The Practice of Law Does Not Need to Be Disrupted

I get a lot of pitches from startups, and nearly every one of them claims to be “disrupting” something in the legal industry. I got an email the other day from a startup that claimed it was going to disrupt “legal business development.” Another startup recently told me it was going to disrupt “solo and small firm practice.” Somehow.

I imagine there is an endless string of Silicon Valley launch parties at which clueless entrepreneurs talk about what they are disrupting.

Joe stepped up to the bar at “Diss-rupt,” the swank lounge that was disupting the craft cocktail industry and hosting tonight’s launch party.

“What can I disrupt for you?” asked the bartender. Joe ordered a Bud Light, and a moment later, the bartender handed him a yellow drink in a cocktail glass. He took it and walked over to an alcove lit with blue neon where Matt was casually listening to an earnest guy in a plaid suit. Joe sat down on a plush Aeron footsool and tuned in.

“Bro,” the guy was saying as he gestured with a red Solo cup, “we’re going to disrupt the legal filing industry with our digital manila folder solution, RedRope.io.” Joe took a sip of his cocktail, which tasted like Bud Light mixed with concentrated lemon juice, and waited for a chance to butt in with a plug for his own startup, “Transcriptz.fm,” which was poised to disrupt the transcript-reading-at-trials industry.

Most of these would-be disruptors seem to have an “As Seen on TV” perspective on what it is like to practice law.

In other words, they have been told the legal industry is ripe for disruption, so they go find something about law practice that does not make sense to them, and then they build a “solution” to what they perceive to be a problem. The business of disrupting law practice is a crowded field of solutions looking for problems.

Legal startups with good ideas exist, but they are few and far between. And if they think they are going to disrupt anything, they are probably delusional.

The Legal Industry is Not So Easily Disrupted

Setting aside the question of whether or not it is a good idea to disrupt (or reinvent, if you like) the legal industry, the law is impressively resistant to disruption. I do not mean that lawyers themselves resist disruption (though many do), but that the practice of law itself is difficult to disrupt.

There are many reasons for this. The practice of law is regulated, making it difficult for non-lawyers to provide legal services without breaking the law. And every jurisdiction is regulated differently, meaning a disruption in one state may not spread across the border. Those regulations are mostly well-intentioned, too, structured to protect consumers (even if they sometimes seem not to be doing a particularly good job of it).

In law practice, experience often matters more than brilliance. So does reputation, which, combined with experience, can lead to faster and better resolutions of legal problems than any software we can imagine. An app cannot replicate those things.

Law practice is also, at heart, a personal-service industry. (Nobody talks about disrupting the massage industry — at least not that I have ever heard of.)

Related“The Problem with Disruption and Law Practice #ABATechShow”

There are a lot of reasons why it is especially hard to disrupt an industry like this. It may be impossible. And that may be a good thing.

Who Says the Law Needs to Be Disrupted, Anyway?

It seems to have become a generally-accepted Truth that the practice of law has to change. So says ReInvent Law, for example. And, presumably, most of the people speaking at Harvard’s “Disruptive Innovation in the Market for Legal Services” conference. The form this change must take is hotly debated, but the necessity of change is not. At least, not much.

But look at who says so. Susskind, Knake, and Katz — three law professors who have hitched their careers to the future of law. The practice of law must change for them to have a future career, it would seem. The CEOs of most legal startups say so, too. They must say so, if they want to secure venture capital. General counsels say it must change, although they mostly just mean “get cheaper.”

Everyone who says the future of law must change, in other words, is pretty invested in that change.

A Slow-Motion Revolution

But the thing is, the law is changing. It always has changed. Slowly, to be sure, and incrementally, but steadily. Jordan Furlong made a list of some of the recent changes that add up to, in his words, a revolution. A slow-motion revolution. And I don’t dispute that. Technology, the glut of new lawyers, structural changes in BigLaw, alternative business structures, the growth of intelligent forms — all are leaving a lasting impression on the practice of law.

The future of law is something lawyers definitely need to be thinking about. Lawyers obviously are thinking about it. Our profession faces challenges, and we will all play a role in figuring out how to solve those challenges.

But disruption probably does not play much of a part. As Ryan McClead points out at 3 Geeks and a Law Blog, “We know what the next great innovations in legal service delivery are, even if we don’t know exactly how they are going to work or what they are going to look like.” Lawyers just need to adapt so they aren’t left behind.

As Furlong pointed out, that is exactly what is happening. Slowly, incrementally, and steadily. And without disruption.

Featured image: “Strategy obstruction challenges as a train track that is broken” from Shutterstock.

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  • Right. But here’s a possible soft spot: “The practice of law is regulated, making it difficult for non-lawyers to provide legal services without breaking the law.” – AI (computational law) which displaces lawyers — makes them expendable — can be properly described as a disruption, if not a destruction, of the human practice pf law.

    • If we’re talking about the Singularity, I agree. If and when we have real AI, all bets are off. But that will be a disruption of humanity, not just law practice.

      What we have now are algorithms that are programmed, maintained, and augmented by lawyers. They don’t make lawyers expendable; they just change lawyers’ job descriptions. That’s change, not disruption. At least not yet.

      • Concur. As one panelist stated in that conference at Harvard, most tech is just “absorbed” (even if slowly) by the profession. As for the Singularity, something short of that might begin to eliminate (or shrink) the market scope for lawyers.

  • “Law practice is also, at heart, a personal-service industry. (Nobody talks about disrupting the massage industry — at least not that I have ever heard of.)”

    I think Sam nails it with this statement, particularly for the solo/small firm that represents individuals, families, organizations and businesses where a personal connection is important. How does Legal Zoom guide a client through a difficult family situation? Is there a document for that? Sometimes all a client wants to hear is that if they have a problem, you, the lawyer can help.

    Technology can help me provide better legal services, but I doubt it will replace me.

    • I agree Cameron that things like Legal Zoom aren’t going to put the small firms out of business. Turbo Tax was supposed to put the small solo accountants out of practice and that didn’t happen.

      One thing to remember about services like Legal Zoom is that it’s not that people can’t do these things on their own. They simply don’t. The difference between people not being able to do something and simply choosing not to do it has been around forever and isn’t going anywhere.

      • The difference between people not being able to do something and simply choosing not to do it …

        I was actually thinking about this in the car this morning, too. There are computers all around us. But how often do you sit through an automated phone tree instead of just mashing 0 until you get a person? Or refinish your own bathroom instead of calling a contractor?

        Maybe the second example is closer to the current legal market. There are a lot of legal problems people can solve on their own, if they want to or are ambitious enough. But a lot of people would rather get help. I know I can probably remodel the kitchen myself, but I really don’t want to. And besides, I know a professional would do a better job.

        Many people with legal problems don’t really want to solve those problems on their own. They want help, and so far, at least, computers aren’t all that helpful. Online forms are still DIY.

        When you can go to a computer and get the same sort of help you can get from a lawyer, that will be a disruption. But I suspect that kind of sophisticated AI is on the other side of the Singularity, so I’m not going to lose sleep over it.

        • One thing that people won’t be able to get from AI in the foreseeable future is the feeling of re-assurance/personal insight that they receive from attorneys. In my family practice people looked for that personal side almost as much as they did the actual legal representation. Since AI won’t be replacing that anytime soon I won’t lose any sleep either.

  • Paul Spitz

    Agree and disagree. If we distinguish between the practice of law and the business of law, I think it’s fair to say that the business of law needs to be disrupted, while the practice of law does not. But the business of law is slowly evolving, in terms of technology, different billing practices, etc. The disruption is happening, but over time. Biglaw is like Dead Man Walking — they don’t even realize they are on the way out. My practice area — general business/corporate law — is no longer practiced at big law firms. Their clients, corporations with revenues in the 8 figure zone and higher, have all brought general counsel in-house. All that’s left for Biglaw corporate departments is highly specialized and arcane work. The business of law for Biglaw corporate has been disrupted quite a bit.

    But the practice of law, yep, I agree it does not need to be disrupted, nor should it. These DIY document websites, they aren’t providing something superior. They are providing something profoundly inferior, and while they appear to be lower-cost, that lower-cost is illusory. Because the customers don’t know what they don’t know, and after they are done fixing all the problems they created because they tried to do it themselves, they end up paying more. I see this quite a bit with my business practice serving startups. These founders hear that LLCs are cheaper to set up than a C corp, so they go to the DIY site (or worse, they go to their bank manager or accountant), and set up an LLC. Then they find out that venture capital firms cannot invest in LLC’s, so in order to get the VC money, they have to pay a lawyer to set up a C-corporation, and then merge their LLC into the C-corp. They would have saved a lot of money at the start by just going to a knowledgeable lawyer and setting up the C-corp. (although there are supposedly sophisticated Biglaw firms that don’t know that either, and are setting these guys up with LLCs).

    So ultimately, people try to go the DIY route with you-know-who, and they get burned, and they come back to us and pay to DIR (do-it-right). Darwinism at work. It’s a marketing issue for us — we need to get the message out there that you-know-who is a markedly inferior product, and will cost them more money in the long run. We fix DIY mistakes…for a price. It’s also a competition issue for us. I think that every state and local bar association should be filing grievances against the DIY companies, claiming that they are engaging in the practice of law without a license. We should be going after them with guns blazing, and put their sorry butts out of business. We should disrupt the crap out of them.

  • I guess it depends what you consider “disruptive.” Increased public education about ADR would be tremendously disruptive to the many family law practitioners whose bread and butter is litigation. (Please note that I am NOT claiming litigation is never appropriate in family law, but I do think it is significantly overused.) I am sure other practice areas have similar opportunities to dramatically change how client concerns are addressed — sometimes with technology, but sometimes simply by reimagining how personal services can be delivered most effectively, outside of the traditional frameworks.

  • Terry Williams

    The historically high profit margins, the massive inefficiencies in the way law firms work, and the degree to which the profession is protected from new entrants by legislation & regulation suggest to me that there is definitely room for disruption. There are new business models emerging all over the world, and while these are growing at different rates, there is no question they are taking share from traditional law firms. Technology is really only getting started, and I don’t think you need to look at the singularity before that will be truly disruptive. Consolidation and insolvency are two outcomes that we are already seeing. The profession is changing structurally, and in ten years will look very different. The degree to which this is evolution v disruption is to my mind an exercise in semantics – big change is here.

    • If we look back in five or ten years and realize that a huge chunk of lawyers have had their jobs replaced by algorithms or are doing fundamentally different work, we can call it disruption.

      In the meantime, I’m happy to admit that, in part, I’m just really annoyed by the overuse of the word “disruption,” especially in the legal industry, and especially by people who seem to have no idea what it means to deliver legal services, much less disrupt that delivery in any meaningful way. But I also think it is not the right way to describe what’s happening. Law practice is evolving, sometimes drastically, but lawyers aren’t being replaced en masse.

      That could change, of course. The most disruptive thing on the horizon may be taking doc review away from lawyers, either by reclassifying it as “data processing and computer services” that can be done by non-lawyers, or by predictive coding. That would definitely put a lot of lawyers out of work.

      • Paul Spitz

        “Disruption” is over-used by tech startups on a widespread and routine basis. For example, is Lyft really disruptive? It’s basically a gypsy cab service, something that has been around for decades. Is Uber really disruptive? It’s basically a car service, something that’s been around for decades. What’s the innovation? That you need a smartphone to use the service? Big whoop. What’s really going on is that these companies are trying to undercut their rivals by ignoring the regulatory system that is in place and applicable to their business. So yes, I guess that is disruptive, in the way that any law-breaker is disruptive to society.

        • myshingle

          I don’t claim to understand the meaning of the term disruption but I do think that it potentially applies more to Uber than what’s happening in the practice of law. True, Uber is a car service but it differs from prior service models because service is provided by crowdsourced labor rather than a central regulated entity. And Uber has forced changes in the way taxi service is provided; since Uber launched in DC, taxis have rolled out credit card processors in their cabs quickly to try to compete. In law, we’ve always had independent providers – solos and smalls – so many of these crowdsource/sharing economy models like Air BnB, Uber and ZipCar don’t necessarily have analogs in the legal industry.

          • Paul Spitz

            I’m not so sure the crowdsourcing aspect is that new. I suspect that if you look at most taxi operations, you will find that many of them use independent contractor drivers, rather than employee drivers. Uber’s advantage over existing competition is twofold — the first is that Uber refuses to abide by the regulatory scheme that governs it, and the second is that Uber doesn’t need to survive on revenue and profit. I think I read yesterday that Uber has raised $250 million in venture capital. If I had $250 in venture capital, my legal fees would be a penny a day, and I could work a 1-day year. And I’d have a really cool office, with a professional chef cooking meals for me and my employees. When companies rely on venture capital to pay for their operating expenses and expansion, they are less focused on operating lean and developing and implementing sound revenue-generating strategies. Uber will hype their service for another year, then go public, and all the investors will be extremely rich. They can cash out and will have even less incentive to build a sound company.

      • Sam, I agree with most of your points especially about the overuse of the word disruption – as a disclaimer, this is coming from an entrepreneur with a product directed towards improving the quality of the Attorney-Client interaction – However, where I disagree with you is that technology has already impacted the legal industry in several ways and that was absolutely needed. Just like other industries there have been some major improvements in productivity, advertising processes, communication, and practice management to name a few areas of improvement. ( with some negatives as well)

        So, is there room for massive “disruption” as advertised by Reinvent Law and its followers and a bunch of Silicon Valley entrepreneurs? probably not in the short term and maybe in the long term.

        But certainly, you can’t deny the fact that there have been some improvements in much needed areas and that this is a trend that will continue in the years ahead.

        The “Disruptors” face a much bigger problem which is the lack of exit strategies that will keep VC’s away from a feeding frenzy. Thus we will not see the influx of ridiculous “disruptive” concepts in the Legal industry as the “disruptors” predict – ( although there are some already)

  • Sam, thank you for saying what I’ve been trying to say for a long time about the people who are insisting that the law needs to be deregulated – they’ve nearly ALL got a financial stake in deregulation happening.

    That’s not to say that the current system is ideal, but as I addressed in a two-part post on my blog, those who advocate for dramatic deregulation so frequently get away with hyperbolic or apocalyptic predictions are never really called out.

    Article can be found at http://www.thecyberadvocate.com/2013/12/10/who-wins-non-lawyer-ownership-pt1/

  • Sam, thanks so much for this piece. I find it a bit surprising that entrepreneurs persist on offering solutions to problems they perceive (but did not verify with their target market).

    Though we can argue if one aims to disrupt law practice industry, most likely (s)he would not be talking to attorneys (as such disruptive solution would, in theory at least, replace the need for attorneys).

    On the other hand, if these entrepreneurs you encounter so often aim to SERVE the legal industry, they’d better ask attorneys about their real-world day-to-day needs in law practice.

    Thanks, really enjoyed it!
    Ivan

  • James Peters

    A fair number of people in this space think disruptive = innovative = different in some way shape or form = using computers = etc. It doesn’t. The vast majority of developments in the legal services industry are much better classified as sustaining innovations (the market structure doesn’t change as a result of these developments – no matter how much of a breakthrough they may seem to be). A fair number of people also don’t know/forget that inherent in disruptive innovation is the idea that new entrants provide an offering that is lacking something that incumbents are providing. If it was superior it would make absolute sense for incumbents to respond and crush those entrants. That’s not disruption.

    Probably right that no one talks about disrupting the massage industry. That, however, doesn’t stop people from innovating, even in that space. Examples range from business models (low cost, no frills chains have blown up over the last 10 years) to crazy $4000 massage chairs at Brookstone (funny enough massage therapists don’t go after them for unauthorized treatments, but that’s another story…)

    It’s almost as overdone today to bash those talking about disrupting the practice of law as it it to spout “innovate or die” mantras. Perhaps in typical layer fashion we are to hung up on the words or the arguments to stop and consider some of the real issues facing the profession as noted above.

    How can a profession that provides something so important under-serve so greatly?

    How can that profession treat the people it serves so poorly that it consistently has
    satisfaction and respect scores near the bottom of all professions?

    Would disruption fix this on it’s own? Probably not, but I’m not sure that’s even relevant as the legal profession is almost certainly not headed for any true disruptive innovation in the near future. Could it use it? Maybe… I do believe though that the false dichotomy regarding innovation in the delivery of legal services is, at the very least, not doing anyone any good.

  • Completely agree that the overuse of the word dilutes its value made it somehow irrelevant.
    I now have similar aversion for “pivoting” (instead of just changing) and starting to really get annoyed with everybody using “big data” even when it’s a “perfectly normal volume of data”.

    However, just like some companies really wrestle with “humongous data” issues, some companies, start-ups or not, are changing the business and practice of law.

    Finally, in the UK, the main disrupter might even have been the government with the deregulation f the Legal Market.
    We haven’t seen the full effects of that change yet but it is a massive step (forward in my view) and certainly s things up over here!

    • Paul Spitz

      Another humongously overused word: delicious. I hear it so frequently, it almost produces a reflexive need to vomit.

  • Yep.

  • Preston Clark

    Sam, I read the title and was ready to raise hell in opposition. But alas, I agree. “Slowly, incrementally, and steadily.” Since I’m still in search of something to disagree with here, I should point out that the Massage Envy franchise is viewed by many as to have disrupted the massage industry. That’s all I got, my friend.

  • Also, the glut of new lawyers that many people site as a “disruption” to the industry is going to balance itself out. Law school enrollment has dropped substantially since 2010 and the surplus of attorneys will slowly begin to shrink back to the norm. Here’s an ABA article re: the drop in enrollment. http://www.abajournal.com/news/article/law_school_enrollment_down_11_percent_this_year_over_last_year_data_shows/

  • kathleenryanpc

    Great read…really interesting the perspectives people take.