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Several years ago, I was on the ILTACON Conference Committee and was responsible for assembling a panel on "jobs in new law."  At the time there was a lot going on around KM roles, some innovation stuff and a rise in e-discovery.  About five years later, contrast this with a recent post of mine on Twitter that stemmed from a discussion on client-facing KM.  Long thread short, I'm convinced the next winners in legal are going to be those that secure the product talent.

Let me unpack that…it’s no secret that I have an interest in productized legal services.  Even so, the stars seem to be aligned for a significant uptick in productization in the near term.  If that uptick comes to fruition, it will come from product professionals with skill sets that are mostly absent from law firms today.  However, the pervasiveness of these positions generally combined with the current skilled labor shortages seems to be setting the stage for a run on product talent in legal where there will indeed be winners and losers.

Products are so hot right now

Productization (or packaging) of legal services is by no means a new concept. In fact, Richard Susskind was outlining the benefits of packaging as early as The End of Lawyers? in 2008.  With the obligatory Susskind reference out of the way, I can now turn to the factors that are coalescing to make the time right for productization.  First and foremost, there is mounting evidence that law firms are actually engaging in this activity.  On top of that, there are increasing financial incentives that should increase the attention on these opportunities.  Moreover, there are attorney mental health and well being challenges that could shift interest in the product direction.  All of these factors make for fertile soil in which to sow some legal products.

One of the leading indicators I've experienced that productization among law firms is increasing is that there is mounting evidence of firms actually doing it.  In my direct experience, I recently left a job where I was working for about 7 years helping to productize legal services via ComplianceHR. Additionally, Simmons and Simmons in the UK has been productizing their services for years with a substantial portfolio of products at this point. While these are only two examples, I was pleasantly surprised at Ark group’s KM Legal in October of this year to see how many firms were touting some form of productized legal service; there was even an entire panel on the topic with @Scott Rechtschaffen, @Nicole Bradick, @Scott Bailey and @Ed Walters all touting productization projects.  Also, recently Nicola Shaver made the observation on Twitter that many of those that created self-intro videos for the Skills Showcase in January were looking forward to client-facing KM projects (which are basically just a form of productization).  To add yet more fuel to this fire, Jasmine Gavigan, creator of vrtu, a platform for productizing services, particularly legal services, recently posted a how-to video on getting started with creating legal service products.  These are just a few of many examples.  As the profile of these projects increase, you will continue to see more and more packaging projects out of law firms.  And it’s not just that this evidence alone points to an acceleration, but also that the evidence itself will generate even more activity.  As many of you know, law firms are generally loathe to risk first movement on novel practice innovations.  However, the mounting evidence means that it will be increasingly “safer” for firms to experiment with these innovations (along with increasing competitive pressure to do so).

In addition to the sheer fact that law firms are increasingly engaging in productization, there are more and clearer financial incentives aligning to further fund productization in legal.  Rudy De Felice, CEO of Keesal Propulsion Labs, gave a keynote at KM Legal spelling out the myriad factors aligning to increase funding in the legal technology startup space.  Now this space is much broader than productized legal services.  However, it will most certainly include packages services and, moreover, Rudy identified “Self-help legal services”, which is almost entirely products/packaging, as one of the 5 likely hot spots for legal tech investing in the near future.  So how does all of this increased funding help law firms?  Well, as far as I can see, it doesn’t.  However, what it does do is increase the activity in this space, particularly by startups that could challenge portions of law firm business through productized services.  In other words, this increases the pressure that if law firms don’t take on this work, someone else will; it serves as a stick driving more productization.

If increased competition is the stick, improved quality of life is the carrot.  There is a real and current crisis among attorneys’ mental well-being and quality of life. Some of the factors cited are the pressure to bill a large number of hours and the lack of autonomy, particularly to pursue novel business opportunities.  The current billable hour model can resemble a hamster wheel for attorneys.  You can futz with the margins by raising billing rates, improving realization and looking more diligently at staffing and leverage, but the fundamental model requires the continuous creation of billable hours.  The current pace is unsustainable and clearly unhealthy.  One way to relieve this pressure is to diversify the lines of business in which a law firm realizes revenue.  A product line of business would leverage existing attorney expertise, likely meet unmet legal needs of clients and create an additional line of revenue that would reduce the pressure for the entire firm revenue to come from attorney hours.  This should reduce reliance on high billable hour targets and unsustainable attorney pace.  

Where do products come from?

If this impending product-ocalypse (productathon? product-geddon? I dunno, comment if you have better names) comes to fruition, then law firms will need product talent up and down the business side of the firm.  Law firms generally don’t employ people with product skills now and almost all of the folks they do employ are geared toward a service business.  For example, most law firm marketing professionals are accustomed to selling their lawyers’ services.  This typically means assembling RFPs with profiles of all of their attorneys with their accomplishments, accolades and historical wins.  However, product marketing is a different beast entirely; it requires telling a compelling story about why this widget that we have is the widget that you need.  It requires a deep understanding of the customers' business processes and how the widget will streamline, change or generally make those processes better.  It often requires metrics and case studies to prove that point.  And then there’s sales…products have to be sold and law firms don’t really sell. Period. Full stop.  Sure, adept lawyers generate business relationships, but true sales is so much deeper and more nuanced than what lawyers typically engage in.  And these are just the start, there are engineers, architects, designers, product support and on.

Now I can hear all of my fellow legal innovation people starting to murmur “What about all of those fancy client innovation projects that are winning awards? Aren’t those products? And people built those…why not just utilize that?”  I understand why you would think that, but they are two distinct activities.  Client innovation projects are often packaging without the product discipline.  Most client innovation projects start with a single client need (often a "tent-pole" firm client) and are kicked off as a way to strengthen that relationship (the stickiness factor).  These projects are usually developed collaboratively with the client and the attorney and reflect that client’s idiosyncrasies; it’s their business processes, their preferences, the data points they use.  Conversely, the decision to develop a product is a bet.  It’s a bet that there is a broad market need and the widget you're making solves that need.  Product development eschews idiosyncrasies in favor of consistency.  It strives to identify patterns and commonality amongst the market players and to create something that will be adopted by the masses.  Doing this involves market research, prospective client interviews, frequent feedback, etc. Now sure, you could take a single client product and attempt to make a product out of it.  But unless you started with a product mindset, it is going to involve a lot of rework and a highly inefficient and likely unsustainable method for getting to a viable product.  You need professionals that are looking for and thinking about product opportunities from the outset.

Ok, so what? All of the law firms will just start hiring product professionals when they're ready, right?  Well, there are a few issues there.  First, it’s not clear to me that firms will understand out of the gate that they need product professionals.  Law firms have a history of inventing terminology unique to the industry (a form of legal exceptionalism).  If firms make forays down this path, they may find themselves behind the eight ball when the product-athalon (seriously, I need help naming this) begins.  Even if law firms decide they need product talent, product professionals are employed broadly across all sorts of industries.  They will have to compete with the broader market for talent.  On top of that, if you haven’t yet heard, there’s a skilled labor shortage which makes being a new entrant into this labor market particularly challenging.

At this point, it probably sounds like I’m outlining a losing scenario for firms.  I’m not.  If you’ve read any of my prior articles, I think productization of legal services is a HUGE opportunity for firms for all of the reasons above amongst many others.  However, this won’t be a trend that all firms will be able to fully get on board with as it will be limited by the talent available.  So the winners in this next trend in legal services, the Legal Product 500 (okay, I’ll stop), will be the ones who are able to identify early on the need for product talent, hire up that talent and incorporate them into their business as revenue generators.