Legal Technology Pipeline

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The Legal Technology Pipeline
Ron Dolin, J.D., Ph.D.

Framework: Innovator's Dilemma

Changing Market Values

Legal Technologies and Companies

Disruptive to What, Exactly?

Identifying and Handling Disruption

Criteria for Adopting New Technology

Next Steps: Innovation and Design

If you could design a law firm from scratch, what would it be like?T.L.*, p. 155

* T.L. Tomorrow's Lawyers, Richard Susskind I.D. The Innovator's Dilemma, Clayton Christensen

Innovator's Dilemma Framework

Disruptive vs. sustainable technology

Changing market values

Diminishing high-margin market

Business structure dependencies

Market research useless

Discovery-based planning (failure IS acceptable try, try again)

Established Market Values

Comprehensiveness

Complexity

Customized (Susskind bespoke)

High Quality

Established Relationship

Risk Avoidance (stereotypical outside)

Predictability (workload, outcome) ?

Market moving to demand-driven...

Amid all the uncertainty surrounding disruptive technologies, managers can always count on one anchor: Experts' forecasts will always be wrong.I.D., p. 178

Incoming Market Values

Unbundled and selective

Systematized where possible

Efficient

Low(er) cost

Metric-based ROI (e.g. Google PPV/CPC)

Risk minimization (stereotypical in-house)

High Value* = quality / cost* value vs. Value

New Market Pricing

Context of Disruption:
Legal System Attributes (vs. Disks)

Imposed: adhesion (e-bay), small claims...

Barriers to adoption: UPL, state bars, etc.

Time span: 5, 10, 20 years?

Few metrics: quality, ROI, accuracy, etc.

Minimal standards (e.g. XML, metadata)

New associate training (vs. medicine)

Hybrid Model: AFA's and billable hours

Disruptive products tend to be simpler, cheaper, and more reliable and convenient than established products.I.D., p. 219

MS Word vs. Google Docs

Susskind: Disruptive Technologies

Document automation

AI-based problem solving

Intelligent legal search

Big data

Online dispute resolution

Online legal marketplace

Workflow and project management

Relentless connectivity

New-Look Law Firms:

They do not seek to replicate the pyramidic profit structure, or to bill by the hour, or to work from expensive city buildings...

They are less hide-bound by past practices, more flexible, and more respectful, I expect, of ideas that emanate from lawyers who are young or young in heart.

T.L., pp. 128-9

U.S. Legal Technology Sampler*

Cloud-based e-discovery (EasyESI)

Modular ODR (Modria)

Legal research (Ravel, Judicata)

Litigation outcome analysis (Lex Machina)

Legal services (Rocket Lawyer, LawGives)

Virtual practice (DirectLaw, MyCase, CLIO)

Enhanced document automation (KMSystems)* Full disclosure I invest in some of these.

Disruptive to What, Exactly?

I.D., Susskind: market based on new values

Disks: capacity size consumption cost

Legal services demand increasing Value

Law firms are hybrids, continuums:

Billable hours not likely to go away

Non-billable inefficiencies waste money

% of AFA likely to increase two types:Hourly (e.g. discounted rate)

Caps (e.g. fixed fee, max limits, contingency)

Two ways to increase Value; tech helps both

There is a big difference between the failure of an idea and the failure of a firm.I.D., p. 179

Example: Document Automation

Law firm has early-stage startup pipeline

Current model:

Each partner silo processes startups with, say, $10K deferral, repaid only if/when funded

Junior associates: interviews, paperwork, etc.

Experiment (proposed by 1st year associate):

Centralized processing for early stage work

Document automation (client/atty components)

Requires only, say, a $5K deferral

Goal: reduce losses, increase pipeline

No longer will it suffice to have mere interpreters, who explain technology matters to lawyers and legal matters to technologists.T.L., p. 112

Technologists Amongst Us

Google:

Annual employee happiness survey

Annual bring-your-kids-to-work day: impact!

20% free project time

Incentives to play and stay

Big Law:

Punishment for crime of going to law school?

Paying off loans and leaving?

Innovation tolerance, tools, etc.?

What kind of behavior is incentivized?

Identifying and Handling Disruption:
Expanding vs. Adopting

Probably useless? improbable that someone else could utilize the technology (directly) to challenge your business model?

Adoptable? is there a potential role for the technology within your organization (within the timeframe of the potential impact)?

Disruption means definitively no to both: requires a change in business model?

Easier to expand existing than to adopt new!

In most companies, however, individual managers don't have the luxury of surviving a string of trials and errors in pursuit of the strategy that works.ID, p. 179

What is the formal process by which your firm monitors emerging technologies and evaluates their potential for your various practice areas?T.L., p. 153

Criteria for Adopting New Technology*

Value: # people, degree helped, time/$ saved...

Capacity to absorb: key support, maintenance...

Cost/Risk: $ investment, risk level, migration...

Tactical: relative importance, experience...

Learning curve: implementation, upkeep, use...

* See JOLT, Vol. 26, #1, Fall 2012

They must be plans for learning rather than plans for implementation.I.D., p. 181

Stanford Design School:
Legal Innovation Program

Institutional support (e.g. CIO, senior partner, ?)

Adequate team

domain expert (associate)

implementer (programmer)

biz dev? others?

law student (future legal technologist)

Appropriate project (e.g. measurable ROI)

Appropriate technology (not bleeding edge)

Design methodology discovery-based

Advice to interviewing law students: you should view with great optimism a firm that insists that it is driven not by its competitors but by its clients' needs, that the market will clearly require fundamental changes, and that the conservatism of other firms presents an opportunity for a new market leader to emerge.T.L., p. 151

Conclusion

Evolution in foresight is revolution in hindsight

Multiple legal technology pipelines:

startups

technologists

Incentivize innovation

of

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