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Revolution or evolution?

By Alan Bass and Michael Sauber 

Is the legal market experiencing disruption? Perhaps that’s the wrong question to be asking.

In our previous post, we highlighted three market factors that are the setting the stage for disruption in the legal market. But what is “market disruption,” and has it arrived in the legal market? Let’s look to the definitive source on disruption and see if current conditions fit the definition.

The concept of market disruption was first popularized in Clayton Christensen’s seminal book “The Innovator’s Dilemma.”1 As Christensen describes it, market disruption occurs when a new supplier appeals to market demand in a way that incumbent suppliers can’t, delivering value that’s better aligned with what the market wants. The new supplier steadily grows market share, beginning at the edges of the market, with the simplest and lowest-value needs, then gradually working up to higher-value segments, until established players disappear and the challenger becomes the new incumbent.

The conditions for disruption in the legal market are here now. The demand side is substantial, with several hundred billion dollars spent on legal services each year.2 On the supply side, incumbents are clinging to traditional models – including the billable hour – as alternative options emerge.

So far, alternative legal service models have only captured a small piece of the market. But that should be no reason for firms to slip into complacency. It may look like a slow evolution now, but disruption will arrive in time because the value delivered by new legal models is just too compelling. Traditional firms would be wise to ask “How can we change now?” How can we improve productivity and deliver the value that an increasingly sophisticated buyer demands? These are questions we’ll address in future posts. Stay tuned.

1 Christensen, Clayton. The Innovator’s Dilemma: the Revolutionary Book That Will Change the Way You Do Business. HarperBusiness. 2000.
2 Furlong, Jordan. Why law firms should focus on adaptation, not disruption. LegalBusinessWorld.com. 27 October 2016.

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