Yesterday, I spent the day at the inaugural Evolve Law Summit.  For those of you who aren’t familiar with Evolve Law, it’s a community of legal tech companies, entrepreneurs, investors, and consultants, as well as law firms and law schools, founded by legal tech entrepreneurs Mary Juetten (of Traklight) and Jules Miller (formerly of Hire an Esquire) to encourage greater collaboration and cross-fertilization among key legal tech constituencies.  They do a great job at it.  I’ve been a member since December, and, in that brief time, I’ve found EL to be an exceptionally welcoming community offering (in a refreshingly open-handed and non-what’s-in-it-for-me sort of way) valuable insight, support, and connections for aspiring legal tech entrepreneurs and growing legal tech companies alike.  (For those in, or looking to enter, the space, I’d recommend getting involved.)

The Summit was an invitation-only annual event aimed at facilitating partnership and growth in the legal tech space by showcasing legal tech innovators, matching them with potential strategic partners and investors for one-on-one meetings, and hosting a couple of panel discussions:  one on Venture Capital and Angel Investment and one on Strategic Partnerships.  Since we weren’t privy to the one-on-ones, I thought we’d used this post to react to three points from the panels that captured our interest.

2037

Moderator of the Angel Investment panel Ed Wilson of Anthos Capital ended the discussion with a great question for the panelists:  in 20 years, how much of today’s legal practice (in terms of activity) will be done by artificial intelligence?  With respect to the large-firm market, the four panelists offered the following predictions:  40%, 70-75%, 75-80%, and 80%.  (And to think, just two weeks ago, Sec. Mnuchin had us all feeling so secure in our jobs.)

I’m a huge believer in the potential value (and the disruptive capacity) of AI- and automation-based legal tech.  And I think it’s right to expect that that tech will have produced significant changes in firm practice twenty years from now—both because twenty years is a long time and because of the incredible acceleration in the capacity and efficacy of cutting-edge AI in the very recent past—a trend that’s likely to continue.

In 20 years, how much of today’s legal practice (in terms of activity) will be done by artificial intelligence?  With respect to the large-firm market, the four panelists offered the following predictions:  40%, 70-75%, 75-80%, and 80%.

But I nonetheless found the panel’s predictions jarring.  As we discussed in our recent piece “Robot, Esq.:  Four Reasons Lawyers Shouldn’t Fear AI and Automation Legal Tech”, there are critical limitations on the ability of existing, non-general AI to replace human beings in legal practice—including the truly bespoke nature of certain tasks, the lack of sufficiently relevant and tailored data sets to train algorithms to handle even semi-bespoke tasks (given the complex cocktail of idiosyncratic considerations that good legal counsel comprises), and the non-empirical or data-driven aspects of the practice of law—involving emotional intelligence, communication, and persuasion—which I believe are core to providing effective legal services.  Consequently, I think the estimates above meaningfully overestimate the amount of work at large law firm that is susceptible to algorithmic replacement and gives short shrift to the value-additive work being done—necessarily—by flesh-and-blood human beings.  Firms’ head counts, training models, leverage ratios, you name it, will certainly change in significant ways in the coming years as a result of AI.  But I would be shocked if the activity-displacement heralded by AI-based legal tech exceeded 50%, even on a twenty-year time horizon.

Scrappy Lawyers

In his introductory remarks for the Angel Investments panel, investor/consultant Mike Suchsland commented on the qualities of successful tech entrepreneurs, highlighting their “scrappiness”, a quality that he thinks is somewhat indefinable, but relates to founders’ dedication, perseverance, openness to feedback, and willingness to change—strategies, even entire business models—in order to make and execute on critical pivots in the life of a business.  At bottom, it’s about being able to redefine, not follow, existing rules and paradigms.  He went on to distinguish that sort of scrappiness from the rule-following mindset imprinted upon lawyers in law school:

Lawyers are trained.  Lawyers are trained in law school to follow the rules.  That is the essence of law school.  There’s a set of prescribed procedures, there’s a set of things that you have to do, there’s case law, there’s court rules, [you have to] operate within those defined rules and procedures.  Being a business leader is exactly the opposite.  It’s about thinking outside the box.  It’s about thinking about what you can do differently from the rest of the world.  And it’s how you redefine the rules, instead of follow the rules.  So, for those . . . in this room, just make sure that you take that law school hat off and put your business manager hat on, so you can redefine your rules in your market.

I had two reactions to that point. 

First, with respect to the qualities that make great legal tech entrepreneurs, I think Suchsland is completely right.  When I think about the successful legal techies I know, scrappiness abounds. (In fact, I immediately thought of a recent experience joining one of my favorite legal tech teams, Allegory Law, and EL co-founder Jules Miller for an “Escape the Room” challenge here in New York.  Attacking a rooms full of mysteries and puzzles with an ambitious group of startup types was an inspiring (and hilarious), immersive experience into the controlled chaos of a take-no-prisoners/failure-is-not-an-option approach to prioritizing and overcoming a series of challenges that could well been a workshop designed to cultivate the very qualities Suchsland espouses.)

But second, the quote above also got me thinking about the qualities that make great lawyers.  I’m not sure the juxtaposition of the lawyer/business manager mindset is quite as clear as Suchsland implies.  For example, in the exceedingly complicated international M&A transactions I encountered in my practice—particularly those where we were negotiating among clients and firms from a variety of jurisdictions with their own expectations for the rules of the road—there was something very similar to the scrappiness Suchsland described that separated that exceptional lawyers from them merely good based on their creativity, perseverance, and ability to change their approach and their own understanding of conventions to achieve the best results for their clients.  And more broadly, the best lawyers I know are often the most entrepreneurial.  They do the original thinking required most complicated matters and have the confidence to take new approaches; they find the path-breaking solutions around seemingly intractable problems to achieve their client’s goals.  And while there are clearly innumerable situations where rule-following and adherence to convention is a virtue in the practice of law, picking up again on the AI discussion above, in the years to come, as technology pushes lawyers away from more rote and strictly rule-based tasks towards more high-value and bespoke ones, lawyers will be called upon to focus increasingly on exactly that sort of outside-the-box, original thinking.  So maybe we should be spending a little more time training our lawyers to think like founders.

Hacking the Law Firm Sales Quagmire

Selling to law firms is notoriously hard.  That’s true for a number of reasons (e.g., firms are incredibly conservative with their tech infrastructure, given the sensitivity of information they manage and the tech reliability their business requires; firms often lack dedicated/comprehensive/effective tech procurement functions; you’re asking the partners to spend their own, instead of shareholder, money; etc.).  (We may try to delve into the subject in a future post, so if you have a take on what makes law-firm sales so difficult, leave a comment below—would love to hear your thoughts or chat further about it.)  The panelists on both panels had some great advice for how to manage the sales process—both for product end-users and potential strategic partners (e.g., following a well-established, comprehensive sales process that targets/loops in all the affective constituencies, identifying and directing sales efforts towards the final decision-maker as early in the process as possible).

But one piece of advice caught my attention—in part because it’s not necessarily intuitive and also because I’ve heard it before from successful legal tech founders.  Although it’s important to target the final decision-makers in your sales process, as noted above, it’s often critical to find and win over someone at the firm (or potential strategic partner) who is a few rungs below because she not only truly understands the pain point you’re trying to alleviate, but she’s the one for whom that pain is a meaningful and present part of daily life (e.g., the senior associate whose life would be immeasurably improved by having your product or service).  That can mean that, early in the process, you’re investing meaningful time and energy targeting someone without control over the purse strings.  But the value of having an internal champion, even at a lower level, who truly understands the benefit of your product and is personally and selfishly incentivized to work to make a deal happen makes that investment a great one.  Definitely a point worth remembering for companies navigating the quagmire that is enterprise-level legal tech sales.

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