In ten years, it is predicted that 40% of the Fortune 500 companies will no longer exist1. This forecast originally cited in Fast Company is from a Babson Olin School of Business study. This notion is nearly incomprehensible, but may have a significant impact on the legal business.
Why is this happening now, and what impact might it have on the law firm?
We are at an extraordinary moment in time with the evolution of technology on three fronts. The trinity of forces are colliding at once, propelling change with everything around us.
Gordon Moore, an Intel chip scientist, formulated a well renowned technical law. Moore’s Law states that roughly every 18 to 24 months, the processing power of computers doubles. That is, the ability for a computer to perform calculations is increasing exponentially. For some perspective, if you were to buy a $1,000 computer in the year 2000, it would have had the processing power of an insect brain. Buy a new computer in 2010 and you would have the processing power of a mouse brain. Fast-forward to 2024 and the expectation is that a new computer will be as powerful as the human brain. In 2045, a $1,000 computer purchased from Amazon.com will process as fast as all of humankind. The implications of this are staggering.
In the second of the three forces, we couple what amounts to unlimited processing power with the advances to storage and memory for computers. In 1965, IBM built a computer with 5MB of storage. It was as big as a bedroom and cost $120,000. In 2004, a memory chip the size of a fingernail cost $99 and held 128 MB. Ten years later, we can purchase a 128 GB chip for $99. This is the hockey stick picture of momentum with exponential growth accelerating rapidly up the graph for both processing power and memory.
The third and last piece of this triumvirate of significant change is programming and algorithms. We are at a state where computers are beginning to teach themselves. Machine learning is becoming an increasingly important part of many businesses. Through an algorithm, a programmer builds a foundation from which the program can learn and continue to adapt and grow. There are a plethora of examples that are starting to take hold. IBM Watson has the most buzz right now with its cognitive computing platform. Uber uses machine learning to price rides, location drop-offs and pickups. Amazon can couple complementary products with your purchase. In the legal space, WestSearch®, the fundamental algorithm behind WestlawNext®, learns as people conduct research. It surfaces up the most pertinent content and good law for the researcher. Other legal examples include e-Discovery where many products utilize predictive analytics to help reduce the number of eyes necessary to review documents.
The blending of these three forces – processing power, memory, and algorithms – is a mixture for infinite growth and transformation at law firms. The opportunities are immense. Here are some possible changes afoot as the trifecta take hold over the next 10 years.
The law firm of 10 years from now will certainly be different from what we have today. In this extraordinary time, with the evolution of technology and trinity of forces, firms will have to adapt rapidly. This fundamental shift will be an opportunity for the firm to become more efficient, create new opportunity, and ultimately serve their clients better.
1 John M. Olin School of Business study
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