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

“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

“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 trope 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. 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. You would think someone visionary would long since have revolutionised the legal market.

But — and, look, it’s easy to be wise in hindsight, readers, but let’s do it anyway — the anticipated “seismic shifts” in legal industry are taking a long time to happen.

To be sure, 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 not really in the ways that the thought leaders had in mind.

But all this change notwithstanding, it is an ongoing source of frustration for the legal imagineers that the fundamental structures of the legal profession haven’t been revolutionised. They’ve rolled with the punches. Clifford Chance seems still to be in rude health, as far as anyone can tell.

But many futurologists have in mind flying robo-taxis and hoverboards. What we have is Uber and electric scooters. You might say is no bad thing: thought leaders say, “yes, yes, yes: but the revolution is yet to happen, and happen it surely must.”

Yet, we have had all manner of changed circumstances thrown at us since the developed 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

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 it is Llewelyn Thomas’s quip that has the ring of truth.

We go to Allen & Overy not because it gives the best advice, but because it is Allen & Overy. Ex-magic circle partners routinely find this to their disappointment when the phone stops ringing.

It isn’t the hole people 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 in 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 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 a four-box quadrant ignores the institutions, conventions, hierarchies and deeply ingrained structures, 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 stability that is necessary to deliver a reliable hole in the wall, or — if that is what the customer wants — that deliver a shiny new drill with lots of buttons, lights and a badge saying “magic circle certified fresh™” on it.

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

The internet, disintermediation and the scope for legal process outsourcing

One of the great themes of the information revolution is the network’s power to disintermediate. There is nothing particular about the internet that makes possible alternative legal process outsourcing where it was not before. To the contrary, outsourcing is a form of reintermediation: generally, instead of leading to outsourcing, technology promises to remove the intermediary altogether.

As it has done: 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 host podcasts. All of these changes have happened iteratively, by the effluxion of time and the gradual change of behaviours, not by revolution.

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. What is more, it 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 — and technology has been the enabler here. The profession has used the tools of the information revolution to further complicate everything.

The problems with law today are not technological, and technology cannot solve them. They are sociological problems. They are deep. They stem from inherent agency problems that arise in any intermediation activity. The arise from natural barrier-protection behaviour that goes on around all substantial paradigms and power structures, and the practice of law is a heavily-fortified, deeply-entrenched power structure.

The doubtlessly well-intended efficiencies that modern(ist) management theory promise and the 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.

There is the challenge that faces legal industry thought-leaders and smug self-publishing wiki-writers alike: how to get inside that hay-maker cultural punch? How to bring long-term change to deeply embedded behaviours and change institutions to make them more effective, more efficient, less of a gravy train, less preposterous?

See also

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