What Everyone Gets Totally and Completely Wrong About Legal Innovation

The legal innovation/legal hacking movement has been gaining steam in the past couple of years. Technologists, investors, and attorneys have been focusing on how to improve the delivery and quality of legal services. This movement has the potential to have a huge benefits for society, and I would venture that it is one of the most important things going on in the startup world today. And it's just getting started.

But there are some unquestioned and harmful assumptions about lawyers and legal innovation that have been repeated so often that they seem like truth. These assumptions place drag on the pace of legal innovation and limit our thinking about what is possible. If you are a lawyer or involved in legal hacking in any way, you will recognize pretty much all of them.

Here they are, in no particular order:

Lawyers Are Risk-Averse

I hear this one so often, and I have never seen any evidence to support it. The thinking goes like this: going to law school is the "safe" choice for college graduates on the political science/history end of the educational spectrum, therefore lawyers are risk averse. Another line of thought proposes that since lawyers are essentially trained to spot risk, they are risk averse.

I am not convinced by either argument. As someone who has practiced law, I can say that I have rarely done work with higher stakes or more inherent risk. Whether that's in litigation or in transactional work, there are no guarantees and the liability can be great (getting sued for malpractice is a constant specter for any lawyer as is getting grilled by a grumpy judge in front of a room full of your peers).

And being "risk aware" is not the same thing as being "risk averse". Being aware of the risk doesn't mean that you are unwilling to take the risk. It just means that you know what you are up against and will plan accordingly.

I have yet to hear any argument that would convince me that lawyers, as a whole, are any more risk averse than the general population (I do believe that most people are risk averse).

Lawyers Are Not Entrepreneurial

I submit that law might be the most entrepreneurial profession out there. About half of all attorneys work as solo practitioners, and then a large chunk beyond that work in partnership with 1-3 other attorneys. All of these people have started, grown, and built businesses with repeat customers and referrals. Not to mention lawyers who take cases on contingency with the very real possibility of not getting paid a cent after working for months or years on a case.

The prevailing definition of "entrepreneur" seems to orbit around the Silicon Valley ecosystem where anyone who manages to raise money from VC firms to fund their next mobile app for dogs can anoint themselves with the title. If they don't generate revenue, no problem. If they fail, they only lose their VC's money while gaining experience and connections to try (and fail faster) again. If they succeed, they become astoundingly rich.

To a lawyer in private practice, those odds would be a relief.

The Legal Profession Doesn't Want To Innovate

I hear it phrased this way: the legal profession is resistant to change. Maybe the law resists change, and maybe bar associations have difficulty grappling with technological change, but I have seen no evidence that, as a profession, lawyers have more resistance to change than any other industry.

Of course there are attorneys and law firms that don't see a need to innovate. Perhaps they have been doing things their way for a long time and it works for them - why would they bother changing things up? But this is true for any industry or profession.

But I think most lawyers are at least as quick on the uptake as the general population, if not more. The profession can be very demanding and attorneys are open to just about anything that can reduce the pressure from those demands. In fact, lawyers have been quick to adopt new technology as it becomes available - from Westlaw terminals in the 1970s to machine learning today.

If there is any resistance to innovation in the legal profession, it comes from ethical rules (with which all attorneys must comply) prohibiting outside investment in law firms. This means that if a law firm comes up with a brilliant idea for legal innovation, the owners of the law firm have no choice but to bootstrap it - using their own money, their own homes, and their own sanity as collateral.

There are ways to structure businesses around these rules, but as members of a highly-regulated industry, lawyers have an extra burden to innovation that must be dealt with. Perhaps there is opportunity for those who can help relieve that burden.

There Is An Oversupply of Lawyers

Despite the breathless news reports over the last few years about the supposed glut of lawyers, since at least 2000 the number of lawyers per capita has remained pretty constant at roughly 1 lawyer per 300 people. In economic terms, if there really was an oversupply of lawyers, the rates paid to attorneys would have dropped precipitously. They haven't.

Saying that there is an oversupply of lawyers misunderstands the real problem. The real problem can be characterized as a broken market: on one side, you have new legal talent that can't find jobs, and on the other you have consumers who want a lawyer but can't find one that works for them. Traditionally, the legal profession has used established firms as intermediaries to connect new legal talent with consumers, but the effectiveness of that strategy appears to be waning (the reasons for that are myriad).

This means an opportunity for anyone who seeks to address the issue head-on. Connect legal talent with the people who need it (and here's a hint: it's not all about price, either). Understand that consumers are not trying to replace lawyers, and understand that lawyers want better tools with which to serve their clientele.

The oversupply assumption limits and distorts what legal entrepreneurs accomplish, leading to wasted energy and missed opportunities.

Why Do I Care?

I am a lawyer who spent nearly fifteen years working in the tech industry as a programmer and designer before setting foot in a law school classroom. I was drawn immediately to the world of legal innovation and legal hacking (never heard of legal hacking? Check out the Los Angeles Legal Innovation/Legal Hacking group to find out more).

I love that so many of us in (and outside of) the legal profession are working to figure out ways to improve the functioning of the legal system and to use technology to everyone's advantage. I truly believe that the practice of law in the 21st century will be radically different from the practice of law in the twentieth century (which in turn was radically different from the practice a century prior) and that technological disruption will make better lawyers.

I often say that my own law practice (Counsel for Creators - I work solely with clients in technology, media, and the arts) is a startup masquerading as a law firm. This is because technology has changed the way that I am able to work with clients and has allowed me to rapidly iterate through new ways of providing legal services and education. I am not alone in this, and there are many lawyers out there doing the same, whether or not they are formally involved in legal innovation or legal hacking.

My goal with this article is to bust some of the myths that I feel have created unnecessary limitations on the way legal innovation can proceed and widen people's perspectives so that we can have a greater variety of offerings and participants. I would love your insights.

I originally published this article on my blog.