Louis: He's Jordan Furlong and he is here with me today to discuss, not the future of law, but the right now of law. Welcome Jordan.
Jordan: Thank you very much, Lou. Thank you for having me.
Louis: Now that's a nuance that you've brought to my attention, focusing on, not the future of law, but the right now of law. Why is the right now of law more relevant than the future of law?
Jordan: Well, it's funny, because when I first began this process of speaking to lawyers, speaking to law firms, and this goes back a good 10 or 12 years ago now, I would regularly get asked to come and talk about what does the future hold? Where's the future taking us here in the law and legal profession? Back then it made sense because we were still in a very static environment. We talked a lot about change. We talked a lot about what might happen someday but a lot of it was forecasting. Some of it was wish-casting, to be honest with you, but that's kind of where we had to work from. You contrast that with today, and I find that we don't really need to concern ourselves with the future nearly as much as we did in the law, because so much of what we forecast and worried about and hoped for, it's here. This is what I frequently say to my law firm audiences. You don't have to sit back and wonder what the future's going to bring. It is here and now what you need to ask yourselves is how do we deal with it? This is a new set of market dynamics. It's a new set of circumstances. As lawyers we have new competitors. As clients we have new options. Sure, this is going to increase and change multiply as time goes on but this is the situation we have now. How do we respond to this today, rather than waiting for down the road.
Louis: Well, you speak to what is a very dynamic situation for law firms and lawyers in the world today. But if you were to turn your mind or your glance back to the legal market over the 15 to 25 years that you've been commentating on it, or working on it, what's the biggest change that you've seen during that time?
Jordan: It's funny because in a lot of ways the biggest change, you kind of have to pull the camera back a little bit to appreciate it, and that's the degree to which all of this talk about change is no longer just talk. It has actually happened. It's the main streaming due to change and new dynamics or the normalization of it. Again, if I'm talking 10, 15 years ago to a law firm about a lot of stuff such as technology and process improvement, and so forth, and a lot of times I'm getting very skeptical looks and I'm getting, "What? Sounds interesting." What have you? Today, I could name you, easily, 10 law firms within the US and Canada, household names for most lawyers, that are actively engaged in projects and initiatives and creating products and services. Heavily invested in technology. Frame worked in elements of process improvement. They're using it to work more efficiently and save money. They're using to deliver services faster and better and cheaper to clients than they could in the past. That I think has been the most encouraging thing for me. The degree to which we no longer have to talk about this as what if, or what have you, and we no longer have the excuse. This is a really important one. The biggest excuse lawyers love to deploy is no one else is doing this. Right? I like to say that if you are in a CEO roundtable, with his or her board of directors or chair people, and someone says, "Hey. Here's a potential initiative. No one else is doing it yet." And everybody is like, "Yeah! That's awesome! This is terrific. We have a chance to have a first mover advantage." You say the same thing in a law firm meeting of managing partners and committee chairs, "No one else has done this yet." "Oh. Well, I don't know about that." Right? This is the excuse we love to deploy but we no longer have it. So if a law firm says to me, "Well, I don't think we can do this." I said, "I can rattle you off a dozen firms that have done it. That are doing it and are going to continue to do it while you tell yourself it's not possible." That has been the change, I think we can really take the most satisfaction from.
Louis: What has not happened during the last 10 or 15 years that has surprised or disappointed you?
Jordan: Oh boy. Disappointments. You know, here's the thing about talking to people like me who, although we talk about the fact that we don't talk about the future as much anymore, I still do. I still talk about where the future brings us and so forth, but anybody who forecasts, anybody who predicts or kind of lays out the path ahead, there's an old dodge that you fall into, very unconsciously, which is where you say, "The thing that I have expected to happen hasn't happened yet but it's going to happen any day now. It's right around corner." Generally speaking, whenever you hear someone say, "Oh in the next 5 or 10 years." that's the tell. It hasn't happened yet, and I don't really know why it hasn't happened yet, but it's going to happen any day now. For me, the thing that I really thought would be around the corner, has not yet arrived it, is what you might the call mobilization or the empowerment of buyers. You can talk about this in both sectors of the market. There is the consumer market, I guess you could say individuals and families and small businesses, which I know is not obviously the area we're talking most about today, but there are still massive problems of access to justice and coverage gaps in the law there and it would be laughable to say that individual clients and individual people have become empowered vis-à-vis people services providers. But I think you could even say the same thing on the corporate commercial side. As much as there has been definable, measurable progress in terms of new services, new products and a sharper and smarter more sophisticated level of demand from a corporate enterprise level clients, there is still so much further ahead that we could be at this point. For me, I tend to point the finger, I love pointing fingers, it's one of the fun parts of my job, but the fact that most legal purchasing decisions in corporations these days are still made by lawyers. Most of the people, not all, but most of the people in that position in law firms, in law departments, came from law firms originated. This is where most lawyers gestated, for lack of a better term, and so they absorb the culture and they have this idea that a law firm is a default place where you go for legal work and a lawyer is a default provider for legal work. It's that lack of imagination, that kind of structural lack of imagination, that I really think has hobbled corporate clients to literally to really take advantage of what the market offers them right now.
Louis: Do you see any indication or have any hope that might be changing?
Jordan: I do. I see it primarily, okay, I shouldn't say primarily. There are two ways in which I see it changing. One of them is we're getting more people on the buyer's side, again we're talking corporate/commercial enterprise clients, more people on the buyer's side who are not lawyers, who do not have a strictly legal or law firm background. Most often, these people come from two groups. One is from the general area of procurement, which as you know of course, are pricing professionals who are charged with getting the best price they can for whatever order of widgets, or what have you, the corporation needs and they are very, very good at that. They do a great job of getting the price they can but also from a group of people called legal operations professionals. Some of them are lawyers, some of them are not. But they are coming at this from a similar kind of angle. Not so much to drive the best price no matter what, although they certainly like to have the best price, but more about we want to re-think the how of legal service delivery. We want to re-think it internally, how do we solve our own legal problems internally, but also we want to create a level discipline amongst our outside providers of legal services. We want to give them frame works and criteria for what they're going to deliver, when they're going to deliver it and how. I think that bringing these people who are not lawyers into the buying conversation has been a really good development. It is, again, in its relative infancy but I'm optimistic that will continue over the course of time. Second thing that I think has made a difference is that we are seeing far more, hesitate to say enlightened but I'm going to say it anyway, enlightened individuals occupying senior positions in house. Such as general counsel and deputy general counsel and so forth, people, generally speaking from a younger generation with a new approach, and this is something I say to law firms, I said, "Look, I know the way law firms work. I know that you may have a partner who is 55, 60, 65, 70's hanging on, doesn't want to leave, and it's very hard to bring about change when a lot of these people are anchored in the past." But that is not a problem from which our clients suffer. Because when their senior executives get to a certain point they retire because they have a pension and they get a nice little package and out they go and the whole thing is set up for that. A new blood is constantly moving up. New blood is rising to the top faster in corporations and in law departments then it is law firm. I think that's the other positive development we can look at.
Louis: Which begs the question, although I think it fair to say that either process specialists or procurement specialists don't comprise the complete constellation of people who are buyers of legal services, if you had to generalize and share some insight on what it is from your perspective clients want, clients generally want, how would you answer that simple question?
Jordan: Simple question. Here's the way to look at a question like that. Which I think is not just a valid question but is actually the most significant question from a law firm; I really think they should be asking themselves on a regular basis institutionally. I think a good way is to answer that is with another question, which is to say, "What do I want?" Because every lawyer is a buyer of something. A consumer of something. It doesn't matter what it is. It doesn't matter if it’s cars, or TV's or accounting services, or medical advice, it doesn't matter. We are always out there buying stuff. What do we want ourselves in that kind of a situation. Where we are buying something that we don't necessarily have the expertise ourselves to know. Because we're not TV repair people. We don't know how TV's work or the best ones are. Think about that. What we assume, there are certain things we assume, and there are certain things we look for. What we assume is that everybody out there who could sell us a TV, everybody out there who could provide us medical advice is competent. They know what they're doing. They are trustworthy and they can be relied upon because we have laws to make sure that you can't be out there as a complete charlatan offering services like this. It's interesting to me that a great deal of law firm marketing still operates in this idea that we have the best lawyers and we're smart and we're so intelligent and we come from the best law schools. I say to the law firms, "Clients, as general rule, don't care because they assume that you're smart and they assume you know what you're doing." That's table stakes. What else do you got? What do people actually care about? Each of us as individuals, and I think this applies to corporate clients as well, they're going to choose their providers according to a very short list of criteria. They're going to look at is there a proven ability to deliver services of value to people like me. Have you done this before? Have you done it well? Are you affordable? That does not necessarily mean are you cheap. It simple means how much are you going to charge me and is this something that I feel like paying? What is the experience like of getting served by you? Which is a massive black hole for most lawyers in law firms. They do not pay nearly enough attention to what it feels like, and it is a feeling, and it feels like you served by a particular provider. Because you could get great medical advice from a doctor who is a complete jerk and has terrible bedside manner, and many of us have been there, or you could say these are the best TV place in town but the sales people are just so elitist and snippy and I can't stand dealing with them. We've all been there. That's the third aspect of it and the fourth is very ephemeral but it comes down to value. Which, again, is a feeling. We're trying to define value and there's all sorts of projects out there. What does value mean? How can we measure it? How can we put it in a box and diagnose it. It's not a bad thing to try to do that but value, at the end of the day, is a feeling of satisfaction and it's very hard to control that. It's very hard to manufacture it and it really comes out of a relationship and a connection. I wish lawyers would spend more time thinking about their relationship, the connection and the experience because that to me, that feels like a differentiator, because that's what clients want.
Louis: Would it be your observation then, quite paradoxically, that the increasing role of technology, the conversations that we're having about commoditization, artificial intelligence, the paradox of social media as, ostensibly a connector of people but actually something that divides people, and creates a premium around this concept of individual human relationship and feeling. It seems a moment in which technology is pushing us apart there's a greater premium on human connection. Does that speak to what you are referring to?
Jordan: I think absolutely. I think that's a very good insight because that's driving, not just development in the law, but in a lot of different sectors. I think it's why there are people out there who will on purpose, even though they can get something cheaper from Amazon, they will go get it from a person instead. Because they want something more than just the lowest price delivered the next day. Don't get me wrong. Many, many people do. This is why Amazon is a trillion whatever dollar company. But a lot of people out there say that's not the highest or the only value for me. I think the same thing applies in the law. When you are in a position as a lawyer of saying, "Well, a lot of the tasks that I used to be able to bill for", or as a law firm manager to say, "A lot of the tasks that we used to bill our clients for, because we would have assigned it to an associate, especially a junior, and he or she would spend many hours at it and bill out at whatever hundred dollar an hour multiple works for your jurisdiction, we made a lot of money that way. But now we have a problem because the tasks that we used to give to these young lawyers, they are being automated." Due diligence is getting automated. Document review and contract drafting and contract management and legal research, and discovery, all these different dimensions of work that lawyers used to do are getting automated. It's reasonable to feel a level threat or a level of concern about that, to say, "Well, what are we going to do? If we're not doing that what will we do?" The way I often put it with lawyers is, "You know what? Think about it a little differently. Suppose that, somehow through some accident of history before lawyers ever developed, that software was invented first. Such that but by the time you came along as a lawyer and someone said, 'You going to do some document review now?' you'd say, 'Why on earth would I be doing document review? They have a machine for that.'" I think that kind of approach, not to look at it to say work we used to do is being taken over by machines, but to look at it and say work that we would never have done, never have wanted to do in the first place, work we sure never went to law school to do, is being done by machines, okay. What else is there to do? In no way have we exhausted the entire universe of needs and opportunities that are clients have for us. Our clients will be the first ones to tell us that. I think the human elements of yes, empathy and connection and engagement are really important, but I really think the underrated element now is kind of creativity to say, "What else could we do?" This is not a question lawyers are accustomed to asking themselves but we are smart, we are good thinkers, we are, at the best, very good people to relate to one another, what could we do?
Louis: But it's also not a mode of thinking that's encouraged or taught or even discussed at law school, generally speaking, and insofar as lawyers are before they're lawyers are law students, and law firms, or I should say, law schools, aren't rapidly changing, what challenges or risks does that present to the profession in terms of cultivating or curating people that you say are now required for us to be able to compete and adapt?
Jordan: A really critical point and frankly there are certain points of critical vulnerability for the legal profession at the moment, I think, and one of them is that the fact that the system we have traditionally used for bringing people from the start of their legal careers, which is the first day of law school, to a point of viable market competence, or viable client competence, that system is breaking down and we don't have something to replace it. Law schools have never been all that great at actually preparing you to practice law. Law schools, they're there to credential you. That's essentially it. They give you the basics grounding in legal information and so forth. Law firms, for the most part, have done the heavy lifting of saying, "Okay. You know, you're a smart person with a smattering of exposure to legal principals, now I'll actually show you how law works." Traditionally you go back enough decades in the past and you'd find a little more tenured lawyers actually taking younger lawyers in hand and showing them the ropes. That has not really been the case now for a number of years. Now we see the diminishment of a number of opportunities for articling, here in Canada, and similar opportunities elsewhere in other jurisdictions. We see the number of associate positions shrinking in law firms, as I believe we will see, because of the kind of work associates have traditionally done is being automated, now in a situation of saying, "How do we train new lawyers? How do we develop new lawyers?" There's no answer to that yet. The approach I take to it, and I've said this on a number of occasions at a number of different conferences, to the question of who's responsible for training and developing new lawyers, I think the proper response is to say, "Let's ask the question differently. Not who's responsibility is it but who wants the opportunity?" Because there is a massive opportunity right now to fill this gap. To take over this void. If there's someone out there with a whole lot of venture capital money and an interest in the legal profession, and there are, who wants that kind of opportunity, that is where I suggest they go. Because we need, not just a bridge between law school and practice, we need an entirely new ecosystem or structure for developing that. I really hope we get one because if we don't, like I said, it's a critical point of vulnerability and it needs an answer.
Louis: Well, also to the extent then that you've put your finger on a deficit or gap in the capacity of law firms to provide service that we think is critical to meeting the needs of our clients today, it may be fair to say that there is a group, if you will, that is filling that void and becoming, arguably in the minds of some, an existential competitor to existing law firms, and that's the big four accounting firms who are multi-disciplinary partnerships providing often, not just legal competence, but a variety of advisory services that, I think, represent the balance of the deficits that you're referring to, how much of a threat are they to the existing historical law firms? Is it overstated?
Jordan: I don't know that it's overstated. It might be a little premature at this point. It's quite reasonable to be concerned about the big four. I'm concerned about the big four from a competitive standpoint for law firms. If I'm running a law firm right now I should not consider the big four law firms as my biggest competitive threat today. Nor would I necessarily put them on the radar for the next couple of years but in the mid to long term, I actually think so. Part of it is just the sheer scale of these entities is just astounding. The smallest big four accountancy, which I think is KPMG, has something in the range of 130,000 employees. We have the biggest law firm in the world with 7,000 lawyers. We are not on the same scale. These are behemoths. The depths of pockets are just extraordinary. But I think what's most important about the big four, and people say to me, "Are they coming after law firms?" I said, "No. They're not coming after law firms. They scarcely notice law firms. They wouldn't notice law firms they way you might notice an ant if you stepped on it." Law firms are simply in their way. What they want is a good substantial segment of the legal market. The only reason they want it is because it's another service they can provide to their customers, to their clients. That's the thing about the big four. They are comprehensive service providers to their business clients. A little bit like Amazon. Amazon is famous for intentionally saying we want a piece of every transaction in the world. That's part of their, whether they say it or not, that's part of their business model. The big four, I think, are kind of similar. They don't see any reason why they should not be a provider of a business related service to their clients. So their comprehensive and they bring in specialists and professionals and technicians of all kinds. They figure out what do we need, who do we need, to deliver these services to our clients and they get them and they deploy them. Law firms are not comprehensive businesses. They're specialized businesses. Law firms do one thing. We solve legal problems. That's what we do. So, to answer the question you actually asked me, if I am a highly specialized legal business, I am a high end boutique, for instance, or trial advocacy or maybe intellectual property or a few other kind of specialist areas, and especially if I'm in a very tightly defined jurisdiction or market, I'm not especially concerned about the big four. Because they're not looking for businesses like me. If I'm a relatively comprehensive firm, such as a full service multi-national law firm, then I think I have more reason to be concerned. Because what they're looking for is to add another arrow to their quiver, essentially. We only have one arrow. That's it. One arrow. One quiver. That's what we do. We're lawyers.
Louis: Well, let me challenge you though on that conclusion.
Jordan: Sure thing.
Louis: Because from a regulatory perspective law firms, in this jurisdiction, have the ability to have a multi-disciplinary partnership. Nothing would prevent from a law firm from engaging or bringing in within that firm advisors with different competencies to do exactly what the big four are doing, perhaps on a smaller scale. Would you, given what you think represents a competitive advantage on the part of the big four, is it something that you would advise law firms to consider? Broadening the scope of advisory services that they provide as a way of putting their arms around clients more effectively?
Jordan: Absolutely. Even in the absence of the big four they should be doing that. I mean, your point is well taken, yes. Law firms have the ability to be multi-disciplinary in their practices but they are hobbled in that ability from actually taking advantage of it by two things. The first is, although you're allowed to bring into your practice someone who is not a lawyer, you are not allowed to offer that person equity. You're not allowed to give them a share of the pie. For the best of these people they're not coming into be an employee, reporting to lawyers, especially. It's like, no, no, no, no. I report to you. I might work with you but you're not my boss. If you cannot offer equity to these individuals the best of them are going to say, "I'm not really all that interested." The second problem is that even if you could, and I do think there are regulatory reforms in the way that could deliver us in that direction in the not too distance future, even if you could there is, forgive me for saying it, a strong streak of elitism within the legal profession that looks down on people who aren't lawyers. You may be the sharpest professionally, the wisest sort of technician in the world, and sure you have a lot of good things to offer us, but you know what? You're not a lawyer. Law firms today have massive problems with getting the most value they can out of their employees who are not lawyers because they have this kind of dismissive approach to it. I know so many people in legal marketing, in legal knowledge management, law librarians, who struggle with this daily. It's the sense of getting talked down to by the lawyers. Drives the law librarians nuts, who have at least three times as many degrees, as the lawyer they're reporting to.
Louis: Right.
Jordan: I think that level elitism, which is like self-sabotage, on the part of law firms and legal profession.
Louis: Let's change gears. You were talking a little bit earlier about commoditization and technology within the practice of law. We are hearing a great deal about artificial intelligence and its potential to disrupt the legal services model. Are lawyers really going to lose their job to robots? Is this hype or is there some real risk to the profession?
Jordan: There is a ton of hype. There's a huge amount of hype. And part of it is because of all the vendors out there are who are competing in a very busy market place for your attention. And part of it there is a very large legal media ecosystem out there that's kind of desperate for clicks and will happily put images of robot lawyers, again, just kind of scare of you into thinking there's an issue. There's a huge amount of hype. There is a small but increasingly significant kernel of reality. Over time the hype is going to dissipate and the kernel of reality is going to grow. Because we are already seeing an increased capacity, especially in terms of machine learning, I mean, AI itself is not a very helpful term for us in the law because it's just too big a term to describe anything useful. But machine learning which has a number of different aspects to it, something as simple from a lawyers point of view, is natural language processing. A lot of lawyers would say, "Ahhh, I don't hear much about that." but that is critical to so much of the developments coming up now in machine learning in this whole area. Something that we don't pay enough attention to. I would not be concerned as a lawyer about losing my job to AI, unless I was a really low valued lawyer. To be blunt about it. If the only things I can do as a lawyer can be automated, then you know what? They should be. I should be out of a job. This is part of a challenge, by the way, for first and second year associates whose skill levels are not really going to be that much higher or above that. So, if I'm a law firm, I'm paying close attention to that but I'm also looking at from the point of view, again, I'm not looking for technology to replace anybody, or I shouldn't be. I want technology to augment my lawyers and to augment my professional staff so they can do their job faster, better, cheaper. Because you know why? Because, faster, better, cheaper is what clients care about. If clients care about, I do too. You've heard as I have the old saying, anything that interests my boss fascinates me. Our clients are interested in faster, better, cheaper. If there's tools out there that can help us do that we should be looking into them.
Louis: And finally, if you could wave a magic wand and change two or three things about the law firm business model, what would you change?
Jordan: Oh boy! Magic wands, alright. I'll tell you. As I mentioned before, I would wave away if I could, this pointless elitism between lawyers and, quote/unquote, non-lawyers. As I say in my presentations, I said, "No one talks about non-nurses. No one talks about non-plumbers. This isn't a thing we do. Only lawyers separate the world into us and not us. Nobody who gets referred to as a non-lawyer likes it. Because people don't like being defined as the absence of us. Law firm business model and culture. I would do a serious deep dive on lawyer compensation and incentives. I would move law firms away from this idea that the vast majority of compensation because the vast majority of value perceived is wrapped up in billing work and business development. Or bringing business into the firm. Not that these aren't important. Of course they are. But, Lou, as you know, especially as a managing partner there's so much more that makes a good healthy effective long term sustainable law firm than just these two aspects. I would be finding ways to incentivize. Financially is a great way to start but there are other ways to incentivize people as well. Reward people for being multi-dimensional contributors to value, sustainable long term value, for the firm. I guess the other thing I would say is I would love to see a renewed emphasis, in law school sure but in law firms especially, on ethics and professional responsibility. Partly because, yes, it is the right thing to do and we're seeing a lot of examples of people in society, and also lawyers in law firms, straying from the narrow righteous path of ways in which we expect professionals to act. So if you want to make a moral case for it I'm happy to do that but the business case, for emphasizing ethics and professional responsibility, is that is our differentiator. What's set lawyers apart from machines? What sets them apart from legal management services? What sets them apart from anybody? Among other things it's the fact that we have a cannon of ethics, we have a code of professional conduct, we swear an oath to protect and uphold the courts to a rule of law and we take that seriously. That is gem. That is a gift to the legal profession in a very dynamic competitive market. I would push harder and dive deeper on that. I would love to see lawyers and law firms invest in that more substantially.
Louis: Well, Jordan Furlong, thank you for your time today.
Jordan: Thank you, Lou.