Legal Education’s Waterloo: Still in the Fire Swamp

FLW

Begin here.

Story One 

Evolutionary (or adaptive) professionalism

Technological change, shifting financial markets, expanding and contracting labor markets, fluid trade patterns – the legal profession has seen these before, and it’s seeing related things now.  The values and principles that define law, lawyers, and the profession are durable and transcend the details of specific organizational forms and educational pathways.  Law schools today and law practice organizations should steer into the skid, so to speak, as they have learned to do in the past. That means accommodating new technologies and modes of education and practice into well-established pathways to professional excellence and community and client service.  Innovation and disruption will come, as they should, but they lead to legal worlds that look slightly different tomorrow compared to how they look today. 

If that’s your story of law and legal education, then its central strategic implication is pretty simple.  You don’t need to do much except carry on, ride out the tough times and celebrate the good times.  There is little need to lead. Be as distinctive as you must to maintain your competitive position. But in the spirit of E.M. Forster, only respond.

Story Two 

Disruptive change. 

Story two is more complicated.  We might call this Christensen change, because the idea of disruption has gotten closely aligned with the work of the late HBS professor Clayton Christensen. It’s important to be specific about what this story signifies, because the word disruption gets thrown around so frequently and casually that it often means nothing at all.  If everyone is a disruptor, then no one is; what you have is simply market capitalism, for better or for worse.  So by disruptive change, I have in mind the pattern that Christensen focused on in The Innovator’s Dilemma

A rational incumbent market leader maximizes profits by offering goods or services much as it has in the past, because its market-leading position means that it can maximize its margins without significantly improving its products or processes. Innovation is discouraged. Innovation is expensive, cuts into margins, and threatens market share. The innovator’s dilemma is simple. Innovation is essential to maintaining the company’s competitiveness in a dynamic market, but innovation corrupts the company’s profitability in the near term.  Organizational incentives are likely to subordinate the innovation imperative to the profitability imperative. All is mostly fine so long as costs are stable; the market is more static than dynamic. If the cost structure of the industry changes (for example, costs of inputs plunge because of labor- or technology-based innovation), upstart lower-cost and lower-margin competitors may challenge the incumbent from below. They take market share by selling less expensive versions of the incumbent’s products.  To maintain its margins, the incumbent may respond by moving upmarket (doubling down on what the company does well, and at the higher margin end of the product line) rather than by innovating. That expands the market space available to competitors. The cycle continues.  More competitors enter.  The incumbent moves upmarket. Again. Eventually, you may get Pittsburgh and the steel industry in 1982. Collapse.  The incumbent loses its dominant position altogether. 

Christensen’s advice was simple, perhaps so much so that many condensed it into an even more simplistic and unhelpful dictum, only disrupt.  The better advice was this. If you’re an incumbent, and despite the innovator’s dilemma, innovate anyway!  But innovate in a novel way, so that the profitability imperative doesn’t interfere. Innovate organizationally, by putting R&D efforts out of the line of the company’s usual bureaucratic sight (perhaps literally – put R&D in another state, if that’s possible).  Build something like Lockheed’s famous Skunk Works, in other words. Eventually, when the company’s main business has been pushed so far upmarket that the company is at risk of failure, corporate innovation will look like a version of the old joke about Richard Nixon in 1988:  tanned, rested, and ready.

Bill Henderson writes a lot about the Rogers Diffusion Curve for organizational innovation, which is essentially a bell-shaped narrative of how innovation pervades a market:  innovators and early adopters to the left, the majority in the middle, and the laggards to the right. The Rogers curve and its story of change are continuous.  Christensen and others modified Rogers to make the curve S-shaped and discontinuous, making the point that innovators and incumbents confront not only questions about timing relative to the maturity of the innovation, but also other market and cultural conditions.  Innovators enter when risk profiles and cost structures align.  Incumbents resist, if they receive greater value from status quo than from novelty (or if they can’t afford to innovate), or they embrace, eventually, if they can innovate and profit without disruption.  If the innovation is embraced, eventually it turns to obsolescence, and the cycle begins again.  Or the innovation is never embraced; culture and capital are insufficient to overcome skepticism and indifference.

Paralleling Christensen, your story of legal education may be a story of innovative fits and starts, some of them unexpectedly dramatic, rather than a story of adaptation and improvement.  To thrive, you need to identify the incumbent(s), and the upstart competitor(s), and you need to map their respective market shares and strategic moves. Which role or hand are you playing? What cards have you been dealt?  Where are you on the change curve? Is some kind of Skunk Works appropriate? Feasible? For whom? By whom? What would it do?

Story Three

Interplanetary re-alignment.

At their core, stories one and two are both about maintaining legal services, the legal profession, and legal education in some versions of their present selves.  Maybe change will be incremental; maybe change will be sudden. But the essential identity of the universe will be preserved.  Charles Darwin (gradualism) and Stephen Jay Gould (punctuated equilibrium) offered different stories of evolution. They were both evolutionary biologists. 

Story three is told by a quantum physicist.  What if the universe that’s coming is an entirely different universe?  In culture, society, and economics, I associate this futuristic line of thinking with the World Economic Forum and the idea of the Fourth Industrial Revolution.  In law, I associate it with Richard Susskind.  In a series of books, including The End of Lawyers?, Tomorrow’s Lawyers, and The Future of the Professions(with Daniel Susskind), Susskind has sketched a big, bold vision of transformation in education and practice, including but not limited to law.  He describes the rise of agile, expert organizations that draw on multiple fields, disciplines, and technologies rather than limit themselves to humans or to graduates licensed via 20th century professional silos.  We might call this Susskind change.

Central to Susskind’s thesis are the many ways in which the functions currently bundled together in legal (and other professional) organizations can be unbundled, profitably, by converting some of their functions (or at times, most or all of them) into separate expert technologies (AI, and related things), on the one hand, and newly-designated and trained human experts, on the other hand.  Newly unbundled functions can by reconfigured in novel ways, some of them formal and organizational, some of them informal and fluid, but all of them bearing no necessary relationships to the organizations and institutions of today.  Universities?  Out with departments and schools, perhaps, and in with something(s) else. (Maybe out with universities altogether.)  Law firms?  No need.  Courts and judges?  Move dispute resolution online.  And so on.  If many react to this like they reacted to Wall Street’s Gordon Gekko, dismembering companies in the name of greed, many others react happily. In its most optimistic form, this vision unleashes massive opportunities for bringing massively useful law and justice to massive numbers of people who are underserved today or not served at all.

If that’s your story of law and legal education, then you need to sort out functions and associated skills.  What’s done now that needs to be done in the future? What’s done now that can be discarded? What isn’t done that should be done?  What are things that humans can and should do? What are things that can be and are likely to be automated, not just now, but over the next decade or more? How should education – not just current law schools – prepare humans to do the second group of things effectively, manage the first group of things ethically, and build institutions, organizations, and practices that combine them in economically and socially productive ways?

This isn’t just Skunk Works-style thinking.  This is experiment-across-the-program thinking, with the whole university and all of the nonprofit sector, the public sector, and market-based firms as potential lab spaces, in multiple configurations.  Every feature of the current program can be examined for its forward-looking utility.  Novel combinations of people and practices are not just worth trying but are essential.  Gordon Gekko might (and one hopes, will) turn out to be the wrong fictional focal point altogether. Maybe we should be invoking Chief Martin Brody faced with a legendary Great White Shark: “You’re gonna need a bigger boat.”

[To be concluded, soon, with a focus on the evidence so far.]

All posts in this series

Bonus

Reward yourself for reading this far by subscribing to The Future Law Podcast. It’s easy on the ears, and it may even be useful.