State of the Legal Industry: A Leading Advocate for Innovation Calls It “Stagnation” — And Points to a Remedy

Company owners and executives need to take charge of legal and regulatory affairs in order to control legal costs, prevent liability, and otherwise cope with the legal and regulatory system’s increasing demands upon business. 

Because their lawyers won’t do it for them. 

Consider last week’s diagnosis (here and here) from Ken Grady — one of the legal industry’s leading visionaries: 

“NO SIGNIFICANT CHANGES IN LAW

“Today, we talk about the legal industry going through a transformation. We point to new providers, the use of new tools such as project management, and the miracle of artificial intelligence and what it can and will do.

“But, if we look carefully at the legal industry, we can see that not much has changed from 100 years ago even with these tweaks ….”

Grady is dismissive of the hype surrounding legal technology:

“What passes for innovation is, for the most part, unremarkable. In many cases it represents a Rube Goldberg approach to the industry — complicated ways to accomplish what doesn’t need to be done or could be done much easier without the software.”

In the same article:

“The very modest tweaks heavily publicized represent not radical change or even significant change, simply the introduction of a bit of efficiency into what is otherwise a 100-year-old stagnant industry.”

Who is this guy? And why is he talking this way?

Ken Grady is one of the very few attorneys whose career has included both law firm practice and P&L responsibility as a general manager (i.e., not as in-house counsel — though he’s done that too).

Grady teaches at Michigan State Law School where he’s a Research Fellow, following a career that included partnership in the McDermott, Will & Emery AmLaw100 law firm and — later — P&L responsibilities for a manufacturing company that adopted Toyota lean methodologies 25 years ago.

(In an earlier post I described his work as a practicing lawyer / then general manager / then lawyer again.)

Unsurprisingly, Grady’s experience as a manufacturing executive and the Toyota lean outlook that he learned along the way seems to have shaped his expectations for the legal industry:

“If I sat down with a [legal] team today and did the same reinvention of legal services that we did in the factory with manufacturing, the market would reject our new approach ….

“They aren’t ready for 60 minutes of work to be compressed into 60 seconds or 6 seconds. They aren’t ready for the labor of 20 to be done by 1.”

That last paragraph is the sort of thinking to which I was introduced as a GE executive back in the Jack Welch era. At GE it was Six Sigma. In Grady’s company they adopted Toyota lean.

These ideas of reshaping the tasks themselves to make better use of human talent — therefore less human talent — have long since reached every part of the business except for the one run by lawyers.

Hence Ken Grady’s discouraging conclusion at the end of his sweeping review of the management techniques and technologies available to dramatically improve the work of lawyers: “Those in the position to drive change see no rewards in doing so.”

Business owners and executives need to drive the kind of change Grady talks about because the legal industry itself clings resolutely to the status quo — and, as he puts it: “Those in the position to drive change see no rewards in doing so”.

In the next post I describe how business owners and executives can go about driving such change.