Disruption is hitting the legal services market. Over time, that disruption will fundamentally change the market for entry-level JDs and for the law schools that educate them. There is time, however, for law schools to change. But the window of opportunity will not remain open forever. As my co-author, Michael Horn, and I explain in our new white paper, “Disrupting law school,” law schools should begin now to set themselves up as the disruptor. That would involve offering online, competency-based education programs that train students to provide legal services, not necessarily to be a JD, and shoring up the place-based education with extensive training in the lawyering competencies necessary for 21st-century lawyers.
The building blocks for disruptive innovations in the broader field of higher education are materializing and soon these or other disruptors will turn their sights to legal education. As we have seen in industry after industry, competition is not limited to current market players. In fact, the chief digital officer of the Metropolitan Museum of Art considers its biggest competition to be Netflix and Candy Crush, not the MoMA or the Guggenheim.
A variety of potential disruptors, all powered at least in part through some form of online learning, are also emerging in higher education. From coding bootcamps that blend online and face-to-face learning to online course providers, and from providers of modules of online content to online, competency-based programs, there is no shortage of organizations serving nonconsumers of traditional higher education. These disruptors bring flexibility, convenience, and often affordability to higher education. And, propelled by a variety of new technologies, business models, and teaching pedagogies, they are positioned to change the status quo.
Unfortunately, when disruptive innovators get their start, incumbent institutions typically dismiss disruptors—at the start disruptors cannot offer the same quality as incumbents do according to the industry’s traditional metrics of performance. As a consequence, it is easy for incumbents to overlook disruptors.
For example, during the 1970s and 1980s Digital Equipment Corporation (DEC) led the minicomputer industry. But this high-flying company missed and ultimately was destroyed by the personal computer. Because DEC could earn higher and higher margins producing more and more powerful minicomputers for demanding clients, the company had no incentive to pursue PC technology.
But seeing a disruptive opportunity, Apple, one of the pioneers in personal computing, took a different tack. Originally it sold its model IIe computer as a toy to children, who took little notice to its rudimentary capabilities and were delighted to be able to afford a computer at a fraction of the price of a minicomputer.
DEC ignored these early PC’s because they did not compete head on for its higher paying customers. Moreover, early personal computers lacked the processing power to serve DEC’s customer’s needs. Indeed, none of DEC’s existing customers could even use a personal computer for the first years it was on the market because it wasn’t good enough for the problems they needed to solve.
Within a few years, however, powered by improvements in microprocessor technology, Apple’s smaller personal computers were capable of doing work that previously required mainframes or minicomputers. This made computing widespread and cheaper, and it created a huge new market. It left almost everyone—except the mainframe and minicomputer companies like DEC—better off. DEC’s decision to ignore PC technology—and the large swaths of customers who stood to benefit from a cheaper, easier to use machine—ultimately cost the company its place atop of the computing industry. Other minicomputer companies were no different; virtually all of them collapsed in the late 1980s.
Like with DEC, the complacency of law schools may turn fatal. Signs already suggest that law schools have overshot many of their customers and converted others into nonconsumers—the 40 percent drop in law school applicants and the drop in applicants in the highest LSAT scores brackets are signs of that. Unless law schools respond appropriately, more students who otherwise would have considered pursuing a JD from a traditional school are likely to forego it in favor of a less expensive, more convenient online or blended online and in-person alternative, either in law or in other related fields.
Incumbent institutions will find it hard to disrupt themselves from within their existing institution. That’s because incumbent institutions have particular ways of doing things, which have been refined over the years and are known to bring them success. It is hard to change something that is perceived to work even when the theory of disruption tells us that we have to change to survive.
In light of this, we have found that the only foolproof way for an organization to launch a successful disruption relative to its core operations has been for it to create an autonomous business unit that is not bound by the traditional constraints of its existing model. This is what drove Southern New Hampshire University to create an autonomous division to launch its online university and then, a few years later, to create another autonomous unit to launch its online, competency-based program, College for America. Building on this model, a law school could develop an autonomous, administration-driven business unit separate from the existing law school infrastructure. The early attempts by several law schools to expand into alternative new markets, through master’s and LLM programs, may lead the way for the testing and development of competency-based, modular educational models designed for multiple non-JD audiences, as well as, eventually, for JD students themselves.
When proceeding in this way, it will be important to remember that disruptive innovators start with a blank slate. And, as a result, they must approach educational design very differently from traditional law schools. Their new business models are more nimble and better able to adapt to the changing practice of law.
New business models for legal education are emerging. Competition in the form of disruptive innovation may emerge from unlikely sources. The question is whether law schools will act in time.