Fireflies and Algorithms

fireflies

We’ve been looking at workfare — the legislated link between jobs and the social safety net. An article published last week  — Fireflies And Algorithms — The Coming Explosion Of Companies[1] brought the specter of workfare to the legal profession.

Reading it, my life flashed before my eyes, beginning with one particular memory:  me, a newly-hired associate, resplendent in my three-piece gray pinstripe suit, joining the 4:30 queue at the Secretary of State’s office, clutching hot-off-the-word-processor Articles of Incorporation and a firm check for the filing fee, fretting whether I’d get my copy time-stamped by closing time. We always had to file today, for reasons I don’t remember.

Entity choice and creation spanned transactional practice:  corporate, securities, mergers and acquisitions, franchising, tax, intellectual property, real property, commercial leasing….  The practice enjoyed its glory days when LLC’s were invented, and when a raft of new entity hybrids followed… well, that was an embarrassment of riches.

It was a big deal to set up a new entity and get it just right — make sure the correct ABC acquired the correct XYZ, draw the whole thing up in x’s and o’s, and finance it with somebody else’s money. To do all that required strategic alliances with brokers, planners, agents, promoters, accountants, investment bankers, financiers…. Important people initiated the process, and there was a sense of substantiality and permanence about it, with overtones of mahogany and leather, brandy and cigars. These were entities that would create and engage whole communities of real people doing real jobs to deliver real goods and services to real consumers. Dissolving an entity was an equally big deal, requiring somber evaluation and critical reluctance, not to mention more time-stamped paperwork.

Fireflies And Algorithms sweeps it all away — whoosh! just like that!– and describes its replacement:  an inhuman world of here-and-gone entities created and dissolved without the intent of all those important people or all that help from all those people in the law and allied businesses. (How many jobs are we talking about, I wonder — tens, maybe hundreds of thousands?) The new entities will do to choice of entity practice what automated trading did to the stock market, as described in this UCLA Law Review article:

“Modern finance is becoming an industry in which the main players are no longer entirely human. Instead, the key players are now cyborgs: part machine, part human. Modern finance is transforming into what this Article calls cyborg finance.”

In that “cyborg finance” world,

“[The “enhanced velocity” of automated, algorithmic trading] has shortened the timeline of finance from days to hours, to minutes, to seconds, to nanoseconds. The accelerated velocity means not only faster trade executions but also faster investment turnovers. “At the end of World War II, the average holding period for a stock was four years. By 2000, it was eight months. By 2008, it was two months. And by 2011 it was twenty-two seconds….

Fireflies And Algorithms says the business entity world is in for the same dynamic, and therefore we can expect:

“… what we’re calling ‘firefly companies’ — the blink-and-you-miss-it scenario brought about by ultra-short-life companies, combined with registers that remove records once a company has been dissolved, meaning that effectively they are invisible.”

Firefly companies are formed by algorithms, not by human initiative. Each is created for a single transaction — one contract, one sale, one span of ownership. They’re peer-reviewed, digitally secure, self-executing, self-policing, and trans-jurisdictional — all for free or minimal cost. And all of that is memorialized not in SOS or SEC filings but in blockchain.

“So what does all this mean?” the article asks:

“How do we make sense of a world where companies — which are, remember, artificial legal constructs created out of thin air to have legal personality — can come into existence for brief periods of time, like fireflies in the night, perform or collaborate on an act, and then disappear? Where there are perhaps not 300 million companies, but 1 billion, or 10 billion?”

Think about it. And then — if it hasn’t happened yet — watch your life flash before your eyes.

Or if not your life, at least your job. Consider, for example, a widely-cited 2013 study that predicted 57% of U.S. jobs could be lost to automation. Even if that prediction is only half true, that’s still a lot of jobs. And consider a recent LawGeex contest, in which artificial intelligence absolutely smoked an elite group of transactional lawyers:

“In a landmark study, 20 top US corporate lawyers with decades of experience in corporate law and contract review were pitted against an AI. Their task was to spot issues in five Non-Disclosure Agreements (NDAs), which are a contractual basis for most business deals.

“The study, carried out with leading legal academics and experts, saw the LawGeex AI achieve an average 94% accuracy rate, higher than the lawyers who achieved an average rate of 85%. It took the lawyers an average of 92 minutes to complete the NDA issue spotting, compared to 26 seconds for the LawGeex AI. The longest time taken by a lawyer to complete the test was 156 minutes, and the shortest time was 51 minutes.”

These developments significantly expand the pool of people potentially needing help through bad times. Currently, that means workfare. But how can you have workfare if technology is wiping out jobs?

More on that next time.

[1] The article was published by OpenCorporates, which according to its website is “the world’s largest open database of the corporate world and winner of the Open Data Business Award.”

The Lost Joy of Working (It’s Worse Than I Thought)

“There is but one truly serious philosophical problem, and that is suicide.
Judging whether life is or is not worth living amounts to
answering the fundamental question of philosophy.”

Albert Camus, An Absurd Reasoning (1955)

The last few posts had a lot in them about suicide. I really didn’t plan to write about suicide. I meant instead to talk about happiness and meaning in our work, particularly for lawyers and the legal profession — nice, safe topics. I mean, who can argue with enjoying our work?

Trouble is, as I did my research, suicide kept coming up, along with other topics I didn’t plan to write about. Some were predictable, like globalization, technology, and disruptive innovation. I’ve written about those before, although they came up in new ways that merit re-examination. But then a whole lot of uninvited, touchier subjects jumped onboard. such as income and wealth inequality, poverty and the welfare system, nationalism and immigration, and more.

Uh oh. If last year’s election taught me anything, it’s that public discourse has been largely displaced by what this Aeon Magazine article calls “moral grandstanding.” As a result, if you write something, it’s likely to be slapped with an assumption that you’re on mission to convert other people to a point of view. and thus the fight begins. I learned that the hard way when a Facebook “friend” pounced one of my shares, and before I knew it our other “friends” were cheering us on like students making a circle around us in the high school cafeteria after I accidentally stepped on his potato chips.

How about we don’t do that? At least not here.

I recently shared some of the economic research I’ve been doing in connection with these posts with a friend who’s a hedge fund manager. He immediately demanded that I define my terms. Whoa! I replied that I wasn’t pretending to be an economist, I’m just trying to figure out how the world of work is changing, and how that affects human beings. (If you’d like a book list of what I’ve been reading, you can check out my Goodreads page. Or email me.) Guess I won’t bring up economics again, I thought. And yet here I am, risking it in this column. Why?

joy of cookingMainly, because my research keeps linking all those touchy subjects to the safe ones I started with, and because all of them — controversial or not — seem to be symptomatic of a worldwide clash of social and economic narratives. And that interests me, very much. Work as a life-giving human activity has been an enduring passion of mine since college, when I cut a headline out of a magazine that was based on the iconic “The Joy of Cooking” cover, except it substituted “Working” for “Cooking.” I pasted it on a bookshelf I lugged around for decades until it got lost in a recent move.

The headline was lost, but not the interest. I plan to keep writing about The Joy of Working because I care about the human beings getting squeezed by the cultural and commercial shifts that are currently revolutionizing the world of work. I care that the legal profession is at Ground Zero for many of these developments, with its endemic high levels of career dissatisfaction and related loss of personal wellbeing. And I care because my research shows that things are worse than I thought:  feelings of a lack of meaning about our work aren’t just a complex and difficult social and economic phenomenon, they’re a plague that too often ends in self-inflicted death.

I also believe that, if anyone is positioned to steer public discourse toward constructive outcomes, it would be those directly engaged with how the law is learned and practiced, created and applied. We’ve already sailed some stormy seas together in this series, and we’re heading for more. I think we’re up for it.

One last that thing:  I have no illusions about my own objectivity; I am as prone to cognitive bias as anyone. (We’ll take more about that, too.) Thus I invite you to remember that I intend this be about conversation, not conversion. Plus, I’ll make the customary disclaimer that I write my own thoughts, not the CBA’s.

I will brave the discourse if you will.

The Future of Law (20): Some Final Meta-Thoughts

The “meta” of something is its higher abstraction, the bigger picture behind the smaller ones. In scholarship, a meta-analysis is an analysis of all the analyses of a topic. Each separate analysis collects and analyzes data. The meta-analysis analyzes all the analyses.

Now that we’ve looked at various individual current trends and projected them into a vision of the future of law, what’s the meta of them? What’s the big picture?

Our futurist approach has been mostly based on trend analysis:  seeing what already is, then guessing where it’s going, meanwhile keeping in mind that we are not passive recipients of the future, but powerful agents of its creation.

If we want to be, that is. If we make the effort.

Some of us want to be, and will. People in this group will engage with the dynamics of change deliberately, consciously, intentionally, mindfully — taking action to shape current trends into the future they want.

Some of us don’t want to be, and won’t. This group will be the change resistors, daring those responsible for disruptive innovation to prove that the trends represent change for the better as the resistors judge it to be.

The first group will feel the energy of personal and cultural transformation moving through themselves and their lives. The second group will wonder what ever happened to the world they once knew. Together, both groups will create what Thomas Kuhn called the state of incommensurability between old and new legal paradigms

Regardless of our response, the future is ours, whether we choose to advance or resist it.

All this will happen on countless individual stages, but what’s the big show that will play out on the biggest stage? What’s the meta of the future of law?

The answer lies in the nature of the law itself. The law is itself a meta-reality — one of those gigantic, archetypal organizing principles of human life. The law enfolds and expresses our humanity, creates cultural and societal and national context. Those who live and work in the law are unavoidably its guardians and tutors, stewards and caretakers. We will create the law’s future, one way or another.

When we create the law, we shape and guide our humanity.

When we do that, we create our world.

And most of all, we create ourselves.

The law:  our humanity, our world, ourselves. There’s a lot at stake here. May we craft the future with care.

The Future of Law (16):  The New Law Masters

 [I wrote last week about open source law. Check out this article on that topic from The Lawyerist  that was posted the same day. Yes, the future of law is already here.]

I Googled “definition of expert” and got this: “a person who has a comprehensive and authoritative knowledge of or skill in a particular area.”

  •  We will still see legal experts in the future, but not as we currently know them.

As we saw earlier in this series, the legal experts of the future will be systems thinkers who can fashion comprehensive, multidisciplinary, mass-appeal, consumer-oriented IT products with legal solutions embedded within them. And, as we saw last time, Law by Algorithm will increasingly provide the “think like a lawyer” artificial intelligence needed to create those products.

On the other hand, in his book Tomorrow’s Lawyers, law futurist Richard Susskind anticipates the ongoing need for lawyers (using human brains, not artificial intelligence) who can fashion legal solutions beyond the “think like a lawyer” work product.

  • Those lawyers will emerge as a new class of legal masters.

Consider this quote from Ken Coleman. host of The Ken Coleman Show and author of One Question, in which Coleman captures the essence of the commoditization we’ve been talking about.

“Society seems to favor mass production from its citizens. We dress alike, behave similarly, and speak with a common vernacular. Thanks to the gifts of the digital age, anyone today can become an ‘expert.’”

In this blog interview with author Daniel Pink — bestselling author of Drive and A Whole New Mind — Coleman and Pink agree that what’s really needed is not expertise but mastery, and share some thoughts about how you get it. Further, check out this blog post on that topic from The Lean Thinker, which ends this way:

“Put another way, the ‘expert’ knows. The ‘master’ knows that there is much to learn.”

Here are this week’s predictions about the new law masters:

  • The legal masters of the future will be valued not as repositories of knowledge, but for their inquiring minds, and especially for the ability to ask important, relevant questions whose answers aren’t already embedded in commoditized legal products.
  • The new legal masters’ key proficiency will lie not in knowing the law (the job of experts), but in knowing how to develop it.
  • The new legal masters will shape the law using innovative new methods not currently part of the law landscape. (What these might be is anybody’s guess.)
  • And the law itself will reward them for this expertise, by continuing to provide plenty of gray areas and unanswered questions, commoditization notwithstanding.

In his book The End of Lawyers?, Richard Susskind notes that disruptive innovation is disruptive to lawyers, not clients. This comment suggests another role for the new legal masters:

  • They will profoundly and skillfully shape the assimilation of disruptive innovation into the law and law practice.
  • For example, they will have the sage ability to understand and guide the law and law practice when the law goes multimedia, as it inevitably will (another topic Richard Susskind takes up in The End of Lawyers?).

As for the latter, just try to imagine what the law will be like when it is detached from its Gutenberg printing press moorings in language and logic.

I can’t either.

Which is precisely why we’ll need the new legal masters to help us out.

The Future of Law (7): The law gets faster, goes micro, and eats at the communal table

Harvard professor Clayton M. Christensen coined the phrase disruptive innovation in the late 90’s:

“The theory of disruptive innovation… explains the phenomenon by which an innovation transforms an existing market or sector by introducing simplicity, convenience, accessibility, and affordability where complication and high cost are the status quo. Initially, a disruptive innovation is formed in a niche market that may appear unattractive or inconsequential to industry incumbents, but eventually the new product or idea completely redefines the industry.”

Until recently, the legal profession and the law remained mostly aloof from the impact of innovative disruption, moving instead at an analog pace of change driven by reasoned discourse and scholarly input. Think of the usual pace of legislation, appellate review, uniform laws and legal restatements.… But life in the slow lane is ending.

  • The analog pace of changes in the law is already breaking down. Legal practice developments are already moving at the digital pace of disruptive innovation. Changes to the law itself will soon follow suit.

Disruptive innovation doesn’t wait for reasoned discourse. It moves fast and impulsively, riding on trends fueled by democratized access to information. Disruptive change in the law will create new modes of change that simply will not wait for the historical pace of precedent and consensus.

  • These law changes will first follow the new practice models serving legal niche markets, where “simplicity, convenience, accessibility, and affordability” are essential. (I.e., they will be “micro-law” in nature. We looked at the micro trend in this post last summer.)
  • This new way of creating and changing applicable law will go mostly unnoticed to “industry incumbents” at first, because the changes will be narrowly focused on the particular needs of emerging niche markets, which will make them “unattractive or inconsequential.”
  • In time, however, this way of creating and changing the law will gain wider usage and impact.

Other practice innovations already in place have disruptive potential as well. Consider, for example, ediscovery and due diligence. These practices began as digital versions of their former analog practices, and mostly retain that character, but possibly not for long.

  • These digital innovations could easily morph from their case-specific beginnings into more widely accessible databases of searchable information.
  • If so, they will change the overall fact-specific context of dispute resolution and transactional law.
  • And if they do that, new standards of pleading and disclosure will arise, and will require new rules and procedures to guide their use.

And finally:

  • This new way of changing the law will likely arise from an informal collaborative process which will further — by a quantum leap — the goal of bringing more “simplicity, convenience, accessibility, and affordability” to dispute resolution and commercial transactions.

In this regard, think of disruptive innovation as a sort of communal table process for changing the law. You’ve noticed the community tables springing up in restaurant and coffee shops. They’re more than a new style of seating arrangements:  they’re changing the dining/drinking industry and the dining out experience. (For a wonderful analysis, see Alone Together:  The Return of Communal Restaurant Tables.)

These developments will create some fascinating new bedfellows. Next time we’ll look at one such pair:  commercial law and legal ethics.

These blog posts from the past three years have been collected into an ebook which is currently available as a promotional free download. Click here for details. For those who prefer to do their reading in hard copy, the collection will soon be available in that format (details to follow).