Want to disrupt the market? Why outsiders are more likely to succeed

By Sally Calverley,

Everybody is looking for the “Dyson moment” – the moment when legal services are changed fundamentally by someone who looks at the problem from a new perspective, applies a different solution and hey presto! Toilets around the globe have been changed by the introduction of the Dyson hand dryer. Legal services, so the argument goes, just need a fresh approach.

Well, yes, I agree. The market is ripe for a ground-breaking change, one that radically and fundamentally changes the way that legal services are delivered. A disruptive innovation.

Process improvements, BLP and TLT’s adoption of business transformation skills, improved project management, vertical integration and multidisciplinary approaches, many of the latter driven by the new accountancy led ABS. There have been many improvements, but not anything that makes us go “wow!”

In truth, these are all refinements: as Henry Ford would have said (with apologies to his memory) these are all ways to build the proverbial faster horse. So… where is the disruptive innovation?

The answer is: probably not in a law firm. Innovation often comes from outside.

Take the iPod. Sony, realising that people wanted to take their music with them, developed the Walkman in 1979. 20 years later, the cassette had given way to CDs and everyone expected MP3 players (based on a hard drive) to take over as the means of storing and sharing music. But it wasn’t until the spread of broadband, better memory capacity and the launch of the iTunes store in 2003, that the iPod really took off – leaving the shady world of MP3 players in its wake. Apple, the computer company, had succeeded in disrupting the music business.

Or take the car.  In 1898, the first Urban Planning Convention in New York asked “What will New York look like in 1998?” The biggest problem facing the global economy then was the constraints of the bi product of horse transport. The planners broke up a week earlier than expected, apparently overcome by the prospect of a city buried under mountains of horse manure and carcasses. (For a full assessment of the problem at the time see here). Just one year earlier, the Benz made its first intercity journey. 10 years later Ford launched the model T, by 1912 there were more cars than horses in New York City and 1921 saw the first motor car traffic jam.

Think Amazon and the publishing industry or for that matter solar power and the global energy industry.

There are many reasons why disruptive change often comes from outside. One is that people already involved in an industry find it difficult to accept disruptive change let alone create it. In fact, they are so wedded to resisting change that they will do so even at their peril.

The classic study for this is Karl Weick’s article in 1996 “Drop your tools: An allegory for organisational studies” in which he looked at why all but three firefighters in the Mann Gulch tragedy in Montana died within reach of safe places. In this terrible tragedy, a speed of just a few additional 6-9 inches per second would have seen them to safety. All died with their tools at their sides.

Apart from physical reasons (the noise of the fire, dehydration, carbon monoxide poisoning) there are additional, less obvious reasons:

1. fear of the unknown - unfamiliar technology seems riskier;
2. unwillingness to admit failure;
3. unreasonable belief that all will be well despite the evidence;
4. unwillingness to accept loss of control;
5. perception that fear is not widespread and that there is no cause for alarm – even if you are afraid;
6. unwillingness to be the first one to admit failure;
7. the tools are closely tied to a sense of identity – so being told to drop the tool, is like being asked to drop your sense of self;
8. to drop a tool is to admit to a terrible reality – that the fire is out of control and that you are trapped.

In the Mann Gluck disaster the foreman survived, thanks to the “escape fire” he set. Unfortunately his crew either did not trust the technology – or him – sufficiently and so he was the only one who was saved by it.

To create innovation in the legal industry, rather than simply wait for others to do it for us – or to us – we have got to learn how to drop the tools. To stop looking at how to remove the piles of horse manure stacking up around us.