The Opportunity of Disruption

Remember the good old days? The days when hourly rates increased year after year, junior associate time could be billed for, and it was considered unprofessional to try to poach another lawyer’s clients? That wasn’t that long ago, in fact. But times have changed.

The market for legal services is flat. Since the Great Recession, there has been fundamental change in the legal landscape. Much like the housing market bubble that precipitated the economic slowdown, the legal marketplace has shifted from a seller’s to a buyer’s market.

This has led to downward pressure on fees, demand for creative, alternative billing practices, and greater competition for fewer opportunities. Work has also moved in-house, as corporate law departments have looked for ways to cut costs and have become not only clients, but also competitors, to solo lawyers as well as law firms.

Sensing this shift, non-legal entrepreneurs have stepped in. From overseas document review firms to Silicon Valley technology startups, alternative service providers continue to chip away at work that traditionally was within the exclusive domain of lawyers and law firms. Companies such as Legal Zoom and Rocket Lawyer, which were once seen as novelties, continue to encroach.

Headlines in legal tech publications trumpet the inevitable march of artificial intelligence in the legal industry, and its power to displace and disrupt many of the basic legal service functions provided by today’s lawyers and law firms.

As other industries have experienced – from retail to music, software to automotive – the legal industry is experiencing change both more rapid and more profound than most could have predicted as recently as 15 years ago.

But here’s the thing: While many lawyers lament these circumstances, and see a glass half empty, other see them for what they are – a massive opportunity.

Disruption is kryptonite for lawyers and law firms averse to change, but fuel for the fire of ambition and opportunity for forward-thinking types. If one’s focus is on stability and near-term profit, then it’s tough to see around corners and anticipate – let alone take advantage of – the opportunities presented by market change. This principle has been irrefutably demonstrated by Amazon, which has relentlessly focused on the long-term while delivering innovative solutions and creating new business models, while the traditional giants of retail are clinging to life.

Why didn’t Sears create Amazon? Why didn’t Marriot start AirBnB? How come Comcast didn’t create Netflix? Shouldn’t GM have seen Uber coming?

Disruption isn’t coming to the legal industry – it’s already here. And the truth is, it always has been. It’s just happening at a much faster pace today thanks to the Internet. Ignore it at your own peril. Embrace it and realize great rewards.