This week was back to reality week for me. Back from the fun, sizzle and excitement of CES (fka the Consumer Electronics Show). Back from sunny Las Vegas with all its glitz and glamour. I always come back from this event charged up and optimistic about what is possible in tech and the legal profession.
But January in Louisville is gloomy and damp. And after reading several recent posts and articles, my optimism about the status of change and innovation in the legal market has also darkened. I wonder, again, whether the legal profession will ever really change and what it will take for change to occur.
First, earlier this week came the announcement that Atrium was ending the legal practice part of its business to focus on software advice. Atrium was created as two businesses. One was a law firm that would offer services on a transparent, fixed-fee, subscription basis. A separate business handled all the business processes for the firm and built software to streamline the firm’s operations.
The practice side was to be everything traditional law practice was not. A focus on alternative fees. Use of technology, automation, and innovation to supply a better product to clients. A better and more wholesome lifestyle for its lawyers.
While the precise reasons are a little murky, one can’t help but wonder that it’s because the innovative practice simply wasn’t as profitable as it was hoped.
But after receiving some $65 million in investment funding in 2018, Atrium announced it was terminating its law practice arm and laying off its lawyers. Atrium now plans to focus on serving the business needs of startups. While the precise reasons are a little murky, one can’t help but wonder that it’s because the innovative practice simply wasn’t as profitable as it was hoped. Which is depressing.
Name and reputation were and are still more important than the ability to do legal work better, cheaper, and faster.
This was highlighted in two articles by my good friend and dean of legal tech writing, Bob Ambrogi. In reporting the Atrium decision, Bob harkened back to an earlier article he had written on the demise of Clearspire. Clearspire had adopted a similar model a few years ago but also folded. Bob reiterated what Clearspire’s founder, Mark Cohen, now a legal industry commentator and consultant, told the Wall Street Journal about the company’s demise in 2014. General counsel at big companies liked the model but were reluctant to unseat their incumbent firms. Name and reputation were and are still more important than the ability to do legal work better, cheaper, and faster.
The second recent article that suggests we still aren’t close to a sea change in law was Zach Warren’s A Future Focus: The Success of Legal Tech Depends On Transformation, Not Automation. Like Ambrogi, Warren is one of the more astute observers of the legal scene and his observations I usually pay attention to.
The pace of change is glacial,…the practice of law to me looks very 20th century, maybe even 19th
Warren offers a couple of quotes in his article that sum up where we are. James Sandman, President of the Legal Services Corporation, said: “I think the pace of change is glacial,…the practice of law to me looks very 20th century, maybe even 19th. For all the talk about change in the practice, I’m not seeing change at a rapid pace. No better than linear.”
And Jason Barnwell, Microsoft attorney and Board member of the Corporate Legal Operations Consortium, was quoted as saying, “So many legal professionals spend their time on work that is emotionally satisfying because their customers are really good at saying thank you, but that has too little business impact to make it worth applying scarce human time…we need legal professionals spending 80% of their time on the 20% of issues that require judgment. They are bogged down answering the same questions.”
Certainly, Warren and Barnwell see solutions to this state of affairs and have hope for change. But the fact that these keen observers of the legal scene see the same status quo picture is depressing.
And finally, just this week came an article by Paul Hodkinson. Hodkinson hypothesizes that technology is detrimental to the human relationships so critical to the practice of law. It is these relationships say Hodkinson that make the practice what it is (or was). According to Hodkinson: “Over the long term, loyalty to clients and providing an excellent service are more powerful motivators than the simple satisfaction of generating fees…Technology has found a way to increase the speed of interactions. But, so far, it can’t do anything to deepen them.”
I agree that we desperately need more human relationships in the practice of law, both with clients, our colleagues, and those we practice with and against. But to blame technology for the demise of the human touch only fuels those in law who don’t want to face and embrace the good technology and innovation can bring. (To be fair, Hodkinson’s point was not so much that technology is bad as it was that we need to work hard to maintain the human element of the practice. In my experience, that’s exactly what good lawyers do).
The inability of lawyers to be human and forge deeper relationships in fact stems from a lack of basic empathy. This inability comes not so much from technology but market forces and culture. Well before days of email, some lawyers went out of their way to learn about their clients, colleagues and adversaries. They spend time with them and forged real relationships. Other lawyers did not. And the never-ending focus on increasing billable hours, profitability, and profit per partner are all equally to blame for the dehumanization of the practice.
The irony of it all is that the technology that would enable better and more efficient work to the benefit of the client–our customer–lies dormant. The very technology Hodkinson blames for creating a lesser relationship. But if you have a relationship with someone, you want to act in their best interests, not your own. Perhaps it is not technology that creates a poor relationship but lawyer hubris.
You say something was lost when those practices disappeared. Every change involves some loss. The question is whether things are better off or worse off.
I’m also reminded of the quote of Joe Flom, founder of the Skadden Arps, cited in an excellent 1993 book about Skadden by Lincoln Caplan. (Skadden defined disruption in law in the 80’s and early 90’s). Flom was asked, weren’t the good old “gentlemanly” days of practice better?
His response: “When firms were run with the fathers handing them down to their sons, what was so great about that? What was so great about the fact that certain people could get into clubs and others couldn’t? Or that women or blacks couldn’t work at these firms?…What was so great then that it was more important what your family background was…than what your academic background was? You say something was lost when those practices disappeared. Every change involves some loss. The question is whether things are better off or worse off.”
Let’s be careful that we don’t end up in a closet talking to ourselves too much
These three articles also call to mind something a client used to say. When we had gone over and over a problem and started to overthink a decision, he would say, let’s be careful that we don’t end up in a closet talking to ourselves too much. Those of us in legal tech who hope for change sometimes spend too much time talking to ourselves about change. We fail to see sometimes how hard change in law is.
Let’s face it, most lawyers resist change. Looking for problems and roadblocks is what we do: it’s easy to become naysayers to anything new. When our business model is the billable hour, it’s hard to adopt techniques to be more efficient. When we are effectively protected from competition by anyone or anything that is not a lawyer, it’s easy to become arrogant. To be condescending to those who are not lawyers and not in the club.
So what’s it going to take to see change, true change in the legal profession? Competition
So what’s it going to take to see change, true change in the legal profession? Competition. Competition from those not in the profession that will force us to become more client and customer driven. To be more responsive. To offer better products. That’s why I think the regulatory changes being proposed by various states are so important.
So maybe there is reason to be optimistic after all.