-how and experience into an organized body of practical tools, methodologies and knowledge that can be efficiently taught to law students and recent graduates.  See Post 43 (introducing IFLP). This boils down to knowledge training in five distinct disciplines:

  1. business and finance,
  2. data analytics,
  3. process optimization,
  4. legal technology, and
  5. product and service design.

Collectively, these are known as the “Top of the T” disciplines, from the renowned T-shaped Lawyer model.

By all measures, IFLP is an unqualified success for the students as well as both direct and indirect stakeholders, which includes law schools and some of the world’s largest companies and law firms who’ve provided over 50 paid internships to IFLP students in under 2 years.  See Post 118 (detailed analysis of student and employer survey data); Post 117 (“General Counsel stand up to improve the legal talent supply chain”).

It’s in this context that I view the continued growth and success of IFLP as the single most relevant and urgent “Skin in the Game” endeavor. 

To date, IFLP’s ability to pursue its mission is the result of two interdependent, Skin in the Game-type factors:

  1. A Community of Volunteers: thousands of hours logged by dozens of legal industry leaders, from designing and managing the overall program, to direct instruction and mentoring of students, and
  2. Donations totaling over $550,000 from dozens of sources including many Am Law 200 firms and Fortune 500 companies. (N.B. I am IFLP Patron #015)

This is incredibly powerful evidence that leaders from across the profession want IFLP to thrive.  But, as with any successful proof-of-concept, growth and sustainability are dependent on a new round of support.  In the case of IFLP – and particularly in the context of how the current crisis threatens to impact law students and recent graduates – the need is immediate.

What’s Needed, and Why

As discussed in detail in Bill’s Post 154, the next stage of IFLP’s non-profit mission is to develop a comprehensive “Level 1” module focused on foundational knowledge in the five Top-of-the-T disciplines. To meet the severe time and financial constraints of this market, the IFLP Level I modules would deliver this content online in a highly-engineered format that is available to all law students and recent grads (and of course all others in the profession seeking such skills), by the start of the academic year in September 2020.   This is only realized via a significant Skin in the Game undertaking, by one or more supporters.

What is significant? $500,000, by June 15, 2020. (For a deep-dive on IFLP’s go-forward strategy and needs, again, see Post 154).

So, IFLP is facing a pivotal moment. And with it stands so many downstream-impacted initiatives in which so many are investing their intellect, time, and resources. In Post 119 (“Become Part of the Solution”), Bill penned this eloquent plea for support of IFLP:

“If just a few hundred of us stand up and support IFLP, we’ll have a solution for the next generation (and perhaps for us) that just might work. In the meantime, we can share the joy of living our professional values.”

That was seven months ago. And although we now find ourselves in a completely different era, the call-to-action is the same, and even more urgent and more meaningful as uncertainty shines its light on opportunity.

Personally, I don’t think IFLP needs support from a “few hundred of us” to continue its mission.  Thankfully, that group–a true Community–is firmly in place.  What IFLP needs is one or two more exceptional stewards of the profession to put Skin in the Game, in a significant way. Right now.

Ways you can help IFLP continue

There are four:

  1. You personally have the capacity, affinity, and propensity to help fund the IFLP build. If so, please email Bill Henderson.
  2. You potentially know someone one with the capacity, affinity, and propensity to help fund our cause. If so, please forward a link to this post along with a brief personal note.
  3. Donate any amount you can afford. For any amount in excess of $20, you’ll receive a personalized IFLP Patron Card. See Post 119. (All contributions are tax-deductible under Section 501(c)(3) of the IRS Code).
  4. Share this post on social media (LinkedIn, Twitter, your own blog), briefly describing why you and others should support this build.

Thank you!  Kevin Colangelo


Source: Randall Kiser, DecisionSet

American law firms are threatened by acute needs and limited capabilities in three domains: leadership, meaning, and service.


Media attention shifts rapidly from law firm profitability to gender bias and from technology to new lateral partners. Yet, if we pull back to conduct a deeper analysis, what we observe is a law firm sector grappling with three interrelated threats that are seldom the focus of sustained attention:  insufficient leadership, attorneys’ lack of meaning and purpose in their work, and client service. As shown in the above graphic, these three domains are the linchpins of law firm performance and sustainability. Continue Reading Law firm leadership (111)


Culture. Character. Practices. Systems.


When it comes to empirical research on lawyers, we’re all lightweights compared to Randall Kiser.  Over the last decade, Kiser has authored books on lawyer decision making in the context of litigation, Beyond Right and Wrong (2010), the mindset and work habits of trial lawyers who consistently outperform their peers, How Leading Lawyers Think (2011), and an empirically grounded analysis of the skills and behaviors needed to build a successful legal career, Soft Skills for the Effective Lawyer (2017). Continue Reading American Law Firms in Transition: Trends, Threats, and Strategies (book review) (110)

Photo by Jehyun Sung on Unsplash

Post 100 is Henderson’s opinion. It’s also a note to introduce Jordan Couch’s essay on the Washington State Bar.


The U.S. legal profession is suffering from an enormous leadership vacuum.  As a collective group, the lawyers with the most stature and gravitas — law school deans, managing partners of prestigious firms, GC of major companies, state and federal judges — are failing to step up, largely because each has a day job that is all consuming. As a result, profits per partner climb, in-house lawyers get their bonus, law schools hang onto their US News ranking, and the courts make it through another challenging fiscal year. But collectively, we have very few establishment leaders exhorting us to evolve in the public interest. That’s a vacuum. Continue Reading Leadership, current and future (100)


Innovation hype is alienating too many practicing lawyers. This is because we forgot that lawyers innovate in the realm of substantive law.  It’s time to fix that.


Last year I was at a conference on law firm innovation organized by the Ark Group. To close things out, the event’s chairperson, Patrick McKenna, walked attendees through an insightful 30-minute flipchart session that could have been the centerpiece of the entire conference.

Above is a depiction of what McKenna drew on the first page of the flipchart (I’ll call it the McKenna Lifecycle of a Practice Area). Patrick was making the point that legal work moves along a time continuum that starts with lawyers building relatively lucrative practices by becoming experts in difficult and emerging areas of law.  Yet, at some point a substantial portion of that practice area becomes relatively mature.  Notwithstanding one’s level of mastery, the market is filled with other lawyers with a similarly deep skill set. As demand flattens and starts to decline, what was once a cutting-edge area of practice becomes a commodity.

Patrick McKenna

Patrick gave the example of synthetic biology as an emerging practice area.  As Patrick pointed out, synthetic biology raises extremely complex and novel issues of intellectual property, regulatory law and consumer safety to name but a few. In the growth area, Patrick suggested googling “virtual reality law practice” to see that lawyers from Cooley, ComputerLaw Group, and Kelley Drye have planted their flag in this important new practice area. Securities law is a good example of a practice area that has reached relative maturity — complex but sufficiently settled that portions of it can be brought in-house.  Finally, Patrick pointed to debt collection as an area that has become fully saturated and thus subject to pure commodity pricing.

I have been studying the legal market now for more than 15 years. For the last ten years or so, I’ve tried to refine the tool of just talking to lawyers about their practices. In each conversation, I’m listening for novel or recurring patterns.  In my experience, very few lawyers or law firm leaders attribute their success to catching the right practice waves. Instead, conversations almost always focus on the abilities and intellect of individual lawyers.  Perhaps this is because the waves of change in law move slowly and are hard to decipher without a lot of additional effort. As a result, we fixate on the surfer (and the surfer fixates on the surfer) and overlook the importance of the powerful waves that hurl them forward.

In this post, I’ll explain how McKenna’s Lifecycle of a Practice Area is a remarkably useful tool for delineating between two types of legal innovation: Type 0 innovation (substantive law), which is the engine that powered the rise of the world’s most successful law firms, and Type 1 innovation (service delivery), which is crucial for reigning in the problem of rising costs and complexity in a highly regulated, interconnected and globalized world.  Type 0 remains as important as ever, but clients would also like help with Type 1.


For a recent and in-depth treatment of this topic, see McKenna, “The Advent of the Legal Practice’s Micro-Niche, Part 1“, Legal Executive Institute, Oct. 14, 2018; McKenna, “The Advent of the Legal Practice’s Micro-Niche, Part 2“, Legal Executive Institute, Oct. 18, 2018.  It’s noteworthy that McKenna believes that the most important law firm strategy occurs at the practice group level.


Type 0 Innovation

As McKenna explained his diagram, I recalled numerous lunches and dinners with rainmakers who explained to me how they build their practices.  Some fit the profile of the trusted advisor — they were great listeners, excellent at identifying core issues, very practical, and excellent at delegating technical tasks to other lawyers in the firm.

But another group, who were not particularly charming or charismatic, described how a series of assignments early in their careers took them deep into the business and technical aspects of their client’s industry. Eventually they came out the other side with a series of solutions that proved to be very valuable and useful.  As a result, they got more work from their client and others with similar type problems.  These folks caught a wave in the blue or early green portion of McKenna’s lifecycle.

This is Type 0 Innovation. It happens organically when a lawyer has the opportunity to immerse herself in the business and legal complexities of a new or changing industry. Although it often produces the same economic benefits as a major R&D initiative, lawyers and law firms seldom frame it that way.  This is because clients are paying the bill, often by the hour.  It’s just legal work.  The lawyer who develops such an opportunity into a major practice is viewed as a rainmaker and is compensated accordingly.

I call this Type 0 innovation because it is common throughout the legal profession.  Virtually any lawyer has the intellectual tools to do it.  It requires zero additional training. Yet it’s undertheorized almost to the point of being invisible to practicing lawyers.

To illustrate this point, McKenna cites several years of data from law firm retreats where he has polled partners using anonymous clickers. In sessions related to the importance of business development, McKenna asks, “How many of you right now can think of something you’ve observed in your practice that could be turned into a compelling service offering for one or more of your existing clients?”  McKenna says he consistently gets scores in the 65% to 85% range. Next question, “How many of you have shared your idea with firm management?” Remarkably, scores of 25% or lower are the norm.

When asked why, partners explain that they doubt the firm or practice group will support them. Specifically, to “innovate” is to put yourself at risk of being on the wrong side of numerical targets needed to maintain one’s status in the firm. Stated another way, the partners are not sharing risk. As a result, too many partners are stuck trying to sell services in the “mature” portion of the lifecycle, often at prices that cause clients to question the value they are receiving. This is a failure of both strategy and leadership.

That said, some law firms, particularly those that are highly specialized by practice area and/or industry, understand the importance of underwriting the development of substantive law innovations.  For example, one of the attendees of Patrick’s session was Tim Mohan, Chief Executive Partner of Chapman and Cutler LLP, an AmLaw 200 law firm that specializes in financial services.  Tim later told me that Chapman had adopted a system of innovation hours whereby partners and associates could obtain credit on par with billable hours for innovation efforts likely to result in future revenues for the firm.

One area where this approach has paid large dividends is marketplace lending, which is the relatively recent development of non-bank financial institutions matching up borrowers with lenders, often by leveraging technology to evaluate and process loan requests.  Obviously, this has been tremendously disruptive to traditional banks.  Back in 2013, when this industry practice was at best an “emerging” [blue] practice area, two Chapman partners, Marc Franson and Peter Manbeck, wrote a whitepaper called “The Regulation of Marketplace Lending: A Summary of the Principal Issues.”  The first draft (the authors now keep it updated) took several hundred hours to research and write.  But once posted on the Chapman and Cutler website, it became a hotbed of download activity that has led to $10M+ in firm billings. This is pure Type 0 innovation. Far from going away, Type 0 opportunities are growing in number and importance.


Chapman and Cutler is also a shining example of Type 1 innovation.  See Post 039 (discussing the career path of Eric Wood and the founding the Chapman Practice Innovations as a successful example of law firm intrapreneurship).


Once McKenna’s Lifecycle model got into my head, I began to see Type 0 innovation all around me.  Consider the following examples:

Gary Marchant at ASU Law

Gary Marchant is a Regent’s Professor of Law and director of the Center for Law, Science and Innovation at ASU Law.  He is also on the speaker’s circuit, wowing legal audiences with novel questions of law that judges, regulators, and practicing lawyers are grappling with as a result of massive advances in science and technology, from autonomous cars to drones to cloning to global warming to digital data that captures our every move and hence of great value in determining issues of guilt or civil liability.  Several times over the last few years, I’ve had the privilege of being the same program with Gary, where he consistently knocks the ball out of the park.

Our most recent panel was earlier this month in San Francisco. Fortuitously, we shared a cab to the airport.  Thus, I got to ask Gary, “How in the world do you come up with all these examples of new and emerging issues?”  Gary replied that he teaches seven classes a year at ASU Law (e.g., Law, Science and Technology; Genetics and the Law; Biotechnology: Science, Law and Policy; Health Technologies and Innovation; Privacy, Big Data and Emerging Technologies; Environmental and Sustainability Law; and Artificial Intelligence: Law and Ethics). To scale his expertise, each is taught with a co-instructor. “But they’re all paper classes.  I read and grade 400 papers a years. All my examples come from my students.”

Gary Marchant is astonishing example of how to get the three circles of teaching, service and scholarship to overlap in near perfect unity. Kudos to the enlightened deans at ASU Law who found a way to make this work!

Carolyn Elefant at MyShingle.com

Carolyn Elefant, the clarion voice of the solo and small firm bar at My Shingle, has recently written a book called “41 Practice Areas That Didn’t Exist 15 Years Ago.”  The table of contents can be viewed online here. Elefant is renowned for being a solo practitioner who stays busy doing challenging work she loves.  So, how in the world does she have the time to identify 41 new practice areas?  Similar to Gary Marchant, Elefant skillfully leverages the time of student law clerks she regularly employs in her practice.

Carolyn compiled this list not necessarily for her own practice but to prove the point that new practice niches are growing at an accelerating rate.  As a result, any lawyer can pick an emerging area of law that is causing heartburn for some distinct population of clients and, by dint of some research and writing in an ebook format, translate that know-how into seven figures of income. This is because the community of interest passes around the ebook, building goodwill and credibility with future clients. This isn’t theory — this is Carolyn’s own experience which she learned through trial and error as she created a landowner rights practice.  See “Seven Figure Ebook,” My Shingle, Aug. 23, 2018.  She’s turn this insight into an easy-to-follow methodology for creating a lucrative and rewarding Type 0 law practice.

I know all this because I signed up for one of Carolyn’s webinars this past August — for me, it’s field research.  I greatly admire Elefant because she is passionate about helping other lawyers become successful. She reflects the legal profession at its best.

Kevin O’Keefe at LexBlog

Kevin O’Keefe is the Founder and CEO of LexBlog, which is an online publishing platform that currently hosts 1,400 law blogs, including Legal Evolution and the majority of blogs published by AmLaw 200 law firms.  Arguably, LexBlog has become the epicenter of Type 0 innovation, as the vast majority LexBlog content is focused on substantive law.  In most cases, the unit of production is either the boutique law firm or a practice group inside a major law firm.

Like Carolyn Elefant, O’Keefe spends a lot of time helping lawyers see the abundance of ripe fruit hanging less than a foot off the ground. The only catch is the modicum of effort necessary to reach down and pick it up. This is the world of content marketing, demonstrating through your writing your insights on a set of problems that afflicts some discrete universe of clients. When someone in that small universe goes online in search of relief, your content appears near the top of the Google search (the LexBlog platform aids SEO).  That content builds trust and credibility.  Although some readers will use it for pure self-help, the complex work flows disproportionately to the authors and the authors’ firm.

A good, but far from unique, example is Ballard Spahr, which puts out five publications on LexBlog:

In the year 2018, lawyers can skip the rubber chicken dinners and make rain by developing and sharing their expertise online.

Kevin O’Keefe has an infectious laugh and a life story so inspiring that every year I invite him to Indiana Law to talk with my students. Without fail, Kevin marshals example after example of young lawyers who create life-altering career opportunities for themselves by researching the legal issues around what interests them.  Step 1 is to find the online legal experts. Step 2 is to read their content and the materials they point to.  Step 3 is to contribute to the conversation via social media.  That’s right, to get off the ground, cutting-edge Type 0 innovation often leverages a twitter account.


Type 1 Innovation

I hope it’s obvious to readers that the vast majority of Legal Evolution content is focused on Type 1 innovation — i.e., service delivery improvements (data, process, technology, etc.) that chips away at the problem of lagging legal productivity.  For example:

  • Post 001 (lagging legal productivity negatively impacting entire profession)
  • Post 006 (discussing impact on legal education and courts)
  • Post 009 (importance of ODR to solve bottleneck in courts)
  • Post 019 (legal productivity is a “last mile” problem that requires new business models)
  • Post 022 (CLOC is response to lagging legal productivity problem affecting large corporations)
  • Post 036 (discussing dire statistics because of productivity problem in PeopleLaw sector)
  • Post 042 (consumers are coping with higher costs by foregoing legal services)
  • Post 048 (framework to see differential impact on people versus organizations)
  • Post 058 (Landscape report for Cal Bar that emphasized the problem of lagging legal productivity)

Yet, as important as this topic is to the future of the legal profession, it is near impossible to get lawyers to go on this journey when innovation hype ignores or denigrates the innovations routinely occuring at the practice group level.  I hope the Type 0 / Type 1 framework can start to mend this riff.

Definitions

Lawyers value definitions.  I would proposed the following as a starting point:

  • Type 0 innovation.  Adapting law to fit changing social, political, economic and technological conditions.
  • Type 1 innovation. Improving the quality, cost and delivery of existing legal solutions.

[click to enlarge]
We can plot these innovation types on McKenna’s Lifecycle of a Practice Area, with Type 0 (emerging, growth) being in the wheelhouse of skilled artisan lawyers and Type 1 (growth, mature, saturated) being the foundation of one-to-many legal solutions and thus requiring the collaboration of lawyers and multidisciplinary professionals.

Isn’t it obvious that Type 0 and Type 1 innovation are both distinct and interdependent? Further, isn’t it obvious that the legal profession’s tool box needs to include both types of innovation, albeit with lawyers and legal professionals tending to specialize in one or the other but retaining the ability to effectively collaborative across the two types?

Additional Frameworks

As I’ve reflected on Type 0 / Type 1 innovations, I’ve snapped them on to other frameworks.  Below are two examples based on other Legal Evolution posts:

The T-Shaped Legal Professionals graphic (above left) has been discussed in Posts 043 and 048.  Type 0 innovation is enabled by the traditional law school curriculum. If you’re reading the news in the year 2018, it’s obvious that Type 0 innovation is crucial to the functioning of an open society based on the rule of law.  Yet, to address the problem of lagging legal productivity, legal professionals needs a bigger toolbox that includes the ability to collaborate effectively across multiple disciplines. Type 1 innovation is enabled by the disciplines at the top of the “T”.  Solutions to crucial PeopleLaw/Access to Justice issues require quantum leaps in Type 1 innovation. There’s literally no time to waste.  This is why so many of us are working tirelessly to stand up the Institute for the Future of Law Practice (IFLP, or “I-flip”).

Likewise, variations of the Traverse the Pyramid Strategy (above right) have been discussed in Post 010 (the rise of managed services) and Post 055 (law firm strategy that combines substantive lawyering with data, process, and technology). It’s foolish for legal services to migrate away from the pyramid model, as Type 0 innovation is built on the foundation of “mature” law in the operational and commoditized space. It’s also the type of work that law firms have historically used to train junior lawyers. Less than 15 years ago, the process usually began with banker boxes filled with documents as part of the discovery or due diligence process.  Likewise, legal operations and the P3 disciplines (pricing, project management, process improvement) all exist within the Type 1 innovation vertical — though more prices sensitive, it reflects the bulk paid legal work.  Thus, we need to retool the traditional law firm talent model so that it can flex in the direction of both Type 0 and Type 1 innovation. This is yet another challenge that is being taken up by IFLP.

Conclusion

Neither Type 0 nor Type 1 innovation are easy or costless.  Both require continuous learning and an investment of time and resources without a guaranteed financial return.  Yet both add immense value to clients and form the basis for challenging and rewarding careers.  Thus, for both lawyers and legal professionals, the future is bright.

What’s next?  See PartnerVine and Last Miler’s Club (072)

Photo by The Climate Reality Project on Unsplash

Elite, one-percenter lawyers are an easy group to vilify, especially from afar. Change agents and disruptors alike need to resist the temptation.  


Conference season is in full swing, and legal professionals of varying titles are convening in cities all over the world. Some conferences coalesce around themes, but most events target functional roles both new and old. As more and different roles proliferate around the practice and business of law, some spheres collide or merge (law librarians + competitive intelligence, pricing + LPM, etc.)

These days, everyone – managing partners, the law firm C-suite, the general counsel, legal ops, pricing professionals, legal technologists, marketing, marketing technologists – has a conference dedicated to showing them how to navigate the future.  Everyone is meeting, learning, networking, and engaging in dialogue in gatherings of every size, shape and flavor.

Everyone, except the working partner.

Failure to appear ⇒ default judgment

The recurring conference call is a feature of modern professional life. Often, one or more people are late, giving rise to this well-worn piece of office humor: A late arrival offers an apology that falls somewhere between perfunctory and profuse. In response, someone jests, “No worries… we assigned you all the work.”

(How funny or good-natured this actually turns out be depends on a number of factors: the relative importance and current status of the project, personal relationships and professional reputations of those involved, and the varying levels of good feelings or ill will that pervade the team.)

A similar social dynamic plays out at conferences about the legal industry. Whether as a function of exclusion or absenteeism, working partners are not in the room where it happens.

Keynote speakers often sprinkle in one or two jokes about lawyerly tendencies for the easy laugh; these jokes tend to be mild and good-natured. Lawyers are incorrigible! 😂

Panel speakers tell stories that feature some fresh tale of folly, along with the heroics required to overcome their challenge. Knowing heads shake and nod as sympathy flutters across the room. Near-strangers find solidarity in genteel mockery. Lawyers are clueless!! 🙄🤦🏻‍♀️

Attendees gather in small groups to vent their latest frustrations in hushed, conspiratorial tones, seeking advice from old colleagues and new friends alike. These exchanges tend to be more frank and more angsty; pearl-clutching and NSFW language are both featured in equal measure. Lawyers are 😤 insufferable, 😠 arrogant, 😡 out of touch, 🤬 overpaid!!! 💢

There is also solidarity in shared vitriol, but it becomes weaponized, and the metaphorical crosshairs are often fixed on people who aren’t in the room.

No worries… we assigned you all the blame. 

So where are the partners?

The Altman Weil surveys of law firm leaders and Chief Legal Officers always makes for interesting reading, but the best insights come from tracking trends over time.

A key development in recent years has been the waning confidence of law firm leaders. It’s been many years since managing partners received the “lawpocalypse now” memo, and most firm leaders are trying their best to adapt to a changing market. Over the past few years, however, they’ve admitted openly that they are having a much harder time than anticipated, particularly in creating the same awareness among their partners.

In the most recent Law Firms in Transition survey, 69% of managing partners reported not doing more to change service delivery because “partners resist most change efforts”:

Click to enlarge

This is not necessarily because they are stubborn, arrogant, or incurious. Big Law partners are not exactly oblivious: in fact, most of them are stressed and worried about an increasingly uncertain future.

But most law firm partners are phenomenally busy, and they spend most of their days under an unbelievable amount of pressure. Many of them put in grueling hours on client work and travel. In many firms, even senior partners receive less administrative support than ever. If they attend an event, it is usually an industry affair for networking and business development. They prioritize these tasks because their standing within the firm depends on it, and because that position seems less secure with each passing year.

Most law firm partners are not reading books about the future of law or legal service innovation, because there are people at the firm who are paid to do that. They are not following breaking news about ALSPs, which are growing fast but still comprise less than 1% of the legal services market. They are not following what the Big 4 are doing in high-volume, low-margin areas that have no relation to their own area of practice. Mostly, they are focused on doing what they know.

And they are likely to continue down that path until they hear from the only stakeholder that matters to them: their own clients.

There are many echo chambers, but this one is mine

The last decade has spurred greater interest in dialogue about the future of law. This is, on balance, a good thing: the number and quality of communication channels positively influences the rate of innovations. See Post 008 (explaining the key variables that determine rate of adoption).

In 2018, the legal industry has more communication channels than we did even five years ago. Some are high in quality. I worry, however, that our communication channels are splintering the industry into sharper and more brittle factions.

Let me give some context for my concern. The legal industry has been under enormous pressure since the Great Recession – this we all know. Most professionals working in legal businesses are suffering from change fatigue. The dialogue, in short, is getting a bit more heated and a lot more cynical.

Take the ongoing debate over the word “non-lawyer“: it is complicated because it’s symptomatic of the long-simmering resentment of allied professionals. Professionalization of a new role is a difficult undertaking. Pioneers must build content to standardize language and practices in tandem with a community of practice that will accept and uphold those standards. But the most taxing work, in my view, is the murkier challenge of building legitimacy and market acceptance – and in this instance, that market has been comprised of lawyers.

Legal marketers, project managers, pricing officers, legal technologists, and legal ops professionals all have stories to tell about the bad behavior of lawyers. In these war stories, lawyers almost always fail to recognize the value or respect the legitimacy of other professions. The “non-lawyer” grievance neatly and implicitly captures the indignation and resentment of the marginalized.

Against this backdrop, it makes sense why change agents seek out forums filled with like-minded people who “just get it.” Conferences fit the bill: “something of a ‘high school reunion’ for professionals who have been in the change management game for some time.” Strom, “The Law Firm Disrupted: In Heavyweight Bout, It’s Clients v. Law Firms,” Law.com, May 18, 2018.

At their best, conferences function as important forums for continuing education and professional development – two things that are desperately needed for the legal industry to keep pace with the markets it serves. Apart from content and programming, the social aspect is also important. Professionals, especially those in emerging roles, often need the support of a community of peers and mentors that share similar challenges in similar contexts.

A place to share stories and perspectives is important and valuable, but much less so when the gathered group is homogenous in viewpoint and attitude – and not at all when the talk turns to complaining and commiseration. We are all subject to the temptation of groupthink because it is much more pleasant to hear our own worldview affirmed and to be told that we are fighting the good fight.

It all becomes a bit problematic, however, when we fixate on a common enemy who also happens to be a constituent and stakeholder in the very industry we want to transform. Gentle mockery can devolve very quickly into meanness and schadenfreude when talking about people who are not in the room. Any misperceptions or knowledge gaps we might have about their challenges and constraints will persist, while repetition makes us more confident in what we believe.

Anonymous shade and public diatribes

A couple of years ago, Casey Flaherty wrote a book for corporate counsel called Unless You Ask. It is an excellent and comprehensive guidebook designed to help in-house counsel drive structured dialogue with their firms on how they might create or provide greater value. I have read the entirety and I highly recommend it, but that’s not why I bring it up. I bring it up because the origin story of the book is fairly indicative of the current state of “dialogue” in our industry.

For many years, Altman Weil posed a series of questions to both law firm leaders and Chief Legal Officers:

  • How much pressure are corporations really putting on law firms to change the value proposition in legal service delivery?
  • How serious are law firms about changing their service delivery model to provide greater value (as opposed to simply cutting costs)?

These questions provided reliable fodder to deride firms. Here is a side-by-side comparison of how each group rated the seriousness of firm efforts to change:

Click to enlarge / 2018 CLO survey not yet released

There are two basic points of interest in the chart above. The first is glaring and has been noted widely: there is a material perception gap separating the client and firm viewpoints. In 2018, this gap (based on the average) amounted to two full points on an 11-point scale, meaning law firm leaders consistently graded themselves more generously than clients did over the same period.

The second point of interest is that more clients appear to be growing disenchanted with law firm commitment to change. In 2012, one in ten CLOs rated law firms as “not serious at all”; by 2017, that proportion had grown to one in six. The clients at the very edges of dissatisfaction with the status quo are most likely to articulate pain points and unmet needs and to actively seek new solutions from a wider range of providers. These clients are also likely to self-identify and coalesce into like-minded groups in forums like ACC and CLOC to facilitate knowledge sharing across companies.

Often, it is this vocal minority that make up the early markets: they are the innovators and early adopters who are very often featured in conference keynotes and panels and interviewed and featured by legal publications. Keep this group in mind — they will feature in this discussion again.

In 2015, Altman Weil upped the stakes by asking firm leaders why they weren’t “doing more to change,” and firm leaders responded with stunning candor:

(Cue the 💢 uproar 💢 of indignant disbelief.) 

For most pundits, the top two responses provided proof positive that Big Law was doomed to 🧐🧐🧐 their way to certain extinction. Law firms were roundly excoriated.

Over the following year, Casey wrote his book because he understood something worth restating here today: most clients really do not ask. There are a handful of clients who give very good talks at conferences about the change imperative facing us all. Others give extensive interviews explaining the broad challenges of the industry. Most of this group is in the vocal minority.

From time to time, a scathing denunciation of firm behavior by a client might be quoted with attribution, but the veneer of civility ensures that no names are mentioned. In other instances, clients will register their displeasure through some strongly worded but anonymous comments to reporters about things like associate compensation. For the most part, clients continue to give tepid grades to firms in anonymous surveys and scorecards.

But by and large, the majority of clients aren’t holding direct conversations with their relationship partners at their primary firms about what they specifically want. This much has been apparent for years to close readers of the Altman Weil survey: below is another side-by-side view of how CLOs and law firm leaders have answered the question about corporate pressure on law firms to change.

Click to enlarge / Question not featured in 2018

Constructive dialogue must happen at conferences and at your place of work

Let me be clear. The problem isn’t that clients and/or change agents sometimes say unkind things about lawyers behind their backs at conferences. The real issue is that we need to have more tough conversations in our own place of work with our own colleagues, clients, suppliers, and stakeholders.

In two positive examples, constructive dialogue happened in spades at recent conferences:

  • “Whose Fault Is It?” at LMA P3 Practice Innovation Conference
  • “Transforming the Client-Firm Relationship” at the ACC Legal Ops Conference:

The first was framed as a gladiatorial battle but progressed as a debate, pitting firms against clients to decide who is to blame for the glacial pace of progress in pricing innovation. The second was less controversial in format, with a panel of speakers leading table discussions on real-world scenarios and problems that arise in client-firm relationships. Both of them were designed to feature multiple viewpoints, from law firms as well as law departments. Panelists spoke frankly about their constraints and their frustrations, pushing attendees to consider not only the familiar perspectives of their peers but also the unfamiliar challenges facing their counterparts and stakeholders.

Constructive does not mean pleasant. However polite or well-intended, disingenuous consensus is ultimately not constructive. Difficult dialogue may be stressful but festering resentment is usually toxic. Meaningful change cannot happen with some collision of differing opinions, but candor need not be feared if we work to preserve civility.

With those points in mind, we need to include working partners in the dialogue about legal services innovation. Too many change agents within law firms go around in circles without understanding why partners resist change. Too many pundits dogpile on lawyers for arrogance or avarice without considering context.

It is a competitive disadvantage for any business to believe its customers or competitors are stupid or crazy. Firstly, all people sense antagonism, learn to anticipate it and become more defensive over time. Secondly, the assumption that some stakeholders behave in a way that eludes our understanding makes our own thinking lazy: when we see people as incomprehensible we stop trying to understand them. Lastly and most importantly, it is nearly impossible to change anyone’s mind while dismissing their worldview, thinking lowly of them, and sort-of-semi-secretly wanting to see them punished.


As frustrated as we might be with the pace of change, the industry is making progress — and that progress happens in actual conversations that take place behind closed doors. It might not be visible on Twitter or in headlines, but more clients are asking, new entrants continue to experiment, and law firm leaders are still trying.

Enjoy the conference season. When you get back to the office, though, I hope you will try a bit harder to empathize with the people who weren’t in the room.

What’s next? See The Godfather just lateraled to a law firm (055)

Legal education is in the early stages of remodelling and renovation. Thus, we are living through a period of messiness. Evidence of this is a virtual Symposium at PrawfsBlawg, a forum of law professors for law professors.  The symposium is called “The Futures of Legal Education.”  The organizer is Dan Rodriguez, dean of Northwestern Law and a legal educator with an excellent track record of leadership.  Dan was inspired by an epic five-part series on legal education by Pitt Law Professor Mike Madison at Madisonian (Part I here).

There is no way to summarize or boil down the conversation except to say (1) all the contributors are legal educators, and (2) the desire to do good is pervasive and sincere.  Design thinkers might counsel us to try rapid prototyping, but in the legal academy, our go-to move is a symposium.  Fortunately, several of the posts reveal real progress at home institutions.

There is not a lot overlap between the readership of Legal Evolution and PrawfBlawg.  Thus, I am republishing my contribution here, in part because it explains the paucity of recent Legal Evolution posts (which will soon change), and in part because because my post reflects a Legal Evolution perspective.  I hope you enjoy it.


“Every good idea sooner or later degenerates into hard work.”

This quote comes from writer Calvin Trillin, but I first heard it from NYLS Dean Rick Matasar over a decade ago as he shared some realism regarding innovation, in legal education or elsewhere.

I wanted to participate in this forum earlier, but alas, I was stuck doing hard work that followed a good idea.  A handful of innovators, including myself, have created a new nonprofit called the Institute for the Future of Legal Practice (IFLP, called “i-flip”).  Details online here.  I have been matching IFLP law students with summer employers. Unless this gets done well and quickly, the IFLP idea will fail.  So writing about the future of legal education had to wait.

I’ve been reading all the symposium posts and wholly appreciate the growing intellectual ferment.  Legal education is going to transform itself. I’m confident we’re in the early days of something great.

To help the cause, I would like to share a story about another idea that degenerated into nearly a decade of hard work.  The idea came from the initial publication of NALP’s bi-modal distribution, which revealed some very peculiar features about the market for entry-level legal talent.  We can argue over how we define legal ability or potential, but there’s little doubt it’s normally distributed.  Therefore, as noted by Harvard economist Greg Mankiw, labor markets should not have two distinct modes.

That insight led to the creation of Lawyer Metrics (now LawyerMetrix, owned by AccessLex Institute), an applied research company that, among other things, sought to bring analytics and measurement to legal hiring.  Of course, to make the idea work, we needed clients.  In the early days, I was very fortunate to be placed in front of the Chair of an AmLaw 50 law firm. To prepare, I circulated a four-page, single-spaced Moneyball memo.  I also created a PowerPoint.  Because I had sailed through tenure at Indiana on the strength of my empirical work on law firms, I was confident I could impress.

Yet, the meeting did not go well.  The Chair was certainly receptive, but she found my approach “too academic,” both orally and in writing. God love her, she was kind enough to tell me so.  If I wanted to do business with her firm, it was entirely up to me to close a very large communication gap, as she had other tough business problems to solve.  Suffice it to say, you don’t get too many one-hour meetings with law firm chairs. That was beginning of a steady diet of humble pie.

Around that same time, Marjorie Shultz and Sheldon Zedeck used gold-standard IO psychology methods to empirically derive 26 lawyer effectiveness factors.  See LSAC Final Report. One of the key takeaways was that academic predictors (LSAT, UGPA, 1st year grades) were correlated with only a handful of the effectiveness factors, with some of the relationships being negative (e.g., UGPA and practical judgment; LSAT and business development).  In contrast, a handful of well-validated assessments (e.g., Hogan Personality InventoryHogan Development Surveybiodata instruments) had much better correlations with lawyer effectiveness, and all of them were positive.

The Shultz-Zedeck findings strongly supported the business premise for Lawyer Metrics, which I documented in a lengthy 2008 memo.  But that is not the point of this story. If I scored myself on the effectiveness factors, I came up short.  For Lawyer Metrics to have any chance of surviving, I had to develop skills that were far beyond what tenure required.  Acquiring those skills (more specifically, attempting to acquire them) was the hardest and best thing I have ever done. However, on the front end of the “good” idea, I saw none of it coming.

I am not going to risk obliqueness here.  The narrative on legal education won’t materially change until one or more markets get moved.  And there is an ocean of distance between a good idea to better legal education and one’s ability to plan, finance, and execute that idea in a way that redistributes things that law schools care about (e.g., jobs for students, applications, philanthropic dollars, prestige, etc.).  What are the odds of that happening if we approach these challenges in our familiar academic way?

In Post 37, the wonderful and thoughtful Mike Madison asks the question, “How do we bring non-academics [legal tech, legal practitioners, access to justice advocates] meaningfully into the dialogue?”

My answer is simple.  We don’t. This is because academic dialogue is not what is needed.  Instead, we leave the building and visit these legal industry stakeholders in their natural environment.  We bring sandwiches.  We observe what is happening.  And we ask thoughtful and respectful questions, so we can come closer to seeing the world through their eyes.  Then we go back home and build prototypes that fit this new world.  Then we repeat.

This journey starts very messy. That is more than okay. What I am offering is a friendly admonition that our symposium won’t have an impact unless it degenerates into hard work – work likely beyond our current academic skill set, though hard work can fix that too.

Many thanks to Dan, Mike, the PrawfsBlawg editors, and the many contributors for a thoughtful month of dialogue.

What’s next? See My long history of law firm scorecards (047)


On the occasion of his Lifetime Achievement Award, Legal Evolution is pleased to republish Mark Chandler’s 2007 speech, “The State of Technology in the Law.” This speech arguably marks the beginning of the current era of law practice in which large corporate clients assert more power and authority within the relationship.

At the time, the Chicago IP Litigation blog commented, “Anyone involved in the private practice of law should take the time to read it. … I can assure you your clients are reading it.”  Likewise, the prominent law firm economics blogger, Bruce MacEwen, wrote, “I’m quite confident I’ve never used the phrase ‘must-read’ on ‘Adam Smith, Esq.,’ but this is my first nominee.” The headline for the WSJ Law Blog read, “Law Firms: ‘The Last Vestige of the Medieval Guild System.” 


Mark Chandler:

I hope to offer a somewhat informative perspective on the effect that changes in technology will have on the practice of law.

I offer you three questions for our discussion today.

  • First, how is technology driving change in knowledge-based industries?
  • Second, what are the key areas of vulnerability in the legal services business to these technological changes?
  • And third, what will it take to succeed in this changed environment?

Now as you can imagine, I have my own ideas on these questions. I don’t pretend to be unbiased.  Where you sit does affect where you stand.  You may profoundly disagree with my conclusions about these three questions. But they are questions that need to be grappled with by anyone who is in the business of providing legal services.  Once again,

  • How is technology driving change in knowledge-based industries?
  • What are the key areas of vulnerability in the legal services business to these technological changes?
  • And finally, what will it take to succeed in this changed environment?

Let me tell you a bit about my company and why these questions are so interesting to me.  Cisco sells products and services which connect people around the world, from home networking products, such as the iPhone series, to the core routing and switching systems used by the world’s largest telecom companies.  We do so at an annual run rate of $32.8B, which would place us at about number 60 in the 2006 Fortune 500.  Our operating expenses are about 35% of revenue and falling. Our gross margin is close to 65%, and we bring nearly 22% of our revenue to the bottom line, before interest and taxes. Nothing that would make a large law firm envious, but we’re proud of it. We have $19.5B in cash, generate over $2B of cash flow from operations each quarter, and have bought back $37B of our company’s stock in the last 5 years. We have about 51,000 employees working in 80 countries.

I offer these data points from the perspective of a general counsel who is required to run his department just as other corporate departments are run.  This is more and more the case in American industry.  The legal department in Cisco is as metrics-driven as manufacturing, HR or sales. I have 4.7 employees in my department per billion of revenue, total legal spend is about .38 percent of company revenue, and non litigation spend about .16 percent.  I spend $34M internally, and about $75 million per year with outside counsel.  I know just where I stand on these metrics vs. my peers, because we share the data.  My numbers are pretty good, but I still don’t know how to be as efficient as Larry Tu at Dell.

The bottom line is that I’m driven by the same need for productivity and scale improvements as is the rest of the company.  It’s simple. As Cisco gets bigger, the share of our revenue devoted to legal expense needs to gets smaller.  Letters from law firms telling me how much billing rates are going up next year are therefore totally irrelevant to me, or as we say in Silicon Valley, orthogonal to my concerns.  Think about it: not one of the CIOs of your firms expects to get a letter from Cisco explaining how much more our products will cost next year.  And not one of our suppliers comes to us to tell us how much their prices will go up next year.  Well, that’s not quite true.  The law firms try.  But from my perspective, I don’t care what billing rates are. I care about productivity and outputs.

Turning then to the first of the three questions, how is technology driving change in knowledge-based industries?

My core message is that access to information is being simplified.  The price of information is being driven toward its marginal cost of production.  Disintermediation is occurring at the fastest pace since Martin Luther proposed that a Catholic priest wasn’t a necessary part of a relationship with God. Traditional command and control organizations – think of the US Army and the record labels – find themselves outmaneuvered by small decentralized organizations who know how to build networks – think of Al Qaeda and the Iraqi insurgency, and Kazaa and eMule.

How many people here have read Tom Friedman’s The World is Flat?  Friedman is right.  Easier access to information, symbolized by the Internet, is revolutionizing the global economy.  I was at a community lecture a couple of years ago by Michael Spence, who won the 2001 Nobel in Economics.  He described the networking of computers as the most important development in economic history since the opening of trade routes from Europe to Asia in the late Middle Ages.  The reason: because where work gets done, and how it gets done, is being radically altered.

Those who thought they had a corner on information find that’s no longer the case. I was talking with a friend recently who is a senior technology officer at a large high tech company. She’s from India and was describing a problem a friend of hers in India was having — the friend’s son wanted very much to go to one of the IITs, or India Institute of Technology campuses.  They were so oversubscribed, with the emergence of 300 million middle-class Indians seeking advancement, that he was rejected.  The parents were complaining that because of that, their son was forced to go to Cornell.  Now everyone I tell that story to laughs at first.  But there’s a moral there – the corner on information, on knowledge, on the transmission of knowledge, that we think we have in this country, that we think we have in this profession, just isn’t there any more.

What’s happened in the recording industry provides a great example.  Tower Records’ liquidation is the end of an era.  iTunes, to say nothing of eMule and Kazaa, represent the beginning of a new one.  Recording industry revenues are down 25% in the last five years.  The ability for any centralized organization to dictate how information will be packaged and delivered is going to zero, as individuals take control of how information and knowledge is generated and offered.

With Trip Advisor and ePinions, what is the role of Fodor’s and Frommer’s? With Wikipedia, what is the role of Brittanica? With Amazon and reader reviews and blogs, what is the role of the bookstore? Did you know that the membership in the American Booksellers’ Association has declined from over 4,000 to about 1,800 in the last twelve years. There was no law of nature dictating that this would happen between 1994 and 2006.  It happened because of technology.  One bookseller said he knew it was over when he saw the mailman delivering packages from Amazon to the tenant upstairs.  With eBay and craigslist, what is the economic model for daily newspapers?  From printing boarding passes to tracking packages, to repairing complex software to deciding where to dine and stay and how to buy a plane ticket, tasks previously undertaken by human beings – and often highly trained human beings at that – are now accomplished through well designed expert systems.

I recommend you check out a fascinating new book called The Starfish and The Spider by Rod Beckstrom and Ori Brafman.  They very succinctly trace the power of decentralized, knowledge sharing technologies to undermine enterprises and industries which are based on a command and control approach to information. Simply stated, people around the world are building their own communities to connect with each other and share knowledge.

Political leaders recognize the fundamental nature of this transformation.  I saw in the paper two weeks ago that the acting President of Turkmenistan kicked off his election campaign with a call for greater Internet connectivity.  Put that in the time-warp category: how would you have reacted if twenty years ago someone told you the acting President of Turkmenistan kicked off his election campaign with a call for greater Internet connectivity? I was at a dinner several weeks ago with Alejandro Toledo, who until July of last year was President of Peru.  Toledo had grown up as one of 16 children in a destitute village in the Andes highlands.  Thanks to having met Peace Corps volunteers at the age of 14 he got a scholarship to the US.  He has two graduate degrees from Stanford, and is the first person of native American descent to lead his country. 46% of Peruvians live on less than $2 per day. Toledo is passionate about helping the poor in Peru.  He told me his first priority is education generally, and his second is getting the people of his country connected to the Internet.

So for question number 1 — how is technology driving change in knowledge-based industries? — my answer is that the networking of computers is transforming the nature of knowledge accumulation and distribution.

So let’s turn to question 2: what are the key areas of vulnerability in the legal services business to these technological changes?

At a famous presentation at Black and Decker, a consultant held up one of these, a drill, and asked the Black and Decker executives if this is what they sold. They all recognized the product and answered “yes”.  He then suggested to them, that from the customer’s point of view, what they are selling is this, a hole in a board.

From the law firm think perspective, “sales” too often means a one to one relationship with a lawyer who bills by the hour.  As a client, I can tell you what I want to buy is access to information, strategy, and negotiation, and, in the case of litigation, to courtroom skill as well.

There’s a fundamental misalignment at work here.  Law firms cannot afford to own the business risks of their clients, have a lot of employees to pay and also have to allocate the limited resources of extraordinary star partners.  On the other hand, clients want access to information and counseling and want to pay for value received. Put more bluntly, the most fundamental misalignment of interests is between clients who are driven to manage expenses, and law firms which are compensated by the hour.

The current system also misserves the lawyers themselves, particularly the associates, also known as the next generation of partners.

In most of my major law firms, I see more and more problems retaining associates.  I am inundated with resumes of top notch associates who don’t want to work in large law firms any more. The chairman of one firm told me that only people in their 50s and 60s are willing to put in long hours these days, that associates regularly turn down the chance to work on major deals if it interferes with social plans or a vacation.  He finds a lot of younger lawyers self-centered and self-indulgent. Since I’m 50, I wasn’t  personally insulted.  But this reminded me of something I read recently, a complaint that “affluent parents have become role models for luxury and licentiousness, and have moved far away from caring about whether their children develop habits of discipline and self-restraint.  As a result, young people are increasingly impudent and have a total disregard of the respect they owe to themselves and others.”  Pretty strong stuff. This was written by Tacitus in 75 AD.

Those who grew up with the Internet just view the world differently than you and I do.  I’d like to ask everyone to raise your left arms. Go ahead. Left arms up.  Now, everyone who is wearing a watch, put your arm down.  I will tell you, that if all of us were under 30, the results would be the reverse. People under 30 do not wear watches. They use their cellphones.  My college senior daughter wants a wristwatch to wear exclusively at job interviews, since she thinks she’s supposed to.  My friends, we are dinosaurs, we don’t get it.

The difference in outlook goes deeper than that of course.  Some of you may know Dick Gross, a mathematician who is Dean of Harvard College. I once heard him tell a group of parents that if they want to communicate with college-age kids, they better learn Instant Messaging.  He told of coming into his 16 year old son’s room while the son was doing homework, and finding five IM conversations going at once on the computer. He asked, “How can you get work done when you have five conversations going?” His son answered, “Dad, you don’t understand, this is how we communicate. For us, IM is like email was when you were a kid.”  I must ask, “If five conversations are open at once, how do you bill the time?”

This generation, brought up on Wikipedia and Kazaa, believes that information should be free.  Upending one’s life to support inefficient means of communication, driven by a billable hour system, to maintain a relatively slim chance of making partner, is antithetical with that upbringing.

But if the economic system of the firm is frustrating to associates and even some partners, I can tell you that from the standpoint of a metric driven general counsel, it is more than incomprehensible.  It looks like the last vestige of the medieval guild system to survive into the 21st century.

About a year ago, I testified before a House subcommittee regarding the Internet in China. It was a lengthy hearing, and it was grueling.  I was pleased with the results, largely because I’d spent two days beforehand being prepared by Ambassador Charlene Barshefsky at WilmerHale.  If you shouldn’t leave home without American Express, you shouldn’t go to the House without Charlene.  At the risk of mixing my credit card metaphors, her help was priceless.  The total bill for her services was about $10,000.  I have spent 300 times that amount to get mediocre assistance in patent disputes.

The legal industry has spent millions on IT, largely to speed access to information. Yet the only way I can get that information is through an individual billing me by the hour.  In many cases, my in-house team has more sophistication than the highly-paid associates who mine the knowledge management system to generate a memo.  I’m just not allowed to access the information without paying for someone’s time.

The systems exist today to change the delivery of legal information to clients.   But that change would challenge a model that today delivers high profits.  Every big company, including Cisco, is using those systems to make our support services more effective, and to drive down the costs of providing service. Law firms are not doing this as effectively to drive savings to the customer.  Clay Christensen of Harvard Business School has written, and I quote, “Large American law firms are just about the most profitable businesses in the world.   Speedier information-gathering capabilities allow large law firms to increase utilization of less experienced lawyers without passing cost savings on to their customers.”  So changing the service delivery model will be disruptive, and not just because associates are kept busy doing work that a machine might be able to do better.  Changing that model will also cut into the effectiveness of cross-selling.  From a client’s point of view, cross-selling is an effort of star partners to leverage the loyalty they have earned to drive hourly work to other parts of the firm.  Today, there is little incentive for law firms to apply risk-reward logic to the amount of legal services provided.  And General Counsel know that.

The growing scope of knowledge availability will endanger this system.

When technological change comes, it is easy to get left behind.  Richard Susskind, who’s a brilliant English commentator on the legal profession, and who gave me the Black and Decker example I offered earlier, observes that when law gets standardized, it can be outsourced, co-sourced, integrated,aggregated, syndicated and sharedOne-to-one consultative advice gives way to one-to-many information services. And the client becomes empowered.

My contention is that the very source of success for firms today – the ability to manage client access to information and require clients to use bespoke 1:1 systems – will be the source of failure in the future.

So my answer to question number two is that the greatest vulnerability of the legal industry today is a failure to make information more accessible to clients, to drive models based on value and efficiency.  The present system is leading to unhappy lawyers and unhappy clients. The center will not hold.

And that brings me to the third  question: What will it take to succeed in this changed environment?

Clay Christensen got it right when he said of our industry, “the forces that act upon service sector businesses are the same that act upon all companies.”  And he predicted that a new class of providers will “develop new delivery models that will be highly disruptive to established firms.”

My answer to this question is therefore simple: first, winners will be those who are able to standardize services to meet clients’ cost management and predictability needs where very good is good enough.  Second, those who can differentiate themselves by providing the top notch of customized services, where that is needed, will also win.  In some cases, one firm may be able to do both.  But my bet is that despite the consolidation trend we’re seeing today, top quality boutiques will thrive while the cost structures of larger centralized firms will put them at risk.

All around the periphery of the legal industry, standardization of information is happening.  Check out www.taxalmanac.org, which uses wiki to create sophisticated, easily-searchable on-line discussions, and ultimately counseling, by tax professionals on a variety of topics.  The legal work of generating residential leases and individual tax returns is now largely done by software.

Let me give you a few examples of the way this is now spreading to first tier corporate legal work.  Let’s start with patent prosecution.  At Intel, Bruce Sewell bundles patent disclosures and prosecution of the applications is awarded based on a reverse auction.  The most successful firm is in Australia.  At GE, Brackett Denniston has over 60 patent lawyers and agents, US trained and supervised, working to prosecute patents at GE’s Global Research Center in Bangalore.  At Cisco, we pay a fixed fee for patent prosecution, and advise our firms to find ways to lower costs, since the amount we will pay will go down by at least 5% each year. We also have a fixed fee arrangement to review unsolicited offers of licenses which seem to arrive quite regularly these days.  Bart Showalter, the partner at Baker Botts who leads that effort for us, said the fixed fee scared them at first, but over time they developed a systematic approach to the work, and as he put it, “the system made us more efficient.” To get the measurable results we need, we are driving the use of knowledge sharing technology throughout the process.

In the corporate secretarial arena, at Cisco we got tired of the choice between the overhead of dealing with a hodge-podge of local firms and high billable hour rates from so-called global firms.  So we are working with one firm on a solution. We’re aiming for a 20% cost reduction compared to our current global costs.  Now this firm doesn’t have a huge global network of offices – but are ready to revolutionize the way information is processed and shared.   Our goal will be accomplished by standardization of forms and open interfaces, making a smooth multi-vendor operation out of what had been a series of job shops.  And we want to help them to sell this approach to other companies and other law firms.

In contract processing, we have an online contract builder that allows our employees globally to build their own NDAs  and other contracts.  With electronic approval and digital signature, they can go from creation to execution to archiving.  Five years ago, Cisco had to build its own system. Today we’re buying off the shelf.  Within the next five years, a substantial proportion of the Fortune 500 will be doing the same.

Counseling will be the next frontier, as tools like taxalmanac spread to other legal areas, from sweepstakes rules to export regulations to human resources to securities law compliance. We’re working with eight other Fortune 500 companies, and a number of law firms, to create a site called Legal On Ramp.  Legal On Ramp will allow direct access to knowledge management systems of law firms. The site will organize information and allow collaboration using Wiki technology.  If you don’t know what a wiki is, I suggest you learn very quickly. Sites will be segmented by company to protect privilege.  It will also help drive follow-on questions to firms for fee generating work.  And you can bet securities work, especially ’34 Act and Section 16 compliance, will be one of the first targets for providing standardized information and shared experience.

Today, all of Cisco’s US corporate, securities and M&A work is done superbly by Fenwick and West operating on a fixed fee, based on an expected number of transactions, with fixed prices for extra transactions.  Gordy Davidson came to me recently and offered to keep the fixed fee the same next year, despite rising hourly billing rates.  He thought he was being generous, or at least practical.  I turned him down.  I told him I wanted a 10% cost reduction.  But my goal was not to reduce my costs while hurting Fenwick’s profitability.  I suggested he propose a service level agreement for me, his client, to fulfill.  The SLA will oblige Cisco to take on lowest -value-add tasks that were consuming 15% of Fenwick’s total lawyer costs, and that we can do ourselves with our administrative staff.  I told him I expected only a 10% fee reduction, however, and that he could keep the remaining 5%.  In this way, we become a better client, and we both win.

We are doing the same thing in litigation. We have a fixed fee with Morgan Lewis  for all of our US commercial litigation.  Not surprisingly this has made Cisco litigation avoidance a key goal of Morgan Lewis.   We’re driving down the time that human beings have to spend reviewing electronic documents.  We bid out discovery work based on cost per gigabyte.  In some cases we’ve outsourced document production to a different law firm than the firm that is providing counseling or other support.  But what we had to build ourselves five years ago is now becoming the norm.

Now as I said at the outset, you may disagree completely with my analysis, with my prescriptions, or both.  You might even think I’m just trying to sell more networking equipment.  But I ask each of you to grapple with the three questions I posed and come to your own conclusions.

How is technology driving change in knowledge-based industries?  What are the key areas of vulnerability in the legal services business to these technological changes?  And what will it take to succeed in the new environment?

The opportunity is there to recognize the business realities that will be driven by new technology. We can seize the chance to offer more value to clients. We can seize the opportunity for our own employees to be more engaged and productive.

Our mutual success depends on it.  I’m fortunate to have great counselors like Gordy, Charlene, and Bart.  They’ve helped ensure, through past practice and good preparation, that my company has no issues with its stock options, minimal comments on our 10-Ks, and only one piece of litigation listed in the last 10-Q, and that one has subsequently been resolved.  I need those counselors to themselves have healthy businesses. Successful outside counsel is an integral part of Cisco’s success.

We should all be very proud of our profession.  We help drive compliance with the democratically-enacted laws of our country.  In the last five years, we’ve accomplished extraordinary things. Since the dark days of the Enron collapse and the advent of Sarbanes Oxley, we’ve restored credibility to the institutions that are the backbone and the motor of the greatest economy in the world.  We defend those who have done the indefensible, even when the government threatens us for those efforts. We work to preserve the rule of law.  In our daily work we do not fear, in fact it is our obligation, to speak truth to power.

We are in the midst of an economic  revolution that is the most important event in economic history since trade routes opened from Europe to Asia.  We must reach out and seize the golden ring that is just within our grasp.

Thank you for your attention today.


What’s next? See A Deep Dive Into Axiom (036)

The graphic above is a breakdown of the 76 sessions at the 2017 CLOC Institute. Since there were seven concurrent tracks, it was impossible to attend more than a small fraction of the total programs.  Nonetheless, if one wants to understand the mindset and priorities of corporate legal departments, there is hardly a better window than a careful review of the various problems that the CLOC sessions are trying to solve.

The sessions are grouped into eleven subject matter categories (HT to research assistant Seth Saler for his help).  The numbers inside each unit reflect specific sessions (session titles can be accessed here). Below is a brief discussion of the content of the top categories.

Inside the Client’s Head

The biggest category is Legal Department Design, which suggests that the top priority of legal ops professionals is designing, building, and upgrading the legal department of the future.  It is both high-level and strategic in orientation.  Topics in this category include legal department budgeting, KPIs, using metrics to calculate ROI, data analytics, workflow design, and building and deploying internal dashboards. A common theme in all of this is doing more with less.

Continuing this theme, the second biggest category is Outside Counsel Management.  This includes convergence, AFAs, e-billing systems, legal project management, applied technology, outside counsel guidelines, rate evaluations and benchmarking [internal methodologies and tools, not sharing of industry data], litigation budgeting, outside counsel selection, client/law firm collaboration, using metrics to drive alignment, and law firm scorecards and evaluation. At most law firms, strategic planning takes the form of annual revenue targets by practice group. Judging from the CLOC sessions, it’s going to take some innovative thinking to get greater wallet share from these clients.

Professional Development and Tools & Technology tie for the third biggest category, with nine sessions each. Professional Development focuses on personality assessments (overview plus an applied workshop), improving teamwork and collaboration, workplace generational shifts, and networking. Tools & Technology includes technology platform selection, workflow automation, data security, technology roadmaps, how to create dashboards, and process design.

Note that Artificial Intelligence in its various forms appears in several session titles, but always as part of specific use cases. At least at CLOC, AI is no longer an introductory, freestanding topic.

The Professionalization Project

One relatively large category that I was not expecting to create was Legal Ops Professionalization. Instead, it emerged from the data.  The six sessions in this group focus on legal ops core competencies [click on CLOC figure to the right to enlarge], creating a legal ops function in your company, review of the legal operations maturity model {detailed multi-level model created by CLOC members], and salary negotiations for legal ops professionals.  Session title 62 says it all: “Control Your Destiny: How to Assess and Develop Your Legal Ops Skills.”

History is replete with examples of workers coming together to “professionalize” their craft through the creation of a common language and set of standards. This same process is now fully in motion in the emerging field of legal operations.  Although still a few years away, it will eventually culminate in a system of credentials and certifications to help the market identify and allocate legal operations talent. Such a system helps organizations hire the right person for a very important, high-stakes role.  As a second order effect, it also helps legal ops professionals increase their economic power and influence.

It is my view that legal ops is not, strictly speaking, a career path within legal departments.  Instead, legal operations is field that focuses on systems and controls for managing legal problems and complexity.  Under this broader definition, there are legal ops professionals inside progressive law firms, see Post 021 (categorizing law firms based on innovations in people, process, and technology), and legal managed service providers, see Post 010 (noting how managed service model requires “remarkably tight systems for project management and process improvement”). Although buyers and suppliers of legal inputs will always have slightly different perspectives, their underlying knowledge and skills are on a convergence path.

We are still very much in the early days of the legal operations movement.  This is a key part of solving the lagging legal productivity problem.  See What is Legal Evolution? (001) (discussing importance of solving lagging legal productivity); see also Six Types of Law Firm Clients (005) (discussing rise of CLOC).

What’s next? See Public Event: Soft Skills for the Effective Lawyer (023)