Drills and holes

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We don’t want to sell you Life Insurance ... we want you to know and have what life insurance will do. A 1/4 million drills were sold last year: no one wants a drill. What they want is the hole.

—The Manhattan Mutual Life Company advertisement, Manhattan Kansas, 1946

“To a man with a hammer, everything looks like a nail.”

— Mark Twain

That a customer wants a hole, not a drill, is a favourite conceit of legal futurologists. Their message: do not assume that users of the legal system are irrevocably tied to how it currently works. Clients want outcomes. How the legal machinery by which these outcomes are delivered works is of little interest to them; what matters is that the outcome works, it is cheap and it is quick.

So: all this carry-on with law reports, dusty legal opinions, horsehair wigs and so on is incidental bunk. No-one, necessarily, wants it. Heed the rational moderniser’s refrain or risk being driven out of business.

Come the revolution —

We have been hearing these warnings for twenty-five years. With his offspring Professor Richard Susskind has cornered the market in legal soothsaying, and has been sagely predicting a private practice Armageddon that has stubbornly refused to come, for thirty years. The Susskind Hypothesis reached its apotheosis with 2008’s The End of Lawyers?

Yet there has been, literally, no end of lawyers since then. Nor has that been for want of trying: JC’s legaltech roll of honour refers. But the only constituency growing faster than the legaltechbro sector is the actual legal sector. The charge-out rate reaches ever upwards, as if some cosmological constant. If revolution really were in the air, surely it would have happened by now. This time is resolutely refusing to be different.

But AI? Well, let’s wait and see. But ask yourself about the use case: one skill the legal industry has never lacked is windbaggery and random word generation.

In the meantime, the legal market has incrementally changed: it has absorbed every innovation — fax, email, internet, mobile telephony, mobile internet, cloud computing, offshoring, outsourcing, and it is currently embedding what it can of neural networks and natural language processing — but never really in the ways that the thought leaders had in mind. This is the nature of innovation. Incumbents never see it.

It is thus an ongoing source of frustration for legal imagineers that the fundamental structures of the legal profession haven’t been revolutionised. They’ve rolled with the punches. Clifford Chance seems still in rude health, as far as anyone can tell.

Futurologists had in mind a neat four-box quadrant of flying robo-taxis, hoverboards and software-as-a-service. What we got was Uber, electric scooters and outsourcing. You might say this is no bad thing: thought leaders say, “Yes, yes, yes: but the revolution is yet to happen, and happen it surely must.” See, for example, this curious piece from A&O.

Yet, all manner of changed circumstances have thrown themselves at us since the world lost its major stabilising influence in 2016: Political insurrection. Disease. Dislocation. War. The Pentaverate. Prince died. All of these things, you would think, would accelerate the rate of change. But the only constant since then has been the ongoing good health of the traditional legal industry.

So what is going on? Où est la révolution?

No one got fired for hiring Big Law

“I don’t think it works like that at all. You see an electric drill in a shop and decide you want it. Then you take it home and wander around your house looking for excuses to drill holes in things.”

—Llewelyn Thomas, quoted in Rory Sutherland’s Alchemy

The first thing to say is that this observation — that people want outcomes and don’t really care about the machinery that delivers them — is hardly new. It does not depend for its validity upon the information revolution.

If it is true that we want holes not drills, it was as true in 1790 as it was in 1996, as it is today.

If.

But Llewelyn Thomas’s quip has the ring of truth.

We go to Allen & Overy not because it necessarily gives the best advice — and certainly not because it renders its advice in the most customer-friendly way — but because it is Allen & Overy. Ex-magic circle partners routinely find this to their disappointment when they move to a smaller firm and the phone stops ringing.

It isn’t the hole we want: it’s the drill. We can believe this is not so, but only by denying facts as they appear to us in favour of a mental model that appeals to us.

Law as a complex system

The legal ecosystem developed the way it did not despite customer demand but in response to it. But not just customer demand: practitioner demand, societal demands and all the other multifarious demands, contingencies, hierarchies and doctrines that energise and enervate the wider system. The legal system is, well, a system: a web of complex interactions: stocks, flows and feedback loops, subroutines, submerged agendas and conflicting interests that push it into a gently morphing pseudo-equilibrium.

Re-imagining this whole system from scratch through the lens of an imagined future ignores the institutions, conventions, hierarchies and deeply ingrained ways of doing things, embedded in glacial pace layers — the ways we have all worked out of comfortably working — that are there, in significant part, to protect the system from sudden shocks and, yes, to protect the selfish interests of the multitudes that presently thrive within it. They deliver certainty. They provide the necessary stability to deliver a reliable hole in the wall, or — if that is what the customer wants — a shiny new drill with lots of buttons, lights and a badge saying “magic circle certified fresh™” on it.

Revolutions are not driven by thought leaders. Revolutions put “thought leaders” up against a wall. Usually, one that already has holes in it.

The Internet, disintermediation and the scope for legal process outsourcing

One great theme of the information revolution is the network’s power to disintermediate. Where we once had to rely on rent-extracting gatekeepers, publishers, distributors and systemically important financial institutions to interact with each other, now we are hyperconnected: we don’t need rent-seekers: we can reach audiences, clients, markets and counterparts directly. (Hullo, world!)

But hyperconnectivity makes re-intermediation easier, too: ironically, the major thrust of management orthodoxy over the last forty years — the approximate life of the internet — has been to financialise, atomise and distribute around the planet the operations of organisations that were once heavily centralised. Here is a tension: the same technology that connects us multilateral makes possible the “will to atomisation”: a systematic extraction of rent on a scale never seen before.

Outsourcing is a key form of this re-intermediation. As we have embraced technology, re-intermediation has exploded.

Some forms of legal process outsourcing have been obliterated, though it’s a done deal now, we have banked it, so thought leaders tend not to talk about it.

But secretarial work, proof-reading, couriers, mailrooms, prospectus printing services, even media and marketing services — have vanished. Lawyers type their own stuff now. They send their own email. They manage their own branding, do their own webcasts of the same dreary seminars. They even, god forbid, host podcasts.

All of these changes happened iteratively, by the effluxion of time and the gradual change of behaviours, not by revolution. The behavioural change has nonetheless been profound. Our new ways of working have become “part of the furniture” so it doesn’t feel like a big deal. Profound, lasting change rarely does.

This doesn’t make it okay

Now none of this is not to say a great deal of the legal work product is not preposterous. It is. Most of it. Lawyers have contorted their preferred ways of working, carrying on and expressing themselves to fit the new regime.

What is more, the legal idiom is demonstrably more preposterous than it was thirty years ago: there are more lawyers, legal agreements are longer, legal prose ever more tortured, form ever more imperiously towers over substance where the net risk situation is meant to have lessened. Technology has been the enabler here. We have used the tools of the information revolution to further complicate everything.

Do not expect AI to be any different. Large language models will serve as convolution machines because convolution — using tools to erect barriers to entry — best suits those who control the tools. Knowledge professionals are not having a Kodak moment.

The problems with law today are not technological but sociological. Technology cannot solve them. They stem from inherent agency problems that apply to any intermediary. They arise from natural barrier-protection behaviour that goes on around all substantial paradigms and power structures. Make no mistake: the practice of law is a heavily-fortified, deeply-entrenched power structure.

The doubtlessly well-intended efficiencies that modernist management theory promise and the new vistas the information revolution have opened have multiplied the opportunities to defend the existing structure. Technology can be deployed to defend power structures just as easily as to dissolve them, and those within the orthodoxy have the resources to do it.

Entropy always wins

This is the challenge facing thought leaders and smug, self-publishing wiki-writers alike: how do you get inside that cultural hay-maker? (it is a hay-maker, by the way, in both senses). How do you deliver long-term secular change to deeply embedded, monk-like behaviours? How do you manage to change all implicated institutions to make them more effective, more efficient, less of a gravy train, less preposterous?

It will be hard. It is probably not even possible. It will require continual, coordinated, concentrated effort — real hard yards — over a long period, in the face of the lazy drift back down towards warm, brown entropic mediocrity. We will have to all work at it. Scale-dependent shortcuts like networked monopolies and industry-deployed AI chatbots won’t do the trick.

Few in the industry seem to have the fight for it. Over the last decade JC has formulated fourteen seventeen laws of worker entropy: these militate against the cleaner, plainer, more organised universe that thought-leaders portend. Not one of them is derailed by the foretold new ways of working. As the charge-out rate continues its steady, cosmologically constant ascent, nor should we expect them to.

See also

• Systems theory
• End-to-end principle
• IT strategy
• The Nature of Technology: What it is and How it Evolves