Talk given by Bill Henderson to the Illinois Supreme Court Commission of Profession on May 18, 2017

1. The Legal Profession’s
”Last Mile” Problem
William D. Henderson
Editor, Legal Evolution
Professor, Indiana Univ. Maurer School of Law

2. doubles
lawyer
productivity
20 in 10 Box
© Legal Evolution PBC

3. 20 in 10
Data, Process, Technology
© Legal Evolution PBC
$2.5 million
12 months
to build

4. 20 in 10
© Legal Evolution PBC
“How will we price
our work?”

5. 3 Options
Option 1. Client pays for 10 hours. No increase
in hourly rates.
Option 2. Client pays for 10 hours. Firm doubles
rate ($400 to $800/hr)
Option 3. Share the benefits:
a. Firm / client split 50/50.
b. Firm gets more a lot more volume
Complex
Technical
Sales

6. Current Solutions:
1. Plain old telephone systems (POTS)
2. Integrated Services Digital Network (ISDN)
3. Digital Subscriber Line (DSL)
4. Cable / Cable Modem (coaxial cable)
5. Wireless (cellular & satellite)
6. Optical fiber
Source: TechTarget, “Last Mile Technology”
“Last Mile”
Local Exchange Core NetworkStreet Cabinet
Copper
sub-loop
Fibre
Telecommunications

7. “Last Mile” for Legal
Profession is not
technological
We lack Business Models
that reliably reward higher
lawyer productivity
© Legal Evolution PBC

8. Regulatory Complexity

9. Tax Complexity

10. $1,000
To
Resolve …
Legal
Complexity
1 unit
© Legal Evolution PBC

11. Acme Inc.
• $2 Billion global widget company
• Revenues increase 5% per year
• $10 million legal budget
• Budget increases 5% per year
• 10,000 units of legal complexity
• Now pays $1,000 per unit
• Complexity increases 10% per year
© Legal Evolution PBC

12. 10,000
11,000
12,000
13,000
14,000
15,000
16,000
$10,000,000
$11,000,000
$12,000,000
$13,000,000
$14,000,000
$15,000,000
$16,000,000
2017 2018 2019 2020 2021
UnitsofComplexity
LegalBudget Forecast of Acme's
Legal Budget and Legal Complexity
2017 to 2021
Legal Dept's Budget
© Legal Evolution PBC
5%
growth

13. 10,000
11,000
12,000
13,000
14,000
15,000
16,000
$10,000,000
$11,000,000
$12,000,000
$13,000,000
$14,000,000
$15,000,000
$16,000,000
2017 2018 2019 2020 2021
UnitsofComplexity
LegalBudget Forecast of Acme's
Legal Budget and Legal Complexity
2017 to 2021
Legal Dept's Budget Cost @ $1000 per unit of complexity
10%
growth
© Legal Evolution PBC
5%
growth

14. $1,000
$955
$911
$870
$830
$0
$200
$400
$600
$800
$1,000
$1,200
2017 2018 2019 2020 2021
Cost per Unit of Complexity
needed to Stay within Budget
© Legal Evolution PBC
20 in 10

15. $830
To
Resolve …
Legal
Complexity
1 unit
© Legal Evolution PBC
$830

16. What does client want:
a) A lower hourly rate?
b) More complexity resolved per hour?
© Legal Evolution PBC

17. 27%
46%
203%
-25%
0%
25%
50%
75%
100%
125%
150%
175%
200%
225%
1997 1999 2001 2003 2005 2007 2009 2011 2013 2015
% Change in Number of Employed Lawyers
by Practice Setting, 1997 to 2016
Law Firms # Government # In-House #
© Legal Evolution PBC
Source: Bureau of Labor Statistics

18. 3 Options
Option 1. Client pays for 10 hours. No increase
in hourly rates.
Option 2. Client pays for 10 hours. Firm doubles
rate ($400 to $800/hr)
Option 3. Share the benefits:
a. Firm / client split 50/50. Or
b. Firm gets more a lot more volume
An honest, sophisticated
dialogue on value

19. Thank You
@wihender
bill@legalevolution.org