This week’s second post features an interview of Kenneth A. Grady. Professor Grady is a legal evangelist and as well as a prominent voice in the legal innovation and legal technology worlds. He is also prominent on Twitter, tweeting under @LeanLawStrategy. As he writes in his LinkedIn profile, “I don’t just talk about the future; I teach it and help mentor students and practicing services providers on how to achieve it.”
1) Delivering Legal Services: New Legal Landscape
One of your course titles includes the phrase “New Legal Landscape.” What is the New Legal Landscape?
Prior to the 21st century, legal services were delivered through one format: the law firm. Several forces came together roughly around the turn of the century creating an environment for new legal services delivery models. Starting from a small base, alternative legal service providers (ALSPs) have grown into an influential part of the legal industry. These ALSPs include ediscovery vendors, managed service providers, and, technologically enabled staffing groups.
The New Legal Landscape refers to the evolving structure of the legal industry. Clients can choose to use traditional law firms. They can choose to select an ALSP. Or, they can use combinations of providers matching what is available to their current needs. The supply chain for legal services to clients has become a complex mosaic of competing companies.
2) Entrepreneurial Lawyering
Is more niche-based, entrepreneurial lawyering the future of law practice or just one new legal service delivery model among many?
I think the industry is evolving to structure with many legal services delivery alternatives. Within that, there will be more places for entrepreneurial lawyers, but there also will be places for more systematized practices that work efficiently on volumes of similar matters. As a quick example, the field of marijuana law did not exist a few years ago and now it is a growing niche area.
The opportunities for niche practices, however, can be some of the more exciting ones, especially for lawyers just entering the industry. In contrast, building a practice handling higher volumes of more routine matters will take resources in many areas. Entrants to that part of the market will face significant competition and from established entities who see opportunities in the legal industry. The Big 4 accounting firms are doing this right now. They can build practices that look very competitive for handling routine, standardized, or systemized legal services.
Entrepreneurial lawyers can build small practices that are very interesting and profitable, even though demand for services within their niche is relatively small. Part of this comes from the explosion of new risk areas and part comes from what technology already offers the practicing lawyer.
Blockchains are a new risk area. The community of blockchains knowledgeable lawyers is small, though starting to grow. Most of the lawyers in the area took it upon themselves to learn the technology and then start analyzing the issues blockchains would raise. What happens to certain assets when you die, yet the asset resides on a blockchain forever? That issue may come up once every few years if your practice is restricted to your city or county. But we have the Internet. You can put your knowledge on the Internet through social media, blog posts, and other vehicles. Now, you have a presence across the United States. The size of your niche expanded without you leaving home. You have become the person to consult on the issue. A law student can pick a topic and by the time they graduate, have a significant body of written work out on the Internet. They get invited to speak, and now they have a practice. This is one way entrepreneurial lawyers can enter the profession and build out new areas.
This is a concept that I think this concept is misunderstood right now. It isn’t that demand for legal services is failing; it is demand within the traditional model that is shifting. The number and types of legal questions is rising, but we don’t have lawyers trained to find them and take them on.
3) Artificial Intelligence
A lot has been written about, tweeted, and spoken about artificial intelligence and the law. What is your take on its role within the ongoing evolution of law practice? How can one adapt to the rise of AI-driven tools?
Right now I think the best way to think about AI and law is to break it into two categories. The first is AI as a tool in the legal industry and the second is the impact of AI as a tool on law and society.
As a tool in law, AI can help us in many ways and can hurt us if we misuse it. In that regard, it is similar to understanding how to use our current tools, such as online legal research. As a lawyer you need to understand the tools available to you, how to use them, and what they can and cannot do. You need to incorporate them into your practice when it makes sense. Lawyers can leverage AI to free the lawyer to do things AI can’t do. They also can use AI to augment what they do. For example, AI can review thousands of documents in a fraction of the time and with higher accuracy than a lawyer. But, AI can’t interpret the results of that review. Combined, the lawyer plus AI will deliver a higher quality product, in less time, and at lower cost, than either could do alone.
Outside of the industry, AI is having a major impact on society. Laws that were written for human agents should be re-considered given that humans are being replaced by AI agents. We have many situations where AI can do something, but the real question is should it do that something? In what settings should we regulate AI? How will our tort laws handle the volume of data AI consumes and uses when we ask causation questions? How do we test the integrity of algorithms?
This second area is especially interesting because technologists are driving forward with their own approaches to answering these questions. They are not waiting for lawyers to tag along. Put bluntly, law is slipping away from lawyers to technologists. This is an historic shift and one that has some very deep implications for our society and rule of law.
4) Legal Innovation
How would you define legal innovation?
I don’t think “legal innovation” is different from other “innovation,” so I think using existing paradigms such as the one Clayton Christenson set out in The Innovator’s Dilemma is fine. The more we try to make law a unique thing, the more we find out that law is just like other domains.
Today, I would say we see almost entirely incremental innovation in law and very little disruptive innovation. Most of what we see is disappointing. I call it “widget innovation.” The lawyer had to highlight something and change the color from red to green, and the innovation is that with the click of a key he can change the color.
That innovation mix needs to change if we want lawyers to remain relevant. We need new ways to do things that have orders of magnitude effect on prices, quality, and efficiency. I would like to see legal innovation that transforms access to justice. But to see all that happen, we must become a profession that understands when and how to take risks.
For young lawyers/new graduates, how would you advise them as they enter this new world of legal practice?
Law students should understand from the first day of law school that they are now fully responsible for developing their careers. We have passed the point where you could go to law school, do well, and expect someone to hire you, train you, and give you your career. This is where the lawyer having an entrepreneurial mindset starts.
Law students also should understand that differentiation will be key to their success. Every law school graduate knows how to handle basic legal questions. Without something to distinguish you, you are sitting in the most competitive, least rewarded, and greatest risk spot. Doing contracts, basic counseling, simple litigation tasks, are tasks that computers and ALSPs can do with fewer lawyers. If this is all you have to offer, you will have a tough time in the market.
That leaves us with the entrepreneurial approach. This is where I think law students need to look. During the three years of law school, students should start building their area of interest and personal differentiation. A law school student could become skilled in law related to the internet of things, cyberlaw, space law, AI and torts law, etc. That is, seek out a niche or two and become that individual who knows the field. How do you demonstrate our knowledge? Put it on display. Write articles, blog posts, and white papers. You can do all of this for free. While doing it, you are learning more about the law. If you do it well, you will find a home for your talents.
After three years of law school, you can graduate with a network not just in your law school, but around the world. Your online publications plus social media make that global world accessible. They also give you a way to find out who values your services. Instead of graduating and hoping to find a job, you will have built a pathway to start your career. We have many examples today of students who have followed this approach who find themselves in demand when they graduate.
For a lawyer wanting to enter the legal tech/legal innovation world, how would you advise them?
I would advise them to approach it using a similar model to the law student who wants the substantive practice. The target audience for what you do shifts, but the basic approach is the same. You should understand what the ALSPs (who will make up that market) want. Blockchains are a very hot topic right now. One of the barriers to further use of blockchains is the lack of lawyers who understand the technology and law. If the area interests you, then dig in and start addressing some of those questions, publish your thoughts, and share them with your target audience.
If you are most focused on the tech side (you like being the coder more than the lawyer), then understand you are in business. You must network with those who play in that tech space and you must think like them. I strongly recommend Eric Ries’ two books, The Lean Startup, which we used in my classes, and the new one, The Startup Way. Many entrepreneurs are focusing on law, especially given the high inefficiency in the industry, but the quickly move to the incremental change area. If you can find the few focusing on disruptive change, you have a chance to make a meaningful impact.