Dreaming of the Future of Law Firms

In my previous post, I identified a number of themes that weaved their way through the sessions I attended at the annual conference of the International Legal Technology Association (ILTA) in August. I did note, however, that one session, entitled Do Robot Lawyers Dream of Billable Seconds?, was particularly provocative. I therefore opted to devote a full post, namely this one, to that one session.

The panelists were (in alphabetical order) Stuart Barr of High Q, Joshua Lenon of Clio, Michael Mills of Neota Logic, and Noah Waisberg of Diligence Engine. The panel was ably led by Ryan McLead of Norton Rose Fulbright and also of the 3 Geeks and a Law Blog.

The session generated a veritable “tweet storm” as it took place, but, more interestingly, in addition to Ryan having written a summary on the 3 Geeks blog, each of the participants afterwards wrote follow-up posts about the sessions:

I don’t anticipate that most readers will have the time to read all four of these, although you are warmly encouraged to do so. I would suggest, however, that, if you can read only one item about this session, it be Ryan’s synthesis and reflection, entitled The Exponential Law Firm.

An often-quoted bromide, attributed to various individuals including Yogi Berra and Neils Bohr, is that “prediction is very difficult, especially about the future.” Each of the panelists noted that particular peril, but, happily for us, plunged in regardless.

Here’s my synthesis of the different views expressed at this session and in Ryan’s follow-up article, along with a couple of related observations:

  • Peter Diamandis’s keynote address (which I noted in my previous post) talked of the “six D’s,” which all start with, and flow from, digitization of content
  • Digitization of “law content” has already started
    • o Just look at what has happened already in e-discovery
  • It is almost impossible to see exponential change, except in retrospect
  • The effect of digitization will be the same in our industry as in all the others, namely, exponential change
    • o As Michael pointed out, despite what lawyers might think or how they may currently be acting, we are not immune to the forces that have transformed far larger industries
    • o However, the general reaction seems to be that “the practice of law, which is a profession, isn’t affected by the same trends as in industry”
  • “Lawyers and IT personnel, as a general rule, do not think much beyond the next immediate hurdle. They approach the world linearly, solving problems as they arise, and planning for a steady progression of linear events.” (Ryan)
  • The way that legal services are currently delivered — by (expensive) legal experts, usually from (comparatively expensive) offices (which means a number of fixed expenses) — means that the current players in the legal market have significant legacy costs, which hamper their ability to do things differently
    • o The example of Blockbuster and Netflix was cited more than once
  • The tyranny of the billable hour, delivered by lawyers who practise in a partnership structure that cannot retain any earnings for, say, R&D but which must distribute its profits every year, makes change difficult
    • o Every dollar invested in the future is one dollar less in the partners’ pockets today
  • Many people are resistant to change, but studies have shown that lawyers are even more so
    • o How many times have we heard the comment, “I didn’t go to law school in order to do X!”
  • Much current discussion focuses on the need to innovate
    • o But as Bruce MacEwen at Adam Smith, Esq., recently noted, true innovators don’t focus on innovation as an end in itself but rather on delivering exemplary customer service
    • o Law firms that wish to innovate, however, often focus on their own needs, not on client needs
  • Ever greater computing power, harnessed by market entrants who are not burdened by legacy costs or the confining influences of either the billable hour or the partnership structure, gives these newer players great flexibility
    • o At a number of different sessions, it was noted that it was just a matter of time until IBM’s Watson would be trained upon the legal market

The prognostication, then, would seem to be grim. The panelists were, however, rather upbeat in their predictions of where this is all leading us.

Stuart Barr envisages the emergence of “new structures that provide a framework for innovation, more like a tech start-up than an old fashioned institution. Firms will be looking to hire entrepreneurs, technologists, and big thinkers to help them.”

Michael anticipates that the successful firms are the ones that will figure out how to “leverage without associates and bill without hours.”

Joshua said that, “It’s worth considering that the distinction between ‘big law’ and ‘small law’ may not exist in the future. We’ll all be part of a new system that I would call ‘swarm law.’”

Noah was, if anything, the most optimistic of the bunch. He noted that legal problems are, if anything, growing in complexity and hence there will be a continuing need for experts to solve evermore complex issues. “Efficiency,” he said, “can drive demand, which can then lead to more legal work.”

So, where does that leave us? We know that the death of the billable hour has been predicted for some time now, yet those pesky tenths of hours still persist. Will change be as rapid as in the changeover from Blockbuster to Netflix, or is there some underlying inertia in law, the result of which is that the changes here will be slower than in other markets? All we can do is wait and watch.


  1. Thanks for that synopsis, John. A couple of thoughts: I agree – our profession will need to adapt. We are no more immune from changing client expectations than anyone else. Losing sight of that will not help us better serve our clients. We need to recall that while what we do is very important, there are many ways to do it. The more our services are delivered in ways that resonate, the more our value is made visible and the more we play our role as a profession. Client expectations are, indeed, key and we need to meet them. I am optimistic that we can do that without undermining those principles and values that are central to the lawyer-client relationship.

    And for all lawyers who think “this is not why I went to law school”, what if we worked closer with other professionals who did go to school to do those things? might we be able to do a better job if we did? and enjoy our work a little more?

    Thanks again for this post. And I for one am on the optimistic end of the spectrum.

  2. 2 Mistakes: (1) lawyers write the solutions to the unaffordable legal services problem, but lawyers don’t have the necessary expertise (including experts in law office management), therefore they don’t understand the cause of the problem; and, (2) the cause is the method of delivering legal services; not the absence of the right improvement to the method.
    The required solution is to develop a range of specialized support services for all traditional areas of legal services. That process will move the legal profession from its present “handcraftsman’s method” of delivering legal services, to a “support services method.” No law firm or lawyer need change-just decide whether to use the support services instead of relying entirely on the its own lawyers to do all of the work.
    That is what has been done by all professions and by all types of competitive manufacturing of goods and services, that must cope with a level of pressure that produces a constant fear of not surviving.
    Law societies don’t have such fear because Benchers are part-time amateurs, without risk of suffering personal loss to the problem of unaffordable legal services. Therefore the necessary innovation has not happened. As a result, most junior lawyers and their families face a very negative economic future, and do so at a time when people have never needed lawyers more. If legal services were affordable, lawyers would be overwhelmed with work.
    Support services produce much greater cost-efficiency and lower costs of production because: (1) they are much more highly specialized than is any law firm; and, (2) they have greatly scaled-up volumes of production that produce the economic forces that the much lower law firm production volumes cannot obtain. LAOLAW at Legal Aid Ontario is based upon this strategy. As a result, it is the best legal research unit Canada. And, even though it has the poorest of resources, it has been created in the worst possible place in the legal profession for such innovation. It happened because the necessary pressure was there to make it happen. Law societies don’t make such innovations happen because they are not under any significant pressure to make such innovations happen. Therefore they have let the legal profession price itself beyond the majority of the population.
    As a result, all lawyers in Canada are vulnerable to the opportunism that “alternative business structures” represent. In spite of what their advocates say, ABS’s cannot solve the problem.
    So now, and at the next Bencher election, demand more competent performance from Canada’s law societies, instead of looking to experts in law office management for solutions. They cannot provide them. The solution has to be created by good law society leadership, that changes the method of delivering legal services. Experts in law office management cannot bring about that necessary change. They can add a motor to a bicycle, but they cannot make it perform like a motor vehicle. Law societies have to supply the vehicle, and not merely add motors to out-dated and inadequate forms of delivering legal services.
    For more in-depth analysis, see: (1) my “access to justice” articles on the SSRN (Social Science Research Network); and, (2) their summaries in my “access to justice” Slaw posts. — Ken Chasse, member, LSUC & LSBC.