Anyone who has been paying attention to the legal profession during the past few years knows that we are experiencing a wave of technology driven and venture capital fueled innovation that will either disrupt or evolve the practice of law in a way that provides benefit to the public at large. Many startups are doing amazing things and deserve enormous rewards; entrepreneurs have tackled everything from automated document assembly to legal marketplaces to case law visualization.
Although lawyers often lead these startups, there are also many practicing lawyers and law firms of all sizes that are working towards legal innovation. In my opinion, lawyers—being the chief participants in the legal profession—have a great deal to offer by adopting an entrepreneurial approach to the practice of law.
At its simplest, entrepreneurship can be defined as combining resources to create a profitable business; an entrepreneur takes various types of capital and uses them to create something new. The more popular conception of entrepreneurship emphasizes innovation and entails certain cultural connotations and practices.
In this piece, I am using my own experience as a vehicle for describing how any lawyer might innovate in their own practice. My hope is that lawyers will actively engage with technology rather than live in fear of being “disrupted” out of business.
Why am I a lawyer-entrepreneur?
I come from a technology background. I started coding at age eight, and started working at technology companies at age 16. I say this simply to explain that approaching problems from an entrepreneurial perspective has been the default mode for me throughout my career as a software developer, and now, in my career as a lawyer.
When I made the switch from code to law, I knew that I wanted to keep my technical skills fresh and use them in my practice. My goal has always been to think about how technology can be used to improve the practice of law for clients and lawyers.
What has strengthened/led to that thinking?
First of all, starting my own legal practice out of law school forced me to bring what I learned from the technology and startup worlds to bear on the legal world. At the beginning, it was simply a survival tactic—while some lawyers could rely on decades of experience to provide value to clients, I had to find a different way to give the people what they want. This situation has forced me to take an iterative and holistic approach to building my business.
More importantly, running my own firm has forced me to think about issues beyond strict legal practice. I had to understand where clients come from, what they want, and what it takes to make them feel like they had a good experience that they would recommend to others. Similarly, any lawyer knows that there are a number of administrative issues to handle when running a legal business, everything from: billing, conflicts checking, managing trusts, networking, accounting and managing everyday office tasks. These areas can be made more efficient with the judicious application of technology.
Working with smart people in the legal industry has also helped me to grow in the way that I approach lawyering. Through my involvement in the Los Angeles Legal Innovation/Legal Tech meetups, I have had the opportunity to talk with many lawyers and technologists who are serious about changing the way that the legal industry operates. My brother-in-law is a startup founder and Y-Combinator alum, so I get to pester him with questions from time to time. From there, I am constantly learning about new tools and ideas that I then attempt to apply to my own practice.
What are the benefits of taking an entrepreneurial approach to legal practice?
Rapid iteration represents one of the chief benefits of approaching legal practice from an entrepreneurial perspective. Traditionally, legal services have been provided on an hourly service model. This model functions well in many scenarios, but there exist a wide range of other situations where this might not be the best choice. By adopting the entrepreneurial mode of introducing an offering, getting feedback, and then tweaking the offering, I have been able to more quickly home in on what my clients really want.
Technology now allows attorneys to try new ways of providing legal information and legal advice to customers. Whether that means writing books, offering flat-fee service packages or conducting seminars on legal topics, lawyers are increasingly seeking ways to get people what they need, at accessible prices, while preserving profitability.
Conversely, my legal training has added a great deal to my thinking about developing technology. My experience as a practicing attorney has helped me to learn to remove extraneous information, operate under ambiguous conditions, and constantly to question my own assumptions. And being in direct contact with clients gives lawyers an advantage over non-lawyer startup founders when working in the legal space.
What are the drawbacks of taking an entrepreneurial approach to legal practice?
It’s important to be upfront: entrepreneurship lacks security. There is no guarantee that your best efforts will amount to anything, there will be expensive dead ends, and there is a real risk of total failure. It may be in vogue to fail faster, but it really hurts to experience it first-hand. The psychological roller-coaster exists and even if it is not discussed, every entrepreneur has to ride it.
Being an entrepreneurial lawyer also involves restrictions on outside investment. The ethical rules in many states (including my home state of California) prevent non-lawyer ownership of law firms. In a practical sense, that means that if you are a lawyer who wants to build a new service, it is not always possible to raise money in the context of a law firm (although one could spin that product off into a separate company that could take outside investment, but that’s another story). Such a restriction makes it difficult to test good ideas at scale. All that said, many smart lawyers with good ideas are currently pushing for reevaluation of these rules, so things may change.
How can lawyers or law firms work to embrace it?
Lawyers and law firms can work to embrace entrepreneurial thinking by thoughtfully considering the value that they provide to their clients. The goal would be to understand what legal services can be automated, and what need the hand of the lawyer. That goes back to understand where lawyers provide value and where value can be better provided by an automated system, and where it makes sense to work in concert. Many larger firms are making progress on this front, and there are probably a number of small firms who are doing this work.
Law firms can promote entrepreneurial thinking by educating students on how to work with clients and how law functions as a business. As it stands, at many schools, clients are spoken of as mysterious creatures that are only ever seen by law firm partners. Accordingly, law students are trained to cater to the needs of partners, and not clients.
Finally, read some good books on entrepreneurship. The ones that I have found most helpful are ones that are perennially popular among the startup set: The Lean Startup by Eric Ries, The Personal MBA by Josh Kaufman, Rework by Jason Fried, and Zero to One by Peter Thiel (I haven’t read this one yet, but I have heard great things). And since we are talking about legal practice, Tomorrow’s Lawyers by Richard Susskind is a must.
Bonus: a not-so-secret secret is that it is possible to develop a startup (or at least apply startup principles to your business) without writing much code. Many popular web applications—including many that attorneys regularly use—feature interfaces (APIs) that allow users to integrate them with other web applications. As a practical matter, this allows anyone to use tools like IFTTT or Zapier to do things like sync their accounting system to their time tracking system to their analytics system to their blog platform and automate much of the law office backend for a fraction of what it would have cost even five years ago.
Part of my motivation for writing this article comes from a desire to see lawyers take a more active role in the development of legal technology. Although progress is being made in the area of legal innovation, I am convinced that if lawyers get more directly involved in the process of developing startups—or simply apply startup thinking to their legal practice—we can get better products that meet the needs of both consumers and the legal profession.