“When your firm and country are established titans the future looks rosy. Everything looks quite fine and you don’t really want anything to change. You do everything to keep the status quo and resist fundamental innovation. The picture is completely different at the bottom. I don’t want to run a small law firm in a struggling country. But instead of changing job or emigrating, I want to revolutionize both my firm and my country. Here at the bottom, we have nothing to lose”.
Law firms of the past Just a few days ago my friend returned from a trip to Chernobyl nuclear disaster site. Time has frozen there, he said. When I recently returned to the place where I played as a kid, everything also remains exactly the same as it was 30 years ago. I had the same feeling visiting a legal forum in the neighbouring country of Belarus this year. I have spoken to many lawyers and in-house counsels of local companies, and here are just a few of their ideas:
Lawyers must come to the office at 8:30 am. Each lawyer always has to have a notepad to write down a task, which a superior can give him at any time, even in the office elevator or the kitchen
There is a list of books on self motivation to be read and list of video-trainings on personal effectiveness to be watched. Not just a list, but a strict sequence of books and movies.
“The lawyers must”, “the lawyers are obliged”, and “the lawyers have to pay a penalty for” are common expressions of managerial policy.
I was so frustrated about these ideas, that I immediately wrote an article on online platform Medium. I emotionally wrote that there is no need to push lawyers to work under the pressure of silly rules: tough deadlines, crazy bosses, boring office spaces and the necessity to immediately respond to any phone call. And you know what? Many of my colleagues from the top-ranking law firms in Ukraine, Russia and even Belarus agreed with what I wrote.
This means that the future is already here, at least in our personal understanding. But translating this understanding into modern work practices in Eastern European law firms remains a daunting task.
Post-industrial world
We live in a post-industrial world. And this is not my crazy idea, this was the topic of the recent World Economic Forum in Davos. Electronics, computing, social media, internet 2.0 - all these remain in the industrial era. Big data, IoT, robots, artificial intelligence, uberization, the sharing economy and many other things we as yet have no idea about signal the post-industrial world.
But, just few hours ago we printed a few Lego-type blocks with my daughter. In a few years maybe she will push a button reading ‘Nike’ on a 3D printer and will produce a brand new pair of sneakers. The only time when we can’t surf our iPads is when we are in the car. While driving we usually listen to radio. So what will happen when a robot drives the car instead of us? Right! We will start doing everything, except listening to the radio.
Nobody knows what trends will shape the legal profession. Smart contracts may destroy the traditional processes of business contracts. Blockchain will make real estate transactions as simple as purchasing book on Amazon. Initial crypto offerings will replace classic IPOs. Maybe randomly chosen Facebook users will act as judges for all kinds of disputes, while Linkedin users will be hearing business disputes.
Companies in the post-industrial world
In the future, will there be “companies” as we know them? I am not sure at all. Let’s have a look at the Upwork statistics: “53 million Americans now freelance - new study finds’.
Number of full-time employees in the United States from 1990 to 2015 (in millions)
53 million people are freelancers and 120 million are full-time employees. Just imagine, every third worker is freelance. I heard a very good schema of the companies of the past and the companies of the future: the Bricks and the Balloons.
Imagine, that you are the manager of a company. And you disappeared for few weeks. If everything stopped working and nobody knows what to do, then this company is definitely a Brick.
Brick companies have strict hierarchy, where only managers know what and how to carry out tasks. These companies are sustainable and effective. Their business models are easily scaleable: just hire ten times more people (and same amount of managers), and your revenue will be multiplied by 100. But these companies were good for the industrial world. As the smart guys decided at the World Economic Forum, we live in the post-industrial world. And the market is changing dramatically.
Balloons are another story. Can a company be ready for changes by design? And what does this really mean, to be ready for any changes by design? Let’s jump back to freelancers and see maybe they are the future of companies?
Humans in the last one hundred years became taller and weaker. Our legs became shorter, bodies - less hairy, and faces became more and more similar. In accordance with my personal investigation, dogs now cross the roads at the crossings. At least, this is true for Ukraine.
“In 10 years Nike will be an IT company”. “Self-driving cars will destroy radio”. These things sound silly, don’t they?
Just a few hundred years ago workers could be easily purchased, sold or just killed. After slavery was cancelled (btw, can you guess when slavery was officially cancelled in Ukraine?) a company was supposed to use employees not more than 40 hours a week. It must provide safe working conditions, cannot just sell staff to another company, cannot stop paying salaries, etc. But humans are still not happy with employment. If we look at the numbers Upwork gathered it looks like people would like to decide where to work (at home or on the beach), how much time per day to spend - eight, ten or twenty five. They are also not happy to have a boss or a manager. These guys are self sufficient, independent, and they are… entrepreneurs. Is there a way to manage entrepreneurs? Imagine, that Jimmy Wales, Elon Musk, Tony Shae, Bill Gates, Steve Jobs and Mahatma Ghandi all work in your company. Just try to manage them.
Prostitution
No, I am not about to offend and not going to compare lawyers and prostitutes. What I would like to show is what happened with the oldest hourly paid business, even in times with less religion and more freedom:
And, what happened with the prices in the post-industrial world with all that uberization and wikinomics: Internet 2.0 and social media platforms disintermediated the market and this was immediately reflected in the structure of the market and prices. The above facts are not the results of my personal investigation, I gathered the data from solid sources, like this longread in the Economist - http://www.economist.com/news/briefing/21611074-how-new-technology-shaking-up-oldest-business-more-bang-your-buck
Legal services
I believe that there is shrinking place for companies as we know them in the post-industrial world. But freelance is only part of what I see in the future. I have lived in Ukraine all my life and I am accustomed to everything. But each time I am landing in Kyiv airport, I meet all those wild taxi drivers hustling for business. Weapons are prohibited in Ukraine, maybe that is why this old school way of selling services is still alive.
Uber came to Ukraine less than a year ago. BlaBlaCar came a little bit earlier. Most of my friends use Uber and BlaBlaCar now. And you know what? Uber/BlaBlaCar changed clients’ demands completely, but have not changed the behavior of their competitors, the old school drivers. They still try to provide the services in their beloved manner, which is less acceptable for clients.
The story of Uber is well known and very obvious. For everyone except lawyers, it seems. Lawyers still believe that the client will never use an application to chat with a bot-lawyer. Lawyers are a hundred percent sure that the client will never ever subscribe to a contracts constructor for $9 per month. Artificial intelligence will never prepare a claim.
This may sound a little bit rough, I know. But there will be no law firms in the future. There will be platforms (Uber-like), big and small, full-services and specialized, country-specific and worldwide. There are no more lawyers-employees, there are freelancers, who are simultaneously using different platforms to find clients.
“Someone has to serve ExxonMobil and they will never look for a lawyer on any platform”. In this regard let me remind you few very nice predictions:
“There is no reason anyone would want a computer in their home.” — Ken Olson, president, chairman and founder of Digital Equipment Corp. (DEC)- manufacturer of big business mainframe computers, arguing against the PC in 1977.
“The horse is here to stay but the automobile is only a novelty – a fad.” — The president of the Michigan Savings Bank advising Henry Ford’s lawyer, Horace Rackham, not to invest in the Ford Motor Co., 1903
“The Americans have need of the telephone, but we do not. We have plenty of messenger boys.” — Sir William Preece, Chief Engineer, British Post Office, 1878.
“The world potential market for copying machines is 5000 at most.” — IBM, to the eventual founders of Xerox, saying the photocopier had no market large enough to justify production, 1959.
Of course, billionaires will never use Uber, even Uber black. They have their personal drivers and all that. So, a few old school law firms will remain, but only with the purpose of serving old school clients.
The lawyers of the future have to somehow handle all these new technologies like AI, neuro networks, robots, platforms. I am not sure that a 2017 lawyer without any coding experience, or any knowledge of CPA/CPC models, or data science skills will stay afloat. Or maybe everything above is wrong and I am just playing with the numbers and parts of silly predictions which do not have any justification. Like the chart below that shows the correlation between drownings and films with Nicolas Cage.
Maybe this story is not about the future of law. It is about the company which I and my partners are building in Eastern Europe right now. We are building a firm which will be two-sided.
One side will act as a platform for freelance lawyers, the other side will be an information technology company, delivering new legal applications and features to the market. Self-organizing teams of lawyers and legal engineers, no bosses, no managers. I do not know if it is possible, but our company reached its one-year anniversary this March and we are still making progress.
About the Author
Dima Gadomsky is a TEDx speaker, Lecturer in Kyiv-Mohyla Academy, Head of legal committee of Lviv IT Cluster, co-head of IT committee of Ukrainian Bar Association. Ranked in the TOP 5 of Best Lawyers in IT according to the annual study Ukrainian Law Firms 2014, 2015, 2016 and TOP 100 Lawyers in Ukraine according to all-Ukrainian study the Choice of the Clients 2014/2015. Named as an excellent, forward-thinking lawyer in Intellectual Property by Legal 500 2016. but above all Cinema fan and jazz listener, he eats after 6 p.m. and plays football.