IFLP is proud to collaborate with the above list of innovators and early adopters.


Later this month, the Institute for the Future of Law Practice (IFLP, or “I-flip”) will celebrate its one year anniversary. Before that, it was just an idea in the minds of a few dozen lawyers, legal educators and allied professionals.  In the fall of 2017, this “Group of 40” participated in a needs analysis. There were two questions: Is an intermediary organization needed to align the interests of law schools, legal employers and clients around the educational requirements of 21st century law practice?  And if so, could such an organization become a viable nonprofit operating company?

The Group of 40 concluded that the period of industry-wide discussion and debate, which began in earnest after the 2008 financial crisis, had run its natural course.  It was time to start building the future. Thus, an organization like IFLP was worth a try.

The Group of 40 endorsed the creation of a skills bootcamp in spring 2018 for a group of roughly 25 students. A key feature would be paid internship employment for every admitted student. By hiring students, IFLP employers would be signalling the value of IFLP training. Eventually the rest of the market would catch on.  In a nutshell, that was the model.

Initially IFLP’s only assets were relationships, albeit that was huge. In November of 2017, Cisco Systems committed to six paid 7-month internships ($300,000+ in salaries). Northwestern Law committed classroom space for the inaugural bootcamp.  In addition to hiring IFLP grads, Chapman and Cutler and Elevate Services agreed to provide year-one operating capital (later Quislex provided additional founding sponsor support). A wonderful group of professionals agreed to serve on our volunteer board. Another dozen-plus industry leaders agreed to serve as volunteer instructors. All this happened because of a network of professional peers with significant history and a reservoir of trust.

Drawing upon this foundation, IFLP was brought into this world on January 16, 2018 as a Delaware nonprofit nonstock corporation. A few days later, we launched a website and started recruiting employers. Before we had a checking account, we were interviewing students for the bootcamp. See Post 043 (announcing launching of IFLP); Post 046 (providing an early days account).

The inaugural bootcamp went well. We faithfully collected metrics on all of it. In the fall of 2018, as we began to plan for 2019, we finally had the bandwidth to create a logo and refresh the website with content that reflected our longer-term aspirations.

As we approach our one year anniversary, IFLP is immensely grateful to the above roster of 2019 IFLP employers. These are the legal industry’s innovators, early adopters, and opinion leaders.  To fill all the employment slots, IFLP will be running skills bootcamps in Boulder (Colorado Law), Chicago (Northwestern), and Toronto (Osgoode Hall) for 75 to 90 students. We have room for approximately ten additional employer slots before we hit maximum capacity. Our existing funnel of prospective employers is likely to yield that. Likewise, in 2019 we are fortunate to have 18 participating law schools, see list on IFLP website, with plans to add more in 2020.

As the title of this post suggests, this is an update on IFLP.  I have time to write it because the IFLP board and leadership team has done a very good job of building an infrastructure that can scale. As of today, our expansion is on schedule.  Below I will do my best to describe the organization’s current activities and future plans.  The good news is that we are building a big tent for those wanting to co-create a better future.


For the pre-history of IFLP, including the indispensable role of the Colorado Law’s Tech Lawyer Accelerator (TLA) Program, see Henderson & Linna, “Is Your Organization Building a World-Class Talent Pipeline?,” Law.com, Aug. 31, 2018; see also Post 018 (discussing TLA during the summer of 2017).


Mission

IFLP’s core mission is to align the interests of law schools, law students, legal employers and other industry stakeholders around the knowledge, skills and training needed by 21st century legal professionals. What makes this mission so important is the relentless growth of complexity in a highly regulated, interconnected and globalized world.  Without a bigger toolbox, legal services will continue to become unaffordable to a larger proportion of clients.

This pressure is most acute at two ends of the legal spectrum: PeopleLaw, where a growing share of ordinary citizens are forgoing legal services, see Post 037 (data on declining PeopleLaw sector); Post 042 (legal services shrinking portion of CPI basket); and large organizational clients, where legal need is racing ahead of legal budgets, see Post 022 (CLOC focused on this problem); Post 041 (Legaltech focused on this problem); Post 053 (rise of NewLaw focused on this problem); Post 055 (Godfather of legal ops joining Baker McKenzie to solve this problem); Post 069 (Microsoft legal dept focused on this problem).

For both clients and lawyers, the increase in legal complexity is experienced and, therefore, framed as a cost problem.  Yet, it’s really a problem of lagging productivity. The increased volume of complexity requires lawyers to find ways to accomplish more per unit of effort. Otherwise, the lawyers are priced out of a job. Cf. Henderson, “The Legal Profession’s ‘Last Mile Problem,'” Law.com, May 26, 2017 (legal industry is hindered by lack of business models that reliably reward efficiency).

IFLP is designed to serve the entire legal profession, as evidenced by this graphic, which organizes IFLP employers by sector. Yes, law firms, law departments, legaltech and NewLaw are supporting IFLP, but nearly 20% of our employers are public service organizations.

T-shaped curricula

In the most practical sense, IFLP is trying to accelerate the development of T-shaped legal professionals. See diagram to right. For lawyers, law school and law practice provide a deep foundation of substantive legal knowledge and skills. The T-shaped legal professional is created by adding a working knowledge of other disciplines, such as data, process/project management, technology, design and business principles.

The legal profession’s future is lawyers and allied professionals working side by side to cost-effectively solve very difficult problems. Cf. Ron Friedmann, “A Multidisciplinary Future to Solve Legal Problems,” Prism Legal (Mar. 2018). T-shaped curricula make these collaborations more effective and fruitful.

Someday the type of curricula offered by IFLP will be standard in law schools throughout the world.  Indeed, IFLP’s mission is to enable law schools to do just that.  But right now, the state-of-the-art is being pioneered in the field by innovative practitioners and allied professionals. The first step is to locate subject matter experts and organize their knowledge and know-how into subjects that can efficiently taught to others. Fortunately, IFLP has the networks to make this happen. Notice IFLP’s logo — it’s a network.

Bootcamps

Below are the modules that are currently covered in our foundational and advanced track bootcamps.

IFLP’s 2019 foundational boot camps will run from May 13-31 in three locations: Chicago, Boulder, Toronto. This training targets rising 2Ls but rising 3Ls and mid-career professionals may also participate. At the end of the bootcamp, law students go on to paid internships with IFLP employers.

The advanced track bootcamp is offered later in the summer to rising 3Ls and mid-career professionals. The advanced track is designed to be preparation for 7-month full-time internships (technically a “field placement”) during the summer and fall semester of a student’s 3L year.

In terms of contact hours and out-of-class study, both the foundational and advanced track bootcamps are designed to fulfill ABA accreditation requirements for a 3-credit law school course. Likewise, the 7-month field placement is designed to earn another 8 credits. See ABA Accreditation Standard 304(d) (defining requirements for field placements). Thus, the full IFLP sequence could total up to 14 academic credit hours, albeit the approval and granting of academic credit is done by participating law schools.

Below is the current timeline for 10-week and 7-month internships: 

To my colleagues at other law schools, I am happy to share the course proposals that led to approval of the full IFLP sequence at Indiana Law. In the course catalogue, these courses are referred to as Modern Law Practice I, Modern Law Practice II, and Modern Law Practice Field Placement. Email me.

Evolution, not revolution

In Post 077, Dan Rodriguez distinguished between mission-based and mission-disruptive innovation.  IFLP is definitely the former, as the IFLP curricula enables law schools to adapt to massive changes occuring in the legal profession.

On this point, it is noteworthy that the majority of IFLP students are rising 2Ls who complete the foundational bootcamp and go on to 10-week paid internships with IFLP employers.  This is creating a paid labor market for law students based on newly acquired skills.  The bootcamp leads are Dan Linna in Chicago, Bill Mooz in Boulder, and Monica Goyal in Toronto.  These are very accomplished T-shaped lawyers who are also experienced law school teachers. Throughout the bootcamps, each is assisted by over a dozen guest instructors who teach in their area of expertise and/or supervise team-based simulations and exercises.  This content is worth 3 academic credits, which significantly multiples the value of the other 85 credits needed to earn a JD degree.

One of the challenges faced by IFLP — albeit a challenge that is sure to fade over time — is a view by some law professors that T-shaped skills are peripheral to the actual practice of law and thus can be safely ignored during law school.  This is just not accurate. Below is a list of some of the substantive legal projects performed by IFLP interns over the summer:

  • Review and draft various contracts
  • Draft software service and licensing agreements, including NDAs, MSAs, SOWs
  • Contract management and risk analysis
  • Research substantive legal issues and write memoranda
  • M&A due diligence
  • Intellectual property: copyrights, trademarks
  • Deal negotiation
  • Litigation document drafting
  • Prepare regulatory filings
  • Update privacy policy and data usage and protection policies
  • Advise on employment law issues
  • Attend and summarize meetings with business units

It is also true that IFLP interns work on projects that have a legal operations focus. Below are example projects drawn from past interns:

  • Develop expert systems: checklists, compliance automation, document assembly, and workflow templates
  • Create budgeting templates
  • Use predictive modelling to create machine learning tools that predict case cost,outcomes, and timelines
  • Knowledge management: classifying documents, updating clause libraries
  • Case data analysis to develop value pricing models
  • Process map specific case type, then draft standard pleadings, discovery, litigation documents, and checklists for every stage of this case type
  • Simplify and streamline legal department’s advertising approval process
  • Research current state of blockchain and legal
  • Technology evaluation, selection, implementation, testing, and training
  • Analyze outside counsel survey responses and develop objective system for selecting firms
  • Trademark library clean up

So much of the innovation occurring in the legal profession these days are activities found on this second list.  One reason that law firms struggle to fully embrace these innovations is that their fee-earners are too expensive to take offline so they can be properly trained in the top-of-the-T disciplines. In contrast, IFLP offers a pipeline solution where foundational knowledge is baked into students’ law school education.  The attractiveness of this solution is why we ended up with 50+ sophisticated legal employers before we reached our first anniversary.

Placements that benefit interns and employers

In the year 2019, we are all in continuous learner mode.  Thus, it is understandable why a lawyer or legal service organization might conclude that they lack the expertise and bandwidth to supervise an IFLP intern. Yet, there’s a solution to this common situation.

In 2018, IFLP founding sponsor Elevate Services worked with Univar—a Fortune 500 company—to pioneer a supervised internship model. Univar was undergoing a major restructuring that consumed all its internal bandwidth. General Counsel Jeff Carr, an innovator who is frequently cited on Legal Evolution, see Posts 008, 052, 053056, needed the extra hands and the intern price point. However, his team lacked time for daily supervision.  Thus, he hired an IFLP intern supervised by ElevateNext, a law firm affiliated with Elevate.

Jeff recently told a group of fellow Fortune 500 general counsel, “I just can’t say enough about the importance of this initiative as well as the quality of the program and the interns. Our experience was incredibly positive.”

Below is quick overview of the two ways that employers can hire through IFLP:

Because Elevate has deep expertise in data, process, and technology, an IFLP supervised intern can be a very time-efficient and cost-effective way to accomplish an important organizational project while also observing and learning importance new methodologies related to law practice. Additional details here.

7-month field placements

In 2019, approximately 15 of the 75-90 IFLP employer slots are reserved for rising 3Ls who complete the foundational and advanced track bootcamps and go on to 7-month field placements. The value of this model was learned through employer experimentation and feedback.

As noted earlier, IFLP was born out a four-year pilot at Colorado Law called the Tech Lawyer Accelerator (TLA).  In its early permutations, the TLA looked very much like the current IFLP foundational bootcamp: 3 weeks of instruction followed by a 10-week paid internships.  However, based on feedback from employers, the TLA began experimenting with 7-month internships that extended full-time employment into the 3L fall semester.

Stephanie Drumm

One of the 7-month interns was Stephanie Drumm, a 2017 CU Law grad who is currently a second-year associate at Bryan Cave Leighton Paisner (BCLP).  Stephanie spent the first four months seconded inside one of the firm’s technology clients and the last three months working onsite at the firm.  The combination of tech and client knowledge proved to be invaluable to partners who work with emerging technology clients, particularly start-ups.  Thus, despite no expectation of permanent employment, Drumm was added to the 2017 incoming associate class and continues to receive glowing feedback. As Stephanie noted during IFLP’s Wave One launch event in Chicago, she believes the TLA 7-month internship gave her an edge in her career that continues to compound over time. This BCLP experiment went on to win a 2018 FT Innovation “Standout” award in the category of Managing and Development Talent, citing how it was instrumental in the creation of IFLP. See FT North America Innovative Lawyers 2018 at 19.

Other strong advocates for the 7-month field placement were Mark Chandler and Steve Harmon of Cisco. Between 2014 and 2017, the Cisco legal department hired nine 7-month interns from Colorado Law.  Seven months of onsite full-time work enabled the interns to learn Cisco’s business and work flow, which in turn improved their performance on more sophisticated and complex projects.

Indeed, one of the reason Bill Mooz and I felt compelled to form the Group of 40 and conduct a needs analysis was Chandler’s and Harmon’s willingness to hire six 7-month interns a year (a $300,000+ salary commitment). A second reason was a change in the ABA accreditation standards that removed the prohibition on for-credit field placements where students could also receive pay.  See Karen Sloan, “ABA Approves Pay for Law Student’s For-Credit Externships,” Law.com, Aug. 8, 2016. Although the 7-month field placements were phenomenal learning experiences for students, each student was required to move of heaven and earth to earn sufficient credits to graduate on time. This was a huge supply-side constraint.

Of course, removing a prohibition got us part way there. For-credit/for-pay programs have to be approved by individual law schools.  Further, someone has to do the legwork and find employers who see value in this type of program.

Fortunately, my home law school, Indiana Law, was willing to go first.  For several years, we have run an excellent program in Washington, DC where students work full-time for a federal agency for eight academic credits.  Each fall, an eight to ten student 3L cohort meet weekly or bi-weekly to review and discuss assignments with an Indiana Law instructor. This classroom setting earns students an additional two credits, thus totally ten for the 3L fall semester.  Although students were not paid, occasionally one of the agencies would provide a modest housing stipend. My colleagues viewed the IFLP field placement program as substantially the same.  The key constraint is that the placement must be with an employer utilizing sophisticated and advanced methods of practice — a description that applies to IFLP employers.

IFLP first class of 7-month interns

In 2018, I served as faculty liaison for three Indiana Law 3L students who were on IFLP field placements. All three completed the foundational boot camp in May and the advanced track in June before heading off to their jobs. Two (Matt Rust and Seth Saler) worked in San Jose in the Cisco legal department. The other (Elmer Thoreson) worked in Chicago at Chapman and Cutler as part of the Chapman Practice Innovations team.

During the fall semester, the four of us met regularly via Webex to discuss the assignments and mine the field placements for insights. While Seth and Matt worked on cybersecurity initiatives, M&A deals, proxy statements, preparation for the Cisco annual meeting, a dashboard for the legal ops group, and various other projects, Elmer was immersed in the application of process improvement and document automation to the intricacies of finance law, which is Chapman’s core area of expertise.  Seth and Matt raved about the weekly sessions on competition law that were run for their benefit by Gil Ohana, Cisco’s Senior Director of Antitrust and Competition. Elmer talked about the learning curve on Tender Option Bonds and the UX and UI features that entice lawyers to use technology.

One of the last assignments for the IFLP field placement was a departure memo to direct supervisors that summarized what each student had learned.

In the conclusion to his department memo, Elmer wrote, “Working in the Chapman Practice Innovations group has been a different experience from anywhere I’ve ever worked before. The entire group has valued my input, pushed me to expand my knowledge, and encouraged me to find solutions to problems. My time in the group has changed the way I look at legal problems and has encouraged me to figure out how different disciplines can influence the practice of law. … While the future is not entirely clear, I feel that my time here at CPI has helped me develop my long-term goals. In closing, thank you for the opportunity, the knowledge, and the laughs this semester.”

Likewise, Seth observed, “[During the internship, t]here were opportunities to complete document review, to witness oral arguments, and dive deeply into regulatory frameworks. …  I maintained a fairly comprehensive spreadsheet that tallied 30+ projects to which I contributed over the last six months. I was tasked with many of the fundamental tasks in a legal project pipeline: ideating, researching, drafting, and reviewing. … [T]he people I worked with departed from the conceptions I had about an internship. Rather than squeezing as much value and productivity out of me as they could in six months, the people at Cisco were interested in pouring value back into me.” Seth goes on list nearly a dozen people he considered mentors. Matt was equally effusive regarding what he learned and who he learned it from.

The last field placement assignment was co-written by Matt, Seth and Elmer and provides advice to next year’s 7-month interns.  Feel free to give it read. See Final 7-Month Intern Group Memo (Dec. 2018).

I hope the idea of a paid field placements in advanced practice settings takes off.  This is good for the law students, good for law schools, and good for the legal profession. That’s why I got involved.

Get Involved

This post is an invitation for readers to get involved with IFLP.  During 2019, members of the IFLP team would welcome the opportunity to speak to a wide range of industry groups, as we would like to include more law schools and more law students in our 2020 program. To do that, we need more IFLP employers. That is possible when more employers hear the IFLP story and learn what we have to offer.

During 2019, we will also use some of our foundational materials in our law school curricula to start creating high-impact, time-efficient training for mid-career professionals. That is the leg of our business model that will enable us to be self-sustaining.

Finally, IFLP is greatly indebted to our four founding sponsors who supplied the key resources to get to our year one anniversary.  Many thanks for your leadership!

IFLP Founding Sponsors

On Wednesday, November 29 from 6 to 8 pm at Northwestern Law, student teams in my “How Innovation Diffuses in the Legal Industry” give their capstone presentations. Topics include Everett Rogers’ rate of adoption model (see Post 008), the role of change agents (see Post 020), and crossing the chasm (see Posts 024, 025, 026).

If you want to attend and learn, please email me. We have a small class in a big room, and interest from mid-career professionals will energize these terrific students.

What’s next? See Can Intrapreneurship Solve the Innovator’s Dilemma? Law Firm Examples (039)

As the above syllabus excerpt suggests, there is now a law school course on how innovation diffuses in the legal industry.  This new ground is being tilled at Northwestern Pritzker School of Law, where I am visiting this fall.  It is one of the few courses at Northwestern Law that enrolls both JD and Masters of Science in Law (MSL) students.  This enrollment is ideal, as the diverse educational backgrounds and professional experiences of the MSL students are a terrific complement to the 2L and 3L students who have already internalized a surprisingly large amount of legal culture.

The class started last Monday (10/16) and runs for eight classes.  As diffusion theory is part of an applied research tradition, see Post 004, we spent exactly one class on the underlying theory and the legal industry before moving to examples.

The examples are supplied by legal innovator and early adopter guest lecturers.  For Week 2 (10/23), we had the pleasure of hosting David Perla, co-founder and former co-CEO of Pangea3, and Ian Nelson, who was part of the original US sales team of Practical Law Company (PLC) and more recently co-founder of Hotshot, a tremendously innovative e-learning company focused on legal professional development.

NewLaw and legaltech start-ups are now widely covered by the legal press. But that was hardly the case during the booming mid-2000s when all the focus was on soaring BigLaw profits and salaries.  I wanted to start our guest speaker series with David and Ian because during this hey day period, both quit top-of-the-food-chain jobs to pursue obscure and speculative business opportunities (David in 2004 and Ian in 2006).  At the time, the future we are now living in was far from obvious.  Yet, when their respective companies sold to Thomson Reuters a few years later at valuations and multiples on-par with highly successful Silicon Valley start-ups, it became clear that NewLaw and legaltech were sectors with enormous opportunity for the innovative and ambitious.

Perla’s story

Over the years, I have heard several renditions of Pangea3 founder stories.  But Monday’s edition provided a new twist, as David focused on the preeminent importance of professional relationships and how, in hindsight, the long game is the only game that really matters.

David went through a long litany of examples of how a decade’s worth of professional contacts accumulated since law school (by both he and Pangea3 co-founder Sanjay Kamlani) were crucial to opening doors or indirectly supporting the fledgling start-up.  From getting free access to 1,200 Indian lawyer resumes from Monster.com so the duo could stand-up a work team in India over the course of a few days (David had just quit the GC position at Monster to launch Pangea3); to several months of office space at Katten Muchin so Pangea3 could signal a midtown Manhattan address (David was a former Katten associate); to an initial investment by a prominent Indian-American lawyer who had credibility in both US and India venture capital and legal circles, thus greasing the skids for everything that followed (this came through Sanjay’s tenure at PWC and OfficeTiger, a first-generation business process outsourcer in India), each story illustrated the tremendous importance of relationships. Cf. Post 020 (discussing crucial role played by “weak-tie” relationships in the diffusion of innovation).

The most surprising and powerful story was David’s family connection to the head of litigation of a major global bank.  The family friend took David’s call, but said at the outset,  “I am happy to help you in any way I can through mentoring and coaching, etc., but I’m never going to send any documents to India.”  David replied, “I understand.  Is it okay if I check in with you every six months?” The head of litigation said “Sure.”  David foreshadowed that this connection would turn out to be key to the ultimate success of Pangea3.

In the meantime, David and his colleagues were trying to crack the code of the large global banks.  One of their prospective customers broke the disappointing news that “we innovate in our trading strategies, but not in operations or sourcing. For that stuff, we’re a second mover. So if you want us to hire you, go get [list of global banks] as one of your customers. Then we can talk.”

Fast forward a couple of years, the big break for Pangea3 was the turmoil in the financial services market in the fall of 2008 and the resulting global recession.  David fields a call from one of his board members, who buoys his spirits, “Doubledown on sales; recessions are good for outsourcing.”  Shortly thereafter, David takes a call from the family friend / head of litigation at the major global bank. “David, the General Counsel just informed us that our budget has been cut by 25%. I know I said never, but never just happened.  Can you be here this week for a meeting?”

That meeting resulted in Pangea3 landing its largest and highest-profile client, which in turn sped up the sales cycle for several other large banks waiting to go second. David acknowledged that he did not have the benefit of diffusion theory when he was building Pangea3.  Yet, on both the investor and customer side, he could see how certain key early adopters had the effect of making a wide array of disparate pieces fall into place.  David specifically referred to these people as “influencers.”  Cf. Post 020 (discussing how “opinion leaders” within a social system are “able to informally influence other individuals’ attitudes or overt behavior in a desired way with relative frequency”).

Nelson’s story

I first met Ian Nelson in the fall of 2008 at a legal innovation conference–in hindsight, the first of its kind–organized by USC law professor and economist Gillian Hadfield. By 2008, Ian had been working at PLC for two years, initially in content creation but then transitioning to a lead role in sales.  Although PLC had already become a dominant force in the UK, the US was a bigger market governed by different law.  Thus, for all practical purposes, Ian had joined a US-based start-up.

There are two reasons why the PLC model is highly relevant to anyone interested in legal innovation.  First, Thomson Reuters’ acquisition of PLC in 2013 remains the high-water mark for financial success among legal industry entrepreneurs.  See “Thomson Reuters buys Practical Law Company,” Telegraph, Jan. 23, 2013 (reporting the size of the deal between £200 and £300 million, all of it achieved without outside investment). Second, there remains a wide array of activities currently performed non-expertly by law firms and legal departments that could be turned into highly successful businesses by carefully applying the core logic of the PLC model. In fact, this logic is very much at work at Ian’s current company, Hotshot. Thus, let’s briefly review the PLC model.

Practical Law began life in 1990 as a trade journal focused on the UK legal market. Some of the most popular features were practice tips that pulled together and explained the technical aspects of new and emerging methods of finance.  This is not surprising because PLC’s two founders, Robert Dow and Chris Millerchip, began their careers as associates at Slaughter and May, a leading Magic Circle firm specializing in M&A and sophisticated corporate finance.  Quipped Millerchip, “We created the thing that we wanted when we were practicing.” Ross Todd, “Web Practice Tools for Transactional Lawyers,” Legaltech News, Jan. 23, 2009.

With the growth of the web, PLC’s offerings became simultaneously better and easy to access via an online subscription model.  Relatively quickly, firms were being placed in a competitive disadvantage if they lacked access to PLC work product, which included document templates, standard clauses, practice guides, and deal checklists. In theory, firms could create this content on their own.  Yet, the ability to scale across the entire corporate bar enabled PLC to deliver higher quality work product at a much lower per-unit cost. In effect, PLC had become a privately run shared service relied upon by the vast majority of top UK law firms. The economics of a shared services model make it virtually impossible to dislodge a well-run first mover — and PLC fit that description to a tee. Cf. Thiel, Zero to One 97-98 (2014) (“[M]oving first is a tactic, not a goal. …  It’s much better to be the last mover—that is, to make the last great development in a specific market”).

During his guest lecture, Ian recounted his early days as a NYC corporate associate when he first encountered some of the quality gaps later filled by PLC and now being targeted by Hotshot.  The first instance occurred within a few days of hiring when Ian was dispatched to a far-flung city for due diligence on a “reverse triangular merger.”  The supervising partner instructed Ian to review a large volume of contracts and flag anything that “looked weird.”

Despite his law review credentials, Ian had no idea what a reverse triangular merger was, much less the definition of weird. Thus, for the next 48 hours, Ian was thrown into a silent panic, fearing that his legal ineptitude would should be exposed to the world. Yet, what he soon discovered was that neither the partner (and apparently the client) cared about the inefficiency of the process, as Ian’s overinclusive approach to copying “weird” provisions for further study at the firm’s headquarters was all being billed by the hour. Had Ian had access to Hotshot, he would have had on-demand videos and practice guides enabling him to get the answers that the supervising partner lacked the time or interest to provide.

A second formative incident occurred a couple of years later when Ian headed to London to work on-site at a UK firm that was co-counsel on a major transaction. During a tour of the office, Ian was shown the cafeteria, the copy room, and the work area for the PSLs.  Ian asked, “What’s a PSL?”  He was flabbergasted to learn that in the UK it was common practice to have “Professional Support Lawyers” who were responsible for, among other things, organizing and cataloguing the firm’s work product so the very best precedent could be quickly located for use on future client matters.  Ian subsequently returned to the US and lobbied his firm for the creation of a similar role, as it would replace the then-common practice of firm-wide emails soliciting documents that could be used as a starting point for current client matters. Upon hearing these ideas, however, the partners shrugged with indifference.

Six years into corporate law practice, these were some of the formative experiences that caused Ian to respond to a job ad for PLC — experiences that really struck a chord with the students. At my request, Ian did a deep dive into Hotshot. However, Hotshot as a business and product offering warrants its own future post.

What diffusion theory insights did we learn?

As I reflect on Week 2, three themes stand out.

  1. There is no innovation without execution. It’s easy to discuss innovation as something conceptual, but until the early adopter end-user receives full value, innovators are just trafficking in ideas.  Although this terrain is covered in LE’s “Crossing the Chasm” and “Hype Cycle” series, see, e.g., Posts 024025, it was made more vivid by Perla’s description of solving funding and operational challenges while also hunting down the early adopter customers. Standing up a quality-first operation in India (the putative innovation) is extraordinarily complex, time consuming and costly. Although Pangea3 was able to hit its ambitious sales targets relatively early, the time span between a signed deal, doing the work, and getting paid — particularly when large corporate clients string out vendors for 45 to 90 days — resulted in a “near death” experience for Pangea3. Suffice it to say, there is enormous risk in translating an idea into an innovation that warrants diffusion. Innovator-leaders like David and Sanjay who can skillfully coordinate the technical talents of others are very rare and very valuable.
  2. There are usually several social systems that matter; not just one.  As I listened to David and Ian, it became obvious that several social systems were interacting with one another.  For example, David describes how inroads with the New York global banks had little to no impact with legal departments at large US tech companies.  In fact, it was an investment by famed Silicon Valley VC firm Sequoia Capital (on less favorable terms that other VC shops, though the discount was worth it) that opened doors with tech companies on the west coast and, in turn, reverberated throughout India, signaling to young Indian lawyers that Pangea3 was the firm to join.  In Ian’s case, the early adopters at Hotshot were all Silicon Valley-based law firms who saw real advantages to having better-trained associates who could actually understand and do the math in venture capital deals.  A credible roster of west coast-based AmLaw 200 firms were eventually enough to open doors on the east coast and in the midwest where the deal flow was more traditional M&A.  Cf. Post 004 (“Rogers’ core insight … is that the diffusion of innovation is a process that occurs through a social system“).
  3. Relative advantage, cultural compatibility, and trialability really matter.  Apparently, for a large global bank, the difference between “never” and “this week” is a 25% budget cut.  Thus, drawing upon the Post 008 rate of adoption model, Pangea3’s big break turned on a sudden shift in the “relative advantage” of legal process outsourcing. Likewise, regarding cultural compatibility, both David and Ian emphasized how their status as former BigLaw corporate lawyers, including knowledge of cultural norms related to speech, dress, and credentials, opened both minds and doors.  Finally, Ian gave examples of how trialability was key to making sales for PLC and Hotshot, while David discussed how small projects resulted in growing sales, including a mandate from a major client that Pangea3 would be used by all outside counsel for all large-scale document reviews.  Apparently, nothing is more convincing than tasting the soup.  If it tastes good, your early adopter customers will set off a chain reaction (within a firm or legal department, or among peer firms or legal departments) that will do the work of an army of salespeople. Cf. Post 025 (Geoffrey Moore noting that word-of-mouth marketing is essential to crossing the chasm).

Week 3 of How Innovation Diffuses in the Legal Industry features three highly accomplished Thomson Reuter professionals:

  • Joe Borstein, Global Director of TR’s Managed Legal Services (formerly Pangea3) and Innovation Columnist at Above the Law
  • Rebecca Thorkildsen, Global Director of Legal Solutions (a person with an amazingly broad and deep grasp of the rapidly expanding legal ecosystem)
  • Paul Stroka, Director of Legal Solutions (a very capable corporate lawyer who has a deep understanding of consultative sales — i.e., selling as a second-order effect of customer problem solving — which is the core skill of a change agent)

I’ll do my best to pass along what we learn.

What’s next?  See The 2017 Forum on Legal Evolution (033)