Adaptive Innovation: Innovator's Dilemma in Big Law

Abstract

Big Law has been described as being in the throes of a painful transformation brought about by factors such as the increased use of technology, globalization, and a transition from a supply-driven market to a demand-driven one. A common framework for such upheaval is Clayton Christensen’s The Innovator’s Dilemma, which generally portends an inevitable collapse of market incumbents when they cater to the performance requirements of their high-value customers’ demand. Big Law is not immune from the principles of The Innovator’s Dilemma. However, neither the disruptive nor sustaining innovation described in Christensen’s work seem to adequately characterize the changes occurring. In this paper we describe a hybrid model, “adaptive innovation,” that takes into account the opposing forces in play. As with most other sectors, lawyers have argued that Big Law is different. This paper reviews some of the most cited factors predicting and denying the demise of Big Law. We argue that market-imposed values such as quality, efficiency, and ROI will likely dominate over reputation and comprehensiveness, forcing a fundamental change in many common features of Big Law. However, law firms will likely remain an inevitable mechanism for the delivery of many of the services currently occurring there, albeit under a different model.

Keywords: Big Law, Innovator's Dilemma, Legal Technology, Legal Informatics, Am Law 100, Am Law 200, Law Firms

JEL Classification: K00, O30, O31, L1, L2, L84