Imagine a conference attended by many legal industry leaders. This conference includes chairman of the largest firms, CEOs of the biggest non-law firm businesses, appellate court judges, deans from major law schools, and other notable figures in the legal industry firmament. Now, imagine that this august group has assembled to talk about technology and its future, near-term and long-term, for the legal industry.
If you are having some trouble imaging what I described, I’m not surprised. That type of gathering just doesn’t happen in the legal industry. But, it happens all the time for clients. The CEOs attending these conferences are not just the CEOs of tech companies (though some are), they are CEOs of Fortune 500 corporations in businesses that are not primarily tech related. The schedule of a Fortune 500 CEO is packed, day and night, so if CEOs choose to attend these conferences it tells you tech is a big thing. As I write this, some of the legal industry players are attending Bloomberg BNA’s Big Law Business Summit 2015. While a start, this summit doesn’t get us where we need to go.
The professional service firms, other than law firms, that advise the Fortune 500 CEOs spend a lot of time thinking about and studying technology. They hold conferences about it and write serious papers studying the potential impact of it. In particular, they develop ways for clients to leverage technology. These firms don’t do this work out of the kindness of their hearts; they do it because they see commercial value in doing so. If it is important to their clients, it is important to them.
Technology is an Opportunity, Not a Threat
Within the legal industry, however, tech is something most lawyers avoid. Very few of the individuals I listed who would be the candidates for an industry tech conference know much about tech. They know it is a large budget item for law firms and less so for law departments, but they rarely know enough about tech to understand the real benefits and risks to the firm. Gather the industry leaders together, and the conference may reveal more about what lawyers don’t know than facilitate industry growth.
This gap between the legal industry and clients raises many issues. If clients put tech as one of the top five issues they worry about, and most CEOs place tech there, and yet lawyers place tech low on the list (if it even makes the list), isn’t there a disconnect between lawyers and clients? It isn’t as if tech raises few issues (cybersecurity and privacy, to name just two). Tech has the potential to disrupt every business out there. How do you act as a trusted advisor to a client, when you have almost no understanding of what worries your client?
Let’s consider one piece of tech: blockchains. Because the people who read this blog tend to be more knowledgeable about tech, I’ll guess that two or maybe three out of every 10 readers could describe blockchain technology, at least in a non-technical sense. According to Wikipedia, a blockchain is a:
distributed data store that maintains a continuously growing list of data records that are hardened against tampering and revision, even by operators of the data store’s nodes.
If that sounds too techy, then try this definition:
The blockchain is a simple digital platform for recording and verifying transactions so that other people can’t erase them later — and anyone can see them. “You can think of the blockchain [as] an ‘append-only’ ledger. You can only write to it, you can’t delete it,” Peter van Valkenburg, the director of research at Coin Center, told Gizmodo… Bookkeeping tools generally require a bookkeeper, but with the blockchain, there is no head honcho bookie. It’s a decentralized, crowd-powered spreadsheet, relying on cryptography instead of a central authority.
Still confused about blockchains and wondering why they would interest you? Consider this. One of the Big 4 audit firms has been studying the business opportunities of block chains for about 18 months. Recently, it confirmed that it is “trialling blockchain technology to automate client auditing and crowdsource its consulting efforts.” Of course, this professional services firm isn’t alone in looking at blockchain business opportunities. In the financial community, companies have been looking at blockchain technology for quite some time. That makes sense, since blockchains use cryptocurrencies (think Bitcoin).
What about other clients, such as retailers? They are looking at blockchain technology for things like loyalty card programs. Auditing firms look at it as a way to reduce auditing costs. Consulting firms consider it a way to connect services requests with service providers. Where databases are used, blockchain technology may provide advantages over existing technologies. For lawyers, blockchains present substantive opportunities and legal service delivery opportunities. So if the CEOs of major financial institutions, Fortune 500 corporations, and non-law professional service firms (and I use non-law loosely here) are spending time on this tech, don’t you think it may be worth the time of the legal industry?
Embrace the Future
Blockchains are not all that is happening in technology, but they serve as one example of the growing chasm between lawyers and their clients. Clients need lawyers who are curious, who are passionate about learning what is happening in the world and then finding ways to use it to help clients solve problems with legal dimensions. Clients are becoming increasingly resistant to using lawyers who can do no more than present old ideas warmed over in new packages. Lawyers who do no more than deliver warmed over ideas add little value.
Lawyers who want to be viewed as leaders in their substantive areas should be thinking more broadly. What will be the impact of emerging technologies, such as blockchains? How could those technologies impact clients’ legal interests in those substantive areas? How could the technologies be used to mitigate legal concerns or add greater protection to clients’ interests? Law firms can assemble cross-substantive area teams focused on the legal implications of technologies – blockchains – for clients in particular industries. For example, a firm could form a Retail Industry Blockchain Working Group. The Group would focus on the implications of blockhains on legal industry legal issues and develop preferred courses of action. Or, the firm could expand the Group to include retail clients and work on industry approaches. Lead that Group and watch who retailers call when they have a blockchain issue.
Blockchains aren’t the problem; they are one symptom of a much bigger issue. Lawyers are content to ride out the past. Whether in firms or law departments, lawyers spend their time debating bills and other mundane aspects of practicing law. Money is important, but when did money become the central focus of legal services? Lawyers who deliver real value, who enable their clients to reduce risk and achieve their strategic objectives, don’t worry about money. When the value is there, clients appreciate it and will pay a reasonable amount to get it. When the value isn’t there, the only thing left to argue about is money.
Technology isn’t a threat to lawyers; it is a threat to legal service delivery practices that have outlived their usefulness. Technology is an opportunity for lawyers who know how to embrace it, help their clients navigate it, and who use it to augment their judgment to provide clients more value than either technology or lawyers alone can provide. Technology should be a call to action among legal industry leaders – embrace technology and lead clients into the future.