I Am Now an App™

[W]e’re writing these things that we can no longer read. And we’ve rendered something illegible. And we’ve lost the sense of what’s actually happening in this world that we’ve made.
Kevin Slavin, How algorithms shape our world, TEDGlobal (July 2011)

I finished my last post speculating that the business of law will be changed by programmers in the same way one might boil a frog. That is, it will happen slowly under the guise of software support for all of the decision making you have to do every day, and you’ll accept that support, incrementally, because you are a consumer. And I’m using “consumer” in a pejorative sense here, namely one who passively (and happily) accepts programmatic decision-making in most aspects of his or her life, such as refrigerators (e.g., handling cooling systems), cars (e.g., protection algorithms to eco-driving), financial markets (e.g., the 2010 flash crash), movie preferences (e.g., the Netflix prize), and healthcare (e.g., knowing whether you are headed to the hospital), just to name a very few things. So, thinking about how much of our day-to-day existence we’ve already ceded to software and algorithms (or will), it seems appropriate to consider how—not whether—the practice of law will be reduced to an app.

The title of this post is one part a wink-and-a-nod to those within and hovering outside of our industry seeking to capitalize on the notion that most of the work lawyers busy themselves with is reducible to a series of logical arguments necessary to execute a program, and one part a call to recognize how we, as lawyers, are contributing to the perception and actualization that I Am Now An App™. The mark is not about whether software or algorithms will subsume us as attorneys, lawyers, or counselors, but rather how software will change our clients’ perspective of our profession. This was, to some extent, the concern of Richard Susskind in The End of Lawyers? when he addressed disruptive technologies. [Fn. 1] And like Susskind, I am concerned that most of us aren’t prepared for what we’ve set in motion.

Marc Andreessen, co-founder of Netscape, wrote last month that over the next 10 years software will extend its disruptive tendencies to other industries, particularly those with a heavy “real world” component.

Software is … eating much of the value chain of industries that are widely viewed as primarily existing in the physical world. [¶] Health care and education, in my view, are next up for fundamental software-based transformation. My venture capital firm … believe[s] both of these industries, which historically have been highly resistant to entrepreneurial change, are primed for tipping by great new software-centric entrepreneurs.

It’s hard to imagine an industry with a heavier real-world component than the practice of law, or one more resistant to entrepreneurial change. And yet, it would seem that we are “primed for tipping.” Jordan Furlong, a fellow Slaw columnist, recently assessed the current situation as follows:

New providers and new technologies are not going to replace lawyers. But they are going to marginalize lawyers and render law firms mostly irrelevant. [¶] Lawyers are smart, knowledgeable, creative and trustworthy professionals who, unfortunately, suffer from poor business acumen, terrible management skills, wildly disproportionate aversion to risk, outsized revenue expectations, and a business model about 25 years out of date. The market won’t abandon them—they have unique and sometimes extraordinarily valuable skills and characteristics—but it will find the best use for them: expert specialists with limited influence over the larger process.
Furlong, Goodbye to all that Law21.ca (Aug. 26, 2011).

Whether lawyers and firms will be displaced as he suggests will be answered in time, but meanwhile, we can at least consider what he and others are suggesting are the new providers and technologies that will accomplish such a great feat.

Over the last two years, we’ve been inundated with suggestions that the Susskindian revolution is upon us, and that the practice as we know it is collapsing. But outside of alternative fee and business agreements (and the imminent death of the billable hour), what sorts of businesses have been responsible for these dire warnings? In other words, what have consulting prognosticators been touting as the source for concern and worry?

As best as I can tell, the following suspects have consumed much of the Internet’s time and attention (and are presented in no particular order):

• Nolo’s online legal forms
• Quicken’s Legal Business Contracts & Forms
• Business Integrity’s ContractExpress DealBuilder
• Wilson Sonsini’s Term Sheet Generator
• Linklater’s Blueflag
• Eversheds’ HR Dealbuilder
• HotDocs
• Exari
• Koncision
• Kiiac
• West Publishing’s ProDoc
• Westlaw’s FormBuilder
• Rocket Lawyer
• LegalZoom

The common denominator among these businesses is document automation, which just happens to be §4.1 of the Susskind playbook on disruptive technologies. But when I think about them in the context of I Am Now An App™, I wonder why all the fuss over this stuff? It’s not new technology; lawyers have been relying on forms and blanks for over a hundred years and some form of document automation for at least a good 15 years. Even Susskind notes as much. [Susskind, The End of Lawyers? at 102.] So why are we giving so much attention to these businesses, and how are they going to change our relationship with clients?

It would seem the answer lies in Susskind’s Pre-Internet | Post-Internet distinction:

Pre-internet business thinking saw document assembly systems as internal efficiency tools mainly for law firms; post-Internet, we can see that this technology is a power vehicle for making legal know-how widely available on an online basis. [Id. at 103.]

In short, systems designed to make lawyers’ work more efficient are, post-Internet, being directed outward, toward the client, and this is disrupting (or has a greater potential to disrupt) the attorney-client relationship.

In my opinion, the disruption began many years ago with the Quickens and Nolo Presses, who were allowed (or won the right) to provide automated services directly to consumers for the simplest of legal transactions, such as wills, NDAs, and other business documents. LegalZoom and Rocket Lawyer are merely extensions of those services, but not necessarily also-rans because they add a different component, namely Web 2.0 savvy and legal online help (or essentially, a referral service). Either way, they are marginalizing some lawyers because they tap directly into the current DIY mentality of many consumers. [Fn. 2]

The other services listed above are business-facing, so they tend to be used by lawyers to facilitate workflow, but their long-term effect is no less disruptive, and this is where I see a greater threat than self-help divorce, simple wills, and NDAs.

For business-facing services where attorneys are considered the primary user, it seems logical that the user (read: attorney) is less of a customer and more of a sensor for the ecosystem. One of the benefits of having all of these smart, educated lawyers using and interacting with contract drafting and forms automation software is data collection. The more data the system can collect from the user, the smarter the system. And that collection has to occur passively because most attorneys won’t take the time to rate a form, suggest changes based on certain fact patterns, identify which form is most relevant, provide a decision-matrix, etc. If a forms-automation business is looking to scale, obtaining data—that is, the user’s intellectual capital—passively is an effective means of doing it. And as long as you, the attorney, are deriving a benefit, namely a more efficient practice, why should you care? [Fn. 3] It’s this feedback loop that creates an opportunity to sell services directly to the consumer, which facilitates the disruption.

Interestingly, the Internet has been so focused on forms automation lately that it’s pretty much ignored §4.5 of the Susskind technology-disruption playbook: online legal guidance. For some segments, I think this presents a greater opportunity for disruption than forms automation, but not in the same (negative) way.

Consider, for example, the online corporate ethics and compliance provider ELT, which was founded in 1997 by and relies exclusively on the significant intellectual capital of Littler Mendleson. In January of this year, Littler, through ELT, partnered with The Riverside Group, a private equity firm, to grow the business globally. ELT may represent a path to consumer-facing success for certain vertical businesses, assuming of course one can convince partners and associates in the firm to produce content on a schedule without taking credit for it (one aspect of Littler’s publishing success) and in the manner required by the affiliate (which is run by non-lawyers). Although ELT represents a disruption in the attorney-client relationship because it takes legal advice directly to the consumer through online classes and dramatic videos, it’s a good kind of disruptive. It’s one that allows the firm to participate in the financial success of an affiliated business and reach a larger consumer base than it might as a firm.

Keys to success, of course, might start with (1) consolidating intellectual capital [Fn. 4], (2) determining what services could be off-loaded to clients, (3) developing “guaranteed by lawyers” systems, such as ELT’s Legal Engineering™, or (4) embracing technology as an extension of the firm’s capital, not necessarily its brand (but recognize that the imprimatur is still valuable). Susskind adds:

I have identified three keys to success when it comes to making money from online legal guidance. First, for an online legal service to generate serious revenue, its use must actually add substantive value to clients. Unless clients think extremely highly of the systems and would be near panic stricken at the prospect of their withdrawal, then there is little chance they will actually pay for them. Second, the systems must not be easily replicable or competitors can easily mimic their development and … the prices of rival online legal services will tend rapidly towards zero…. Third, for law firms to charge for online legal services, it must not be perceived that these systems are internal systems that are simply being recycled for clients’ use. In that event, clients may feel cheated and will argue that such services are a natural (but non-chargeable) extension of the services traditionally being provided.
[Susskind, The End of Lawyers? at 125.]

Perhaps more than forms automation, online legal guidance requires lawyers to come to terms with I Am Now An App™ because to be successful they would first have to acknowledge there are aspects of the practice that require their knowledge and experience but in which they, as a person, can be disintermediated. With forms automation it happens slowly, without their consent, again, like boiling a frog. But convincing them to voluntarily off themselves so they can make money a different way is a very different, and difficult, proposition. Nevertheless, I do believe some firms will follow Littler’s footsteps and seek greater disintermediation as a means of global expansion.

I would be remiss if I didn’t mention Scott Greenfield’s recent reaction to the idea of “robot overlords,” as his thoughts represent a certain segment of the legal practice culture:

Technology may well bring useful tools to our practice, but they do not dictate our practice. The vultures who use technology in an effort to infiltrate the practice of law and medicine, to circumvent the judgment and advice that distinguishes what real professionals do versus the bot that spits out factoids, want to convince you that they are the future, that they own the future, that they own us. This is no more law than it is medicine.
[Greenfield, The Robot Overlords Are Here, Simple Justice (Sept. 4, 2011).]

And indeed, there are practices of law that will defy programmatic application for the time being, such as family, criminal law, and other areas where being an advocate and counselor (or therapist) is tangible. But make no mistake, this cannot be said for many other areas, such as within immigration law, that are capable of being defined by a routine workflow and little discretion. [Fn. 5]

It is good to bear in mind that much of I Am Now An App™ is a problem of our own making. As Kevin Slavin’s quote at the beginning of this post suggests, we are writing things we can no longer read. And I don’t mean that we can’t read statutes, judicial opinions, or briefs or represent clients based on all of this information, but the volume of the information being generated by lawyers, judges, legislators, etc. can no longer be found, digested, disseminated, or understood without software and algorithms. Much of modern practice requires software intervention, and it is only natural for today’s client-cum-consumer to expect technology will afford them some savings and relief within the traditional billable-hour model. It is also natural that we will push the boundaries of programming into every inch of the attorney-client space suitable. Whether you’ll be on the right side of the change will simply depend on your perspective of what you do today.

Good luck.

_______________________

[Fn. 1] To be clear, “disruption” refers to the displacement of attorneys or aspects of the practice of law through technological advances. It does not refer to the manner in which the implementation of technology within law practice has altered the way lawyers think, which has been adequately addressed in The Document Life: Why “lawyer” is moving from a profession to a metaphor.

[Fn. 2] I’m convinced that automated legal forms have given consumers permission to accept the idea that there is nothing special about many legal documents, and consequently a lawyer’s imprimatur is, essentially, a waste of money.

One benefit to the use of computerized forms revolves around a concept that is ingrained in the American mind—the ability, if one so desires, to make full use of the legal system without the interference of a third-party, i.e., a lawyer. Citizens can research their own particular legal problem and represent themselves pro se. However, the law can be an exclusionary profession, and the process of legal research may intimidate the average consumer. By using computerized forms instead of consulting an attorney, consumers may be able to limit the amount spent on remedying a legal problem. Printed forms with very broad instructions are available to the average consumer, but paper can be inexplicably intimidating in comparison to computerized forms. Computerized forms not only offer a broader range of help options than printed forms, they are also more easily edited than their paper counterparts. Instead of buying a separate set of forms for each possible situation, legal software typically contains a variety of legal documents.
Scott, Filling in the Blanks: How Computerized Forms Are Affecting the Legal Profession, 13 Alb. L.J. Sci. & Tech. 835, 838-39, 843, 853 (2002-03).

[Fn. 3] This is already happening with legal research, which is business-facing. For example, WestlawNext, which is marketed as an evolutionary step in legal research that provides greater assistance to human-decision making by providing you more “relevant” results, feeds your search queries and decision-making back into the system to help determine relevancy for every other user. And you’re glad to do it as long as the system gives you what you believe to be are the most relevant and accurate results.

[Fn. 4] As a publisher, I have often advocated for firms to let us come in and review their intellectual capital to determine what could be consolidated, streamlined, and published in an effort to capitalize on the brand and find additional revenue streams for the firm. Most advances have been rejected, but in the one instance it wasn’t, the firm discovered a number of inefficiencies and inconsistencies in the same practice group across multiple offices that made just the consolidation and clean-up effort worthwhile. From what I know about firm KM, my opinion remains unchanged: firms need a C-level IP and content manager that is looking for ways to monetize firm IP.

[Fn. 5] Within a day, Scott Greenfield followed up his robot overlord post with another recommending the creation of a new position within the practice of law: the Legal Practitioner.

I propose the creation of a new professional position, the Legal Practitioner. It’s modeled after the concept of the Nurse Practitioner/Physicians’ Assistant. It would require specified and regulated education, though significantly less than would be required for a lawyer and at a substantially reduced cost. It would require testing and licensure to make reasonably certain that its practitioners possessed minimum competencies and that the public was safeguarded from incompetents or, in the alternative, had redress.

The function of these Legal Practitioners would be to provide representation to member of the public in non-litigation aspects of the law, such as wills, contracts, uncontested divorces, real estate closings. The most critical function would be to distinguish between those legal functions they are fully capable of performing and those that require an attorney.
Greenfield, The New Position: The Legal Practitioner, Simple Justice (Sept. 5, 2011).

The concession further clarifies that the debate about robot overlords is merely one about the necessity for meat in the consumer-software sandwich.