What do the companies on the following list have in common?
Kodak, AOL, Betamax, Blackberry, Palm Pilot, Blockbuster
Answer: Each of these companies were at one time highly profitable and the leading company in their respective markets based on dominant technological advantages over their competitors. Now, each of them have either gone out of business, been through bankruptcy, been acquired, or are an also-ran in their industries.
How could failure happen to organisations that were once so highly successful and led by very smart, competent mangers? Each of these companies, and many more that could be named, clung too long to technologies that were approaching inherent limits (as depicted in the well-known S Curve shown in Figure A), and failed to make the leap to the next dominant technology that emerged to replace them (from T1 to T2 and then T3 as depicted in Figure B). For example, from vacuum tubes, to transistors, to integrated circuits to microprocessors. Motorola is a rare example of a company that did make the transition across all of these electronic technologies.
Instead, in many cases other companies that did not have anything invested in the existing technology seized the opportunity and successfully exploited the new technologies. This pattern has been repeated over and over again and can be considered a form of “creative destruction” as described by economist Joseph Schumpeter in the 1950’s.
It is the rare company that can repeatedly recognise the discontinuity between old and new technologies and successfully transition its products (particularly more than once, e.g. Motorola). This phenomenon has also been extensively explored and documented by Prof Clayton M. Christensen in his well-known book “The Innovator’s Dilemma” and other related works. In short, it takes remarkable vision, and considerable courage, for a manager to abandon a technology that is responsible for generating current profit, and devote resources to a new, untried technology to ensure long term future success. However, history has clearly shown that the inability to do exactly that is responsible for failures of the venerable companies listed above, and many, many more.
Which brings us to today’s technological landscape. One of the many, many emerging technologies that have the potential to provide transformative opportunities to the innovative enterprise is the blockchain revolution. That revolution will radically transform many industries, including the legal industry. Blockchain based solutions offer an instantaneous, immutable, cloud based record of all documents and transactions affecting a client. Reliability goes up, costs go down, and security and confidentiality are assured.
Of course, there is an inherent conflict over this in the legal industry. Lawyers are by nature and training inherently conservative and suspicious of anything that is not tried and true. Reliance on precedence is the guiding principle. Yet, the rise of completely new technologies such as blockchain are both a grave threat and a tremendous opportunity rolled into one. It is inevitable that the legal practice in coming years and decades will look radically different than what is seen today. New skills and knowledge will be required. New jobs and even new industries will be created. Existing ones will be destroyed and disappear. Those lawyers and legal organisations that embrace new technologies such as blockchain to offer their clients new services and products will be the ones that survive and prosper.
In short, as succinctly described in the title of this article: Your Products Are Going to Be Replaced by Someone. It Might as Well Be You!