Monthly Archives: September 2012

“The Competitive Advantages of Scale Have Been Commoditized.”

The more of Nilofer Merchant I read, the less need I see for me. One after the other, she’s making all my points in her new book, #SocialEra, and on her blog. All I have to add is to say, “yeah, and it applies to law firms, too.”

Her post on the blog last week, Our Obsession with Scale is Failing Us , which expands on a tenet of her book, is virtually a pillar of my 21st-Century-law-firm creed.

Listen to this (from Merchant):

 In the industrial era and even the early web era, size was central to scale. People first began to organize together inside centralized organizations to do things “at scale” because the cost of coordinating work otherwise was just too much, and too hard. Over time, the ability to scale and “reach” an ever larger number of customers caused organizations to keep growing and growing until they became “too big to fail.”

The new reality is this: The ability to scale is no longer a direct function of size.

The Social Era — in which information efficiency is taken for granted, and people can easily self-organize without having to belong to a singular organization — dramatically decreases the cost of communication (e.g., finding people and collaborating with them), changing one of the fundamental reasons that centralized scale once created strength. The competitive advantages of scale have been commoditized.

We’re at an inflection point where work and value creation can reach “scale” without having to be done by a large, single firm. We can see today that Social is more than tools, information-enabled efficiency, products, services, or processes. It is not that we have more ways to be social. It is that the cumulative difference of all these ways of being social allows for an entirely new way to scale — through and with connected individuals. The improvement in what is possible creates new economic effects that add up to a new way of doing business. Organizations that get this are changing the way they create, deliver, and capture value — in essence, creating entirely new business models.

The competitive advantages of scale have been commoditized. Wish I’d said that.

I’d add: “in law firms.”

It’s going to be some time before we have all the applications and processes and skills we need. At least, among and within  law firms that’s true. We need some “social skills” that we don’t have now.

I learned two things about that last week.

First, a new breed of companies is emerging in the law world, that will advance this process. I’m talking about firms that vet and select law firms for clients.  And, I’m not talking about those cheesy operations that charge lawyers a fee to get interviews with corporate counsel at resort hotels. Instead, what’s emerging are companies that do  interviews and other due diligence themselves to find firms to suit the needs of clients and their general counsel. These are forerunners of companies that, one day, will find “entirely new ways to scale” for legal projects.

Second, lawyers will  need a new range of skills for collaborating effectively  “through and with connected individuals.” Bill Ross and Adam Crowson (and your humble servant) spoke to this at the Geneva Group International conference in Raleigh this past weekend. Bill recounted his experiences assembling working groups among public and private interests to save endangered woodpeckers. Adam spoke about the continued importance of personal contacts to build trust and confidence among collaborating professionals, notwithstanding the technology.

Yes, doctor Merchant, we can get to scale without size but, for lawyers, operating without the structures and boundaries that have kept us in control before now, requires new skills. Social skills.  And there are both an art and a science to those that are yet unknown — among lawyers anyway.

The #Social Era

That’s what I’m talking about:

The companies thriving today are operating by a new set of rules — Social Era rules.

* * *  *

It’s helpful to call this new context the Social Era to emphasize a point: while in the industrial era, organizations became more powerful by being bigger, in the Social Era, companies can also be powerful by working with others. While the industrial era was about making a lot of stuff and convincing enough buyers to consume it, the Social Era is about the power of communities, of collaboration and co-creation. In the industrial era, power was from holding what we valued closed and separate; in the Social Era, there is another framework for how we engage one another — an open one.

Nilofer Merchant, who wrote this, has been thinking about the possibilities of “communities and collaboration and co-creation” for how businesses are organized for some time. She has a blog that’s called Yes and Know; and she has just published an ebook called 11 Rules for Creating Value in the #Social Era.

 Her ideas apply directly to law firms as we are coming to be.

Jonah Lehrer Crashed

Jonah Lehrer has crashed.

But Proust Was a Neuroscientist is a really fine book and How We Decide is a very useful one. I have never gotten around to reading Imagine where the fake Bob Dylan quotations appeared.

Sounds like there are three possible sins: (i) re-using your own previously published material without saying that’s what you are doing, (ii) stealing material from others without saying that’s what you are doing; and (iii) making stuff up (Dylan quotations). The first two don’t detract from the value of the product. In fact, republication of material (with or without due attribution) actually vouches for its value. The third just depends on whether you are making up “true facts” or the other kind.

For the record (and nothing on the Internet can ever be deleted), I do not condone (i) or (ii) or (iii), but if the contretemps has made copies of Proust and How We Decide cheaper to buy, I’d say buy’em and read’em.