So, the 2018 ILTA Conference opened today. ILTA calls itself the “premier peer networking organization, providing information to members to maximize the value of technology in support of the legal profession.” This year’s version sported record attendance and enthusiastic crowds even though just as last year, there was a leadership crisis on the eve of the conference–the CEO “resigned” just days before the start–and even though for some reason ILTA decided to crack down on press passes and some say selectively apply its media criteria.
Nevertheless, and perhaps a bit ironically, the opening keynote, entitled Kill the Company focused on how to recognize and accomplish change in the workplace, how to identify it and how to prepare for its inevitability. Which, of course, was entirely fitting for an industry slow to change, slow to adopt technology and by and large blissfully ignorant of the true threats to its business model.
The presenter, Lisa Bodell, an accomplished author (Kill the Company: End the Status Quo, Start and Innovation Revolution) in the business innovation space talked about strategies to adapt to and deal with change to an audience composed of people who day in and day out try to move the tech and innovation needle mainly in biglaw. (It always struck me as ironic that ILTA is made up of people who are often entirely at the decision-making mercy of lawyers who don’t understand them, and many times marginalize them).
Let’s take time to think about how we would kill our business.
Lisa’s theory is that businesses in general don’t take the time to ask themselves hard questions like who is our chief competitor–not only to our business but more importantly to our business model. What are the threats to the business model 5-10 years from now? And who do should today’s successful business partner with sometimes across industry lines to better recognize and deal with those threats?
As Lisa correctly noted, business need to take the time to think versus do; to value and protect thinking. To recognize long term threats and how to deal with them, to take the time to think about the big picture instead of solving day to day and, frankly, less important problems. Hence her title Kill Your Business: lets take time to think about how we would kill our business.
One of her examples was BMW. BMW certainly worries about Mercedes as a competitor. But they also look to threats on the horizon outside the car industry. For example, BMW has recognized that many cities are looking at ways to eliminate or reduce the number of cars from the city-the infrastructures just won’t allow it.
So, one way to deal with that is to ignore it. One way is to fight it tooth and nail. Neither is a long-term strategy for success. Another option is to do what BMW is doing: partnering with city planners and other diverse groups to prepare for the future. To formulate a business strategy that does not necessarily rely on the conditions and environment of today.
These theories ring particularly true to an industry whose business model is the billable hour.
While the presentation was a bit full of platitudes (“the future is about who we are becoming”, “demographics is destiny” “complexity and complacency are the enemies of change”, all of which are true, by the way), her theories ring particularly true to an industry whose business model is the billable hour. Every minute spent thinking about the future is non-billable and detracts from the model.
Not only do we ignore the threats down the road, we don’t even take the time to ask ourselves what they are. It’s not billable. With some exceptions, we as an industry don’t take hard looks at the competition to our business model and how to partner with others to better meet the threats.
So, what are some of those threats? If we look at our field with the idea that will never happen until it does, we might see things differently. Two threats immediately come to mind: alternative legal service providers (ALSPs) and the Big 4 accounting firms. Inevitably, both will be making inroads into the provision of services law firm have historically provided.
Think it can’t happen? Does anyone really believe that the rules against non-lawyers having ownership stakes in law firms will always be in place? Its already eroding in other countries. How long will it stay in place when sophisticated and well-heeled business interests mount a campaign against it? When this prohibition ends if not before, isn’t it obvious what the big 4 will do? How will that new reality threaten our model?
Relatedly, does anyone really think long term law firms can hold onto commodity type work that ALSPs can do cheaper and faster and just as good if not better? Its already eroding. If we look hard down the road and are honest with ourselves, do we really believe that clients will continue having us handle all aspects of a big case when the ALSP can do part of it?
What if Baker McKenzie, the world’s largest law firm, were to announce tomorrow a merger with Deloitte, the world’s largest accounting firm?
If you followed Lisa’s logic, and recognized these threats, none of us should be surprised to see some market altering partnerships both formal and informal being formed. We are already seeing law firms teaming up with alternative service providers.
Would we be surprised if tomorrow’s LawSites headline was “Skadden Arps Announces Partnership with Elevate” to provide an alternate way to handle complex litigation (I previously discussed the advantages of just such a concept). And what if Baker McKenzie, the world’s largest law firm, were to announce tomorrow a merger with Deloitte, the world’s largest accounting firm? How surprised would we be, really?
The threat posed by ALSPs’ and the accounting firms to the legal business model are real and are the kinds of threats most law firms ought to be looking at. But we spent little to no time thinking about them, preparing for them or thinking about who we could collaborate with to prepare.
I think Lisa Bodell would say a strategy of saying it will never happen until it does is nothing more than glorified navel gazing. Or, as one of my clients put it, too often we are guilty of “standing in the closet and talking to ourselves way too long”.
But then, isn’t that what most law firms are doing? Too many of us kid ourselves into thinking change won’t happen when are only evidence is that it hasn’t happened yet.