Reflections on a week with our tech team in the US
Until recently if I needed a taxi I used to add 10 minutes to my likely journey time given the impossibility of knowing when I would successfully flag down a black cab. Now the days of getting wet, missing a train, being late for a meeting are, traffic permitting, gone. Thanks to Uber. Uber owns no cars and employs no drivers. At its simplest it built an app that has dramatically changed, virtually overnight, the supply chain in personal transportation. Uber makes it easy for customers to travel from A to B. Customers get the solution they want at a lower price. Of course, as lawyers often tell me, there are no lessons here for legal or other professional services. None of Uber, Airbnb, Amazon, iTunes speak to the legal market, the potential for disintermediation or the consequences of customers being provided with a better solution. Law is different. Really? After another exhilarating week in the US with our CTO and the tech team of our recent acquisition, I’m even more convinced that the direction of travel is very clear. Uber, Airbnb, Amazon, iTunes, and many others, all talk to the disintermediation that good, simple, low cost technology can bring. They show what happens when customers are given easy to use tools. They change our behaviour. So what will change behaviour in the legal market? What will make customers, whether they are large corporations, mid-sized or small businesses and/or consumers change the way they use legal services? I’ve no doubt that one of the leading change agents in the legal market will be digital / virtual assistants. Tools that when deployed to customers change their behaviour. Tools that enable customers to do what they and suppliers currently do better, quicker and at lower cost. Tools that enable them to select the most effective and efficient supplier, quickly, and switch between in-house and external suppliers at will. This is where the parallels with Uber, a poster-child for technology disintermediation, become interesting: Knowledge and experience: London taxis drivers refer to ‘The Knowledge’, a stringent test that they have to pass to get their licence, as one of their major differentiators. The Knowledge tests the drivers ability to get from location A to location B via the shortest route. London taxi drivers are renowned for knowing all the roads and the routes in London. Before Satnavs / GPS this may have been an advantage. Technology has commoditised The Knowledge and virtual assistants have made it easy for any driver to find their destination. The same will happen in large areas of the law. Of course, The Knowledge ought to help in complex situations; Satnavs / GPS sometimes struggle if they need to divert from the obvious route. But this just speaks to the top of the legal pyramid and the protection that some players will be afforded. Even here much of the complex work will be delivered in a different way. Regulation: Uber has been and is being subjected to significant legal challenges. Taxi operators in many countries object to its model because it is not regulated in the same way. Well, object they may, the reality is that customers have and are voting with their wallets. The message customers have sent is compete or wither on the vine. Taxi operators need to recognise that monopoly pricing and a lack of innovation (they could have invented Uber) is now harming rather than helping them. The same will happen in large areas of the law. Profits and margins are only going one way for the vast majority of incumbents. The next generation: If you speak to older drivers you will hear them say that it is not the same as it was, that when they started, they never thought that that their human expertise and knowledge could be replaced by technology. They add that they are pleased that they are coming to the end of their career and they worry about young cabbies. They recognise that they lived in what will be seen as a golden era for taxi drivers. There are too many drivers and Uber has compounded the problem. Of course, there is no over-supply of lawyers in the UK and the US and none of us have heard partners in law firms say that they are pleased that they are coming towards the end of their careers given the changing landscape! In this sense the only difference between taxi drivers and lawyers is that the taxi market is further into its restructuring than law is. The same will happen in large areas of the law. Disintermediation: In practice the black cabs of London and the yellow cabs of New York have been disintermediated. Until Uber we, the customer, were dependent on a taxi being in the right place at the right time. Taxi drivers determined whether we could take a ride because either they were there or they were not. Now we decide. A simple app has changed the value chain. It has brought more supply into the market. It has put the customer at the centre of the model. It has reduced prices and improved the customer experience. The same will happen in large areas of the law. I’d rather be Uber than a taxi driver even though I’ve had many brilliant taxi rides with opinionated London cabbies who have either told me the result of the next election, loved/hated my beloved Chelsea and/or moaned about … well everything, including Uber. Of course, and to quote a well-known legal commentator, I may be wrong. But, it’s better to compete than moan and I know where we’re investing our time and money; building a technology-led business with deep legal domain expertise. We will employ more lawyers next year than we do this year and we will employ even more lawyers in future years. But within a few years we will have more developers, data analysts, knowledge engineers, client managers … etc than we have lawyers. It is this combination of tech and domain expertise that will win in the emerging legal market. After all, Uber has a valuation of US$50bn and employs less than 2000 people while the value of a yellow cab medallion in NY has almost halved. Customers are the winners when legal virtual / digital assistants become widely available; assistants who will not be restricted to the legal market! Karl Chapman, Chief Executive, Riverview Law
