Doppler effect in legal innovation?

Our main understanding of the Doppler EffectDopplerfrequenz comes from the experience of changing frequency/pitch and volume of a sound associated with a given physical position relative to the source of the sound. It’s that neeeeeeeeeeeeYYYYYYYYYYYOOOOooouuuuummmmm sound you hear as a car approaches then passes by and drives away.

I’ve been spending a lot of time with legal tech builders and market innovators.  I’ve also been working closely with lawyers, companies and associations that are the intended targets (I’m using targets here as both “customers” the innovators seek to serve and as “competition” they seek to disrupt). The builders and innovators, by definition, are at the centre of the action – they are at the YYYYYYYYYYYYOOOOO stage of the legal innovation wave, and trying to secure that position lest the movement leave them with only a lingering oooouuuuuuuuummmmmm signalling that the wave has passed them by.

As for the targets?

Well, they can tell by the neeeeeeeeeee that something is coming, but not many are feeling the urgency and so for them the YYYYY…… has yet to begin.

From my vantage point, the wave is getting much closer than many realize but for most of us it may take another year or two to feel like we are in the middle of it.

What are you hearing?

Who are your competitors?

If the practice of law is a sport, which sport is it?

More to the point, regardless of which sport you think it might be, what does it matter if your client is indifferent to your choice? To the client, a win is a win, whether it comes from scoring runs, touchdowns, trys, goals or baskets.
A recent post from Friedrich Blase at the Thomson Reuters’ Legal Executive Institute site reminds us that keeping your eye on the ball these days in the legal services market is getting more complicated. Competition to serve your client’s interests doesn’t just come from those playing your sport (i.e., other law firms):

Law firm leaders say that a growing numbers of in-house lawyers are sucking away their traditional work. That highlights three important trends: First, it is basic labor arbitrage, of course. Second, it shows us that firms’ offerings are specialized until the client needs it in such quantities and frequencies that it can blow away the magic dust of “made in a law firm”. (Of course, with that, the 200% mark-up premium dissipates, too.)

And third, it shows that law firms—despite decades of relentless marketing claims and lackluster training—have not yet managed to understand their clients. Clients want their lawyers to understand their business, and really, really understand it. And few lawyers in private practice actually do. In-house lawyers have a much greater chance to master an understanding of their own company’s business, mainly because they are not distracted by the 10 other clients they are serving and the 50 others they are chasing.

But there is more to this excess capacity question than in-house competition—way more! Law firm leaders underestimate the amount of work that is being done by providers other than law firms and legal departments. One prominent example is in the regulatory compliance space where the large accounting firms—under the thinly veiled ruse of offering consulting services—provide nothing short of legal advice. Other examples are e-discovery and contract life-cycle management, which are now being handled by legal managed services (LMS) providers with a far superior mix of people, processes and technology. These are massive projects that were once handled exclusively by lawyers (and still are), but most law firms aren’t even invited to bid for that work because they have no way to staff the work at a reasonable price point.

Change now, before you have to

Richard Susskind, writing in National Magazine to introduce the release of the strategy guide for lawyers he prepared on behalf of and with the Canadian Bar Association, explains the impetus for the guide and the need for individualized action. In a word, change. In several words:

What is happening, though, is not an overnight, big bang revolution. Nor is it a leisurely evolution. Instead, I characterize it as an ‘incremental transformation’ – countless significant advances in the way that legal services are delivered, none of which in isolation might appear to be earth-shattering but, cumulatively, will add up to legal and justice systems that look radically different. These will be systems that are fit for purpose in the 21st century rather than systems that owe their origins to the 19th century.

Who is running your firm?

That’s the question corporate governance consultant Irene Seiferling asks in a recent Canadian Lawyer column.

As she makes clear, the changing times don’t necessarily lend themselves to traditional firm models rooted in the assumption that the owners/partners are the optimal managers:

As law firms grow in size and complexity, traditional hands-on management and partner-dominated decision-making are no longer practical. Law firms are being redefined by technology and challenged by increasing competition for clients and talent. To succeed, firms must be efficient, effective and strategic in their leadership, decision-making, and business operations. Law firms must re-examine their systems of governance.

  

Governance is about the firm’s structure, roles, and responsibilities. Who is making and delegating which decisions, and how do these decisions impact the partners, the firm as a whole and the running of the business? Governance is about strategy, actively planning for long-term success. It is also about the firm’s culture — how the firm positions and treats its people and its clients.