In the world of entrepreneurship, the concept of “disruption” has taken over. It’s a term that’s been used to a near annoyance. These days, nothing seems to escape its grasp. Uber has upended the taxi business. Tinder has forever altered the way we date. Airbnb has transformed the way we vacation. And now, a newly published white paper charges law schools to do some disrupting of their own—before someone else does it for them.
“Disrupters usually start on the fringe of the market and then they catch the incumbents unaware, serving their existing clients,” Michelle Pistone, a professor at the Villanova University School of Law and co-author of Disrupting Law School , explains on a phone call with Tipping the Scales. “By the time they see the disrupter, it’s often too late. If the legal academy, doesn’t do the disrupting, something else will.”
FRINGE PLAYERS TAKING A MARKET HOLD
Indeed, the vulnerability of the legal education is no secret. Since the Great Recession, applications and enrollment at law schools have been in free-fall. And it’s largely because of the disruptive innovations from technology and business model innovations taking place. Entities like LegalZoom and Rocket Lawyer are cutting time spent on cases by attorneys at Big Law firms, leading to those firms to not need as many staffed lawyers. The newfangled “do-it-yourself” services are also allowing people to do their own lawyering.
In the report, Pistone and co-author Michael Horn of the Clayton Christensen Institute–a research organization looking at disruptive innovations–liken the upstarts to Amazon, which was also once a fringe player. In 1995, the report says, when Amazon.com was launched, Borders Group went public with its book selling chain, Borders. In 1997, Borders stock soared to an all-time high. By 2001, Borders went as far to outsource its online book sales to Amazon, which of course, ended up being a behemoth mistake that led to bankruptcy in 2011.
Horn and Pistone see some eerie similarities in the unwillingness of law schools to change with the times. “Facing dramatic declines in enrollment, revenue, and student quality at the same time that their cost structure continues to rise and public support has waned, law schools are in crisis,” the report asserts. “A key driver of the crisis is shrinking employment opportunities for recent graduates, which stem in part from the disruption of the traditional business model for the provision of legal services.”
A MARKET POISED AND VULNERABLE TO DISRUPTION
According to the report, the legal market and legal education are vulnerable to disruptions stemming from technology and business model innovations in at least three ways. First, the technology and business model innovations are making legal services more standardized and commoditized. Next, technologies are freeing lawyers to boost productivity—enabling firms to accomplish more with less lawyers. Third, attorneys are losing their monopoly on legal services.
The potential disruptive innovation of the likes of LegalZoom or Rocket Lawyer fit the bill. For a product or service to be disruptive, it first has to be attractive to “nonconsumers” or “people for whom the alternative is nothing,” the report reads. Even if the service is lower quality than what’s already in the market, it can capture a smidgen of the market that would otherwise not exist. Then, the service or product can improve, eventually becoming a bona fide competitor, which is dangerous for the established players, believes Piston.
“People who might not have hired a lawyer, hire LegalZoom, which takes out part of the market,” asserts Pistone.
Since 2001, LegalZoom has grown from a fringe organization to being able to acquire a 200-year-old U.K.-based law firm and settling multiple multi-million dollar cases. Instead of adapting or innovating as LegalZoom gained a market foothold, state bar associations in North Carolina and South Carolina have tried to fight LegalZoom by calling it illegal–so far to no avail. And LegalZoom is definitely not the only company making moves in the DIY lawyering arena. Organizations like Nolo and LegalShield, among others are also establishing themselves in the volatile market.
A MORE DETAILED, COMPETENCY-FOCUSED APPROACH
But all is not lost, Pistone and Horn say in the report. Now is the time for law schools to adapt and survive. While not a do-or-die situation, the report asserts the window for innovation won’t last forever. Indeed, some schools have already begun to innovate–but only as an attempt to hold status quo, the report says, instead of implementing bottom-up radical change.
For example, over the past decade, legal residency and incubator programs have been established to train attorneys either in their final year of law school or immediately after graduation. The American Bar Association’s website lists more than 50 similar programs–many of which are associated with law schools. Still, the report says that’s not enough. Pistone believes law schools should be focusing on and emphasizing lawyering skills from the get-go of law school. Skills such as fact checking and client relations and exposure, should be a substantial part of legal education, she says.
Additionally, the report suggests adopting an online competency-based form of education. The model suggests switching from a time-focus on learning to a competency-focus. That is, instead of requiring a certain amount of hours for graduation, schools would emphasize designed and strategic competencies to be mastered. The report also suggests law schools adopt a “stackable module” approach, where courses are completed in modules instead of the traditional courses. This could allow students to focus on specific areas of the law and build more of a custom curriculum.
‘NO SCHOOL IS IMMUNE TO TECHNOLOGY’
Of course this research also says a lot about choosing a law school to attend. Pistone suggests looking beyond the U.S. News rankings and looking at what law schools are doing to innovate. Applicants should understand they are consumers of the law degree, Pistone says, and they should be active in their education. Pistone suggests examining some of the research from law professors Marjorie Shultz and Shelden Zedeck to match “lawyering effectiveness” skills with legal education.
And for the students in the upper echelon of the applicant pool, now is the time to apply, Pistone adds.
“Schools are competing against a much smaller body of students,” says Pistone. “Students in the top bracket are not applying to law school like they used to before. There’s a lot more competition for those few students. No school is immune to technology, if any school thinks it is, it will get blindsided.”