Business of Law

Disruption always comes from where we least expect it. Lawyers exercise an iron grip over their profession. They determine who can practise law and how they should conduct their business. They organize themselves in bar councils that then determine how they can (and cannot) advertise and with whom they can share profits. If librarians had exerted the same sort of control over the organization of information as lawyers do over the business of the law, the modern internet might never have come to pass. Unless we lawyers can loosen the iron grip that we have over the business of law, the profession might never see the disruption that it needs and deserves.

It is the nature of innovation that the ideas that gain traction are those that offer direct, tangible benefits to users. Since most legal technologies solve client problems they benefit clients more than the lawyers who use them. Legal technologies are slow ideas that will not disrupt the profession. We need fast, disruptive ideas and all that we are getting is incremental improvements in efficiency.

There is a need for accurate, real-time court reporting by professional journalists. At present we are relying on lawyers’ live tweets that cannot be expected to be unbiased and factual public information. We need to make changes to enable this institutionally.

Complexity is the friction of the legal system. We need to simplify the entire legal system - making it more accessible and less mysterious. The reason we have not been able to achieve this is because unlike all other industries, lawyers exercise 360-degree control over every facet of the legal industry and protect the profession from disruption.

Law firms struggle with partner compensation models, balancing profit and collaboration. The “eat-what-you-kill” model, based on individual revenue generation, can lead to competition and reduced cooperation. In contrast, the lockstep system, rewarding tenure over performance, may not fully incentivize productivity. Similar challenges exist in finance, where hedge funds guard proprietary data. Numerai, an AI firm, addresses this by using homomorphic encryption and a public platform, allowing data scientists to contribute to a meta-model, democratizing data without compromising confidentiality, and rewarding contributions with bitcoin. This innovative approach could inspire similar solutions in the legal industry.