Last week, I provided some highlights from my attendance at a lecture given by Professor Richard Susskind.
Today, a closer look at a few points that were raised. Like any provocative thinker and compelling speaker, Professor Susskind’s words demand some reflection and personal distillation. I am only at the beginning of this process.
The two lodestars for me are these quotations from the lecture that I included last time:
Turn knowledge into value for the benefit of clients.
This is what KPMG has said that they really do.
There is no finish line in information technology.
This is what Professor Susskind states is the reality lawyers face, actually the reality all professions and disciplines face. We shouldn’t feign arrogance as lawyers to think that all this change only is directed at us.
As to the first point, “knowledge into value,” I was struck by the fact that Professor Susskind never mentioned alternative fee arrangements, value pricing, or any of the other latest machinations about how lawyers get paid.
I didn’t have the chance in a brief conversation to ask Professor Susskind about this; I expect that he might offer that pricing of anything is partly about supply and demand. And if first-cut document review can be done by computers with smart software, what lawyers could charge for this will inevitably go down over time. (And has.)
To this I would add that pricing alternatives aren’t really innovations, they are the result of other innovations. In the time a major law firm and a Fortune 100 client scope out, negotiate and finalize an alternative fee arrangement, Apple has upgraded its iPhone/iPad operating system.
Put another way, if you have a hard time placing a clear value on something, chances are it isn’t that valuable, or it’s really a legacy cost masquerading as such. This, to be blunt, is where most large law firms find themselves: a cost structure borne of another era:
(Gadget fans of a certain age will recognize this as the “Bowmar Brain,” arguably the first consumer handheld calculator, which burst onto the scene in the fall of 1971. Bowmar went Chapter 11 in 1975).
And look closer at the first quotation. It’s “for the benefit of clients.” That’s the biggest rub in many of the detailed, exotic, and frankly exhaustive attempts at AFAs these days. Law firms have costs with value to them; costs that don’t trace directly to the benefit of clients.
Indeed, in the tony confines of some BigLaw executive committee conference room, you could perhaps hear the KPMG formula twisted into this:
Turn lawyer time into hard currency for the benefit of partners.
Enough of the money stuff, let’s look back to the second statement first above, about there being no finish line in IT. Some lawyers take this personally, as in:
If there weren’t so many damn computers and gizmos, we could go back to practicing law like we used to.
Technology doesn’t just affect lawyers. For example, look at this recent graph about the trend of newspaper advertising:
I’m not suggesting all large law firms will go the way of the newspapers. But honestly the thought that some are trending this way has crossed my mind.
Technology, obviously, affects everyone in every industry. If you want to catch significant VC dollars, find something that takes a lot of people power, and develop software to automate it. (This is not really me talking, it’s Marc Andreessen).
One other thing technology affects: clients. They see what it is doing to formerly strong products in stout markets. Clients view technology as vital to lowering costs in a drive to remain competitive. Our precious legal “industry” is just another component in their supply chain.
Put another way, as impressive as BigLaw is, it’s not BigEnough to slow the march of technology.
I see Professor Susskind’s message as both hostile and hopeful. Hostile to the status quo; hopeful for those who are trying to venture beyond it.
Sometimes the most important messages in life are those we least want to hear.