Ch-ch-ch-ch-changes
(turn and face the strain)…
Ch-ch-changes
Just gonna have to be a different man
Time may change me
But I can’t trace time
Changes by David Bowie
I recently ran across an article in Macworld by Dan Moren. The article is entitled Apple Is Quietly Preparing for a Future Without the iPhone-Or Another Big Thing.
In the article, Moren talks about how several well-known tech companies have pivoted even when they seemingly were on the top of their game. By pivoting sooner rather than later, these companies set themselves up for survival. And even greater success in a changing world. Says Moren, “Where once they might have ruled the world by producing the thing that everybody needed to have—whether it was a hardware product or a crucial piece of software—they seem to eventually evolve into a new form, one where they’re focused less on delivering a key product and more on what service they provide.”
He gives two well-known examples. First, he observes that IBM was once the market leader when it came to business computers. But despite its dominance, it got beaten by a then upstart, Apple. Instead of fighting what probably would have been a losing battle, IBM moved out of business computers. It moved into enterprise services, where it remains successful. But I’m sure that decision wasn’t so clear or easy at the time.
Moren’s second example is Microsoft. Microsoft was once the market business software leader with its Office productivity suite and the Windows operating systems. And it guarded its platforms zealously. But Moren says Microsoft missed the mobile revolution. And it ultimately recognized that it had to change to remain successful. Today, says Moren, “Microsoft is everybody’s best friend,” announcing partnerships with other tech companies it once tried to bury.
Moren concludes that Apple may do something similar. This may be why Apple is already moving more and more toward services and focusing perhaps less on hardware. Moran concludes, “you can’t count on being the biggest fish forever, and sometimes you’re better off making yourself an indispensable part of the landscape.”
And there are multiple examples of companies that refused to change and made themselves extinct. Kodak, for example, knew all about digital photography but couldn’t wean itself away from film. To do so would have meant a short term hit in profits and disruption.
Not seeing threats and facing up to them is the best way to doom your business.
Blockbuster couldn’t seem to move away from brick and mortar stores when rent by mail and streaming were on the horizon. And one close to home for lawyers: Blackberry didn’t get that people would want mobile devices that would do more and more things. Not seeing threats and facing up to them is the best way to doom your business.
What does this have to do with law? Most of the law ecosystem is based on either the billable hour or contingency fee model. This reliance hasn’t changed in decades. most of the law is focused on serving the needs of those with big money or who have a substantial asset (a lucrative claim). And most of the work lawyers do is based on a labor intensive model where more is more. Where all legal work is bundled together and done by a single shop.
Granted, there are substantial impediments that make changing these models difficult. Unlike corporations, most law firms are run by consensus among strong willed partners making any sea change difficult. Law firms can only be owned by lawyers, creating an insular world that doesn’t necessarily see the need to change and resist it. Frankly, lawyers are making lots of money doing things the way they have always been done. As Richard Susskind famously put it. ” It’s hard to convince a room full of millionaires that they’ve got their business model wrong.”
And there seems to be little evidence that any sort of significant change is needed. Clients like the billable hour model. The contingency fee model seems to provide some rough sense of justice. Last year was a banner year for law firm profitability. So why think about change?
So why think about change?
There is reason to wonder whether we may coming to an inflection point where, like IBM and Microsoft, we have to face change and fundamentally reposition ourselves. The Big 4 is moving increasingly into legal and can supply not just legal “advice” but a whole range of business services, making them a one stop shop. Alternative legal service providers are equipped to better supply more repetitive legal needs. ALSPs can simply do a lot of legal related work cheaper and faster, making the unbundling of legal work not only doable but advisable.
Automation is making it possible to eliminate work that doesn’t take a lawyer to do but that many do anyway. And automation can also make it possible to serve untapped markets by making legal work more affordable.
There is pressure, albeit faint, to change law firm ownership rules. There are pressures to let legal professionals who are not lawyers do more. The ability to do remote work may, as Tom Mighell, and Dennis Kennedy, asked in their book The Lawyers’ Guide to Collaboration Tools and Technologies: “Aren’t collaboration tools logically leading us toward virtual law firms?”
Lawyers and law firms may have to recognize that they aren’t the biggest fishes anymore
All these market forces, and more we don’t even see yet, may require law firms to rethink themselves and pivot to new and different models. Lawyers and law firms may have to recognize that they aren’t the biggest fishes anymore. That they are not special snowflakes and that much of what they do is not an art form. That the practice of law may need to be redefined in fundamental ways.
Given the impediments and outright resistance to change of most lawyers, change could get bloody. But smart lawyers and well managed law firms should take a long hard look at themselves. What are the real risks to their business and operations? What lines of business may need to be dropped or the delivery of such lines rethought. Does the firm need to think more like IBM and Microsoft and make some hard pivots? Those that do may well find themselves, to paraphrase Moran, perhaps not the biggest fishes anymore, but at least an indispensable part of the landscape.
The other option: do nothing and hope for the best. Just ask Kodak, Blockbuster, and Blackberry how that worked out.
It’s always time, in the words of David Bowie, to turn and face the strain, however hard as that is.
Photo Attribution: Change Photo by Markus Spiske on Unsplash
