At Disrupt this past month, Jack Dorsey took the stage in an anticipated keynote speech. While the reviews of Jack’s speech were mixed, he made some interesting points about revolution, and how we as entrepreneurs should focus on spaces ready for revolution.
Few would argue that the legal industry is primed for such a revolution. Many revolutions, however, are quashed swiftly by entrenched incumbents. The legal industry has withstood change for hundreds of years due to powerful incumbents and a monopolistic industry. Successful revolutions require the appropriate timing, setting, strong motivations and the right players. Jack’s reference to the American revolution was a prime example of such requirements. The correct cocktail of timing in American colonial history, a home field advantage, democratic ambitions and an all-star team allowed for a successful revolution. What about the legal industry? The chances for startups to execute on a legal revolution have never been better.
Setting for a Revolution
It appears the frustration with the legal industry has reached a precipice. Primarily brought on by the recent recession, consumers of all types are baulking at many of the broken features of the traditional legal model.
Unlike 10 or even 5 years ago, consumers and lawyers are now able and ready to use technology to find one another, going against the traditional grain. Ten years ago, the average consumer was just getting used to purchasing products online. Now, acquiring (not just finding) the assistance of service providers online is easy and reliable through end-to-end marketplaces. Even for services which demand a high degree of trust like dating, babysitting, in-home healthcare and now legal, consumers are more comfortable now than ever connecting with service providers online.
The traditional legal model is struggling to adapt. Monopolies have never been good about morphing in response to consumer sentiments and empowered consumers have the power to make big changes. Take the music industry. Record labels and traditional music stores fought online technology innovations tooth and nail, but these technologies gave the consumer more power over their music purchasing decisions. It took years for many to come to terms with these changes and realize that the industry would never be the same again, nor should it. The masses, including the incumbents, eventually came to embrace the online music revolution which entrepreneurs started just by empowering the consumer. The revolution in the legal industry will follow a similar consumer driven path.
As if this wasn’t enough, the traditional legal model is going through a dramatic state of uncertainty at the moment revealing obvious flaws that have been ignored for so long, particularly profits-per-partner. The recent demise of mega law firm Dewey & LeBoeuf highlighted this unstable system and potential continued toppling of firms. Partially brought on technology and partially brought on by the recession, the legal industry is itself fighting to determine their future.
Stakes are High
Operating within the legal industry carries with it a noble cause worthy of revolution – accessible legal services to everyone. Access to legal guidance empowers a democratic nation, especially the U.S. which relies heavily on its court system. Whether business or personal, when you have proper legal guidance and representation your life is much better off. If that wasn’t enough, the $300 billion at stake in the U.S. alone ($600 billion globally) is a strong motivation for any entrepreneur.
Every successful revolution must have their seasoned veterans. Thankfully, companies like LegalZoom and DirectLawyer have taken on these roles. LegalZoom was the first over the wall. They have fought countless lawsuits over the years and laid the path for a new breed of talented entrepreneurs in the space. Hopefully, the current wave of legal startups can amplify the waves created by these early visionary companies. Admittedly, I am a co-founder of one of these companies.
Innovative technologies are sweeping through the legal industry via a wave of entrepreneurialism. Startups filled with talented hackers and hustlers are helping the consumer find and hire attorneys more easily, breaking down the barriers to accessing legal information, and giving lawyers the digital tools to approach the changing buying habits of consumers for legal services. While approaching the problem from different angles, the end result of our efforts is arguably the same – more efficient business development channels, greater transparency and great accessibility to legal services.
As with any revolution, there are no guarantees of success despite optimal circumstances. Even the American revolution was won by a hair. The legal industry is a 10,000 lbs gorilla which has withstood change for hundreds of years. It will not go gently into the night. The industry is firmly entrenched in monopolistic regulations and decade old mentalities. But, with the legal industry in such an uncertain state, consumers looking for alternatives, and talented startups providing consumer empowering technologies, the chances for a successful legal revolution are better now than ever. Few would argue that it is long overdue.