law school – Law and Innovation 2

November 18, 2016

Bringing Innovation to Law: Think like Elon Musk

Introduction

The legal industry is in need of ideas for change and innovation, and I found just the person to look to.

Elon Musk is the founder of SpaceX, and the co-founder of Tesla Motors and SolarCity.

With SpaceX, his goal is to make humans a multi-planetary species. In Tesla, his vision, dubbed the ‘Master Plan,’ involves creating a fully electric car that is affordable and can be manufactured at high volumes. Using SolarCity, he plans to create low-cost sustainable energy by harnessing the power of the Sun.

iron-man — **“Doth mother know you weareth her drapes?”** *image credits: http://www.wired.com/images_blogs/underwire/2010/04/im_large_660.jpg*

Before that, he was the founder of Zip2 and Paypal. The former was a software company that designed online city guides, and the latter is an electronic online payment platform.

He is the closest thing to a real life Tony Stark that lives in our time.

So how does a man who started his career in software engineering end up being at the forefront in aerospace, automotive, and solar energy? There are many things that lawyers and law students can learn from a man that is attempting to change the landscape of 3 gigantic industries.

Here I have offered 2:

First Principles Reasoning; and
Learning Transfer

First Principles Reasoning

Musk describes that one of his core philosophies that guides his method of thinking is called First Principles reasoning.

First Principles, Musk describes, is a physics way of looking at the world. You boil things down to its most fundamental principles, stripping away all the assumptions that we have accumulated about the topic, and then reason up from there.

He gives an example of a battery pack in an electric car. Historically, a battery pack costs $600 per kilowatt hour. The assumption is that battery packs are expensive. As a car manufacturer, you take that assumption as an unchangeable fact and figured you will just have to integrate that cost into the price of the car.

With first principles, a person would attack that assumption. You boil the battery pack down to its fundamental principles and look at what are the material constituents of the battery, how much those materials would cost, and how much it would cost to assemble them into a battery. If you realize that it will actually only cost you $80 per kilowatt hour, you have now changed what everyone else took for as a fact.

As law students and lawyers, our challenge is to identify the assumptions built into our legal industry that we had accepted as fact over time.

For example, take the cost of legal services. In a 2015 Canadian Lawyer legal fees survey, the average hourly rate of a 10-year call was $360 per hour, and the national average cost of a 5-day trial is $56,439. The assumption is that legal services are expensive, have always been expensive, and will always be expensive.

Let’s take a first principles approach. Attack that assumption. Boil down the cost to its fundamental parts, and take a look at what components are no longer needed or can be changed.

Take a look at what Axiom Legal did. It realized that a big law firm with a large beautiful office space that is located in a prime location garners prestige, but also attracts a massive overhead. Instead, Axiom has its employees working remotely or onsite with their clients, and the result was that Axiom was able to eliminate 30 percent of a traditional firm’s overhead.

Another example is the billable hour. Lawyers have been using the billable hour to charge their clients because it is simple, familiar, and is flexible enough to account for the varying times it can take to work on a file. The assumption is that the billable hour is the best way to charge clients because no better method exists. However, the billable hour is unpredictable for clients because they do not know how much they will be billed for, and this allocates the risk to them.

its-how-weve-always-done-it — *image credits: http://stevedigioia.com/blog/wp-content/uploads/2015/12/The-Same-Old-Thinking-e1450563823707.jpg*

Let’s look at how Hughes Amys LLP has attacked this assumption. Hughes Amys employs an alternative fee arrangement. They use a practice management software to gather data on personal injury files. They looked at the average costs for different claims, the average times it took for these claims to be resolved, and the average awards that were paid out. The firm then presents this data to the client to provide a transparent estimate of how much a flat fee for the month would cost.

What other assumptions should we tackle?

Learning transfer

Elon Musk has become a leader in many areas of industry such as space exploration, automotive and energy. He is also a leader in many areas of their technology including reusable rockets, self-driving cars, and residential solar roofs.

One of the reasons he is so competent in these different areas is because he is very proficient in Learning Transfer. Learning Transfer is a process where you transfer what you learned in one context and apply it to another.

Elon Musk is an avid reader and eager learner. According to his brother Kimbal Musk, Elon would read 2 books a day. The books he reads spans multiple disciplines and interest areas, including philosophy, religion, programming, and science fiction. He would also read the biographies of influential figures such as Benjamin Franklin, Albert Einstein, J.E. Gordon, and Howard Hughes.

Musk then uses what he learns in one industry and applies it to another. Combined with the first principles approach, Musk would deconstruct a field of study into its fundamental principles, compare and contrast these principles with a second field of study, then reconstruct the lessons learned from the first to the second. He has done this to quickly become proficient in the field of artificial intelligence, physics and engineering.

As lawyers and law students, how can we apply learning transfer in our practice?

In an essay written by Ben Heineman, William Lee, and David Wilkins titled “Lawyers as Professionals and as Citizens: Key Roles and Responsibilities in the 21^st Century,” the essay urges lawyers and students to develop complementary competencies in addition to our core competencies.

Our core competencies are things like our basic legal training on the main legal subjects such as contracts, torts and property. It also includes legal skills such as critical thinking, analysis, and issue-spotting.

However, with new technology such as the artificial intelligence lawyer ‘ROSS’ that can do legal research on an entire body of law faster than what a human can achieve, including legislation, case law and secondary sources, the contemporary lawyer must possess inter-disciplinary knowledge and skills in order to stay competitive in the market.

This is where learning transfer can be useful in developing our complementary competencies. Complementary competencies are things like cost-benefit analysis, creative and constructive thinking, risk management, negotiation, communication, and value-based decision-making.

For example, one of the core competencies we develop in law school is issue-spotting. During an exam we are given a fact pattern and, drawing from the topics we’ve learned in that class, we can determine what legal issues need to be analyzed in that question.

Now let’s use learning transfer to apply that skill set to another context: negotiations. The fundamental principle in issue-spotting is being able to identify the ‘triggers’ in the fact pattern that tell you what legal rules will be engaged. You can transfer that fundamental principle to negotiations by learning to identify the key information in each negotiating party to determine how much bargaining power each party possesses.

As a student trying to become a 21st century lawyer, who better to learn from than the 21st Century Industrialist? There we go, we got a little bit of learning transfer going on right there.

Conclusion

The legal industry is notorious for being very conservative. Clients want more value for their money, and new technological advances are threatening the old ways of doing things. Elon Musk is trying to break the status quo in 3 very large industries, and we can learn a lot from him.

As law students and future lawyers, we have the controls to choose the direction our profession takes in the coming years. It’s easy for us to be resistant to change and be protective. After all, it feels personal to us because it is our livelihood. However, this is an excellent opportunity for us to be at the forefont in changing how lawyers do their jobs.

Or … we could be like Comcast to Google Fiber and bury our heads in the sand. The choice is ours.

December 7, 2015September 3, 2016

The Road to (Legal) Innovation

First, I would like to start by congratulating the class on the successful completion of the Law Hacks presentations. I thoroughly enjoyed all the presentations which exposed me to some great ideas regarding legal innovation. I am excited to know that at least one of those ideas, Summons, is already on its way to becoming reality; I hope that more follow. As we look towards our future and the innovation of legal practice, there is a caveat to be considered.

In his article “The failure of legal innovation“, Jordan Furlong introduces the readers to the nature of the start-up market. Furlong points out that we live in the age of start-ups, a phenomenon that brings about significant social and economic benefits, but one which is characterized by the risk of failure. For every successful start-up, there are far more failed ones. As Furlong points out, the reason for failure is not always a bad idea, sometimes its bad execution, or worse still, pure bad luck. The point that he is trying to drive home is that there are immense challenges in the way of start-ups, which we got a taste of by getting grilled by the ‘dragons’.

As we learned during the semester, the legal profession is going through a transitional period as we play catch-up with the technological advancements. As much as it scary, it is a good sign that we have chosen the route of innovation rather than extinction. It is no doubt that the need of the hour is investment in bold and fresh new ideas. However, I would like to add one caveat to this process: know when to stop. As mentioned earlier, a start-up’s failure isn’t always due to a bad idea; there are numerous other variables that account for success. Therefore, it is important to know when to give up on an idea, lest we end up chasing down a rabbit hole.

As part of the first graduating class of L21C at TRU Law, we are well on our way to start contributing meaningfully to the transition. The challenges ahead of us, as lawyers, are greater in way because lawyers don’t like to be told that they have been doing something wrong, especially when they hold considerable power in terms of regulating the practice of law. However, incremental changes by way of resilience will make sure that we come out stronger at the end of every battle. As Furlong said “[o]ne LinkedIn or Uber is worth many pets.com”; let’s keep trying for our LinkedIns and Ubers.

Finally, I would like to thank Professor Sykes for putting this innovative course together and introducing us to the future of our legal careers.

December 3, 2015September 3, 2016

Artificial Intelligence: Shaping the Future of Law

I very much enjoy Sci-Fi movies about artificial intelligence, but I am not particularly keen on being replaced by a machine that can spew out better legal arguments in a milli-second based on an algorithm. The majority of our class discussions have focused primarily on technological innovations in the legal field. Artificial intellegence has been hailed as the future of law. It’s all very exciting, until the foreboding feeling sets in and you’re reminded that not only do you have to compete with 4.0 Bobby for a job, but with a machine as well. According to Michael Cross in his article, Role of Artificial Intelligence in Law, “ a computer is as fresh and alert at 2 am as it was at nine o’ clock the previous morning.” Yeah, well, no arguments there. Computers will always be faster, more efficient and accurate at any given time of the day.

The abstracts from the 14^th International Conference on Artificial Intelligence & Law sum up the relationship between law and artificial intelligence eloquently. Both fields are involved in the process of creation. AI systems are built, experiments are designed and paradigms are replaced. In law, legislation is drafted, precedents are set and beliefs are balanced. Both fields struggle with the complexity of modeling human behaviour. AI aims to recreate human behaviour, while the law intends to drive human behaviour. The meeting of law with AI was inevitable. But where does that leave the plethora of graduating law students and lawyers?

Throughout this class, we have all been reminded of the concept of the “legal sherpa” and helping the ordinary lay person navigate the convoluted path of the law. A more refined role for AI in law is to provide strategic legal guidance. Programs such as ROSS a digital legal expert, built on IBM Watson helps attorneys with their legal research based on plain word searches. This serves as a valuable tool to help guide lawyers in their everyday research. In the end this will make legal profesisonals more effective because they will be able to complete their tasks more efficiently therefore charging the client less for services.

London firm Hodge Jones & Allen has pioneered a predictive model of personal injury case outcomes to assess the predictability of their current caseload. The program will assist the firm in determining which cases have a greater chance of success, therefore allowing the firm to direct their client towards either settling or proceeding with a claim. This is an example of a legal technological advancement in action and in the future personal injury firms and perhaps others as well, may greatly benefit from using such programs.

This new technology will not hinder or replace legal professionals at all. In fact, I see it helping to make the jobs of lawyers easier and more enjoyable. It will also help them bring a wider array of services to their clients in a quicker and more streamlined manner. These advancements will thrust lawyers into more advocacy-based roles because those types of positions cannot be fulfilled by AI, at least not for now. In conclusion, I do not believe that lawyers will ever fully be replaced by AI but it can serve as a useful tool that can better the practice of law.

November 27, 2015September 3, 2016

Money Can’t Buy Me Happiness… But It Can Buy Me a Boat

If you were to play a game of phrase association with a group of lawyers (and law students for that matter) and give them the phrase “mental health”, I would posit that many of the answers would deal with clients. You would be likely to hear many things: not criminally responsible, fitness to stand trial, and other job related answers.

The troubling part of this thought experiment is that lawyers (and law students) have a strikingly high occurrence of mental health issues but would be very likely to point to the mental issues of others. As is pointed out in the New York Times article by Douglas Quenqua, lawyers are over three-and-a-half times more likely to suffer from depression. The reasons and causes for this are unknown but oft hypothesized. The fact that getting into law school (I would argue it starts even when trying to get into law school) results in an immediate spike in the likelihood of developing depression is a scary proposition. I’m sure that many students understand that they are getting into a difficult profession and one that involves a great deal of stress.

There is something to be said for the fact that lawyers are among the highest paid professions. There is an allure, a draw, and something to be said for the idea that lawyers get into the profession to make more money than they might in another field. This is possibly done at the expense of some personal relationships and free time. Most lawyers go into the job with open eyes and decide to do it despite the downsides.

Lawyers are often of a certain personality type, and I would argue that this personality type is also the reason why lawyers have a higher risk of depression. They are less likely to admit there may be a problem, less likely to seek treatment because of it, and more likely to continue trigger behaviours that exacerbate depression symptoms (read: stress out and drink). Too often depression is seen as a weakness instead of the chemical imbalance that it truly is. The chemical receptors in the brain that allow you to feel happiness do not connect as frequently in a person that suffers from depression.

Quenqua’s main thesis of his article was that lower paid lawyers reported being happier than the more well paid legal professionals. He states that lawyers in the public sector (public defenders and legal aid lawyers) were more likely to report being happy. The most likely rationale for this disparity between public and private is that private sector lawyers are far more likely to be working longer stressful hours. One aspect of public sector and in-house counsel legal work that is often touted as a recruitment tool is that of work-life balance. While not conclusive I believe this is because the expectations of both hours and “billable” work is reduced. As a corollary, the public service lawyers drank less than their higher income counterparts; as noted earlier, alcohol is a depressant. The alcohol may be a “chicken or the egg” argument; the higher-paid lawyers drink more, thus resulting in more unhappiness, or the unhappiness triggers more drinking.

I also take issue with the program at George Washington university, when attending law school many students are unsure of what sort of practice they will be in when they graduate. This is true of most students and speaks to the variety of legal work out there; however, the other major factor at work is the uncertainty of the job market. Many lawyers report finding a firm that they liked following graduation and the firm having an opening or a need in one field or another and “ended up doing x”. I would suggest that while giving students a taste for all the different opportunities is noble, it may also result in a student getting their heart set on one potential stream (abandoning a more broad course load), come out of school seeking only one type of opportunity, only exacerbating the problem of finding a job after law school.

November 23, 2015September 3, 2016

Great Legal Careers!

Friend of the Firm Adam LaFrance drew my attention to this great blog post by Colin Lachance entitled “Make Legal Careers Great Again.” I really urge you to read it, especially as we come to the end of this semester and the sometimes scary, often exhilarating journey we have been on together.

I hold a strong belief – one of the convictions that drove me to create this course – that people go into law because they want more than just a stable way to earn a decent salary. You want to use your brains, creativity and eloquence to do intellectually interesting things that have a practical application. You want to figure out solutions for the problems that confront individuals and social institutions. You want to serve the public good (and also get paid for it). You want to be participants in the important events of your times and leaders of society.

These things are what a life in law has always promised. And it still does. The catch is, you have to find your way there. When you step off that stage after you get your law degree, you’re not going to step onto a conveyor belt that takes you straight to your goals. You have to figure it out. To pick up a metaphor I started out with, it’s another journey with not much by way of maps. Maybe you think you’ve been challenged enough and had to jump over enough hurdles in order to get onto that stage and get your hands on that degree. But, sorry, nope, you haven’t – there are many more challenges and hurdles to come. And certainly the nature of the challenges that new lawyers face is changing profoundly, and sometimes in quite troubling ways. But for all that, becoming a lawyer is still a gateway to an exciting, fulfilling life. Take Colin’s advice to heart; it is excellent. And allow yourselves a moment of self-congratulation for picking a great career.

November 17, 2015September 3, 2016

“More money, more problems?”

As future lawyers, about to embark on a legal career, there is concern that we may be focusing on the wrong rewards…

The New York Times article, Lawyers with the Lowest Pay Report more Happiness, written by Douglas Quenqua, suggests that individuals entering the profession are concerned with wealth, status and stimulating work. However, recent research has found that high income and partnership track positions have no correlation with a lawyer’s happiness and well-being. In fact, lawyers in public service positions reported greater happiness. This research study was based on a psychological model of human happiness called “self-determination theory”. The model is based on competence, autonomy and connection to others.

Young Associates in Trouble, a research paper by David Zaring and William Henderson, concludes that most new lawyers are attracted to working for large, prestigious law firms despite their reputation as difficult places to work. The research conducted by Zaring and Henderson suggests that compensation, partnership and resume value are among the reasons these leading firms remain a fixture for new graduates. The authors accept that some young lawyers may see their experience working at an elite firm and the prestige associated with these institutions as a jumping off point into a more enjoyable career path. However, the author’s data indicates that individuals who remain with large firms over the long term do not show higher satisfaction in partnership than they do as junior associates. This is due to a work-life balance that does not necessarily change as the employee moves up the hierarchy.

An explanation for the unhappiness exhibited by young lawyers may begin at law school. Here, students are pushed towards mainstream, elite firms. Large firm marketing, “OCI’s”, and competition among colleagues may be to blame for this.

The articles above suggest that law students do not appreciate what they are signing up for when entering a new firm. Better information from school career centers, depicting “firm life” in large and small firms and urban to rural centers could solve this problem. My view is that there is a general lack of alternatives to big name firms. Schools do not provide students with the necessary explanation of alternatives to firm employment and students lack the knowledge of replacement options.

We have all been told that the profession is changing rapidly and how this may affect our employment opportunities in the near future. It is time for graduates to turn their mind to careers that fall outside of the institutionalized model. Pursuing innovative legal careers may be a solution to the happiness and work life balance young lawyers seek, without sacrificing both lucrative and stimulating work. By taking the approach that change means opportunity, the transformation of the legal landscape should be viewed with excitement rather than fear.

November 17, 2015September 3, 2016

Technology and Outsourcing – a Change in the Legal Market?

In Blueprint for Change, William Henderson states that the future is bleak for law graduates in the United States because the job market is increasingly uncertain. He writes, “our current legal education is likely to enhance the human capital of our students, but in the emerging economic environment, the benefits of that education are insufficient to pay back its cost […]. The issue is whether the education we offer is able to adapt to the rapidly changing legal industry.”

According to Henderson, the current market is unable to sustain the large numbers of law graduates, and while law schools are having some difficulty filling seats, which ultimately leads to difficulty in finding professional employment for their graduates, they continue to offer attractive financing packages to perspective students, which increases enrollment (and ultimately increases the debt load of graduating students). Additionally, while law schools train students via traditional education models, companies that offer legal products and services (but are not classified as law firms) are becoming increasingly attractive alternatives to hiring lawyers. This in turn decreases the demand for lawyers and leaves many law graduates with an inability to find work in private practice. As Henderson states, “by removing the lawyer from the value chain, cost goes down, quality goes up, and service delivery time becomes faster.”

While Henderson’s research is based on American law schools, I believe that in an era where the legal profession is changing to accommodate self-represented litigants and the entry of ‘do-it-yourself’ products on the legal market, this research adds an extra layer of understanding when it comes to envisioning our futures as lawyers. As my colleague Salman outlined in his blog post “Surviving the Technological Threat,” we have been hearing from our speakers and professors throughout the semester that our current method of practicing law is in danger of changing significantly with respect to new technologies and new methods of outsourcing legal work.

Henderson suggests deviating from the traditional structure and tailoring legal education to fit labour market outcomes, but this does not seem entirely practical for Canadian law schools. While the Canadian legal market is increasingly saturated, we have yet to experience the demise of traditional legal education as Henderson sees it, likely because we have far fewer law schools than the US, and despite our tentative adherence to Maclean’s yearly rankings, our country has yet to implement a tier-based system. As Salman also points out, it is unlikely that the introduction of new technologies will change the legal landscape as a whole. Rather, these technologies will likely assist lawyers to provide more efficient legal services, particularly if lawyers are free to concentrate on more complex legal issues that are outside the scope of these products and technologies.

October 27, 2015September 3, 2016

More on innovation in law

Here are some interesting bits and pieces for L21C partners.

This blog post by Mark Cohen makes a distinction between legal practice and legal delivery. Cohen says the practice of law (what lawyers actually do) hasn’t changed that much, but the way legal services are delivered is changing profoundly:

The traditional law firm structure, designed for profit-per-partner but not conducive to competitive pricing for such repetitive work, has fueled the growth of “alternative providers”. Many of those service providers perform legal functions but operate from a corporate rather than a partnership model. Plus, service providers can-and do-often engage in inter-disciplinary practice with technologists, engineers, accountants, and project managers working side-by-side with lawyers. My take: this is the present mimicking the future.

I’ve never really thought about this distinction before, but it makes a lot of sense to me.

The observation has implications for legal education, too. Cohen argues that law schools are good at preparing law students for the practice of law in the sense that they provide the basic skills a lawyer needs to do legal work. But:

The bad news is that most law schools, like practicing lawyers, do not seem to appreciate the difference between the practice of law and the delivery of legal services. And that distinction is crucially important to legal education because it affects curriculum and the preparedness (vel non) of graduates to enter a new and different legal marketplace. Law schools continue to prepare students for the traditional law firm model-one with high salaries to help defray education costs and partnership opportunities that have all but vanished– that is rapidly being replaced.

Cohen says that law schools “must be more sensitive to the changes in legal delivery and skills students must have to avail themselves of marketplace opportunities.” I’m convinced! It is a real challenge for law schools, because we’re (reasonably) good at doing what we’ve always done, and finding a way to rise to these new challenges is a lot harder, but I think essential.

One more thing: check out the twitter hashtag #cbaleadership15. Lots of great stuff here! For example: “This is the best time to practice the law, but only if you’re open to these new innovative opportunities.” Congratulations – you are entering the profession at the best time to practice the law! Even if it is a bit scary.