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06 Mar 2019

The Rise of Lawyers in a Digital World

Erik Vermeulen

Everyone seems to agree that tech pioneers, software developers, and coders will be at the center of solving the world’s most pressing challenges. But according to Professor Erik Vermeulen, lawyers will also be crucial in designing and building the infrastructure of the future.

This may be a contrarian view, with many commentators predicting that the digital age marks the demise of the legal profession. And Erik admits that there is something to this prediction. 80% of current legal work is “standardized” and it is easy to imagine that such standardized work will be fully automated within the next decade or so. But he believes lawyers have an important role to play.

Erik Vermeulen is a Professor of Business and Financial Law at Tilburg University, and an expert advisor to international organisations such as the Organisation for Economic Co-operation and Development (OECD), the United Nations and the World Bank. In the lead up to his session at The Legal Festival, he explains why he believes lawyers will be a preferred partner in designing the architecture of the 4th Industrial Revolution.

Lawyers: A Necessary Evil?

The truth is that most entrepreneurs and innovators see lawyers as a “necessary evil.” My wife owns a restaurant and her complaints are familiar. Lawyers don’t listen or care, they engage in “over-lawyering,” or they behave like “vultures” trying to extract as much money as possible from a client/deal.

This is why — for most people — avoiding lawyers is the preferred option.

Recent stories on Medium reveal a similar attitude. They too highlight the terrible performance of lawyers in a digitized and decentralized world. Again, the list of complaints is familiar. Lawyers are the worst entrepreneurs, they don’t adapt quickly enough, and (anyway) in technology-driven environments they will be far less relevant.

“My Name is …, and I am a Lawyer”

I must admit that I have often struggled with the image and role of lawyers. It is sometimes better to conceal my legal background. I tended to share the skeptical view of lawyers not being able to adjust to the digital transformation. I too was persuaded that lawyers would face difficult times in the new world of technology.

But, recently, I have changed my mind. This story about the future of lawyers is wrong.

Now I believe that lawyers will be crucial in “shaping a new global architecture for the 4th Industrial Revolution” (to refer to this year’s theme of the World Economic Forum in Davos).

Let me explain.

New Year in Minneapolis

I always start the new year co-teaching a two-week course at the University of St. Thomas School of Law in Minneapolis and spending a weekend in Chicago. This year was no different. On January 6, I was on the flight to the Twin Cities in Minnesota.

The course is about disruptive innovation and what it means for lawyers. We discuss general trends in innovation and the organization and drivers for innovation. More importantly, we focus on two elements: (1) the latest developments in “LegalTech” and “RegTech,” and (2) the use of artificially intelligent solutions, smart contracts and blockchain technology in the future toolkit of lawyers.

But on my flight to Minneapolis this year, I realized that a third element needs to be added.

The crucial role of lawyers in the design of a new digital and decentralized global architecture.

It is clear that the global architecture of the future will revolve around digital technologies and digitization. That much is clear. New technologies, such as artificial intelligence, the Internet of Things, and big data analytics, are enabling the emergence of new economies with new types of organizations and innovative business models.

Think about it. Terms like sharing economy, gig economy, circular economy, platform economy, millennial economy are frequently heard and used interchangeably. Some of it is hyped or exaggerated. But a fact is that digital technologies have changed and will continue to change consumer behaviour. Employer-employee relationships are changing. We think differently about status and ownership. Automation of manual and knowledge work is happening and cannot be stopped. Algorithms increasingly determine our choices. Sensors and biometrics will enable us to do business in new ways. Companies are witnessing the transformation from products to services. We will increasingly assume digital identities. Assets, such as real estate, cars, etc., will also be digitized in the future. We are creating a digital world that mimics the “real world.” Technology leads to flatter and more decentralized organizations and business models. Platform companies are transforming industries. Nano technology will have a significant impact on our life expectancy. Drones and earth observation data can help us save our planet.

The list goes on and it is clear that in our digital society, the coordination and incentive structures will be significantly different from the hierarchical, proceduralized and regulated structures in our current more centralized societies.

Jobs for Lawyers

So, why are lawyers so important in the design and architecture of this flatter world?

Steve Jobs alluded to the answer in his “lost interview” in 1995:

“Everybody in this country should learn how to program a computer, should learn a computer language, because it teaches you how to think. It’s like going to law school. I don’t think anybody should be a lawyer but going to law school can actually be useful because it teaches you how to think in a certain way…. I view computer science as a liberal art.”

Steve Jobs didn’t explain what he meant by this “certain way” of thinking or why that might be a powerful quality/skill in a digital world. But my experience makes me think that Steve Jobs was right. Legal thinking will play a crucial role in the digital age.

The Legal Way

Here then are three skills that — taken together — distinguish legal thinking and which are relevant for the digital transformation.

1. Complex Problem-Solving

Legal thinking is all about creative problem-solving involving highly complex fact patterns. This mean critical thinking, analyzing, and applying. Lawyers are trained to think in and with sophisticated concepts, and this is an important skill in solving the known and unknown challenges of the future.

2. Incentive-Based Thinking

Legal thinking traditionally involves the analysis and study of the impact of rules and regulation on human behavior. This incentive-based thinking can also be very powerful in the digital age in which traditional systems, models and assumptions will be overhauled and thinking about the effects of technological architecture on human behaviour will be crucial in making choices about the best architecture.

3. Storytelling and Persuasion

There are often more answers to legal problems and a premium is on constructing a convincing story and persuading others as to your point of view. These values seem consistent with the needs of a digital world in which the best solution is by no means obvious and storytelling comes to the fore.

But Still . . .

Of course, legal reasoning traditionally involves “looking backwards” and building on precedents and analogies with an emphasis on previous experience and rules. Legal reasoning in a digital age therefore needs to be adjusted and out-of-the-box thinking needs to be incorporated. New “legal” models need to be created in order for lawyers to take center stage.

Hear more from Erik and other pioneering legal innovators at The Legal Festival, two amazing days of content, networking and knowledge-sharing across four separate conferences: Legal Innovation & Tech, Client Experience & Marketing, Talent & Diversity, and NextGen Lawyers.

About the Author

Erik Vermeulen

Erik Vermeulen is a Professor of Business and Financial Law at Tilburg University. He is also Head of Governance/Vice-President at Philips Lighting. Erik is best-described as a “global futurist” and “cross-cultural strategic consultant”. He is constantly fascinated by technological revolutions and how the on-going digital revolution is changing the way we live, work and learn. He has a particular interest in how new technologies such as artificial intelligence, blockchain and robotics are affecting business, government, and education.

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