Within the next decade, it is predicted that 40% of Fortune 500 companies will no longer exist, according to a Babson Olin School of Business study. This notion is nearly incomprehensible, but it may have a significant impact on the legal business.
Why is this happening now? And more importantly, how can the law firm of the future adapt to this possibility?
We are at an extraordinary moment in time in the evolution of technology on three fronts — processing power, memory and algorithms. The trinity of these forces are colliding at once, propelling change with everything around us, including, and perhaps especially, the legal profession.
Gordon Moore, an Intel chip scientist, formulated the well-renowned technical law that bears his name: Moore’s Law states that roughly every 18 to 24 months, the processing power of computers doubles. That is, the ability for a computer to perform calculations is increasing exponentially. For some perspective, if you bought a high-performing computer in 2000, it would have had the processing power of an insect brain. But if you buy the same type of computer in 2024, the expectations are that its processors will be as powerful as the human brain. Twenty years after that, a $1,000 computer will process as fast as all of humankind. The implications of this are staggering.
In the second of the three forces, memory, we couple what amounts to unlimited processing power with the advances to storage for computers. In 1965, IBM built a computer with 5 megabytes of storage. It was as big as a bedroom and cost $120,000. Now, we can purchase a 128 gigabyte chip for $99. This is the hockey stick of momentum with exponential growth accelerating rapidly up the graph for both processing power and memory.
The third piece of this significant change is programming and algorithms. We are at a stage where computers are beginning to teach themselves. Machine learning is becoming an increasingly important part of many businesses. Through an algorithm, a programmer builds a foundation from which the program can learn and continue to adapt and grow. There are a plethora of examples that are starting to take hold: IBM Watson has the most buzz right now with its cognitive computing platform; Uber car service uses machine learning to price rides, location drop-offs and pickups; and in the legal space, WestSearch®, the fundamental algorithm behind WestlawNext®, learns as people conduct research.
The blending of these three forces — processing power, memory and algorithms — is a mixture for infinite growth and transformation at law firms. The opportunities are immense. Here are some possible changes afoot as this trifecta takes hold over the next decade:
- As predicted, 40% of Fortune 500 companies will no longer exist because of these forces, and law firms will likely mirror this as some who do not adapt and embrace these technologies will struggle or go extinct;
- Over the next 10 years, because of unlimited storage and processing power, most document review will be completely automated and computerized. No longer will law firm first-years or contract attorneys be reviewing documents for 18 hours a day;
- Workflow solutions will reign over the next five years; but beyond that, the trifecta of forces mentioned will push these solutions into complete automation so that drafting documents will be computer generated. This is actually happening now with 20% of Internet news articles written by computer;
- We are in an interstitial period with the Cloud. Currently, security concerns keep many firms from taking advantage of its scale and low cost. In the coming years, however, most firms will move everything they can to some type of Cloud;
- Everything will be outsourced at the firm. Phone systems, HR systems, back office, administrative and technical support, where the portal will be hosted, office tools, and all things technical will likely be moved away from the firm and managed by vendor experts. This will greatly reduce costs as vendors tap into the three forces;
- As a result of the above, most attorneys will work remotely, and law firm office space will dramatically decrease;
- Big firms will get bigger and the medium firms may get smaller. The mediums who adapt will find their niche as a regional player, local generalist, boutique, or litigation specialist;
- The impact on speed and adaptability for new attorneys will begin in law school. Some schools have already begun a two-year program with the third year focused on technology, lawyer tools, and recalibrating how attorneys will work within firms.
Without a doubt, the law firm of the future will certainly be different from what we have today. In this extraordinary time, with the evolution of technology and this trinity of forces, firms will have to adapt rapidly. This fundamental shift will be an opportunity for law firms to become more efficient, create new opportunity, and ultimately serve their clients better.