Lawyers: Be Very Afraid or ... Jump In and Join the Fray

October 24, 2013

I’m not a consultant, economist, conference regular, prolific author or multi-part award-winning blog series writer. I’m just a lawyer and legal startup founder keenly interested in how my profession is changing and where it’s headed.

And as a lawyer, what I’m seeking more than anything else is credible evidence about what’s really happening. Monday at Northeastern Law School, I heard some very compelling testimony.

Innovation in Practice (Not Just Theory)

I had the opportunity to moderate a panel discussion titled “Innovation in Practice,” hosted by Northeastern’s NuLawLab, featuring Paul Lippe of Legal OnRamp, Steve Harmon of Cisco and Karl Chapman of Riverview Law.

One of the many things I learned in my 10 years as a litigation attorney is that there’s a big difference between professional experts and expert professionals. From my perspective, Paul, Karl and Steve are expert professionals. All of them are active participants in the changing legal market. They have a lot to say about what’s happening. They’re evangelists, to be sure. But they’re doers, not just talkers. To me, that gives their words great weight.

The Biggest Business Opportunity Ever

It’s damn near impossible to avoid bad news about the U.S. legal industry. For big firms, small firms, solos, new lawyers, experienced lawyers, law students, law schools, legal publishers and law libraries, the outlook seems uniformly negative.

But Karl Chapman has a different take. While many in our industry wallow in despair, Karl is giddy with enthusiasm over what he calls “the biggest business opportunity I’ve ever seen.” That opportunity is one he, his firm and its supporters (including minority stakeholder DLA Piper) are aggressively chasing in the UK and, perhaps soon, in North America.

To be honest, Karl’s seemingly irrational optimism makes me uncomfortable. When smart people zig while the rest of the world zags, I get uncomfortable. I want to understand why. What big secret does Karl know that everyone else seems to be missing?

The Secret Formula: Common Sense?

So I asked him what’s the big secret? What’s behind the curtain?

His response alarmed me more than his enthusiasm. Turns out, there is no big secret. If we’re to believe Karl – and I do – Riverview Law isn’t doing anything particularly brilliant, clever, proprietary or complex. All they’re doing is applying “common sense.” False modesty perhaps, but it sure sounds like a fairly simple blend of fixed pricing, sensible metrics, project/process management, technology, client-first service and team-first culture.

Blank Slates and Slow-Turning Tankers

Applying “common sense” doesn’t seem like much of a competitive advantage. At least it shouldn’t be.

So I posed the question to Paul. Can established law firms do what Riverview Law does? What’s to stop them from evolving in Karl’s direction and going after their own piece of this unprecedented business opportunity?

Nothing, in theory, as Paul explained. Most of what Riverview Law does is within reach of existing law firms. The problem, however, is that established law firms don’t have the luxury of a blank slate like Riverview Law. They’re burdened by legacy management, technology, compensation regimes, process and culture. They’re hamstrung by the need to distribute rather than reinvest their profits each year.

Whatever the theoretical potential, as a practical matter, turning these tankers to chase Karl is extraordinarily difficult.

But What Do Clients Want?

What about clients? Clients either will reward the “new law” model or they won’t, and no amount of enthusiasm or skepticism in either direction will dictate the outcome. Nothing really matters but how clients actually respond.

Our third expert panelist, Steve Harmon of Cisco, offered some very direct insight on that issue. He wants predictable, repeatable outcomes, reduced costs and improved efficiency over time. When he needs the expertise of outside counsel, he wants them to share his focus on delivering desired outcomes and to understand his business objectives. He wants fixed pricing (and it sounds like he gets it).

I suppose Steve’s just one guy in one legal department. Maybe he’s an outlier. Maybe this is just a pet project of his that won’t catch on anywhere else.

I seriously doubt it. During our panel session, in response to an audience question, Steve cited the specific, per deal dollar amount (down to the dollar) it cost his legal department to process a particular type of transaction last year. He then cited the specific (much lower) amount it cost this year. Given the wildly imprecise world I know exists within law firms, Steve’s precision in reciting that data was downright scary.

What percentage of GCs in the world would want that kind of fine-grained data and those year-over-year results? And what percentage of law firms are in a position to supply it?

Implications for Legal Education

Northeastern Law School organized and hosted the event, and there were several law professors, students and administrators (including Dean Paul) who took part in this discussion. Kudos to Northeastern, the NuLawLab and Dean Paul for taking a leading position in this conversation.

The panelists and audience talked a bit about the skills law students and recent grads need to develop, as well as the challenges of integrating new training into the existing framework mandated by the ABA, all while reducing costs and (perhaps) shortening law school to two years. That is a big, thorny problem. I don’t envy the position of the law school deans working hard to figure it out.

But if you believe, as I do, that the fundamental mission of a law school is to prepare its students to be successful lawyers, then it’s hard to escape the conclusion that law schools must go all-in to help their students (a) compete (or land a job) with Karl and Riverview Law and (b) deliver the kind of value that Steve Harmon demands.

Really, is there any other choice?