Last week Jordan Furlong published an insightful post titled “The Electric Law Firm” which ponders how the forces shaping the electrification of the automotive industry may come to bear on legal practice. Referring to a recent special edition of The Economist dedicated to the electrification of motoring, Jordan likens the commodization of certain legal services to the redundancy of petrol-based services in an electric automotive economy. With a fleet of battery driven vehicles poised to hit the roads in the coming years, the petrol distribution network is struggling to find ways of continuing to derive value from electric vehicles by tailoring their services to the needs of this burgeoning industry. One prominent proposal suggests commoditizing the vehicle itself, and revamping the service network to supply batteries on a pay-as-you-go basis, such that, like cellphones and razorblades, you pay for the service, not the tool. Similarly, in the context of legal services, the rise of low-priced alternatives to using a lawyer, such as online documents and forms, is pushing the legal industry to revisit how and where it derives its value. According to Furlong:
The day might soon arrive when firms publish and automate their legal knowledge, document assembly and document review process free of charge, over the internet, to anyone who wants them — but will charge a monthly retainer fee for the personal judgment, advice and representation that animates those documents and processes and provides real value.
Jordan’s article is a provocative read, and struck a special chord with us here at Clio, since we feel that many of the same forces are working to shape the basic economics of the software industry. With increasingly powerful web-based applications luring growing numbers to the cloud as their platform of choice, consumers are growing less willing to shell-out for traditional applications, expecting instead to get the tool as a perk of using the service.
This basic re-thinking of the automotive, legal and software industries may eventually pronounce the irrelevance of more traditional business models, but is paving the way towards redefining value in the new economy.