There is a phenomenon in the world of systems development and software that might just have the most enormous impact on the future of legal services.
As we all know lots of software is proprietary, but much more is known as open source code. Microsoft has been the arch proponent of the proprietary model, jealously guarding its source code and fiercely antagonistic of anyone seeking to use it without permission. Yet there are millions of applications that use code that was freely given away to help generate solutions and to facilitate invention. The internet itself perhaps the best and most widely used example of the open source model.
Open source code is royalty free and available for programmers to use to enhance, in essence, the consumer’s experience. It is as if the code itself does not have an intrinsic value, it is only when the code is used within an application that is then used in a process or system by a consumer that its value is realised.
Now it is possible for philanthropic authors everywhere to be influential (if not always remunerated) beyond imagining if their code is picked up and widely used. It has been a subject that has fascinated me for some time because I see an analogy in legal services that carries both an enormous opportunity and an enormous threat.
What if all legal knowledge was to be treated as if it were open source code?
Law firms, instead of jealously guarding their precedents and their know-how, would simply make it available to anyone who wanted to use it.
In America the Massachusetts Institute of Technology (M.I.T.) and one of the most prestigious seats of learning in the world now publish in their entirety all their lecturers’ notes for anyone to use one year after the courses are delivered.
What a brilliant statement of self confidence, what a wonderful resource for those interested in the subjects concerned and what a great way to share understanding and help develop new ideas.
The analogy with legal know-how might not be exact, but it has a resonance with what I see as the two key drivers of value in legal services…and neither is about the intrinsic value of legal knowledge.
I believe only two things will be valuable going forward:
- The quality of relationships managed and developed by lawyers or
- Control over the means of distribution
In other words, either lawyers will be remunerated because they have great relationships with the clients that use them and it will be the added value that comes from the quality of those relationships that is worth paying for…or lawyers will control how legal knowledge can be disseminated and the means of distribution will be what creates the value.
In the first scenario, the client will appreciate the bespoke solution, tailored, relevant and contextualised; it is a premium rate service built on a trusted advisor status and delivers value through an intimate understanding of interests, not through any intrinsic value in the legal know-how itself. It will be about value enhancement, relationship development and probably expensive. For the relationship to be valued then law firms are going to need the equivalent of concierge services, relationship managers that are simply brilliant at relationship management, not lawyers bullied into trying to cross-sell on behalf of partners they hardly know.
In the second scenario, legal know-how has been commoditised and packaged with any bespoke angle removed (or left only to a drop-down menu); it is probably a partial solution, but its accessibility, brand credentials and customer feedback will sell it.
It is the pile high “sell ‘em cheap” solution and in this case value for the provider will come from owning the franchise, the website, the affinity relationship or the publisher. Hardly any value will be attributed to the quality of the legal know-how, but enormous value will flow to those who control the means of distribution.
Almost everything that lawyers do today will be pushed to one of these two extreme categorisations and virtually nothing will fall between the two; and if you buy in to that analysis and into these two models then there are some hard and quick decisions to take going forward.
Most law firms will need a joint venture partner for the second scenario to work for them and only a few joint venture partners are available currently who will do this well.
In my opinion however we are now only a matter of months away from lawyers selling products through EBay, reverse auctions, on free discs inside magazines and as add-ons to insurance products sold in supermarkets and on price comparison websites (indeed I am sure some people reading this article will tell me that it is already happening).
I do not, however, see these as doomsday events that will only result in the killing of hapless law firms for the sake of progress; but I do think that as the world around us changes, so must legal services adapt to new expectations and new opportunities.
The music industry is still coming to terms with the fact that singers and songwriters will not always be paid because they can sing or write songs. Lawyers must now face a similar challenge…no longer to be paid for knowing the law, but paid because they are brilliant at managing complex relationships for value, or paid because they have the means to disseminate information in ways that people want to buy.
Up selling is only an ad break away!
And if that means that entrepreneurial talent can help us all deliver more value then that is something we have to explore; given the deregulation of the market, surely it is better for lawyers to be designers and architects in this brave new world and not merely the facilities management?