This transcript is derived from the video above and has been edited for style and for print publication. To learn more about this topic, view Volume 1, Issue 1.
In the time since the global financial crisis, there’s been a lot of discussion about what’s happened to the legal profession. Most of that discussion focuses just on the legal profession. That strikes me as a mistake, because what’s happening to lawyers is just one part of a much bigger set of trends that are really reshaping everything about the global economy and the world we live in. First, think about the globalization of economic activity and, in particular, the important shift in that activity from the north and the west to the south and the east. Second, the incredible rise in the speed and sophistication of information technology has changed how we work. Third, think about what I call the blurring of traditional boundaries of organization and thought, which is just a fancy way of saying that things we used to think of as very distinct—the public and private or global and local or dare I say law and business—are much more intertwined than ever about before. There has also been a huge decrease in what the economists call “information asymmetry” between buyers and sellers—again, just a fancy way of saying that buyers are way more sophisticated about what they want, how they want it, and when they want it. They can also take things that sellers are used to selling all bundled together and unbundle them and array them across an increasingly global supply chain. Just think of the way people in my generation bought music—buying an album at a record store—and the way kids buy music today by going to iTunes or through another streaming music site. These things have dramatically transformed the ways in which we think about the world.
This has all led to a change in the way in which we asses products. We used to assess products by their inputs, like the reputation or the credentials of the producer. Or by how many hours it took to produce—something very familiar to lawyers. But increasingly people don’t want to know about the inputs. They want to know about the outputs, meaning: What is the value of the good or service as measured in increasingly objective metrics?
And most things in our economy are produced not by an individual producer but by a network of producers working together to create value. If you think of the iPhone, yes, Apple is the company we associate with it, but the iPhone is manufactured in China by Foxconn. It is Corning Glassware and Apple engineers working together on the iconic glass screen. And then there’s the most important thing about the iPhone—the apps—which are made by millions of producers around the world.
If these things are transforming everything about the way we live, why wouldn’t they transform the legal profession? Law and lawyers after all are a lagging, not a leading, indicator of change. So, if we look around the legal profession, we see increasingly sophisticated clients who are demanding more for less from legal producers. They are telling legal producers to take things that used to be all bundled together by lawyers—like litigation or a big transaction—and to unbundle those things and to array them across an increasingly global set of suppliers. At the same time, we’ve seen a huge explosion of new producers, who are providing services in law, business, strategy, and process management, increasingly through the use of technology. Take legal process outsourcing organizations in India or a company like LegalZoom offering do-it-yourself services through the Internet. Or take, in the high end, the Big Four accounting firms, which are increasingly bundling law, strategy, tax, economics, process management, and information technology to provide solutions to client. These things are transforming the practice of law and the legal profession. Here at the Center, we are studying each of these developments, and we look forward to reporting on them in the coming year.