Disruptions in Big Law

Big Law is changing. Is it a disruption or an evolution? Either way the public will benefit.

Transcript

1. DISRUPTIONS IN BIG LAW
2. Law is a pillar of society and our democracy
3. $0 $50,000 $100,000 $150,000 Legal services Misc. prof., scientific, & tech services Management of of companies and enterprises Waste management and remediation services Educational services Health care & social assistance services Legal services had the highest labor productivity among all U.S. professional service sectors in 2011 Source:  United  States  Interna1onal  Trade  Commission,  Recent  Trends  in  U.S.  Services  Trade  2013  annual  report  
4. But the industry is ripe for change Inaccessible to many people Closed system of privilege Highly complex High cost Bundled services Lag to embrace technology Toxic working culture Low quality design Inefficient Wasteful
5. 80 of people who need legal services don’t get them Source: Ron Doolin, Research Fellow at Stanford Law School, Implementing Innovation: The Challenges to Changing Big Law %
6. BIG LAW is at a reckoning Noam Schreiber, The Last Days of Big Law, New Republic, July 21, 2014 “ There are many, many, more high priced lawyers today than there is high priced legal work.
7. Intensity of rivalry among competitors S U P P L I E R S Bargaining Power •  Tech  op1ons  to  replace  lawyer-­‐centric  work   •  Customer  centered  approach   •  Strong  market  for  top  partners   •  Surplus  of  talented  lawyers   B U Y E R S Bargaining power •  Value  and  outcomes-­‐based  pricing   •  Broader  in-­‐house  services   •  Access  to  compara1ve  pricing  data   •  Alterna1ves  to  Big  Law   •  Low  switching  costs   N E W E N T R A N T S Threat •  Use  of  tech  to  standardize  and  deliver  legal  services   •  Big  Law  brand  equity  and  established  client  rela1onships   •  Unauthorized  Prac1ce  of  Law  (UPL)  restric1ons   •  Liberaliza1on  of  legal  services  outside  U.S.   •  Fragile  financial  ecosystem  of  Big  Law   •  Clients  unbundling  legal  services   •  New  business  structures     •  Fragmented  market   S U B S T I T U T E S Threat •  ShiS  from  preferred  providers  to  managed  service  providers   •  Increase  in  low  cost  alterna1ves   •  Clients  willing  to  unbundle  legal  services   •  Tech  op1ons  to  replace  lawyer-­‐centric  work   •  Increased  standardiza1on   R I V A L R Y : S T O N G • Flat  demand  for  Big  Law  legal  services   • Flat  profits  per  quarter   • Race  to  “steal”  market  share   • Compe11on  for  top  partners   • Consolida1on  among  law  firms   • Cost  reduc1on  strategies   • Greater  compe11on  based  on  price   Competitive forces facing BIG LAW global market for corporate legal services Source: http://info.legalsolutions.thomsonreuters.com/signup/newsletters/practice-innovations/2014-oct/article1.aspx
8. A well-adopted theory for change “ The breakthrough innovations come when the tension is greatest and the resources are most limited. That’s when people are actually a lot more open to rethinking the fundamental way they do business.   Clayton Christensen Source:  hWp://www.wsj.com/ar1cles/SB122884622739491893  
9. Quality Time Quality Time Minimum customer need Quality Time Incumbents  innovate  with  incremental   improvements  to  the  quality  of  product/service.   Focus  is  on  sustaining  the  business  model.   1) Over  1me,  disruptors  improve  the  product/ service  with  new  technology.  The  flash-­‐point   comes  when  their  product/service  becomes   “good  enough”  for  most  customers   3) 2) Disruptors  create  new  products  or  services,   oSen  low  quality,  that  are  ini1ally  not  a   threat  in  the  market.     Incumbents:     sustaining   innova1ons   Disrup1ve  innova1ons     Minimum customer need Minimum customer need Source:  New  York  Times  2014  Innova1on  report   How disruption works
10. Notable disruptions D I S R U P T E D   Cell  phones   Digital  cameras   Online  music   Movie  rentals   Car  service  
11. “ It’s taken an earthquake of a recession to expose the inefficiencies that have long plagued large firms…. Disruptive change looms. Mark Harris Founder and CEO of AXIOM Source:  How  Entrepreneurship  Is  Reshaping  The  Legal  Industry,  Forbes,  July  24,  2013  
12. Big Law is changing Making law accessible Unbundling legal services Value efficiency and quality Lower cost solutions Customer focused Embracing technology
13. Current alternatives Possible disruptors What Who DIY law Low-cost solutions for business & personal legal needs Legal Zoom, Rocket Lawyer, ARAG Alternative providers Outsource work. Services include project management. New use of tech. Axiom, Legal Zoom, Lawyers on Demand Content management solutions Legal research, search, e-discovery, AI & machine learning, work flow systems Ravel, Lex Machina, Westlaw, Judicata, Everlaw Digital and remote delivery of legal advice Consumers can get legal advice online Pearl, LawDingo, LawZam Online dispute resolution Online forums for parties to mediate Modria, eQuibbly Service marketplaces Service providers compete for business AttorneyFee, Avvo, LawGives Lawsuit financing Loans for plaintiff’s expenses while in litigation Oasis Finance, Lighthouse Legal Collectives & consortia Legal market transparency Advance law, e-law forum Source:  hWp://www.quora.com/What-­‐companies-­‐are-­‐aWemp1ng-­‐to-­‐disrupt-­‐the-­‐legal-­‐industry#  
14. And startups follow… 905 Legal startups listed AngelList! Source:  hWps://angel.co/legal  –  August,  2015  
15. The best legal innovations to come, disruptive or sustaining, will be user centered Usable Accessible Engaging Source:  hWp://www.openlawlab.com  
16. We all will benefit.
17. Created by Aaron Stienstra www.aaronstienstra.com