Bar Journal - June 1, 2000
Preparing For the Impending Legal Revolution
By: Attorney James L. Thompson & Brett W. Zinober
Reprinted by permission from Law Practice Quarterly, Volume 1, No. 2, February 2000. Copyright © 2000 American Bar Association. All rights reserved.
"The problem is never how to get new innovative thoughts into your mind, but how to get the old ones out."
For some time now, Internet experts have been admonishing organizations and their leaders of the inevitable, dynamic and sweeping changes the Internet promises to bring to business practices.
It is no longer a secret that in most industries, companies must accept, adopt and even embrace the new Internet medium along with its fundamentally new business issues, or run the substantial risk of losing considerable market presence or market share. As a result of this now-common knowledge, hundreds, even thousands of businesses — small and large, new and old — are being forced to confront the omnipresent Internet and factor its revolutionary ways into their strategic business-planning decisions.
Today’s legal profession is certainly no exception to this phenomenon. Despite being deeply entrenched in traditionalism, habit and a general resistance to change, the practice of law is by no means immune to the powerful forces of the Internet revolution. In fact, some futurists, business consultants and trend forecasters envision the ultimate prosperity of the legal profession as hinging, in no small measure, on the ability to understand and incorporate the ways of Internet culture into the daily operations and practice of law.
One of the foremost writers, speakers, business consultants and trend forecasters on such topics is Tom Peters. Appropriately, Peters was the kick-off speaker at the second Seize the Future conference in Phoenix, Arizona, November 4–6, 1999. Co-produced by the ABA’s Law Practice Management Section and Lotus Development Corporation, the conference was organized to provide an informational forum for those in the legal profession to learn about the important trends that will significantly alter the way they conduct virtually all aspects of business in the future. Some 100 plus attendees spent two days learning from some of the world’s most influential business prognosticators. The following is a distillation of Tom Peters’ message.
Peters’ presentation was designed to acquaint people with the revolutionary changes taking place in the business community as a result of the Internet. Placing the importance of this fundamental change in proper social context, Peters stressed the point that these are "bizarre times," and that changes of this magnitude occur only "approximately every 1,000 years." In fact, not only has the Internet induced changes that have had a massive formative effect on the reshaping and continued development of human interaction within society, but these changes have already rocked the business world. To illustrate this point, Peters pointed out that "Microsoft is now worth more than GM, Ford, Boeing, Sears, Lockheed plus seven other Fortune 500 companies."
SUCCESSFULLY COMBATTING GLOBALIZATION AND COMMODITIZATION
America has become a "do-it-yourself nation." Self-help is in vogue in our consumer-dominated society. Some vital keys to thriving in such an environment are:
- having a consumer orientation and
- creating a perceived unique business proposition.
So, what is the relevance/application of this macro insight to those within the legal profession?
Peters asserts that, thanks to globalization and commoditization, 90 percent of white collar jobs that we know today will be gone or unrecognizable within the next ten years. There is "a giant sucking sound," according to Peters, which is the sound of the middlemen (e.g., distributors of products and information such as stockbrokers, insurance salesmen, car dealers and tax preparers) being sucked out of the global economy.
Lawyers, he submits, technically fall into this potentially endangered mix of "middlemen" professions. As the economy becomes pared down and streamlined to allow for some profit in an era of increasingly smaller margins, how might these "middlemen" combat the powerful forces apparently leading to the demise of their white collar jobs?
First and foremost, welcome to a "do-it-yourself nation" where "self-help is in." We are living in the age of the consumer, and therefore, retail and service organizations must seek to totally revamp their thinking in order to become more consumer-oriented. The Internet medium allows the consumer to identify commodities and to order commodities and goods effortlessly 24 hours a day, 7 days a week. In response to this new wave of consumer empowerment, many of the world’s largest companies are now having to build their strategic business platforms around the Internet in an effort to remain competitive and to enhance consumer perception of their added-value propositions. Testimony to this claim is the fact that when asked "where the Internet ranks in priority for General Electric," Jack Welch (CEO) replied that "Its priority rank is number one, two, three and four."
Like General Electric and many companies in other industries who want to survive and thrive in the new millennium, those in the legal profession must welcome — not fear — this new, Internet-induced orientation. Legal information and forms for wills, divorces, marriages and other legal transactions are already available via the Internet. Legal professionals should not let the "do-it-yourself" books and websites pollute their action. Lawyers should become consultants and counselors rather than relying on producing product to make money.
Moreover, law practitioners should not allow computer applications or programs such as Quicken or other "fill-in-the-blank" services intimidate or paralyze them. They must determine "What is the value added that lawyers provide to the documents that can be pulled off the Internet?" Lawyers should emphasize solutions and decision-making. They should be problem-solvers and facilitators, not barriers or problem-creators.
Peters pointed out the advantage of a business not only being the best at what it does, but also being perceived as the only business that performs that precise service. When practiced in conjunction with the above-described "consumer orientation" philosophy, carving out a "unique business position" can prove to be another key ingredient for prosperity. In this spirit, Peters prescribes that companies must systematically stamp out "mediocre successes" by continuing to work with their clients and getting to know what they want and how to address their needs specifically. Furthermore, this sort of customized approach to client service not only serves to distinguish a company or firm from the rest of the competition in the minds of current and prospective clients, but it also makes the organization that much more attractive in the minds of prospective "talent" recruits.
Peters highlights that it is extremely important that lawyers — as well as other professional "middlemen" — achieve a full understanding of such "Internet-era" trends so that they can protect themselves against extinction and maximize their business potential in a dramatically different and increasingly competitive marketplace.
EMBRACING AND ENGAGING IN "RADICAL CHANGE"
According to Peters, perhaps the most important business trend and a major indicator of future business success is the need for organizations to embrace openly and to freely implement "radical change." Specifically, Peters believes that the age of gradual change is over.
"Radical change" will be needed for success. Although past works and speeches by Peters proclaimed that he was a strong proponent of "continuous improvement" within organizations, he now appears to be advocating the idea that business is in the midst of a new era, demanding very different behaviors for success. According to Peters, today’s successful organizations will recognize trends and, when appropriate, be able to make the rapid and radical changes consistent with these trends.
Making radical changes involves fundamentally altering the manner in which we think and perform. To better illustrate this point, Peters cited Dee Hock, founder of VISA International Services, who once remarked that "The problem is never how to get new innovative thoughts into your mind, but how to get the old ones out." According to Nicholas Negroponte (of MIT), "Incrementalism is innovation’s worst enemy."
The elimination of the incrementalist mindset is especially difficult for successful people, but necessary in the age of the Internet. In fact, many existing corporations, such as Amway, are in the process of creating internet companies that will, if successful, eliminate their own parent companies within 10 years. As for the legal profession, does this mean that our bar associations and firms will be replaced by new competitors or entirely new types of organizations? Quite possibly.
ACQUIRING YOUTHFUL "TALENT" IS THE KEY TO RADICAL CHANGE AND INNOVATION
Peters suggests that in order to promote innovation, companies must engage in stimulating radical and creative thinking. Specifically, companies need to recognize that this is the age of talent, and that incumbency and history are no longer that important. This may be a difficult pill to swallow for firms entrenched in a hierarchy based on history and longevity with the firm. In fact, Peters believes that in order to battle the innate tendency towards incrementalism and to achieve success, our businesses need a massive transfusion of talent.
So, what sort of talented individuals should businesses and firms seek? Talent, reveals Peters, is mostly to be found among non-conformists, dissenters and rebels — not exclusively in the top 10 percent of the Harvard class of 1999.
Furthermore, diversity is an essential component of talent; diversity spawns creativity because diversity naturally deals with "stuff that does not fit comfortably together." Since students in the Internet age will become the teachers, companies should consider reorienting their hiring practices in the years to come by:
- spending time hanging out with and listening to 18-year-olds,
- hiring those who would have previously been considered weird, and
- retaining non-conformists, dissenters and rebels within the organization since they may be more creative and less locked in to the old way of doing things.
What can law firms do to attract and acquire the right talent? Peters sees considerable amounts of "talent" going to small firms that are doing "cool stuff" rather than a 500-person law firm simply engaging in corporate paper shuffling. Many of our talented young people appear to have little patience for, interest in or disposition toward the formal, and often grossly inefficient, ways of corporate bureaucracy. This tendency may help explain why many of the youthful "talent" of today and tomorrow are flocking to professions in such "hot areas" as healthcare and intellectual property.
Peters also recommends systematically stomping out mediocre successes: "No mediocre successes — just great ones!" "The nature of work in the ‘good’ companies will be work that makes a lasting difference — it will be work that matters."
THE IMPORTANCE OF MULTI-DISCIPLINARY PRACTICE (MDP)
According to Peters, MDPs represent the future prosperity of the legal profession. Work units will become professional service firms.
Boundaries are vanishing everywhere. Therefore, since MDPs are already upon us, opposition to them should not be an issue. The legal profession must be market driven, and market demand appears to be calling for and receptive to more consolidation of legal and business expertise in terms of multi- and cross-disciplinary themes.
Peters surmises that how lawyers go about defining and utilizing multi-disciplinary practice is entirely up to the lawyers themselves. However, he believes that we should consider some key personnel issues as we strive to develop the concept of MDP both within our own firms and in the greater context of our profession.
Specifically, Peters believes that our hiring paradigms should produce a very sparse payroll of employees. That is, the goal is to have infinite reach but few employees on the payroll. Moreover, Peters argues that temporary employees or contract services will undoubtedly be important to the legal profession in the future, and that lawyers will choose to "network" with other professionals in order to deliver a value-added product.
In sum, Peters concludes that despite the many required changes for the legal profession, "It is fabulous to be a lawyer today because we will have to reinvent the rules of practice and lifestyle." To remain innovative" and "distinguished" with their products and "consultative" legal services, firms must adhere to a non-traditional hiring paradigm of attracting fresh, new "talent."
Additionally, Peters believes it is important that firms make the necessary changes, many of them "mindset-related," or else run the risk within the next five years of losing more of their unique and energetic lawyers than they have ever lost in the past. However, even with the required recommended changes and attempts to become less traditionalist and less conservative, and more modern and open to change, Peters admits that losing some of these personnel may be inevitable. Peters recommends that law firms seek out "interesting" hires and engage in a program to "train them up." To accomplish this task, Peters believes that lawyers must seriously return to mentoring and training instead of resorting to their total focus on production of hours and product.
James L. Thompson is with the law firm of Miller, Miller and Canby in Rockville, Maryland, where he heads the litigation department. A past-president of the Montgomery County Bar Association, he is currently president of the Maryland State Bar Association, a member of the ABA House of Delegates and a fellow in the American College of Trial Lawyers. He can be reached at 200-B Monroe Street, Rockville, MD 20850; phone: (301) 762-5212, e-mail: jlthompson@ mmcanby.com.
Brett W. Zinober is a senior research associate specializing in Hispanic domestic and international markets with Greenfield Consulting Group, a marketing research consultancy located at 274 Riverside Avenue; Westport, CT 06880-4807. He can be reached at phone: (203) 221-0411, fax: (203) 221-0791, e-mail: firstname.lastname@example.org.