The Role of Technology in Legal Innovation
I’ve just finished my second watching of a great video posted this week by the Stanford Center for the Legal Profession titled “Implementing Innovation: The Challenges to Changing Big Law” (embedded below, h/t to Steph Kimbro). It features Stephen Poor, Chair of Seyfarth Shaw, Ron Dolin, Research Fellow with the Center on the Legal Profession, and Thomas Buley, JD/MBA candidate at Stanford.
The whole thing is fascinating, but I’m going to skip over the bit where Dolin and Buley present their paper discussing whether the “Innovator’s Dilemma” will lead to large-scale incumbent failure in Big Law. (Margaret Hagan has a good set of tweets about it.) I’m also going to skip Poor’s discussion of the incredible perception/behavior gap exposed by the recent Altman Weil “Law Firms in Transition” report (the one where 93% of law firm leaders say that a focus on practice efficiency is a permanent trend yet only 37% say they are changing their strategic approach to efficiency).
More interesting to me, probably because this is a drum I’ve been beating a lot lately, is Mr. Poor’s take on the role of technology in legal innovation (or, more accurately, the oft-neglected role of process). Starting at the 36:04 mark in the video, Poor says:
“We tend to focus a lot on technology solutions. And they’re cool: Ravel’s very cool, and I love what Lex Machina’s doing. . . . But the crux of all of this is thinking about it as a process; thinking about this legal supply chain as an end-to-end process that can be designed and redesigned to drive the outcomes—the efficiencies, the effectiveness—that the underlying consumer needs for the business. There’s a role for technology; I’m as entranced with AI as anybody else, I hang with the Watson guys and its all really cool. I’m sure one day we’re going to be sitting in the office and the voice is going to come over and say “I’m sorry Dave, I can’t do that.”* . . . But we’re not there yet. We [Seyfarth Shaw] view technology as an enabler. We view technology as a part and parcel to making people better, more efficient, faster, and more effective. And it is all tied together, in our judgment, with process and rethinking the process engineering and the redesign of the services.
Because if you think about it, the legal supply chain is a process. And by process I mean the choreographed nature of the delivery of art. Yes there are moments where the inspiration, the spark, the magic that happens with great lawyers needs to happen, and it needs to be recognized and it needs to be celebrated. And yes, in a for-profit organization it needs to be paid for. But it is part of an overall process of delivery. And as we remix services and we think about it as a process it gives us the ability to begin to put pieces back together. And for law firms that are able to play in that environment and shift their thinking, and to be able to adopt a way of delivering services in a new design set, I think there is tremendous opportunity, tremendous potential.
There is so much that strikes me as spot-on in those few sentences that it is hard for me to decide where to begin, but let’s start with some basics. Anyone who has been in business for any length of time will have had some discussion about the interplay of People, Process, and Tools, and their respective roles in driving business outcomes. Of course the three are inseparable, but that doesn’t prevent (more likely it causes) tension among them in any discussion of how to improve an enterprise.
And let’s face it, we humans are enamored with our tools. We like how they look and how they feel, but most of all we like to think about how much better we could be . . . if only we had the right tool. There is something about a tool that causes us to engage in a sort of magical thinking, like a Harry Potter mirror that reflects a more desirable version of ourselves. We endow our tools with our dreams and aspirations and, often bolstered by a healthy dose of marketing, convince ourselves that the tool is the key to achieving them.
This is reinforced, of course, by the fact that tools are sometimes magical. Imagine the first craftsperson who used an electric drill after a lifetime of hand cranking, or the first pole vaulter who transitioned from wood or steel to a fiberglass pole. We’ve all had experiences where finding the right tool has made all the difference in our ability to do a thing well, or maybe enabled us to do it at all. But the power of these magical experiences masks a few truths that we need to acknowledge.
First is that truly disruptive technology is rare. Electric drills were revolutionary, cordless drills slightly less so, but most other “innovations” since then are incremental and pedestrian by comparison. Most of the progress between rare disruptive events comes from process improvements more than technological ones. Incremental technology improvements can lead to incremental gains, but rarely are they earth-shattering.
Second, an improved tool can be a liability just as easily as it can be a benefit. An electric drill in the hands of a professional craftsperson will make one component of the building process more efficient (though it won’t necessarily improve his or her ability to build quality products). But an untalented or untrained worker who is suddenly empowered to make more holes more quickly could cause real trouble.
At the end of the day, the biggest impact a tool can have comes from its ability to enable and empower the people and processes that use it. I’ve talked with dozens of people from legal tech companies over the past few months and they all admit to a fundamental truth: The success or failure of their products hinges on whether their customers make the necessary process changes to improve their practices. The tool can be an impetus and an enabler, but ultimately it is process change that matters.
Of course, the right people can be helpful too. Sometimes only a few individuals are able to make dramatic improvements toward achieving a particular goal even though they use the exact same tools that everyone else does.
Take the pole vault (I was a mediocre college vaulter, thus my interest). The progression of the men’s pole vault world record shows only one period of a tool-induced performance spike, beginning when George Davies first broke the record using a fiberglass pole. But while the world record has improved 71 times since 1912, only 33 individuals have held it. Several of them have been singlehandedly responsible for significant gains over the years. Most recently, Sergey Bubka’s streak of 17 world records was interrupted by only one other vaulter, Thierry Vigneron (who himself held the record five times), and Bubka’s final record stood for 20 years.
Of course these people didn’t do it alone—a network of coaches and trainers and nutritionists provided critical support. But the fact remains that a small handful of athletes who improved their techniques and abilities are responsible for substantially more advancement than even the most disruptive tool the sport has ever seen. And those individuals are rare.
All of which is to say that the spate of recent talk about disruptive technology in the legal industry is almost certainly misplaced (which I think is the point of the Doley & Bulin paper). Sure we are seeing, and will continue to see, technological progress. But the overall gains from improved tools are unlikely to be anything but incremental. And, as with the case of an amateur wielding power tools, there’s no guarantee that all changes will result in net benefits.
Pinning your hopes on finding great people is equally challenging. Sure it is a noble and important endeavor, but real game changers are almost as rare as truly disruptive tools. Hardly a strategy most firms can count on. Better, I think, to engage and empower the people we have to improve our overall outcomes.
In the mean time, as Poor points out, there is substantial opportunity to make gains in the process of legal services delivery. Our workflows are ripe for examination and measurement and challenge to the status quo. Only by understanding the end goals of the customer, and then experimenting with new and better pathways for achieving those goals, will we make significant progress. It won’t be easy, and it won’t be quick, but it is the surest path to improvement.
And yes, I said “experiment.” Lawyers find that notion troubling since an experiment, by its nature, implies the possibility—nay the likelihood—of failure. But progress without experimentation and failure is impossible. I’m not saying we should be engaging in bet-the-company type initiatives or that we should put our clients’ interests at risk. In fact I’d argue quite the opposite. But we do need to start engaging in small-scale, low-risk trials where we hypothesize some potential outcome, make a change, and then measure to see whether that outcome is achieved. Then wash, rinse, and repeat. When done intelligently, we can even run experiments with the blessing and involvement of our clients.
Which gets to one other great part of Poor’s lecture, where he talks about the role of data in legal practice (at 38:50):
“Yeah, we got big data problems in the law, but they’re not “Big Data” problems, they’re big “Data Problems” . . . We may get the big data—these pools of data that are out there that we can manage and look for trends and do predictive analytics on—but the legal industry is so far behind. Part of it is resource allocation into legal departments, part of it is just the dinosaur effect of lawyers.
We need to solve this problem, and our advice to clients is “let’s start counting stuff.” If it is important, you start counting it. Cycle time may matter, so lets start counting cycle time and begin to measure. Begin to develop metrics. As you do that over time you can come up with metrics and analyses that both evaluate the quality and effectiveness of the work. Measure it against outcomes required by the client. But you can also move into more interesting stuff—the predictive analytics—the type of data that can allow you to anticipate and avoid problems.
Measurement is essential to improvement, so I agree—let’s start counting stuff. And if technology can help us with the counting, all the better.
But more than anything I think lawyers need to learn, or bring in people who can teach them, the tools of business process innovation like Lean and Agile and Design Thinking. And this goes for all lawyers: solos and big-firm players, government and in-house counsel, and even judges and mediators (oh the judges!). The productivity gains of the manufacturing industry in the 70s and 80s, and those of the computer industry in the 2000s through today, were not due to disruptive tools. They came from new ways of understanding how to improve processes: Lean in manufacturing and Agile in software.
The methods that work for those industries can, and do, work for the law. Seyfarth is the prime example, but there is a growing number firms large and small that are adopting Lean and Agile methods to measure and improve their outcomes. These methods are working for them, and they can work for you too.
I’ll leave it at that for now. There are a ton of other great insights in the video below—I highly recommend it.
And whether you watch it or not, I’d love to talk with you about how Lean and Agile can help you improve your practice. You can easily schedule a call with me to discuss your own legal operations, or subscribe to my newsletter to get my latest thoughts on becoming a more Agile attorney.[pexyoutube pex_attr_src=”https://www.youtube.com/watch?v=1U1SaDfeaVM”][/pexyoutube]
* Poor was a little surprised at this point at the number of people in the room, mostly, I think, current law students, who missed this reference that is the embodiment of cautionary AI for at least a couple of generations.
© 2015, John E. Grant