Law Firms, Sigmoidal Growth and Innovation

This TED talk is fascinating.   It looks at the maths of biological, economic and social growth.  It shows some basic underlying principles of how Cities and companies grow, suggesting that growth is related to both innovation and the search for economies of scale.  It’s worth watching for general edification but also with half an eye on the growth of law firms and the sustainability of current ways of doing legal business.  The basic message: all companies grow and then die. Growth is spectacular, then it plateaus and then the company implodes.  New models, based on innovation replace them: they build themselves around social networks (not in the facebookian sense but in the Google sense of creative empires).  [Network analysis has not been much attempted in law firms (though see Emmanuel Lazega’s work for very interesting attempts in the area): it may be time to attempt some more.]

Big Law feels like it has been with  us a long time but historically this is not really so.  In the UK big law firms were only permitted once the cap on partners was removed in the late 60s.  The current plateau may only be temporary: globalisation may provide room for further growth or be the engine of innovation and destructive challenge that this talk predicts.  It may be that big law is somehow different, more resilient, protected by its links with the state and political power, but the basic maths of growth outlined by Geoffrey West provides food for thought.

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About Richard Moorhead

Director of the Centre for Ethics and Law and Professor of Law and Professional Ethics at the Faculty of Laws, University College London with an interest in teaching and research on the legal ethics, the professions, legal aid, access to justice and the courts.
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One Response to Law Firms, Sigmoidal Growth and Innovation

  1. Ian Scott says:

    Great observation
    “…with half an eye on the growth of law firms and the sustainability of current ways of doing legal business. The basic message is all companies grow and then die. Growth is spectacular, then it plateaus and then the company implodes. New models, based on innovation replace them: they build themselves around social networks (not in the facebookian sense but in the Google sense of creative empires). [Network analysis has not been much attempted in law firms]”
    Google is an organisation and knowledge business, arguably it is a model that law firms should adopt and adapt for local use . As you may recall we talked very briefly on this (16/3/11) and the likely network effects of a ‘utility law’ model that provided ‘free at the point of delivery’ legal services.
    Geoffrey West notes the long term need for exponential model innovation if such businesses are to be sustained – this appears to be the very strategic essence of Google.
    I’d recommend “What Would Google Do” by Jeff Jarvis (http://amzn.to/1dMRsB) – its an easy read and provocative in its views.
    Ian

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