I recently spoke with Larry Bridgesmith, who is Adjunct Professor of Law at Vanderbilt University and a leading voice in the legal innovation space. He has more than 30 years of experience in the dispute resolution and innovation fields. He also co-founded LPM Alignment, which is the first approved training program in the US for the International Institute for Legal Project Management’s (IILPM) LPM certification program.
In your view, what needs to change within the legal academy so that law graduates can best be ready to practice law in the 21st century?
Law schools in the US have no history of practical education except through clinical programs in which few students participate. The lack of relevant training for law school graduates has led many corporate clients to refuse to pay for hours worked and billed by first and second year associates. Law firms, legal departments, government, and public interest legal employers have shouldered the cost of training young lawyers to practice law. No other professional education has focused on theory over practice like law schools. Currently, the ABA has added an experiential education standard that requires accredited law school curricula to include a mandatory six credit hours of experiential learning. This is wholly inadequate to cover the distance between practice ready law graduates and the current state of legal education. Students today leave law school with financial burdens completely disproportionate to the economic opportunities they enjoy.
Being associated with a great law school like Vanderbilt has convinced me that much more can be done to bridge the unjustifiable gap in practical education. Meeting the need to “teach students to think like a lawyer” and preparing practice ready lawyers is not a binary choice. A both/and journey to learning the substance and the practice of law in the legal academy can be accommodated without running afoul of ABA accreditation standards. Few law schools have chosen to do so. Vanderbilt’s Program on Law & Innovation (PoLI) is an example of how one law school is choosing to respond. In addition to the required substantive law courses, PoLI offers electives that a new era of law students is demanding. Law 2050, Legal Project Management, Legal Design Thinking, Business of Law, Technology in Law and Blockchain and Law are examples of experiential and innovative instruction in the emerging new law model of legal service delivery. It is gratifying to see law schools augmenting their academic offerings to provide vital experiential training courses on many levels.
Law schools continue to suffer through the decline of a shrinking higher education market in general and law in particular. Some law schools have shuttered. Others are on the brink of closing. Quality students are choosing other lines of professional achievement as the gloss on the allure of law has dimmed significantly. The price of legal education doesn’t equal its value. The only journey to relevance and economic survival for law schools is to attain the practice ready culture of medical, dental, pharmacy, architecture, accounting and business professional schools. What makes law schools immune from market relevance? Self-serving tradition can explain it, but little else can justify the ivy tower approach to education still embraced by the legal academy. Law schools must accept the market reality that their customers include the law firms, legal departments and agencies that employ their graduates. Irrelevance is no longer an option.
What prompted your interest in legal tech and innovation?
Admittedly, a geeky, gadget, and techie centric personality promotes an interest in legal tech. That was easy. However, an interest in innovation in law is a direct result of 40 years of legal practice during which I observed the decreasing trust clients afforded lawyers and the rocket ride attorneys enjoyed to the top of economic nobility. In the decade prior to 2010, the cost of living increased 25% (2.5% per year on average). During the same period, lawyer compensation increased 75%. Driven by the billable hour, the traditional business model has proven to be a “perverse incentive” rewarding inefficiency and worse. Billing practices drove a business model based on cost plus pricing which protected the law firm at the expense (literally) of the client. Selling input (time) is far more lucrative than selling output (value).
Lawyer client relations in 2018 are radically different than they were in 1978. The corporate clients I have served over that time are more sophisticated because they are competing in a global economy, which applies management methodologies such as SixSigma and Lean to the “better, faster, cheaper” mantra required to survive. Those are the clients that are impacting the business model of law today. The Consortium of Legal Operations Counsel (CLOC) and the Association of Corporate Counsel (ACC) are moving into the drivers seat. In-house counsel are mobilizing and combining resources to instruct outside counsel how legal services will require legal project management, mandatory billing guidelines, fixed fees and transparency. The Georgetown Law Legal Executive Institute 2018 Report on the State of the Law reveals the legal market for high-end legal services is shrinking. At the same time, BigLaw is “doubling down on a failing strategy.” Alternate legal law models from legal process outsourcers and managed legal service providers to the growth of in house legal departments and BigFour accounting firms are all invading the province of BigLaw to meet client needs and expectation. The Georgetown report calculates that $10 Billion in revenues previously paid to BigLaw was captured by these alternative legal services providers. Corporate procurement officers and reverse auctions substitute for county club relationships and good old boy networks as criteria for choosing outside counsel in increasing measure. Mark Harris of Axiom maintains that 200 companies purchase 80% of legal services provided. That is awesome buying power. At the other end of the legal market, numerous studies and anecdotal evidence support the astonishing reality that 80% of potential legal clients in the US (both individuals and businesses) “go it alone” when confronted with a legal representation need. The reasons for not using lawyers to address legal concerns are many. The lack of affordable, accessible and approachable lawyers are among them, If 90% of lawyers aspire to serve 200 clients at “bet the company” prices, the math doesn’t work. The competition is fierce. The mass consumer market is left in the lurch. Serving the 80% that are currently unserved will require “better, faster and cheaper” legal services. Billable hour pricing and traditional legal business models will not bridge the gap. If 100% of the legal market could be served with prices the clients are willing and able to pay, there are not enough lawyers to meet the need. Only massive innovation in legal service delivery can meet these systemic needs. Legal technology is a set of tools which can assist.
How would you define legal tech? How would you define innovation?
Legal technology is any automated tool that helps a lawyer perform legal services or which provides a legal service in a more efficient, cost effective manner with no loss in quality. Siri on an iPhone can be legal technology. Voice recognition technology can construct email text faster than I can type it. Usually, it can spell better as well. More specifically, legal technology is hardware and software that is built to serve a legal user or deliver a legal service. Web based tools like Rocket Lawyer and Legal Zoom provide legal services in the form of documents that once were provided to clients by lawyers. LexisNexis, WestLaw and ROSS Intelligence provide computer legal search services. A user does not have to be a lawyer to use these powerful technology tools. However, there are many more technologies that augment and expedite the work done by lawyers. E-discovery is an obvious advance that technology has made in work traditionally done by lawyers, and in great numbers. Technology assisted review (TAR) and AI are deployed to review millions of documents for proportional relevance with greater accuracy and at significantly less cost in less time (better, cheaper, faster) than lawyers can provide manually.
In short, legal technology is any technology which helps deliver legal service more efficiently and at less cost.
What is your view when it comes to lawyers learning to code?
Lawyers didn’t need to learn to pilot aircraft to travel across the country to get to a distant deposition. Lawyers didn’t need to learn how to install phone service equipment to improve client communication. Lawyers don’t have to become C.P.A.’s to make sure their accounts and tax filings are accurate. Instead, lawyers need to know how to work with many different disciplines and professionals in order to provide their legal services excellently, on time and at prices clients are willing to pay. They may find it helpful to know the basics of electricity, the principles of hydraulics, the fundamentals of biology, chemistry and math. However, excellent lawyers have never (and will never) have to be experts in everything. That is simply not possible. As much as I would like to fly a plane, obtain a Ph.D. in neuroscience, or understand Quantum Physics, I can be a great lawyer without those added credentials.
Computer system engineers, data analysts, architects and software developers are unique and highly valued professionals. As helpful as it may be to know the basics of “coding” software, legal proficiency doesn’t require it. Instead, my ethical responsibility is to “stay abreast” of technology developments, not master them. I took a computer programming course and remembered why I chose law school rather than engineering school. Calculus and I didn’t get along. As a lawyer, I am better served by avoiding our profession’s tendency to divide the world into two separate populations. Just as there are no non-doctors, non-plumbers or non-TV personalities, there should be no non-lawyers. There are lawyers and all the other careers, professionals, and technical skills on which attorneys depend to practice law.
Otherwise, just call me a non-coder.
What is the biggest lesson you have learned thus far when it comes to legal innovation?
Data, which indisputably proves that innovation is needed is insufficient to incentivize it. Dire economic trends won’t motivate innovation. When I first began the journey into the pursuit of legal innovation, it seemed so clear to me that it was essential and needed immediately. That was ten years ago. Only now am I beginning to believe a pivot point may have been reached and disruptive legal innovation is more likely to prevail than not.
As the recovery community observes, “No one changes until the pain of change is more attractive than the pain of staying the same.” We don’t change because the status quo is painful. We change because the alternative to the status quo makes more sense and offers greater satisfaction. Although not a neuroscientist, I have learned a great deal about the science of decision-making and behavior change. We change when we decide we want to because we recognize the benefits of doing so. Legal innovation evangelists, including myself, often believe that the wisdom of our conclusions should be sufficient for the uninitiated to see the light and depart the dark side. I hereby repent of that fallacious thinking.
Instead, legal innovation advocates must learn to articulate the benefits of changing our legal service models and demonstrate the values of doing so. One lawyer told me, “Larry, you’ve given me half of my day back.” Efficiency can deliver personal and professional benefits. At my session in the recent Legalweek18 AI Bootcamp the audience was asked, “What percentage of your day as a lawyer could be automated?” The answers ranged from 60% to 90%. That is an amazing amount of time that could be dedicated to work life balance, public service, coaching baseball, or if desired, billing more hours. Another attorney bills his clients for high level Intellectual Property litigation services exclusively on a fixed fee basis. Rather than bemoaning a national average of 87% billing of hours worked and 82% collection on hours billed, he told me he realized 110% of his billed services. Because of process improvement and legal project management he is able to improve the financial returns on his time worked and billed at a price certain. So much opportunity can be achieved by approaching legal innovation as a “one starfish at a time” solution to the many challenges our profession faces today.