Payback
The legal profession has never been filled with saints. Long before industrialization gave an adrenaline shot to the profession, lawyers were admired for their skills, though not known for their charitable ways. Oh sure, you can find examples of lawyers who did wonderful things, just like you can find examples in any profession of people doing wonderful things. But, we need to accept gracefully the fact that among the three learned professions (divinity, medicine, law), lawyers cannot claim the frontrunner spot except when it comes to making money.

I should not have been surprised, therefore, when I received the responses I did to my request that lawyers send me ideas for a moonshot. I thought I had carefully framed the challenge—a moonshot was on the order of, well, going to the moon. The most recent visible moonshot idea was the charge to defeat cancer. A moonshot is a big idea, a bold and ambitious attempt to conquer some amazing challenge within a reasonable period. Moonshots take us beyond what we normally can do, because they give us the feeling that as part of an inspired group, we can accomplish great things. For those lawyers who responded to my moonshot challenge, the great thing was “make more money.”

There were exceptions, of course. A few lawyers went the high road and pointed to access to justice as a worthy moonshot. But the bulk of the respondents chose “make more money” as the suitable moonshot for lawyers. As I said, I should not have been surprised, but I was.

I did not publish the results of my moonshot challenge right away, because I wanted to ponder them a bit. What does it mean when your profession (admittedly, a very small and certainly not random sample of the profession) thinks the greatest thing it could spend time on is making more money? On the one hand, you could read it as lawyers saying “get over yourselves, we are working folks just like the rest.” Lawyers are in business to earn a living, not do good.

Of course, many of us still have that voice in the back of our heads that says “we are a profession, and professionals have a higher calling than just making money.” Sure, we need to make a living. But as lawyers, aren’t we supposed to do something more? This is a conflict many of us, especially those in the Baby Boomer generation, have felt. Law was a way to earn a very nice living, and yet most of us did not give much back to our communities.

So I thought that Baby Boomers, as we reach our retirement years, might be interested in lessening the conflict by putting their efforts behind a moonshot. The results of my representative-of-nothing survey say resoundingly “no”! And this is where we get to payback.

For Over 100 Years Lawyers Have Let Things Slide

The many problems with our legal system did not spring into existence during the past decade. In 1919, Reginald Heber Smith published what for many decades was considered the leading book on legal aid societies, titled “Justice and the Poor.” At that time, the Boston Legal Aid Society, where Smith was general counsel, was one of the few legal aid societies in existence. Roll forward, and the number of legal aid societies increased, while the number needing legal aid vastly outstripped the resources of those providing it. Over the past 100 years, one could argue convincingly that the total volume of charitable work by lawyers has increased, but the per capita aid has decreased.

The list of deficiencies in our legal system is long, legal aid is one, and this is not the place to repeat all of them. The simple point is that during the last 120 years, while the legal profession has grown and prospered, society has suffered. Lawyers have prospered while clients have not. Regardless of your political affiliation, if you are poor you are unlikely to get legal assistance. No matter who you vote for, if you are middle class most legal services are priced out of your reach. Independent of which PAC your corporation supports, your corporation will face a tremendously long lag time if you try to prosecute a case through the federal courts, and you will encounter a system ill-prepared to handle your dispute. When we say justice is blind, in the modern context of the United States that means you will find a legal system struggling to handle your needs regardless of who you are or which candidate you support. The rich get better legal services because they can throw lots of money at their problems, not because they have access to better or faster courts, or even better legal services providers.

Yes, yes, there are exceptions. There are always exceptions. But exceptions do not prove the rule of law. So this is the rub. Now it is payback time. Lawyers are feeling under the gun. Society is pushing back and yelling “I’m mad as Hell and I’m not going to take this anymore.” There are many messages from the recent election and surely this is one of them. We may want to argue we have the best legal system in the world, but the numbers tell a different story.

It does not help anyone when people feel free to snub their noses at the law. Regardless of party affiliation, we all can point to instances on our side of the aisle and the other side of the aisle where the law came in second to some person’s or organization’s self-interest. This past 18 months, we have seen those transgressions become the focal point of conversation, rather than the exception. But as lawyers, we can appreciate that when law becomes the focal point of any conversation, good things probably are not happening.

The question for lawyers, then, is whether we have moved past the time when considering a moonshot is an exercise worth discussing. Doctors have their battle to eradicate (or at least make curable) all illnesses. Techies have their battle to create computer intelligence that can match or exceed human intelligence. Are lawyers left with battling for incomes that match or exceed what anyone else can earn?

Let’s talk about artificial intelligence. Right now in the legal industry, you can’t look anywhere without seeing another article about how AI is or will take over what lawyers do. In the next breath, the author speculates about what the economic impact of AI will be on lawyers. I thought lawyers looking for a moonshot might ask some different questions:

  • How do we modify existing laws for a society populated with intelligent machines and people?
  • Regardless of what intelligent machines can do, should we build into our governance systems limits on what we want the machines to do?
  • Should there be limits on what “garage tinkerers” can do with intelligent machines (yes, you may have the technology to tinker on humans in your lab, but that doesn’t mean we give you full license to do so)?
  • How will our legal system evolve as intelligent machines play greater roles and more autonomous roles in our society?

These questions represent a small fraction of the questions we will confront as machine intelligence increases, even if more intelligent machines help us live “better” lives. Yet these were not anywhere near the moonshot ideas I received.

Let’s go in a different direction. One of the major questions of our times is whether our government institutions are no longer sufficient. Are we operating a country using 18th or 19th century institutions in a 21st century world? When the U.S. Code, the compendium of federal laws, has over 67,000 sections, someone should ask whether the concept that each of us is responsible for knowing the law makes sense. Can our institutions handle the challenges being thrown at them? Does governance by regulatory agency supersede governance in other forms? Making how our government functions more flexible and less costly, whether you think there should be more or less regulation, seems like a worthy moonshot, yet it wasn’t on the list.

Nick Bostrom has posited that AI represents a unique existential risk for humans. Never before have we faced something we are creating that has the potential to eliminate us. AI is not the only such risk (nanotechnology and genetic modification are two others that make the list), but it is a leading risk. Although most lawyers would deny it, the legal profession also faces an existential risk. Not today, not tomorrow, but at some point if we continue on our current path, the need for lawyers will be gone. Technology, client friendly problem solvers from other domains, and innovative disrupters will take away what we do. There are no physical or other barriers to prevent the land grab. The efforts of state bar associations to prevent the demise of lawyers simply hasten the process of destruction. A few lawyers will remain, but the existential risk for lawyers is that most become irrelevant.

Is There A Moonshot Left In Us

Any good disaster flick has the moment when the protagonist can see what must be done to save the world. The payback of the last 18 months has brought us to the point where lawyers must ask if they can see what they need to do to save the profession and build a better, more responsive, and more resilient legal system.

A group of us who have been (at least self-proclaimed) disruptors are meeting in the next few weeks to talk about change in the legal industry. I’m sure we will cover many fascinating topics. I hope that we will find some time to talk about change in a broader sense than making more money.

There is no mandate that lawyers do anything more than what they have done for centuries. We do not have to change, nor do we have to look beyond what is in our own immediate self-interest. There is a valid argument that the legal profession reached its zenith many years ago and that it will fade away as many other professions have faded away before it. This may be our payback—we had our run and now we are being told that run is over.

Perhaps many lawyers are correct—now is the time to treat lawyering as a cash cow. We should all make the most we can from it and continue to do so for as long as we can. Something will come along to take its place, but that is not our worry.

I don’t subscribe to the cash cow theory. I think there will remain a need for societies to govern themselves and I think there is a role for lawyers to play. I remain convinced that if we can change some fundamental practices in the legal industry, we can get past this moment and revitalize the profession. I do not subscribe to Richard Susskind’s belief (and I’m overstating a bit here) that the profession is dead, it just doesn’t know it.

I am looking forward to meeting with my friends in the next few weeks and to our discussions. I hope more lawyers around the country will take some time and do the same thing. I encourage you to get together for a few hours with your friends and ask whether you believe lawyers should play a role in re-building the legal system in the United States and, if so, what that role should be. For a moment, put aside the skepticism that drives us all. I think it will be time well spent. And, if you have a few moments left over, ask yourself whether the legal profession has a worthy moonshot beyond making more money.

References Continue Reading It’s Payback Time, Or Lawyers May Have Sown The Seeds of Their Own Destruction

FirstThanksgiving

I’m taking the day off to enjoy time with my family, a rare treat as our children explore their own careers. Have a great week everyone and for those of you who celebrate the holiday, Happy Thanksgiving!

We have rolled out a new format (hope you like it). We also are looking at a way for you to help improve posts before they hit the site. And of course, we always are working on new content. Thank you for reading and watch for the latest post next Thursday.

ElectionThe 58th quadrennial United States presidential election is over and now we turn to the next four years. The discussion focuses on what to expect from the Trump Administration and the reality is we don’t know. But, as the transition begins, I hear one phrase repeatedly mentioned, “rule of law.” President Obama, Secretary Clinton, and most recently the leaders of three major law firms have all emphasized that we (Republicans and Democrats) must act to protect the “rule of law” as we go forward. It is a phrase that carries great promise and “we” should talk about what it means to say “protect the rule of law.”

A Distinguished History

The rule of law idea dates back at least to Aristotle, who used the similar phrase “law should govern” in Politics. The idea pops up again here and there in antiquity. For example, in England the House of Commons included the phrase “rule of law” in a petition to James I of England in 1610, and again in 1644 the phrase appears in a piece by the Scottish theologian, Samuel Rutherford (apparently not someone who subscribed to the modern theory of short titles, Rutherford’s piece was titled “Lex, Rex: The Law and the Prince. A Dispute for the Just Prerogative of King and People. Containing the Reasons and Causes of the Most Necessary Defensive Wars of the Kingdom of Scotland, and of Their Expedition for the Ayd and Help of Their Dear Brethren of England. In Which Their Innocency Is Asserted, and a Full Answer Is Given to a Seditious Pamphlet.”). According to Rutherford:

The prince remains, even being a prince, a social creature, a man, as well as a king; one who must buy, sell, promise, contract, dispose: ergo, he is not regula regulans, but under rule of law….

Samuel Johnson included the phrase in his 1755 Dictionary, which means it must have had somewhat common use by that time, at least among Johnson’s peers in England. Clearly, when the United States was coming together as a country, the idea of “rule of law” existed among Europeans and was becoming important in our new country. From that point on, “rule of law” is in regular use, even though implementation of the idea has seen its ups and downs

An Unclear Meaning

Given that the idea has been around for many centuries, we could hope that it has taken on a clear meaning. We could hope, but it would be for naught.

“Rule of law” seems to have many meanings today. Theorists group the meanings into three categories: formal, substantive, and functional. The categories differ in many ways, including whether the content of law must have specific meaning or whether “rule of law” refers to characteristics, but not content. The functional category focuses more on the degree of discretion man, particularly government officers, has in deciding the law (for example, to what extent does natural law play a role). For our purposes, “rule of law” must be something measurable and so we will turn to a more concrete definition.

A Mediocre Performance

Settling on a definition of the rule of law is a challenge. But a greater challenge is overcoming our perception of the United States as a leader in the rule of law compared to other countries. Most people tend to think that the United States ranks high—among the world leaders—when it comes to rule of law. This gets a bit tricky, because it is difficult to rank countries on their implementation of the rule of law if we have trouble defining it. But, we can approximate by defining key characteristics of the rule of law and when we do, it changes our perception of the United States.

The World Justice Project has for many years ranked over 100 countries to compile an overall Rule of Law Index® ranking. The Index is subdivided into eight categories and 44 subcategories. The categories cover areas such as absence of corruption, civil justice, and criminal justice. I am not arguing that the WJP’s approach is the best way to measure access to justice, but it will serve well for our purposes.

Since I am using the WJP’s rankings on rule of law, it will help to understand how the WJP defines rule of law. According to the WJP, “the rule of law is a system in which the following four universal principles are upheld:

  1. The government and its officials and agents as well as individuals and private entities are accountable under the law.
  2. The laws are clear, publicized, stable, and just; are applied evenly; and protect fundamental rights, including the security of persons and property and certain core human rights.
  3. The process by which the laws are enacted, administered, and enforced is accessible, fair, and efficient.
  4. Justice is delivered timely by competent, ethical, and independent representatives and neutrals who are of sufficient number, have adequate resources, and reflect the makeup of the communities they serve.”

Overall, in 2016, the WJP ranked the United States 18 out of 113 countries on the Index—an okay ranking but certainly not world class. For the category access to civil justice, the United States ranked a measly 28 out of those 113 countries. For comparison, in addition to countries you might expect such as Germany, Japan, the United Kingdom, and Canada, other countries outscoring the United States included Estonia, Uruguay, and Barbados.

The following quote from Judge Jed S. Rakoff, a United States District Judge on senior status for the Southern District of New York, elucidates one part of the problem:

Over the past few decades, ordinary US citizens have increasingly been denied effective access to their courts. There are many reasons for this. One is the ever greater cost of hiring a lawyer. A second factor is the increased expense, apart from legal fees, that a litigant must pay to pursue a lawsuit to conclusion. A third factor is increased unwillingness of lawyers to take a case on a contingent-fee basis when the anticipated monetary award is modest. A fourth factor is the decline of unions and other institutions that provide their members with free legal representation. A fifth factor is the imposition of mandatory arbitration. A sixth factor is judicial hostility to class action suits. A seventh factor is the increasing diversion of legal disputes to regulatory agencies. An eighth factor, in criminal cases, is the vastly increased risk of a heavy penalty in going to trial.

For these and other reasons, many Americans with ordinary legal disputes never get the day in court that they imagined they were guaranteed by the law. A further result is that most legal disputes are rarely decided by judges, and almost never by juries. And still another result is that the function of the judiciary as a check on the power of the executive and legislative branches and as an independent forum for the resolution of legal disputes has substantially diminished—with the all-too-willing acquiescence of the judiciary itself.

The rule of law we hear about is not the rule of law most in the United States experience.

The Role of Lawyers

This brings us to an awkward spot. We have leaders giving us full-throated encouragement to support and defend the rule of law at a time when our record on rule of law is abysmal. There is a terrible disconnect between the aspirational state and the current state of affairs on “rule of law.”

This type of disconnect is not surprising, especially to those who spend time with the philosophy of lean thinking or behavioral economics. In both fields, we frequently see a broad gap between the way the world is and the way we describe the world. In lean thinking, we use tools to bridge that gap. In behavioral economics, we seek to understand why the gap exists. Either way, we understand that gaps are common.

Thus, when we hear our leaders exhort us to defend the rule of law, we should recognize that the rule of law they encourage us to enforce is not the rule of law that exists. They are asking us to defend their vision of the rule of law, for surely they cannot be asking us to defend the rule of law that puts the United States at the bottom of the first quartile among 113 countries.

This is the fundamental problem the legal industry faces and lawyers face as we try to haul the United States’ antiquated legal system out of the 19th century and into the 21st century. The vision many lawyers carry is not a clear-sighted view of reality. For most, it is of a scholarly profession, providing bespoke solutions to the complex problems of society through the use of a unique science known as the practice of law.

This gap between vision and reality cannot be sustained. One of two things will happen. Either lawyers will modify their views of what they do and bring the services they provide more in line with what clients need and are willing to pay, or lawyers will maintain their views and clients will find other ways to solve their problems. The third approach, which many lawyers explicitly or implicitly hope for—that clients will stop pushing their views and let lawyers do what they want—is not a viable option.

A recent survey reminded us, as if we needed reminding, of the growing problem. It tells us that barely one out of three corporate clients is satisfied with the services provided by large law firms. Whether you are at a law firm that thinks it is different, listens to its clients, and has modified its behavior or you are at a firm staunchly defending the 19th century view of the world, you should be worried.

With each story, survey, and article that comes out highlighting the large and growing dissatisfaction among clients at all economic levels with the performance of attorneys, the situation becomes more precarious. The flimsy rope bridge that lawyers have constructed to the sides of the gap gets stretched a bit tighter, the creaking gets a bit louder, and the day gets a bit closer when the ropes holding the bridge will snap.

Some lawyers can afford to roll the dice. They can bet that retirement will come for them before the ropes break. They gamble on the number of years between client dissatisfaction and defection. The majority of lawyers do not have that luxury of taking the risk. They have too many years left in their careers to expect that clients will be that patient. Yet, the majority of lawyers hang back watching the bridge get stretched tighter and tighter by the day.

A Time for Renewal

The social media outlets, Facebook, and other organizations are starting to grasp the role they may have played in this historic election. Again, regardless of which candidate you preferred, we should all understand as part of being informed citizens, the roles that organizations play in shaping our views. Lawyers should pause and consider what role they played in this election.

Both Democrats and Republicans found large swaths of voters disenchanted with government. The legal industry plays an important role in society and our government. It is hard to say in a country which ranks 28th on access to civil justice and where, as Judge Rakoff notes, “US citizens have increasingly been denied effective access to their courts,” that the failure of the legal system to meet the needs of the citizens played no role in alienating voters.

If we are going to focus on values, such as the “rule of law,” we should all understand the differences between vision and reality. We should speak clearly when we encourage others to enforce the “rule of law.” We should acknowledge that the rule of law that once was in the United States is not the rule of law of today. Much will have to be done to bridge the gap. The starting point for all of us should not be focusing on how much more lawyers can extract from the people in furtherance of a legal system that has passed its freshness date. It should be to ask what our clients need from us and how we can best go about delivering—affordably, timely, and with the highest quality that meets those needs—legal services that return the United States to a leadership role in the rule of law.

References

Aristotle. Politics. The Barnes & Noble Library of Essential Reading.  New York: Barnes & Noble Books, 2005.

Isaac, Mike. “Facebook, in Cross Hairs after Election, Is Said to Question Its Influence.” The New York Times, November 12, 2016.

Montagne, Renee. “Social Media’s Increasing Role in the 2016 Presidential Election.” NPR, 2016.

Morris, David Z. “Zuckerberg Responds to Accusations That Facebook Influenced Election.” Fortune, 2016.

Rakoff, Jed S. “Why You Won’t Get Your Day in Court.” Article, The New York Review of Books, no. November 24, 2016 (2016). http://www.nybooks.com/articles/2016/11/24/why-you-wont-get-your-day-in-court/.

Rutherford, Samuel, and Pre-1801 Imprint Collection (Library of Congress). Lex, Rex: The Law and the Prince. A Dispute for the Just Prerogative of King and People. Containing the Reasons and Causes of the Most Necessary Defensive Wars of the Kingdom of Scotland, and of Their Expedition for the Ayd and Help of Their Dear Brethren of England. In Which Their Innocency Is Asserted, and a Full Answer Is Given to a Seditious Pamphlet, Intituled, Sacro-Sancta Regum Majestas, or, the Sacred and Royall Prerogative of Christian Kings.  London: John Field, 1644.

“World Justice Project Rule of Law Index 2016.” Seattle, WA: World Justice Project, 2016.

RuleThe race is on—in fact it is well underway. Somewhere, some lonely legal tech guru is sitting in his garage working on “the greatest thing since the invention of the hornbook.” Based on algorithms that would make most string theorists drool at their complexity, the new app will not tell you what the law is (since it is a fool’s errand to chase the past with the future changing so quickly), it will tell you what the law will be when your case reaches that AI mediator/arbitrator/jurist who will resolve the dispute.

This tool will go far beyond predictive analytics, that measly science of trying to guess human behavior, it will be predictive law. From your smartphone, you will tap in the answers to some simple questions and then set a forecast timeframe: 1 year, 5 years, 10 years. Your smartphone, of course, now has processing power equivalent to your brain, though software is still limping along far behind it. But, by analyzing 10 to the something trends and then running 10 to the something variations of those trends (now called Monte Carlo lawyering), your smartphone answers telling you what the law will be on your preferred date.

And then the pin drops. Some smart-alecky third year associate in one of those big fancy law firms points out that she has spent the past three years researching all manner of legal issues for the firm’s clients. With well over 6,000 hours invested in research, she crisply points out that predicting the future of the law is quite easy and does not require the new app. “In 10 years,” she says, “the law will look basically the same as it looks today.”

It takes more than three years for a case to work its way through a federal district court to conclusion. Then add another three to four years for the case to reach the Supreme Court. But of course that is only one case. For the Supreme Court to even sniff at a case, we must have a division among the federal circuit courts of appeal. That means many cases have to work their way up through federal district courts to final decisions in federal appellate courts, and those decisions must conflict on at least one issue that grabs the Supreme Court’s attention. Then, and only then, will the Supreme Court consider giving an answer, and of course we must put aside all the state law issues which have their own paths.

To those enormous delays, we must add the time to develop the federal statutes that will give rise to the federal cases that will, etc. It takes far more than three years to get a law on the books, and then of course we need the regulations. Only then can we begin the stream of cases that will lead to the Supreme Court. “So you see,” says the third year associate, “the law will barely budge during those 10 years. After spending my more than 6,000 hours on research, I can confidently tell any senior associate to tell the junior partner to tell the senior partner to tell the client that what they want to do may or may not be legal.”

Laggard Law Affects Us All

My question is this: which parts of the above story are made up? I’ll wait. We’ll actually, I won’t wait. I’m a lawyer (retired), but I still do not have any patience. You see, nothing in the story above is made up. Law at the federal level in the United States develops in competition with the movement of glaciers (or, to put it in more timely terms, the melting of glaciers). For a while, glaciers have been winning. The federal legal system in the United States is in gridlock. Rip Van Winkle can take his nap, wake up refreshed, and miss almost nothing when it comes to federal law.

For many lawyers, the laggardness of federal law is more blessing than curse. The law, they say, should not jump and twitch in response to everything techies do. Tech comes and goes (remember those AOL discs you would get in the mail? Google Glass?) and the law should be about general principles (Karl Llewellyn’s “law of the horse” concern) not the latest fads. It takes time for lasting themes to develop and then the law can give guidance on those themes.

There are, of course, others who hold a somewhat different view. Social media, 3D printing, genome splicing, nanotechnology, AI, and many other emerging technologies are raising questions not just of property rights or privacy (both very important), but of greater risks.

We all understand that a human is a human and a machine a machine. One has rights and the other does not. But where does the dividing line exist? As we can replace body parts with devices (sometimes mechanical, sometimes biological), the definition of human starts to slip. What about when we implant electrodes that change how our brains operate? Still human? What about the next step, when scientists using CRISPR technology to alter our genetic structure? What now?

Yes, many of these technologies are in their infancy. The effects are incredible for the individuals involved, but modest for society as a whole. Doing something to hold back or alter the course of these technologies could negatively affect the lives of hundreds, thousands, even millions of people who will benefit from the technology, just because some like to run around yelling “the sky is falling.”

So go back to the original timeline. Getting issues through the federal courts (and most of the meaningful issues arising from emerging technology will need to be addressed on a federal, not state level) can easily take more than a decade. That means issues we see today may not be resolved through the courts until 2026 or later, and that is if we start today. But to reach the point where these emerging technologies can do things that truly change the human condition will take, by the estimates of many technologists, perhaps 15 or 20 years.

Put another way, in 2026 the federal courts may be getting around to addressing legal issues arising today from emerging technologies. But, of course, those emerging technologies will no longer be emerging and will have moved far past the legal issues raised today. We already can see evidence that this will happen. Regulatory bodies struggle to come up with regulations addressing issues that are minor compared to the ones raised by technology. The Dodd-Frank law passed in 2010 required public companies to report their CEO-to-average-pay ratio. The regulations implementing that requirement take effect in 2017. Seven years to handle the debate over calculating a ratio—and without lawsuits. Yeah, the federal legislative system is well-prepared to address nanobots.

Just as the process for delivering legal services is based on a late-1800s model which has changed trivially from then to today, the processes for creating and interpreting law at the federal level have changed little over the same period (and probably longer). Society, however, has refused to conform with lawyers’ desire to keep it slow.

Reform Is Possible

It would be easy to assume that I am arguing in favor of rapid law development. Some fundamental change to the processes of creating and interpreting law that would jerk the legal industry into the present and risk changing the law so quickly that it no longer brings stability and order to society. It would be easy, but wrong.

I do, however, see changes that would pull the federal processes into alignment with what society needs today—earlier guidance on issues that have the potential to affect society at fundamental levels. The definition of “fundamental levels” is beyond this post, but I am talking about process reform so we can leave substance for another day. I’m not endorsing any of the efforts I highlight, merely pointing to examples of people taking action on the types of ideas I suggest. In other words, don’t respond by critiquing the example, address the concept.

1. Move to some form of agile law-making. See, e.g., Agile Government Leadership.

2. Crowdsource opinions from stakeholders. See, e.g., Crowdsourcing legislation efforts in California and New York City.

3. Use superforecasting to test the potential effects of various regulatory approaches. See, e.g., Q&A with Philip Fetlock on Superforecasting (as applied to geopolitical risks).

4. (Greatly) expand the use of process improvement and narrow-purpose technology in the federal court system. See, e.g., 18F.

5. Streamline the process of moving disputes through courts and streamline what courts produce. See, e.g., The Pathway Approach: Draft Rules and Examples of Rules from Around the Country.

I am not attempting to answer any of the challenging legal questions that emerging technologies already have raised. My goal is more focused. The questions need to be worked out through processes that can deliver answers that we as a society can live with, and which are delivered within a time frame that makes them meaningful, not historical oddities. By not fixing our processes today, we risk (and I think the risk is very high) reaching a point when we do need answers and not being able to get them because the architecture of our rule of law system cannot handle the challenge. A rule of law system only works when we actually have law.

FootballJordan Furlong (The Law21 Blog) posted an essay recently titled, “Playing the client’s game.” As usual, it is a well written and interesting piece and I agree with most of what he says. But the issues he talks about are very important and I don’t think most law firm partners and most law department lawyers understand them well. So, in the spirit of keeping Jordan’s football metaphor alive, I’m going to pile on a bit.

The Lawyer’s Value

This question comes up frequently—what unique value does a lawyer offer? Whenever it does, the room gets quiet and you can hear feet shuffling. Richard and Daniel Susskind tried to answer it in their recent book, The Future of the Professions, but ended up with something not very satisfactory (I suspect they feel the same way). I am not saying it is an easy question to answer, but I think the answer today is very different than the answer 120 years ago. Jordan describes the role of a lawyer as not the quarterback, but “the third-down fullback called on to blast through the line in a short-yardage situation, or the speedy wide receiver who goes deep on 3rd-and-22 to make a big play. We’re specialist performers who wait on the sidelines until we’re called upon to do one thing really well.”

To most lawyers, this sounds like a demotion. At one time we were the quarterbacks and many signed up to be quarterbacks. To hear we are third-down specialists deflates the ego. It also suggests our value is limited. Perhaps it should not come as a surprise that when we get back to the unique value question, the room is quiet and you can hear feet shuffling.

Follow the Best Legal Brains

Jordan takes us to a quote from a column by Anthony Hilton in the UK publication, the Evening Standard. I agree with where the quote starts, but then it goes in a direction that I think is wrong and takes us down a wrong path. Hilton starts, “[L]awyers have lost the glamour, the access and the special status that came with having opinions worth listening to. They have allowed themselves to be commoditised and to become the last port of call.” No quibbles there. But then Hilton goes on to say, “They have allowed some of their best brains to move in-house as general counsel in the biggest companies, taking the interesting legal advisory work with them. …” Here I have to disagree.

I don’t think that the best brains have moved in-house as general counsel or are staying in the law firms. I think both have claims to bright lawyers and not so bright lawyers. I say this because I think we see very little difference between the delivery of legal services in law firms and in law departments. Here and there, at the margin, we see some efficiency differences or more thought about what the client needs than what the lawyer wants to deliver. But, overall, there is remarkably little difference between the two worlds. There even are many cases where the general counsel wants to re-shape the law department to look more like a law firm.

Jordan moves next to the point that the number of lawyers in-house is increasing and with that increase the locus of power has shifted from law firms to in-house lawyers. Jordan nicely describes this transition, “I don’t think there’s any question that power (and therefore prestige) is increasingly accumulating on the buyer’s side of the legal service relationship.”

Corporate clients have been pulling work in-house for many years, and according to recent reports the rate has increased over the past four years. The work being taken away from large law firms is going to in-house lawyers, and to some extent to managed service providers and other alternatives to the traditional law firm source.

So far, however, that has been in-housing the law firm. As I and others have said, this is an easy and effective way to reduce law department costs by simply leveraging the cost of labor. An in-house lawyer costs much less than a law firm lawyer and in a market where lawyers are plentiful, hiring in-house quickly ratchets down costs. That has shifted power, but I’m not so sure about prestige.

Keeping with Jordan’s football metaphor, labor arbitrage is a game focused on gaining some yards quickly. Bringing work in house immediately reduces the cost of the work. After that one-time cost reduction, the law department will not get much in further cost reductions unless it tackles process improvement. The improvement might come through technology, though often in-house technology implementation comes with little or no process improvement, so again it yields a one time change in cost. The addition of an in-house lawyer does yield a temporary increase in inventory—lawyer time to work on matters—which can help with work not being done. But eventually, the in-house lawyer will have a full schedule and the benefits of a lower cost will have been realized, so the law department will be back to where it was before. After doing a run play several times, you need to pass.

The danger in believing the labor arbitrage approach is anything but a quick fix comes when we play to win the game, not just get a few yards. Lawyers are, whether they like it or not, a cost center not a profit center. Some may offset the cost by enforcing patents or taking other actions to recover damages owed the client, but that doesn’t change the law department from a cost center into a profit center, it simply offsets costs (recovering money owed is not the same as selling products or services for profit). It also seldom rises to a long-term sustainable strategy and may become even less important if some of the current initiatives to reduce cost recoveries by non-practicing patent entities go through.

Cost centers should constantly seek to reduce the burden they place on the organization, while at the same time seeking to improve quality, timeliness, and other metrics important to the business. Eventually, the CEO or CFO will ask the obvious question, “why has the lawyer headcount grown so much?” At that point, the next logical step is to substitute thinking, capital, and cheaper labor for in-house labor. Enter process improvement, technology, and labor alternatives (these could be cheaper in-house labor alternatives or outside labor alternatives). In other words, time to cut some members from the team roster.

The View from In-House

From Association of Corporate Counsel surveys to comments from general counsel, there is a growing belief that what CEOs really want from their general counsel is strategic help, not just competent management of legal affairs. Certainly, this is more true today than it was in the past and it rings true for some general counsel. But overall, I think general counsel and in-house lawyers are unduly optimistic to think that they have been hired for their strategic acumen. Put differently, if the legal work goes away, it is unlikely many of the in-house lawyers will have jobs working as strategic advisors.

The last statement probably sounds harsh, but let’s take an objective look at the situation. Lawyers are not trained in law school to be strategic thinkers. They are trained to play the role of tactician. Jordan points this out in his post, “But most lawyers are tacticians, not strategists, and they prefer neither to manage nor to be managed.” Without trying to define what law school teaches, it certainly does not teach (putting aside the random course here and there), the type of strategic analysis a first-year MBA student gets. As a student at Northwestern University’s J.L. Kellogg Graduate School of Management, I spent significant time studying strategy, working on case studies focused on strategy, and doing group projects on strategic questions. As a student at Northwestern’s School of Law (now Pritzker School of Law), I did not spend any time studying strategy.

It gets worse. When I have tried to train lawyers at large firms on strategic thinking, they have actively resisted. The comment “we are lawyers, not consultants” comes up frequently. It is the law firm lawyers who move in house, the best brains Hilton talked about becoming general counsel, who may have some interest in strategy (though again, no particular training or experience the field). Lawyers are good at breaking complex problems into small pieces, building solutions, and re-assembling the parts, but that is not strategic thinking.

For in-house lawyers, I think that leads you in this direction. CEOs know they pay a lot of money for in-house lawyers. Some of the general counsel they hire do come with significant backgrounds in strategy, not from training, but from experience. It isn’t uncommon to see large corporations hiring lawyers who have held senior positions in government or leadership positions in other organizations (even law firms, the wastelands of strategic planning). So, some general counsel are better positioned to provide strategic counseling and CEOs want them to do what they were hired to do. But that does not mean all general counsel, and it certainly does not mean all or even most in-house lawyers, are up to being strategic counselors.

Those general counsel who provide strategic guidance face a secondary problem. One person sitting in his or her office will seldom be able to assimilate the necessary information to provide that strategic guidance. That person will need help, and if that person is the general counsel then who will help her? Law departments are not set up to provide that assistance, nor are law firms. How to thread geopolitical risk through the lens of the legal function requires more than a course on international law in law school. The world is filled with strategic consultants who work with other departments in a company, but thin when it comes to consultants focus on helping general counsel and their lawyers become strategic players.

Finally, assuming the majority of CEOs want their general counsel to become strategic advisors, the numbers tell us the impact will not be significant. There are no more than 1,000 general counsel for the Fortune 1000 corporations in the United States. There are certainly deputy general counsel and associate general counsel who are the lead lawyers for very large subsidiaries and divisions, but even throwing those in the basket won’t increase the number to more than 1,500 or maybe 2,000. Double that to include lawyer-strategists in training, and you have maybe 4,000 lawyers who are in the pipeline to provide real strategic advice to the leadership of corporations. Even if you quibble with my numbers, you will still find the majority of in-house lawyers are not in a position to serve a strategic role. They are in a position to provide inexpensive (though talented) labor compared to their law firm peers and that puts them at risk of being cut from the team roster.

The Rise of Legal Ops

Jordan then takes us where many are going when it comes to leading the grand revolution. As he says, “If you’re looking for the quarterback in the corporate legal market right now, I think you need to go visit Legal Ops.” This argument makes sense. The legal operations leaders are being brought to law departments to run them better than their predecessors. They have been asked to focus on legal operations economics, technology, staffing, and outsourcing. What direction should they take? Well, they can just look down the hall to the human resources and IT departments.

Those departments went through these transitions years ago. At first, leaders built those departments to handle work inside. They followed the philosophy that individuals in the organization were less expensive and more attuned to what the organization needed than those outside. Both areas grew large and expensive. And then the CEO and CFO asked the question: “why do we have so many of these folks, and too few of those who generate revenue?”

The next step was to cut the team roster. Human resources outsourced many of its functions to organizations that had evolved to do the work faster, more efficiently, and cheaper (and, typically, with fewer mistakes). Human resources kept the plum (and manageable) assignments for itself. IT went down the same path. Companies wrote their own programs, maintained their own hardware, and overall ran sophisticated IT departments. And then they too outsourced. At the end, they kept the plum (and manageable) assignments in house and moved everything else outside.

There is, of course, a glaring difference between law and the human resources and IT. Today, finding and retaining the right employees is a massively difficult job for companies. They need complicated skill sets from a workforce that isn’t well-prepared to handle the demands. IT must try to keep up with rapidly changing technology and integrate it or leverage it to competitive advantage. Law … well, it isn’t mission critical for most companies.

In the late 1800s and early 1900s, lawyers were key to strategic success for large organizations. Today, as Hilton says in another section quoted by Jordan, “[L]awyers have allowed themselves to be pushed further and further down the food chain, and away from the seat of power. In today’s commercial world, when there is a deal to be done, it is picked over by investment bankers, brokers and public relations consultants—all of whom have a share of the ear of the chief executive. Then when all the high-level stuff has been sorted by these experts, the package is tossed to the lawyer with instructions to sort it out and make it presentable. …”

If the legal operations leaders are successful, they will further reduce the role of law departments by moving much of the work (which will include very complex work) to lower cost, more efficient, higher quality outside providers (enter managed service providers), leaving much smaller in-house lawyer staffs to handle the plum (and manageable) assignments. But plum assignments for lawyers will not be the same as they are for human resources and IT. And still there is the lack of outside strategic thinking assistance.

Refocusing the Discussion

As Jordan says, large law firms will not die. But, in my opinion, they certainly will shrink in number and most will find it difficult to exist beyond bespoke, boutique services. Jordan gives us a picture of what the world could look like, “Maybe such law firms are vestigial and will eventually fall away—to be replaced by smaller expert boutiques where legal shoppers go for occasional splurges, while the rote work that supported their predecessors is either claimed by software and systems or is performed by clients in the ordinary course of events.”

Since most law departments are no more efficient or just slightly more efficient than large law firms, there are significant “opportunities” in both spheres. Through process improvement and technology, the path to reducing lawyer headcount by 50% is clear, though bumpy. That assumes we stick with technology available today and use straightforward process improvement techniques. Push further and allow technology to advance, and we can go much farther. In other words, until we reach limits where computers can’t do what a person can do, or it is impracticable to take waste out of a process, no law of nature stops us from shrinking the workforce devoted to corporate lawyering.

Of course turning to technology and taking out waste means that we can fill lawyers’ time with work that today is being given short-shrift or not being done. Every large corporation has legal work that needs attention beyond what current staffing and budget levels can handle and unless governments around the world suddenly go on regulatory diets, the volume of legal services needed will grow. That will offset at least some of the 50% headcount reduction, even in an efficient world.

Lawyers also could become client focused. Instead of being technophobes, they could learn about emerging technologies. Everyday, technologies such as 3D printing, artificial intelligence, nanotechnology, genome manipulation, and others are becoming more important to what businesses do and sell. The laws to regulate these technologies don’t exist or are woefully inadequate and on a global basis, the cross-jurisdiction issues are wonderfully complex. Businesses are plunging forward creating opportunities and risks that, in many cases, the law department knows nothing about. Rather than fighting over irrelevant or trivial issues, lawyers could refocus their energy on issues that really matter to their clients.

Lawyers in law departments and law firms have faced a choice for many years. They can try to ride out the end of the buggy whip era until retirement, hoping there will be enough horse drawn carriages around to keep them in business until their careers are over. Most lawyers seem content with this approach, even though only a few will survive using this strategy without serious career problems.

Alternatively, lawyers can play through the end of the game. They can change what they do and how they do it and find new ways to remain relevant to their clients. They can pivot the profession to provide the type of resource society will need to help with governance now and in the future.

Imagine what would happen if eleven players from 1894 took the field today and tried to play football? But that is what happens in law. Compare how legal services were delivered in 1894 to how they are delivered today, and you will see very little difference. More complexity, yes, but little difference in how the services are delivered. Yet the client of 1894 is not the client of 2016. To win at this game, lawyers must learn how to play it today and adapt to the rules for tomorrow. I don’t think this is an in-house lawyer versus law firm lawyer question. I think it is more basic. The real question is whether lawyers are willing to do what it takes to be in the game at all.

Educating

On October 10, 2016, the Royal Swedish Academy of Sciences awarded the Sveriges Riskbank Prize in Economic Sciences in Memory of Alfred Nobel 2016 to Oliver Hart and Bengt Holmström “for their contributions to contract theory.” The Nobel Prize has been awarded twice before to economists who focused on contract theory (Ronald Coase, 1991; Oliver Williamson, 2009). Clearly the underpinnings of what lawyers do every day go far beyond what law students cover during two semesters in the classroom.

There was a time, pre-industrialization, when practicing law really was about the law. Pleading had to be in precise form and law itself was concentrated in a few areas of social interaction, such as property, criminal law, and simple transactions. But just as industrialization vastly complicated the mechanics of society, it also complicated the law.

We know this, because we have lived through many of the consequences of that increased complexity. As the volume of statutes, regulations, interpretations, cases, and other information about a topic increased, lawyers specialized and then sub-specialized to keep up with the area. When I started working in law firms, you could still work on large transactions and large lawsuits. When I became a partner in a large law firm, you could still handle cases in many different substantive areas (my areas were securities law, antitrust, environmental law, and general commercial disputes). Today, you would not find that diversity in a large firm lawyer’s practice.

Even with the increasingly focused practices, lawyers struggle to keep up with the volume of information relevant to their field. Reading the information isn’t enough, the lawyer must also find ways to access it and to combine it to the benefit of his or her client. And every day the volume grows. But this is only part of the story.

Lawyers Know They Don’t Know

College students often recount having a dream in which it is the day before or the day of a final exam and they suddenly realize they were signed up for a course but they never attended the classes or did the homework. They awake panicked, only to realize that is was just a dream.

As a general counsel, I would lie awake in the middle of the night wondering if my team and I had missed something important. Sometimes, I was focused on a particular lawsuit or transaction. Other times, I was thinking more generally—what legal issues we not addressing that come back to bite us. From my discussions with other general counsel, my late night musings were not unusual. If it is difficult to keep track of one sub-speciality, think about how hard it is to make sure your law department, especially a small law department, is staying on top of the legal issues relevant to your client.

I think we did a fairly good job with the law. But many times issues would come up where I would think that we must not have been the first lawyers to ask a question. These weren’t legal questions that some hours of research would solve, these were questions related to and part of practicing law. For example, negotiating strategy, pricing strategies (for legal services, not corporate products), operations management, organization behavior, and, of course, technology issues come up daily in any legal practice. I was often uncomfortable with the advice I was getting from law firm lawyers when we discussed these issues. In fact, many times I felt the lawyer was winging it.

When I was applying to graduate schools, one of my undergraduate mentors made a very perceptive comment. He told me that my challenge would not be academic rigor, persistence, ability to handle complex material, or any other aspect of getting a PhD and becoming a successful academic. He saw my challenge as being interested in too many things. I loved to read, learn about all sorts of things, and then try and assemble that information into coherent theories. He told me that for real success as an academic, I would need to pick an area and then know it like no one else. Through that relentless focus, I would come to see things that others glossed over—I would get the insights I needed to make my mark.

While I still disagree that having a breadth of interests is bad, I do admit that strictly from a career perspective, I might have gone further if I had picked one topic and pummeled it to the ground. I would be “the” expert and that type of expertise can take you far.

The tradeoff that I have enjoyed, is a curiosity that lead me to unexpected information and connections. I will see something done in one area, be working on something in an unrelated area, and ask why we can’t borrow from the first area and apply the idea in the second area. This ability to cross boundaries is what, in the end, helped me to become as successful as I did.

But it also led to the nagging feeling I described above—when confronted with many questions, wasn’t it the case that others had already gone there and addressed the question? Consider this example.

One of the hotter topics in the legal industry over the past decade has been alternative fee arrangements. Today, we have many names for the topic, including value fee arrangements and appropriate fee arrangements. In the end, they all mean: should we use some form of fee arrangement for this legal matter other than the billable hour? While alternative fee arrangements have made some inroads, the extent of diffusion has been much slower than many hoped (though faster than many like).

Uncertainty and lack of trust come up often when alternative fees are proposed. The idea of fixing up front a fee for a complex service that will be impacted by many variables creates a discomfort level that causes in-house and law firm lawyers to run back to the billable hour. They both recognize the level of uncertainty in legal matters and neither trusts the other to be fair when looking at the fee after those uncertainties become known. This brings us back to Hart and Holmström.

Lawyers flounder with the fee, trust, and uncertainty issues. But what they don’t do is look to what others who have studied these issues have learned. They don’t show the curiosity to say: this may be a novel issue for us as lawyers, but perhaps it is not a novel issue and others have spent time on it and can give us some guidance. Hart and Holmström have spent much time studying the concept of incomplete contracts (contracts that do not specify all the outcomes of all future contingencies) and the effect on the behavior of parties to such contracts when it comes to setting prices. Other researchers have taken what Hart and Holmström have done and gone further.

In other words, lawyers try to muscle their way through the problem without looking for knowledge. This happens time and again. Today, many law firms have so-called pricing experts. These experts help the partners price legal matters. But in reality, many (most?) of these experts know little to nothing about the voluminous research in the area of pricing. I heard one “expert” talk recently about how he had developed a pricing theory, which sounded like a mashup of intuition, old pricing “truisms,” and a bit of consultant-speak thrown in. When I asked questions about his research on pricing for professional services, he was totally unfamiliar with the area. He just made up the theory sitting in his office based on being a lawyer for many years. He is not unique.

The same story comes up when we look at other areas of legal practice. Lawyers are not familiar with operations management, marketing, organization behavior, and much of finance. Their lack of knowledge isn’t limited to the theoretical side, it also sweeps in the empirical side. Put bluntly, lawyers are unfamiliar with vast areas of knowledge that explain much of what they do each day and why they encounter certain problems. The research also shows ways lawyers could avoid the problems. But then there are the lawyers wondering whether, if they knock the corners off their square wheels, the road will feel smoother.

The lack of knowledge isn’t limited to lawyers in law firms, it extends to lawyers in-house, and lawyers in other practice areas. For a long time, this ignorance was just quirky. Lawyers were lawyers and as long as they got the job done, others were inclined to let the quirkiness go. Not so anymore. As clients have become increasingly distressed by the profession’s backward ways, quirkiness has turned into something uglier. Quirks have become obstinate refusals to affordably help clients at reasonable prices while improving quality.

Let’s Remake Legal Education

I have heard many law faculty respond to the challenge of law schools should teach law and if students want to know business, they should go to the business schools. To them, the problems outside the walls of the law school are someone else’s problems. They have done their job by teaching legal theory. But is that really true? And is it our best position to argue students need two, three, or four post-graduate degrees to practice law?

Much of the law taught in law schools today involves law taught to pass the bar exam. As I’ve said before, we have yet to see a connection between the bar exam and “success” practicing law. It is a filter that reduces competition and should not be glorified as offering more (even competency). But that practice reduces the time available to teach other topics.

The “law” that most students encounter will be law learned or developed after law school. It is hard, in many cases, to say that the post-school law is even based on some “first principles” learned in law school. Modern approaches to contracting are not the types of contracts discussed in most first year classes, and the same is true for other areas.

It is time to ask some basic questions about legal training. Is law too complicated to be taught as we traditionally do in law school? Should education in the law be evolving into education in an inter-disciplinary area, much like other inter-disciplinary areas have developed in universities? With that evolution, should we be training lawyers in research skills, statistical techniques, and mathematical modeling equivalent to what they would learn in an applied PhD program? Should we also be training legal technicians, perhaps at the undergraduate level or as part of a combined BA/MA/PhD department or school? Those receiving a BA will, with some on-the-job learning after school, be equipped to handle many of the technical aspects in law. Those going further will be equipped to guide the law and its practice.

Legal education sits in a funky place. It is not rigorous enough in today’s world to train lawyers to guide the law or legal services. Yet, it is too costly and time consuming to be treated as an extended Bachelor of Arts. With many law schools struggling, perhaps it is time to address the fundamental issue of legal education and move in line with other countries who recognize law for what it is and don’t try to pretend the lawyers are training to be the world’s intellectuals.

SymbolThis could get ugly. I’ll step our way through it so stay close and hopefully you will make it through to the end okay.

Dr. Stephen Wolfram is the guy you did not hang around with when you were in school. He was born in London in 1959. As often happens with people of high intelligence, he struggled in school and had no patience for the “silly” arithmetic books he was asked to read. But by his early teens, he had written three books on particle physics (not published).

One of the reasons you would not have hung around with Stephen in school is that he hardly spent enough time at a school for you to get to know him. By age 15, he had published articles about his research in quantum field theory and particle physics. He went to Eton College, but left before graduating and at age 17 entered St. John’s College, Oxford. He also left St. John’s before graduating and enrolled at the California Institute of Technology where, at age 20, he received a PhD in particle physics. One of the members of his thesis committee was Richard Feynman (yes, that Richard Feynman). What next? He joined the faculty at Caltech and at age 21, became the youngest recipient of a MacArthur Fellowship (the so-called genius grant).

If you think Richard Feynman was a brilliant theoretical physicist who did things ranging from assisting in the development of the atomic bomb, to creating Feynman diagrams (visual representations of the mathematical expressions describing the behavior of subatomic particles), to nanotechnology, you are right. But he also was perceptive about human character. When Wolfram wrote to Feynman saying he was considering starting an institute to study complex systems, Feynman replied “You do not understand ordinary people,” and suggested Wolfram “find a way to do your research with as little contact with non-technical people as possible.” Again, another reason why you probably would not have hung with Wolfram.

Wolfram left Caltech and joined the faculty of the University of Illinois at Urbana-Champaign where he founded the Center for Complex Systems Research and the journal Complex Systems. When he was at Caltech, Wolfram had developed a computer program called Symbolic Manipulation Program. A battle with Caltech over the rights to the program and related issues led to Wolfram leaving for the University of Illinois. Shortly after arriving at Illinois, Wolfram began developing Mathematica and within a year founded his company Wolfram Research. Today, Mathematica is widely used around the world and Wolfram Research, which Wolfram joined full-time shortly after founding it, develops and promotes the program.

In 2002, Wolfram published the book A New Kind of Science, in which he argues that the universe is digital. He further argues that simple computational systems can be devised to model and explain all of nature. In 2014, Wolfram finally named the programming langue that had been driving Mathematica for 25 years, calling it “Wolfram Language.” Wolfram Language can be used to write the computational systems, but Wolfram had been expanding the Language’s reach. Wolfram spends his time on Mathematica, on developing Wolfram Language, and on giving it greater exposure so others will use it. In essence, Wolfram followed Richard Feynman’s advice by creating a world in which he can spend most of his time working with technical people on his vision of a computational future.

And I Care Because …?

Last week, Wolfram posted a long blog post laying out his vision for computational law. The post covers a lot of ground and stretches from Aristotle to the present, so I won’t try to cover it all in my recapitulation. Instead, I’ll focus the rest of this blog on the key point in Wolfram’s blog, his argument that now is the time (and of course Wolfram Language is the vehicle) for creating a symbolic discourse language. In other words, Wolfram believes we are ready for a language we can use to express legal concepts and which computers can use to compute outputs. Creating the symbolic discourse language, within Wolfram Language (a symbolic language) is his next step. Again, talk like this is probably another reason why you wouldn’t have hung with young Wolfram.

Think of symbolic discourse language as something that exists between natural language and computer language. Without getting deeply into computer software and hardware, think of the computer’s operating system (e.g. Windows or Mac OS) as the base level. On top of the operating system we have applications, like Word. When you want to write a letter, you can open Word and just type. Word interacts with the computer’s operating system and the operating system interacts with the hardware, so that when you click “print” your letter is printed.

That system worked well for lawyers and poets, but those who used math were left struggling. They had to program the computer to run their computations, and that meant learning computer languages such as Fortran (in the old days) or C.

Wolfram created a new language that allowed people to run math and get answers to formulas or graphs without having to go deep into programming. The new language, Wolfram Language, is a symbolic language. That means you can enter relatively simple commands and Wolfram Language converts them into the complex commands that drive the computer. The more sophisticated the language, the more symbolic the commands you can use.

If you ask Wolfram Alpha, which takes as one form of input natural language, “what is the diameter of the earth?” it can translate your natural language inquiry into the code needed to search for the information, assemble it, and present it to you in a way that you can understand.

Now think of a court decision. Judges do not use symbolic language. They attempt to explain the law, the facts, and their reasoning using natural language. But using natural language can get messy. Think about separating “preponderance of the evidence” from “beyond reasonable doubt.” You get the terms, but that doesn’t mean a computer or others get the terms. They convey a concept, but not precisely.

A symbolic language could take each term and turn it into something a computer can understand (e.g. >50.0%). Once the computer can understand it, it can receive inputs and deliver outputs. Lawyers and judges would then write contracts, briefs, case law, and other materials using the symbolic discourse language instead of natural language.

If you are straining to extend this idea to all legal discourse, that isn’t surprising. It will take quite an effort to develop the entire symbolic discourse language. But Wolfram’s point is that our knowledge and tools have developed to the point where he thinks his team can do it.

Don’t Get Rid Of Lawyers Just Yet

Let’s address the first issues that come up in a lawyer’s mind when reading this story: what is good or bad in it for me? You may find it surprising, but Wolfram does not take the position that the symbolic discourse language will be the end of lawyers. He says, “Today lawyers have to learn to write legalese. In the future, they’re going to have to learn to write what amounts to code: contracts expressed precisely in a symbolic discourse language. … [I]t will help lawyers think better about contracts.” For those in legal education, this is another, and perhaps the most powerful yet, reason to start teaching law students logic and coding.

If symbolic discourse language won’t decimate lawyers, will it decimate the law. Will law become so simple that anyone can do it? Not so, according to Wolfram,

Once computational law becomes established, the complexity of what can be done will increase rapidly. Typically a contract defines some model of the world, and specifies what should happen in different situations. Today the logical and algorithmic structure of models defined by contracts still tends to be fairly simple. But with computational contracts it’ll be feasible for them to be much more complex—so that they can for example more faithfully capture how the world works.

He goes on to describe how the symbolic discourse language will interact with machine learning software that is gathering information from other sources (e.g., the internet) that the language uses to inform the contract. This gets a bit tricky, but I’ll take a stab at explaining it borrowing from one of Wolfram’s examples.

The contract calls for X to happen when condition Y is satisfied. But Y is something itself difficult to define as “satisfied” or “not satisfied” in simple terms. Wolfram uses the example of fruit. I will pay you $10,000 for delivering to me a certain quantity of fruit meeting the standard “Fancy Grade.” The question is whether the fruit met the standard.

We could define the standard as no more than Z% of the fruit has blemishes and we can further define a “blemish”. A computer could examine all the fruit, calculate the percentage of blemished area, and feed that into the contract yielding an output: pay or don’t pay.

Many lawyers may be shouting “huzzah” right now. We’ve just said that law will evolve to a symbolic discourse language (in other words, legalese of a different type), become more complex, and require knowledge of both legal principles and computers. Is law going back to an opaque art that will require clients to pay for access? I don’t think so, but let’s leave that question to the side and explore other “what does it mean” questions.

Crushing Poetry Out Of Law

Every law student knows the Aristotle quote, “The law is reason, free from passion.” Wolfram says that symbolic discourse language would take us there, “In a sense, the symbolic discourse language is a representation in which all the nuance and ‘poetry’ have been ‘crushed’ out of the natural language.” This will raise some interesting questions, particularly when it comes to equitable considerations. Should contract law be devoid of poetry?

Going in another direction, we can ask how symbolic discourse language might affect our understanding of the economic underpinnings of contracts. On October 10, 2016, the Royal Swedish Academy of Sciences awarded the Sveriges Riskbank Prize in Economic Sciences in Memory of Alfred Nobel 2016 to Oliver Hart and Bengt Holmström “for their contributions to contract theory.” They have focused much of their work on the area of incomplete contracts. The theory starts with the thesis that contracts are incomplete, because they cannot specify what is to be done in every future situation.

Part of specifying the future is data, part is computational power, and part is complexity of the contract. Today, we can’t possibly analyze sufficient data to predict all possible future consequences. Even if we could get enough data, we would need tremendous computational power to analyze it. Finally, writing a contract to cover all the contingencies would result in a document no one would dare write or read.

Wolfram posits a future where those problems would be greatly mitigated. Computers can scour vast databases and use machine learning to analyze data relevant to the contract. With access to tremendous computing capacity, the power to analyze the data becomes available. Finally, if the contract will be written in code—and given that the computer itself could write at least some of that code—we don’t care how long the contract becomes. We can see a touch of this today in electronic trading on the stock exchange. Computers gather and analyze the data, develop algorithms based on the data, and place the trades.

As you can begin to see through the fog, data plays an ever more important role in contracting. Data helps inform the terms of the contract, but data also becomes the fodder for the programs that determine whether terms of the contract have been met. Data also affects the dispute resolution process. If both parties and the court have access to massive quantities of data and the computing power and systems (machine learning) to analyze the data, dispute resolution could become focused on very narrow issues as more contract issues are answered through complex contracts and data.

We Still Have Ground To Cover

Wolfram’s post (which consumes 20 single-space pages) touches on some of these issues and addresses many more, yet still leaves large gaps in its wake. The core proposition is this. Work so far, with some exceptions (many of which Wolfram notes) has been focused on backing into discourse analysis by examining what courts have done and attempting to find ex ante ways to construct systems for describing the logic of law. Wolfram proposes to construct a symbolic discourse language that lawyers, judges, legislators, and society would use to create law. Computers could use the language, augmented by machine learning analysis of relevant data, to evaluate questions arising under the law.

Wolfram acknowledges the huge amount of work it will take to accomplish this feat. But, as his biography suggests, he is not someone to shy away from challenging questions or large amounts of work.

Lawyers should consider what Wolfram proposes in a different light. Perhaps Wolfram will succeed or perhaps this will be a challenge that survives him. But, most of the work we see today involving computers and law involves attempts to automate the present or to decipher the past, not create the future. Just as we are at an inflection point in the delivery of legal services, one could argue we are at a similar point in the substance of law. It has become too chaotic and faces challenges too great (e.g., explosion of relevant data, speed of societal change), for the current approaches to developing law to work. Add on to that other issues, such as the privatization of law and many issues never reach the courts, affecting the evolution of common law.

Wolfram’s path is not artificial intelligence in the law. It doesn’t remove lawyers from the equation (though that is theoretically still possible at some point). Instead, and at a closer point in time, it leverages the power of computers to use data, handle complexity, and make law (in theory) more precise (though at a cost to humanity, a topic for another post). Those are benefits we can deliver to clients and, ultimately, what makes his path intriguing. It will be up to lawyers to determine whether they let this turn out to be an ugly or beautiful path.

ValueNetworkPrior to World War II

During the Edo and Meiji Periods up until World War II, Japan’s economy was influenced and then dominated by zaibatsu. Eventually, four zaibatsu became the most powerful: Sumotomo, Mitsui, Mitsubishi, and Yasuda. Each zaibatsu was controlled by a family. The zaibatsu controlled significant portions of steel, banking, mining, and other core industries that were critical to Japan’s industrialization.

The typical zaibatsu was made up of a holding company, a banking subsidiary, and many industrial subsidiaries concentrated in a few core industries. Those industrial entities, directly or indirectly through other subsidiaries, formed a vertically integrated system. The four zaibatsu were powerful, but there were many smaller zaibatsu focusing on less critical industries.

The Japanese military was not fond of the zaibatsu. The zaibatsu wielded enormous economic power and had great influence over the government in areas such as trade and foreign policy. Outside the military, the Japanese population  viewed zaibatsu with suspicion and awe.

While the zaibatsu increased their power as Japan’s industrialization increased during the early 1900s, they lost much of their power going in to World War II when the Japanese government took over many of the zaibatsu-controlled industrial operations. Coming out of the war, General Douglas MacArthur, leader of the allied effort to assist Japan in re-building, took further steps to dissolve the zaibatsu. He was not completely successful at eliminating them and remnants of the systems still exist today. But the devastation of Japan’s economy, the introduction of many Western ideas, and the desire to move further away from the feudal-like structure of the zaibatsu meant it was time for something new. As Japan began re-building a new structure helped the country take the next step.

The Keiretsu

A keiretsu is a loose affiliation of companies that work together. Typically, they have interlocking ownership structures. The keiretsu, unlike the zaibatsu, are not controlled by a family and are not monopolies. Each keiretsu is built around a bank that provides primary financing to the companies in the keiretsu.

The Toyota Group is affiliated with Mitsubishi UFJ Financial Group (MUFG), which is part of the Mitsubishi Group. Toyota Group’s keiretsu consists of many tiered suppliers who produce parts or sub-assemblies for Toyota vehicles. There are horizontal keiretsu and vertical keiretsu, and Toyota Group is considered one of the largest vertically integrated manufacturing group keiretsu (a seisan keiretsu).

Japan’s laws do not allow banks to own more than a certain minority percentage in industrial companies. As a result, the keiretsu are not as tightly integrated as the zaibatsu. Even ownership among keiretsu industrial entities usually is limited to minority positions, allowing member companies to participate in coordinating and directing other companies without directly controlling them.

The keiretsu system has not been replicated outside of Japan, with  possible exceptions in South Korea and India. Within the United States, for many legal and cultural reasons, the keiretsu idea has not taken hold.

Modern Law Firm Systems

Although the United States does not have keiretsu, we have seen a very distant and pale cousin appear in the legal industry. It is the law firm referral network. These networks have been formed to help clients who need services in many jurisdictions, but who prefer to connect into a pre-existing network over creating their own network. There are two basic types of lawyer referral networks.

First, there are the dues-paying membership law firm networks. These networks pre-screen firms, provide an administrative hub, and restrict member firms to providing services in certain jurisdictions (exclusivity). They exist somewhere between trade associations and vereins.

Second, there is Dentons’ Nextlaw Global Referral Network. The Network is structured similar to other referral networks. But, Denton argues, it differs from the traditional law firm referral network in two major ways. First, traditional law firm referral networks usually require that member law firms pay to join the network. The fees cover the administrative costs of the network, which include advertising, vetting current and potential members of the network, educational events, and handling administrative duties associated with the network (such as maintaining and populating a web site). Second, Dentons does not give member firms territorial exclusivity in its Network, something other referral networks usually do.

However, both network types lack an essential characteristic of a lean network and, therefore, do not move us toward an improved legal services system. The Toyota keiretsu integrated the the operations of each supplier with those before and after it. It was this integration, done through understanding and interconnecting processes, that caused the network to rise well above any competing supplier system.

Why Keiretsu Are Superior

When a client works with multiple law firms, or even one law firm using multiple offices, or even one office of one law firm, it will get—well, it isn’t sure what it will get. Each lawyer will do his or her thing his or her own way. The legal industry is famous for its love of autonomy and lack of standardization.

Sticking with the traditional law firm referral network model, the lawyers in each firm deliver services using their own processes, standards, timetable, and customs. For each firm, this is a custom mix that someone must integrate with what all the other firms are doing. For the client, this means a lot of wasted time (integration), risk (variation among firms), and extra labor (re-work and fitting the work of firm A into the slot left by firm B). Simply putting the firms in a network or on the same software backbone doesn’t solve the problem (though it adds cost to the system).

Toyota Group faced the same problem. No matter how lean it would get, it relied on many suppliers who in turn relied on many suppliers. If that chain wasn’t well-integrated, Toyota Group would be limited in what it could achieve. The solution was to work with those tiers of suppliers to create the integration necessary for continuous improvement.

If a Toyota assembly plant gets its engines from a first tier engine assembler, then the engine assembler must deliver to the plant exactly what that plant needs, when it needs it, and configured exactly the way the plant wants. Toyota Group did not need the wrong engine built efficiently, the right engine delivered late, or the right engine delivered on time, but poorly constructed. That meant Toyota Group needed to work with its engine supplier to develop the value chain through both of their systems. This is key: Toyota Group and the supplier worked to create one integrated, seamless, value chain built on continuously improving processes.

The same problem existed for the engine supplier, which received parts from many second tier suppliers, and so on back through the chain. The value chain was not just what the Toyota assembly plant did, it was what every supplier that participated in the chain did, from the business that made the bolts through the assembly plant itself. Otherwise, waste would get passed along and build up in the system, much as many streams filled with debris will eventually dump all that debris into the major river. Cleaning the river does no good if the streams continue to send debris.

Law firm networks do not integrate the way Toyota Group integrated. Part of the problem lies in legal services delivery. Someone must work with the organization at the head of the system, and then convince that entity and the supplier entities to work together—for the good of their clients—to improve and integrate the system. Then, of course, all of those entities must fulfill the promise. If the head of the system is not standardized, efficient, run on metrics, etc., then the rest of the value chain will have similar flaws.

You can already hear an objection. Each firm argues that it works with many clients and firms and that it can’t adapt its systems for each one. The firms and lawyers will ask why they should “optimize” for one system, or how they could possibly optimize for many systems. This objection comes from not understanding process improvement.

Within Toyota Group, the same objection could have been (and probably was) made—at least below the assembly plant. The supplier companies do not work solely with Toyota Group. They work with suppliers outside the network and they have customers other then Toyota Group. Toyota Group encourages that diversification. Each supplier benefits from learning and improving its processes, because it gains (or maintains) a competitive edge. It improves its financial prospects and becomes more valuable to the companies with whom it does business. It is hard to find a supplier who can plausibly make the claim that using too much labor, delivering mediocre quality, having high variability in its products, and engaging in other wasteful practices works to its benefit.

The Client Network

Although a Toyota assembly plant is a manufacturer and the client is the ultimate  customer, in this story the assembly plant is the customer. In the legal industry, the customer, for large corporations, is the corporation not the lead law firm. Clients should be building networks that contribute to their value chain, not the law firms’ value chains. To do so requires a very different way of thinking than what we see in clients today.

The client needs to start with a value focus and define what it means when it says “value.” It should then assemble suppliers in its value chain who are willing to align their goals with the client, and suppliers means more than law firms. Those suppliers must work together to define the points along the value chain. Then they must go the next step and define processes. The suppliers and client must work as a team to improve and then improve again. In other words, continuous improvement must be built into the client’s supply chain, through law firms, managed service providers, e-discovery vendors, and so on.

For large corporations, this approach sounds feasible, if not easy. But what does the small corporate client do? It can’t reinvent the legal supply chain, but it can reinvent its own supply chain and choose suppliers based on those who will work with it on process definition and improvement. Supplier selection based on what the supplier can and will do becomes more important that name recognition. The size of a supplier recedes in importance and the supplier’s ability to flex, to re-work processes, to understand value chains, to remove waste, and to align itself with its clients goals become selection criteria. Again, we do not see this level of continuos improvement throughout legal services value chains.

The need for end-to-end value chain process improvement in the legal industry leaves an interesting opening for businesses, such as managed service providers (MSP). Clients, rather than depending on law firms to do the integration, could turn to the MSPs to play that role. By providing legal project management, process improvement, technology expertise, and metric knowledge, the MSPs can knit together the law firms, MSP, and other providers (e.g, e-discovery companies) into well-integrated, cost effective, legal services networks. Medium and even small clients could tap into these networks.

The MSPs would have better goal alignment with clients and more incentives than law firms to work with clients for the long-term (long-term benefits accrue more to businesses with long-term perspectives than to law firms which operate on one-year perspectives). They also can build and maintain networks where one client may need Brazilian counsel one time, but across many clients that assistance is needed frequently so there is an incentive to continue improving processes. The MSP also can help with tasks, such as project hanging deals where tight network integration would reduce the friction costs in-house counsel encounter when creating ad hoc deal networks. Of course, a law firm could decide to play the MSP-integrator role, but we have not seen firms willing to take on the challenge (again, we see only loose networks with little or no process improvement integration).

Conclusion

The lawyer referral networks that exist today have been built for the benefit of the network members, not the network users. Law firms participate because they believe the network will increase their exposure to clients and, ultimately, client revenue. This network structure is similar to the zaibatsu, which were built for the benefit of the controlling families. As a client, however, that is not the network you want.

As a client, you want a network structure that delivers value to you, and that means a structure that is aligned around your goals. Unless your goals include spending money on inefficient structures, modern referral networks are not likely to align with goals such as increasing efficiency, cost, and timeliness.

The network that will add the most value to your business should be built with you—the client—at the focal point. You are the starting point for the value stream that will deliver services that are fit for your purposes. The members of your network must be flexible, able to adapt what they do to operate smoothly within the value stream passing services through the network with minimal waste, and well-positioned to add value along the way. In other words, networks should not be law firms strung like pearls on a string. They should consist of diverse service providers who are strategically positioned to deliver what is needed, when it is needed, in the way it is needed.

So far, we have not seen a law firm network emerge with this process-focused, goal-aligned, value driven structure. Even attempts by clients to build networks have focused far too much as cost and spent almost no effort on a true grassroots approach to building the system. Technology will exacerbate the problems of the current lawyer referral networks, though they will undoubtedly herald their use of technology to integrate the members of their networks. As with most changes affecting the legal industry, the real question of change goes back to the client. Will clients today take the lead in building true, value enhancing networks or will they continue to settle for the modern equivalent of country club friends?

BespokeThurgood Marshall was not just a justice on the U.S. Supreme Court, he was the lawyer that led many of the civil rights cases striking down de jure racism in the United States. While he successfully prosecuted many cases, he is perhaps best known for the Brown v. Board of Education landmark decision in 1954. The Supreme Court unanimously ruled that “separate educational facilities are inherently unequal” and, therefore, racial segregation of public schools violated the equal protection clause of the 14th Amendment.

Justice Marshall’s strategy to bring down racist practices in the United States is still studied today as a model for how to run an activist program through the court system. But today’s court system is far more complex, and the contexts in which activists bring their challenges far more convoluted, than at any time in the past. If a few years from now you were faced with a challenge of the type that Justice Marshall faced, could you run a similarly successful campaign?

The Maker Era

We have entered the maker era. You can buy a 3D printer, put it in your basement, and within minutes you can make or replicate replacement parts, toys, or your own inventions. Connect your computer and software, and now you are in the business of designing whatever you want. Once you are satisfied with the design, you can send the file to a commercial manufacturer or license it over the web. You are in competition with the global world of manufacturing.

What if you are a nascent clothing designer? New nanotechnologies allow you to spray on clothing. You can add colors, create texture and design combinations, and even build in special features (anti-perspirant?) into the new shirt. If you don’t like what you created, simply peel it off, dissolve it, and start over again.

If you aren’t interested in manufacturing or clothing, perhaps you would like to use software to mine behavior? Go to the internet and you can download software that lets you analyze text, apply machine learning, and find secrets hidden in the words. You can analyze sentiments, build behavioral paradigms, and test your ideas without leaving the comfort of your office.

Lawyers often struggle to comprehend how fast the world is moving around them. 3D printing, nanotechnology, and artificial intelligence are just three of the many areas rapidly scaling from the laboratory to real life. Yet most lawyers are still in the quill and paper era, trying to master Word and occasionally venturing into Excel or PowerPoint.

Most law and technology posts focus on simple automation or perhaps elementary artificial intelligence applications, such as finding all bankruptcy cases with certain elements. The “scary” futurists speculate about robotic lawyers sitting next to human lawyers as they compete for the next case that comes over the transom.

In this essay, I’m going to take you on a bit of a journey into the future. Let’s imagine how a clever software engineer with knowledge of the law and a lawyer with a bent for social justice could start a movement in the 21st century.

The Designer’s Lawsuit

Thurgood Marshall faced a significant challenge in the 1930s, 1940s and 1950s when he was attacking racism as a lawyer for the NAACP. He had to maneuver key issues through federal district courts and appellate courts, often hostile, to get those issues before the U.S. Supreme Court. To do so, he relied on research, experience, intuition, and luck. Could he do it differently in the 21st century?

Imagine using computational linguistics and machine learning to look at all the reported opinions relevant to the issues you wanted to get before the U.S. Supreme Court. The software “reads” the opinions and the briefs, finding those obscure connections you couldn’t find even you if you had the time to read the hundreds of thousands of pages.

To make the analysis more interesting, you also look at databases built from the biographies of the judges who may sit on the case at each federal court level. The databases include all the information about the judge’s experience (undergraduate school and major, law school, etc.), training (law firms, government positions, etc.), and personal characteristics (age, gender, etc.). It also includes everything the judge has written or said that is public, outside of opinions. Speeches, law review articles, and op-ed pieces sit in the database.

While it may seem like you have the relevant information you need, you don’t stop there. You pull together information on the community where each judge lives. What is the political sentiment within the community? Is it affluent? What religions predominate? You dig deep into the community to understand how it may affect the judge’s thinking.

You also look at the national climate. Where have the trends been going—are the people in the United States moving in your favor or against you on the issues? Are there similar issues from which you can gain guidance? What about legislative movements at the local or national level?

With this massive database, you turn loose your machine learning software again on a small subset, the “training” database. The algorithms (and you use many, stacked to mimic the way the human brain processes information—as best we can tell) run through the information over and over again. The algorithms are learning, attempting to “understand” the data. You ask questions and the algorithms respond.

As the algorithms respond you check the results. You reject most responses and inform the software of its hits and misses. Over time, the hits grow and the misses shrink. The algorithms seem to be organizing information the way an expert might. You reach the point where you think the algorithms are ready for the big time.

You turn them loose on your large data set and wait to see what happens. As the results start to come in, you see that the algorithms have identified some court possibilities you would have picked, but there are some unexpected choices as well. In fact, it turns out the unexpected choices rank higher on the probability of success than your expert choices.

That was the easy part. The next step is to ask the software to design the lawsuit. What arguments will work best in each court? Which arguments should be emphasized and which added as “just in case.” Again, you find some of the picks familiar, but some are unexpected. In fact, there are a few creative uses of arguments that came out of cases decided long ago, but that seem to fit with the times.

With knowledge of the arguments, you turn the work over to the next program: the legal argument drafting program. For many years now, software has been writing corporate earnings articles and recaps of sports games without human intervention. The software takes the financial results or the game record and, using some training on writing styles (a dash of Hemingway mixed with a bit of Lardner), turns out articles that people can’t distinguish from articles written by journalists.

That software has now been trained on legal writing styles. Using opinions by Holmes, Jackson, Hand, and Posner, you have trained the software to write like a judge (or, perhaps, like some judges wish they could write). With the legal arguments preferred by the machine learning algorithms, the legal argument drafting program turns out a passable first cut at a motion for summary judgment. You can use that to back into a complaint. Once you know the district judge and she issues her opinion, you can use the software again to churn out the first draft of your appellate brief. You have designed your first lawsuit. (And before you yell at me about all the professional responsibility issues involved, please remember the spirit in which this essay is intended – to spark interest in what types of analyses will be possible, not to suggest ways to improperly create and file claims.)

Don’t Wait, Dive In

The designer lawsuit is, of course, a thing of the future. The software we have today can do bits and pieces of what I have described, but we still have a way to go before all of those pieces can knit together a new case tweaked for what may work best in each court. Still, we are closer than what many lawyers think.

The point of this exercise is not to scare lawyers into thinking software will replace them soon. It also isn’t to add on to the fatalist pile the thought that lawyers will soon become extinct, or nothing more than the handmaidens of computers.

I do hope the story has piqued your interest in staying current with what software can do. The amount of data available to lawyers is vast and far beyond what we can reasonably consume and use to help our clients. It grows much larger each day. As tools come online that can help us digest that mass, to not use them approaches the irresponsible. That information contains judicially recognizable information that may tip the balance in an argument. It puts judicial decisions in the context of what is happening in society (and if you still think judicial decisions aren’t political or are limited to extending law on the books, then I apologize for rudely dragging you into the real world).

We have entered the augmented age, where humans plus computers can take us further, faster, than humans or computers can go alone. If you believe that is fantasy, think about what you hold in your hand: a smartphone you can talk to that reaches out to all the data on the internet to answer your question. In seconds, Siri or Cortana translates your spoken request to digital commands, processes them, and come back with an answer or at least relevant web sites. Your mind has been augmented, through the smartphone, by the internet. That connection grows closer and stronger each day

When will we have designer lawsuits? Five years? Ten years? Longer? We don’t know and the correct answer isn’t relevant. The designer lawsuit will not be like falling off a cliff: one moment you do all the work and the next the computer does it for you. We will creep closer a step at a time, with the steps coming quickly at some points. Whenever the time comes, you will be much better off for having kept pace with the changes, than trying to quickly run to catch up. No matter how fast you are, you will not succeed.

karateThe next time someone approaches you and suggests it is time to change, check your heartbeat. The simple mention of the word “change,” regardless of what follows, seems to evoke a reaction in each of us. Heart rates increase, breathing becomes faster and shallower, adrenaline starts pumping, and we get ready to fight or flee. The words following “change” could be something benign—such as,  yesterday’s paper to today’s paper in the reception area—or significant—such as, our basic business model. That simple word “change” affects us and colors everything that follows.

We have all perpetuated the story that lawyers are more change resistant than others. It makes sense, after all. Lawyers are trained to live in the past. Ask us a question and we want to dive into the books to find what the law says. What has happened in the past sets the guardrails for what we can do in the future. If the guardrails are missing in a few places, then we want to stay as close to the center of the road as possible for fear of transgressing some as yet undrawn line.

This belief that we are special, augmented with an extra dollop of change resistance, allows us to shut down attempts at change by merely pointing out who we are. We are lawyers, we recite, who are conservative by nature, trained to feed off precedent, and we are told by the more conservative members of our tribe that we should not take it upon ourselves to carve new areas of law (unless we sit in a legislative body).

The thing is, as they say, we just aren’t that special. Perhaps we do have a bit more change resistance than the average person, but change resistance is within all of us and it comes out whenever any of us (even the most change-loving) hear that trigger word. The key is in what happens next.

Lean and Change Resistance

Whenever we introduce Lean into a new environment, whether an industry, an organization, or even a department, change resistance appears. Since Lean started in manufacturing, most people assume it was met with mild to no resistance since it was a manufacturing thing. To the contrary, from veterans to newbies, manufacturers fought the ideas brought by Lean. Today, that resistance still appears whenever Lean is brought into a new setting. More significantly, even when Lean has been in the setting for a long time, perhaps years, we still see  active and passive resistance.

Move outside of manufacturing, and you continue to hear resistance to the changes Lean brings. Of course, the starting point is always the “we don’t make toasters” argument. Lean may be fine for manufacturing, but once you enter services the whole ball game changes. People are not machines so expecting them to act like and be measured like machines just won’t work (this sentiment tells a lot about the misconceptions of Lean, but I’ll hold off on that thought for a moment).

If we really want to hear the change-resistance arguments flow, we can move to professional services. Providing professional services is something that comes from the brain, not the hands, so trying to standardize how we think and have us respond to a takt time makes no sense. Clearly Lean is out of its element when it comes to Law, Medicine, and any other of the professions aimed at helping people.

Having heard resistance from people at all levels, in all industries, doing all manner of jobs, one could start thinking that the problem is Lean. Perhaps Lean just doesn’t work anywhere. But then, of course, there are the thousands of companies employing millions of people who have successfully introduced Lean and made a go of it with outstanding success. How do we dismiss all of them to decide that Lean doesn’t work? Perhaps we need another theory, and that theory is where Lean practitioners went for guidance on how to overcome change resistance.

If everyone initially opposes Lean, then the challenge may not be Lean, it may be how people respond to change. In fact, we can see that Lean is not singled out for change resistance, any form of change meets a somewhat hostile reception. It seems that Lean is not the trigger, change is the trigger, and that gives us a clue. If we can determine how to address change resistance, then it should work for Lean as well as other change ideas.

Overcoming Resistance

Change is change, so it doesn’t help to try and disguise change by saying you are keeping things the same. I remember my first exposure to civil law when I was a junior lawyer. Throughout law school, I had heard professors say, “of course, this is the common law everywhere in the United States except Louisiana, where they follow a hybrid of common law and civil law.” Since I had no expectation of practicing in Louisiana, that limitation was fine. But, sure enough, the first major lawsuits I worked on after graduating were in Louisiana, and it wasn’t long before I was trying to research state law claims.

As a newly trained common lawyer, I started by reading the cases. As I worked my way through them, I would go back a few years and then hit a case which noted that the civil law in Louisiana had been changed. I went to the statute, read the changes, and then read the comments which said “the changes in the statute do not change the law.” After a few hours of research, I had gone through this routine many times as I worked my way back until I got to the French version of the Louisiana civil law. Looking at several civil law claims, I found the same thing with each line of research. It seemed that no matter what the change to the wording of the statute, it did not change the law. “Of course it changed the law,” I would silently scream, “the wording is completely different!” I felt like the legislature was playing a game of hide-and-seek with the law. I did not buy the line that the law had stayed the same, even though the words used to express the law had changed.

The first step, then, is to acknowledge when you are changing something. The second step is to work through why you are making the change. If that sounds like a command-and-control statement (“we are making the change for you to follow”), then you already know the third step—don’t impose change, invite those who will be affected to help you create change. When the people affected helped drive the change, they are more likely to participate in its success.

So far, I have not said anything remarkable, but I have listed three guidelines mostly followed in the breach. There are other guidelines, such as clearly explaining the expectations and goals for the world after the change, listening and responding to concerns, and course correcting when necessary. But even when you follow all the guidelines, something disconcerting happens. In Lean, that means that the improvement journey stalls.

It Is Easy To Succeed—At First

Any Lean improvement journey should start out with successes. Going from a non-Lean world to a Lean world involves removing waste. Look at any system that hasn’t been through Lean improvement, and you will find waste wrapped around all the processes in the system. Even a poorly run Lean improvement program will pull out some waste, and everyone will feel good about the success. But after several of the improvement exercises, things begin to slow down. The teams are confused where to go and start questioning whether they have hit that point where there is no additional waste to remove, or at least the waste that remains can’t be removed. This is the infamous change fatigue plateau.

What seemed impossible, then became possible, then fun, and then tedious. Going back to the same well or even a new well for more improvements starts to seem like drudgery. Yes, perhaps we can take out some additional steps and trim a day off the lead time, but does it really matter? Over time, the frequency of improvement events drops off. The processes that were improved start to succumb to the overgrowth of waste creeping out from other processes. Wait a bit and everything will recede to where it was before the change. What was accomplished?

Change

Lean is not alone in hitting the change fatigue plateau. As I said at the outset, the key is in what happens next. Lean practitioners were sensitive to the plateau. It is hard to sign people on to a program if you and they know it will eventually die. We learned that for Lean to be sustainable, we needed to focus on kata.

Kata is a Japanese word that comes up most frequently in marital arts (in English, you will hear the word “form” used). A kata can be described as a series of specific steps, in a sequence, that the practitioner practices over and over again, seeking perfection. There are many kata for each type of martial art. If you have ever seen a movie with a martial arts class training, you will recognize kata. The class moves through a sequence of steps with each student performing the same step at the same time. Over and over again.

No, as Lean practitioners, we do not expect everyone to become proficient in karate. But we have borrowed the term kata to mean learning how to do become proficient in improvement so that it becomes second nature. By practicing and repeating improvement activities, the Lean thinker gets to the point where continuous improvement is one of their habits. Across an organization, as everyone moves to continuos improvement, the organization becomes extremely powerful because it is constantly engaged in improving. This continuous improvement is a sign that an organization has moved through Lean change to Lean thinking.

Kata Is Necessary, But Not Sufficient

It isn’t easy to do something over and over again. Martial arts students often drop away after a few years of practice. Practicing the kata requires a mental discipline and many students find they do not have the internal motivation to stick with the training. If you have children and they wanted to play a musical instrument, you probably have seen the same thing happen. At first, they have great enthusiasm (if they helped pick the instrument—see above about involving the person in the change process). They happily go to lessons and even put in some time practicing. Then they hit the fatigue plateau. They practice less frequently and start skipping lessons. Now, that instrument sits in its case in the basement, waiting for the next garage sale.

Kata is important, but we need something more to make Lean a real success. That something more is the commitment to a common goal and to the organization trying to achieve that goal. Put simply, it is a sense of purpose beyond accomplishing what needs to be done each day.

Many companies have tried to get to that sense of purpose by adopting mission statements or slogans. I live in Michigan, so here are some from companies that operate in Michigan:

  • “To passionately create innovation for our stakeholders at the intersection of chemistry, biology, and physics.”
  • “People working together as a lean, global enterprise to make people’s lives better through automotive and mobility leadership.”
  • “Imagination at Work.”

These statements attempt to convey what the company is all about externally, and to give employees a point to focus on as they go through each day. Sports teams do the same thing. Running drills every day is tough, but focusing on a bigger goal (winning the game, being the top ranked team at the end of the season) gives players something greater to focus on as individuals and as a team.

The team concept is important in organizations as well as in sports. If everyone has a common goal, a common purpose, then everyone is in the boat together. Employees have more reasons to work together to improve, because not doing so means they are letting down the team. Learning how to continuously improve becomes part of the competitive spirit of the organization as it works towards its goal.

Can Lawyers Find Purpose?

Lean, then, is like other changes. To succeed, the individuals and the organization must develop the kata of continuous improvement. It isn’t the individual improvement events that make the difference. It is the daily repetition of continuous improvement activities with each improvement building on the ones before that distinguishes the organization. To develop that kata, the organization must provide (with the help of its members) the purpose for going through the effort of continuous improvement. There must be a greater goal.

So far in the legal industry, we have lacked both purpose and kata. The focus has been on cost cutting, and that is never going to be sufficient (putting aside the misunderstanding of Lean). Many organizations in the legal industry are pushing Lean or jumping into it. We already are seeing some experiencing fatigue. The danger of failure is not just an organization laboring under waste. It is the danger of failing to transform. The legal industry must get past its present form and that requires leaders—individuals and organizations. To make it through that transformation, we need purpose. If you can’t articulate the common purpose of your organization, then you have more to worry about than becoming Lean.