What if the Next Big Thing Isn’t a Thing at All?

Garry Wise is fond of saying that “the internet and technology are the great equalizers,” in the legal world. They allow smaller players, and newer players, to gain ground swifter than 20, or even 10 years ago, making them a growing threat to larger firms.

Larger firms however, don’t see it that way. They still view themselves as kings of the hill with competition only coming from equal-sized outfits – much like American car companies in the early 1970’s.

When Japanese car makers started to export product to North America, the cars were inexpensive and of not the highest quality. But they found a niche in the marketplace, a niche that they then used as springboard to move up the value chain. We see the results today. Harvard Business Professor Clayton Christensen is famed for pointing out that disruption always starts at the low end of the market, where the incumbents don’t notice it or they outright ignore it. No one notices the disruptors until it’s too late, at which time they’re strong enough to kill off the incumbents.

Is there a cautionary tale here for major law firms across Canada?

The answer is “yes”.

Law firms that will be successful – and still in existence – in 2025, will have strong managing partners who take note of the disruptors (think Cognition, ConduitMiller Titerle, Skye Law, Anticipate Law, Wise Law and many others) and the fact that many of these upstarts rejected big firm ways of practice. While these firms are small now, they are chipping away at large firm work by being savvy enough to see the delivery of legal services in a new light, unencumbered by, as one upstart called them, “the barnacles of large law firm practices.” These new players are to large law firms what Japanese car makers were to American car makers in the early 1970’s. Add better technology and lower cost third party service providers to these upstarts and the playing field becomes very different.

In other words, it’s a mistake to look for the one “big thing” that’s going to change the profession; it’s better to follow the words of Cisco Systems:

What if the next big thing, isn’t a thing at all? It’s lots of things, all waking up. 

Comments

  1. Mitch I think you are wrong on the Japanese cars. Japanese cars have always been as good or better quality than their US/Canadian counterparts. They were cheaper though. Who can forget the Corvair (Nader’s Raiders) and other fiascos.

    As well and very important the Japanese (as well as Korean) market has always been closed to North American car makers. And this nothing to do with quality but with restricting trade. US car makers have trouble even breaking into the luxury market. As to the cheap end of the market in Japan it was not worth it in labour costs terms. Therefore not profitable to export cheap and no good US cars. Not quality though issue at this time. Just in time inventory and that whole craze that migrated from Japan with its other counterpart the Quality Management trend, were made to reduce costs. But by that time the US manufacturers were fighting for their lives against all the European makers and South East Asian manufacturers and it was at that time it was quality against the very poor quality in North America and higher prices. And we know who lost.

    The above does not detract from your argument about law firms, though.

  2. Hi Rick.

    I always thought that the first Japanese cars in North America were sold based on price more than high quality – but I take your point. Thanks for commenting.

  3. Hi Mitch, here is the easiest article I found on the topic and an excerpt:

    Addressing market access barriers in Japan through the WTO: A survey of typical Japan market access issues and the possibility to address them through WTO dispute resolution procedures
    Southwick, James D., Law and Policy in International Business31. 3 (Spring 2000): 923-976.

    “The JFTC’s 1993 voluntary survey of relations between Japanese auto manufacturers and dealers found several issues of concern.33 Unlike in the United States, where Japanese automotive manufacturers entered the market by signing up existing Ford, General Motors, and Chrysler dealers to also sell Toyota, Nissan, and other Japanese products, the JFTC survey found that very few Japanese auto dealers carried foreign cars in addition to their traditional Japanese lines. Although dealers’ contracts with the Japanese manufacturers no longer specifically prohibited the dealers from carrying a competitor’s product (such prohibitions were in the dealer contracts until 1979), nearly half of Japan’s auto dealers did not think that they were free to handle a competitor’s product. Moreover, Japanese manufacturers offered dealers rebates based on the dealers achieving sales levels near their maximum capacity. The dealers therefore were at financial risk if they chose to carry a competitor’s products. The survey also found that many dealers relied on the manufacturer for credit at favorable terms, and in many cases the manufacturer owned an equity interest in the dealer.”

  4. Rick, I think you’re missing the forest for the trees. The major point is that large, established industry players stand to lose a lot by ignoring disruptive trends that start small, at the bottom. The Japanese/American car industry analogy is just that, an analogy.