Legal Education: a New Growth Vision Part I-the Issue: Sustainable Growth or Dead Cat Bounce?** a Strategic Inflection Point Analysis

• Publication year: 2021
• Citation: Vol. 97

97 Nebraska L. Rev. 628. Legal Education: A New Growth Vision Part I-The Issue: Sustainable Growth or Dead Cat Bounce?^[**] A Strategic Inflection Point Analysis

Legal Education: A New Growth Vision Part I-The Issue: Sustainable Growth or Dead Cat Bounce?** A Strategic Inflection Point Analysis

Hilary G. Escajeda(fn*)

Abstract

Legal education programs now face strategic inflection points. To survive and thrive long-term, education programs must embrace entrepreneurship, technology, innovation, platforms, and customer service as the means by which to navigate through strategic inflection points. Imagination, adaptability, agility, determination, and speed will separate market leaders from laggards. Scrappy, entrepreneurial, and action-oriented programs that deliver omni-channel, lifelong knowledge and skills development solutions are the movers that will radically redefine and likely dominate the legal education industry. Slow, tradition-bound programs resistant to change are non-movers that face extinction.

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Entrepreneurial education leaders committed to program growth know that since competitive advantages are transitory, they must create and nurture opportunities for continuous innovation. They also recognize the nexuses between customer satisfaction, institutional relevance, program solvency, and employee job security. These mindset shifts, coupled with a bias for action and modernization, will provide fruitful paths for new doctrinal and skill transfer services by legal education programs.

While tinkers to student admissions and traditional business models may temporarily buffer the forces of creative destruction, the market will ultimately sort winners and losers. Because technology does not respect reputations or legacies, incumbent institutions face significant risks from flexible, adaptive and shape-shifting competitors that exploit emerging technologies. These shape-shifters rapidly respond to market changes by re-engineering and reinventing their business models, platforms, systems, and processes to capitalize on emerging trends-with an end goal of human-AI integration.

Bottom line: innovation represents the only firewall to obsolescence.

TABLE OF CONTENTS

I. Introduction: Creative Destruction and Digital Convergence .......................................... 631

II. Assessment of the Current Legal Services Ecosystem . . 634
A. Technology Will Transform the Knowledge Professions ........................................ 635
1. Omni-channel Experiences ..................... 640
2. Platform-Based Services ....................... 648
3. Hybrid Human-AI Services and Virtualization. . 650
B. Status Quo Under Threat ......................... 654
C. The Business of Legal Education .................. 659
1. Education and the Marketplace ................ 660
2. Langdell Model for Legal Education ............ 668
3. Business Model Shift to a Referral-Based Service Provider ............................... 670

III. Strategic Inflection Points ............................. 675
A. Identifying and Responding to SIPs ................ 676
1. Step 1: Determine Whether SIP Has Arrived . . . 677
2. Step 2: Analyze and Act with an Outsider's Objectivity .................................... 679
B. The Mover Advantage ............................. 684
C. Navigating Through SIPs .......................... 687
D. Winners and Losers ............................... 691

IV. SIP Analysis of Legal Education ....................... 693
A. Legal Education Ripe for Disruption ............... 694
B. The SIP Facing Legal Education ................... 698

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1. SIP Indicator: Student Enthusiasm for Legal Education ..................................... 701
2. SIP Indicator: Funding Changes and Uncertain Economic Outlook ............................. 706
3. SIP Indicator: Law Schools Accepting GRE in Lieu of LSAT .................................. 710
4. SIP Indicator: Personal, Professional, and Financial Well-Being .......................... 713
5. SIP Indicator: Marketplace Dissatisfaction with Graduate Skills in New Landscape of Professional Services .......................... 718
6. SIP Indicator: Technological Disintermediation . 724
7. SIP Response Options: Reinvent or Dig in? ..... 727
8. SIP Reality: Market Will Decide ............... 731
C. Planting Seeds for Truly Sustainable Growth ...... 735
1. Build Startup Culture ......................... 736
2. Embrace New Technologies .................... 738
3. Scout for Opportunities in Adjacent Markets . . . 738
4. Prepare for a Human-AI Future ............... 740
5. Move and Innovate ............................ 747

V. Conclusions ........................................... 748

Appendix I: T-Shaped Skills for Knowledge Professionals ...... 750

Appendix II: Multimedia Resources ........................... 751

Appendix III: Glossary of Key Terms ......................... 755

SERIES OVERVIEW

This three-part Legal Education: A New Growth Vision series introduces the overarching hypothesis that when a strategic inflection point threatens traditional law schools, the strongest survivors will be led by forward-focused, innovative, and agile education entrepreneurs.

Part I of this series questions whether law schools are in the midst of a dead cat bounce, and it also completes a strategic inflection point analysis of the current legal education ecosystem. Part I concludes that law schools indeed face a strategic inflection point and argues that the spiraling downward trajectory can only be upturned through digital, business model, and education services innovation.

To capitalize on the opportunities uncovered by the combined market forces of creative destruction and strategic inflection points, Parts II and III then lay the groundwork for developing customer satisfying innovation ecosystems, transforming business and teaching models, and building organizational dexterity so that survival-oriented law schools can move toward an end goal of being human and digital.

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I. INTRODUCTION: CREATIVE DESTRUCTION AND DIGITAL CONVERGENCE

Entrepreneurship rests on a theory of economy and society. The theory sees change as normal and indeed as healthy. . . . [T]he entrepreneur upsets and disorganizes. As Joseph Schumpeter formulated it, his task is "creative destruction."

-Peter F. Drucker(fn1)

Law schools have enjoyed long and, until recently, positive and productive relationships with law, accounting, and other professional service firms. Now, turbulent economic, demographic, and technology changes threaten the traditional education business model.(fn2) Borrowing from the language of business, a "strategic inflection point"(fn3) (SIP) has arrived for legal education programs. The "business as usual" approach no longer presents a viable path forward as legal education becomes increasingly digital and global.(fn4)

Over the last three decades, information and communication technologies (ICTs)(fn5) have delivered a new era of "digital convergence."(fn6)

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Digital convergence denotes "an essential, pervasive and interactive reconfiguration of the technical and social information infrastructures of modern society."(fn7) ICTs are uprooting once-stable industries, allowing dynamic, value-creating digital ecosystems to blossom in their place.(fn8) These digital ecosystems often exist as platforms-"a group of technologies that are used as a base upon which other applications, processes, or technologies are developed."(fn9) Digital ecosystems bring together people, institutions, businesses, and other social groups to connect, create, and exchange value.(fn10) As platforms become more sophisticated and complex, their capabilities expand.(fn11) Whatever their

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target market, successful multisided platforms(fn12) are diverse, open, networked, nimble, and intertwined.(fn13) Because ICTs and platforms have triggered profound shifts in personal, social, and commercial interactions,(fn14) legal education programs that survive and thrive in the decades ahead must find ways to balance and harness these transformative technologies in their delivery of relevant, market-valued knowledge and skills development services.

Enterprise sustainability guides the analysis and informs the recommendations throughout this three-part Article series. This Article (Legal Education: A New Growth Vision Part I) posits that legal education programs must grab hold of the forces of "creative destruction"(fn15) and embrace innovation, digital technologies, a startup mindset, and modern business models as the means by which to navigate through SIPs and differentiate their education services in the marketplace.(fn16) Part II of this Article begins with an assessment of the

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current legal services ecosystem by examining the stressors facing legal education and the practice of law, which stem from rapidly changing technologies. Part III introduces the concept of strategic inflection points: how to identify and respond to them, the advantages of moving quickly in doing so, and what separates winners from losers in the face of industry upheaval. Part IV performs an SIP analysis of legal education programs, followed by a recommendation that program leaders start planting the seeds of truly sustainable growth. Part V offers conclusions. To assist the reader, Appendices I-III visually depict the T-shaped skills for knowledge professionals, consolidate the multimedia sources referenced, and provide a...