Q&A: Jordan Furlong – “If law firms continue to mosey towards the future, they’re going to have a lot of trouble.”

In short:

• Take professional development seriously within your law firm and avoid the temptation to treat young lawyers as billing machines.
• In the age of AI, lawyers should go beyond a focus on critical-thinking skills to understand the importance of humanity, relationships and the ability to become a trusted partner who can help clients with life and business goals.
• Rather than over-emphasising measures such as productivity, pricing and growth, law firms should be more cognisant of client outcomes, client relationships and reputational capital.

Jordan, you started your career as a lawyer, but quickly realised it was not the right fit for you. So, you ultimately switched to law firm consulting and have carved out a successful career from your base in Canada. Tell us about your journey.

Well, I’ve been doing this consulting work for coming up on 15 years and I really think I’ve found my niche in this profession. I figured out early on, with the help of a couple of law firms, that I was not meant to practise law for a living, but I still felt drawn to this profession and just wanted to contribute in some fashion and help make things better. To put it very plainly, that's really what got me interested in law in the first place. I kind of wandered here and there, but I have found the position from which I can do that best. I to make this point when I'm speaking with younger lawyers or law students – I say, ‘Look, it may take you a while, but there’s a place for you in this profession. If you don't find it right away, don't despair and don't take it to heart. Just keep looking.’

What is your assessment of the state of the legal market in North America?

It’s a very big market – somewhere in the range of US$300 to US$400 billion is spent every year in North America on legal services. The market is incredibly vast and deep and diversified. I do think there are mega-trends that are roiling the waters in the profession here. First, AI is a big one. Second, generational shifts are real. They are having a huge impact on the way many law firms of all sizes are recruiting and finding and developing and hopefully keeping younger talent. Third, the increasing empowerment of everyday people and clients is having a big effect as well. My view is that in North America – and we’re talking about the United States primarily, which is easily 10 to 12 times the size of the Canadian market – is evolving slowly towards a point to which it needs to evolve a whole lot faster. There is still an incredible bias towards tradition and the way that things have always been done. If there's anything that I've been trying to speak to with more urgency in the past few years, it's that, ‘Folks, you've got to accelerate the process by which you get to the next thing because the platform upon which we are standing is dissolving as we speak.’ If law firms continue to mosey towards the future, they’re going to have a lot of trouble. We don’t have the luxury of approaching the shift in this market at the pace that we would like. Other people and other forces are dictating the pace. Lawyers don't like that. Lawyers don’t like being rushed, but get used to things you don't like.

Why is there such resistance?

Oh, it’s part of the nature of lawyers. The profession itself tends to be conservative and risk-averse and it’s an incredibly complacent market. Law has been very remunerative – you can earn a decent living all the way up to an insanely good living. Why would it change? Richard Susskind said it very wisely 20 years ago. Why would a room full of millionaires want to change their business model? Not all lawyers are millionaires, but when something’s been working for you really well, why would you change it?

What are some initial steps that law firms should be taking to turn around such complacency?

A big measure of it is trying to get a sense of the mega-trends that are forcing us to pick up our pace. The number one with not just a bullet, but a hail of bullets, is generative AI. Like most of us, I first encountered generative AI in its current form with ChatGPT back in March 2023. At that point I saw it primarily as a productivity amplifier and accelerator – something that would not just enable, but almost oblige, law firms and lawyers to get their work done faster. I pointed out that for a profession which sells the effort and time that it consumes in order to generate its work, a machine that essentially dematerialises effort and time is a real problem. AI is a fundamental challenge to the culture of lawyers who say, ‘I'm a person who serves one client at a time in a very linear format, a face-to-face format, and I bill my time and my efforts in a way that we've been doing it for a long time.’ AI at its simplest level challenges that notion, but the more I see about where AI is going, with the advance of AI agents, and with the development of AI reasoning capabilities, the AI that's being deployed in legal environments right now is easily at the level of a mid-level associate. That’s mind-blowing because it isn't just a question of how fast can they get work done. It's a question of what is the level of creativity, what is the level of problem-solving and problem identification, and seeing possibilities that didn't exist before. As a result, one of the things I'm forced to say to law firms is that within 10 years generative AI is going to be the main productivity and outcome-generation engine of law firms. It’s going to supplant human lawyers as the sole provider. I think our best-case scenario is that it leads to the point where an experienced lawyer or partner-level lawyer will use AI as an extraordinarily insightful and powerful resource to deliver better outcomes and better value to clients. That’s the optimistic view – the pessimistic view is that it leaves us in the dust.

In one of your recent columns, you advised law firms to develop their own Gen AI tools, rather than being dictated to by the engineers of a tool such as ChatGPT. Is that correct?

Well, there are two angles. In the past few months, I’ve been seeing the release of new generative AI systems that are designed specifically for the legal market and which are revving up considerably in terms of what they can do. I got a demo of a legal research AI product from a company called vLex, and I was speechless. I'm looking at this thinking, ‘Why would you ever train a lawyer to conduct legal research again?’ That's how all-consuming I think that this possibility is going to be, and there will be other tools entering the market very quickly that law firms are going to be able to deploy. I don’t just mean the massive law firms with deep pockets. In due course, smaller law firm lawyers will be able to access such technology as well. We are very rapidly moving past the era of, ‘Oh, you can't use AI because it'll make up cases and so forth.’ I still hear lawyers talk about that, but that was so long ago in terms of AI development that you might as well be talking ancient history. The tools are coming fast. The other point about client-focused AI tools is an even bigger issue. To date, everything we've talked about with AI is around the transformative impact on law firm business models. But generative AI is going to have an even more sizeable impact on the demand side of the market. It is going to become a reliable, effective tool that people use. When I say people, I mean individuals, I mean businesses, I mean corporations, I mean the class of humans on this planet that we used to call clients. People are going to use AI to do a lot of things that they used to come and hire lawyers to do. That, I think, is the ultimate impact that AI will have that we really don't have the capacity to get our heads around right now. I wrote a piece recently saying that it’s no good for lawyers to get up on their high horse and tell individuals out there to not use ChatGPT for their legal problems. You know what? They're using it anyway. One of the reasons they're using it is that they can't afford lawyers, so they’ve got to use something to move down the road. In a worst-case scenario, all of the great generative AI tools will be locked away behind incredibly high paywalls and ordinary people will never get a chance to benefit from them. That's not out of the question, but an equally plausible outcome is that there will be tools made available to people which are, in fact, able to carry out a tremendous amount of legal work in terms of information provision, remedy identification, solution provision – things for which people now go to lawyers.

As a result of this AI and technology focus, will law firms have to recruit more tech-savvy graduates?

I think so. We’re going to require different kinds of people with different kinds of skillsets and personalities and attributes to become lawyers than we did in the past. The mythical skillset of the lawyer is the argumentative, difficult person who is good at debating. But the people who have become lawyers have tended to be people who are very analytical, very detail-oriented who love solving problems, who love engaging with ideas and facts and evidence. The ability to analyse and to reason and to persuade, they’ve all been key elements of being a lawyer. I think a lot of those needs are going to get met by technology. Of course, it’s always valuable to have critical thinking and analytical faculties, no matter what you're doing, especially for the higher-level work that lawyers will be called upon to do. But remember, too, that you don't need to be good at technology to use AI. That's one of the reasons why it's been so popular. Anybody off the street can start using AI and they get results in ways that work for them. So, what are we going to need from new lawyers? We're going to need humanity. We're going to need relationships. We're going to need the ability to connect with other people, gain their trust and become advisors and advocates who are in the position to say, ‘I can help you with your life goals, with your business goals, with a particular problem that you're facing. I am the person who's here to help you deal with all the difficult things that are coming our way.’

In one of your recent columns you questioned the over-emphasis on traditional law firm measures such as productivity, pricing and growth – and that there should be greater attention on issues such as client outcomes, client relationships and reputational capital. Can you tell us more about that view?

Yes, clients don't care how hard you worked on a file. In the same way, I don't care how long it took my mechanic to fix my car and I don't care how much effort he had to put in, and I don't even care how many years he went to mechanic school to do it. None of that is relevant to me. All I care about is, ‘When do I get my car back? Is it going to run as well or better than it did when I brought it in to you?’ That's it. And, ideally, I would prefer not to have to walk through a messy, oily, stained garage to get this service done, and I would rather not be treated with contempt when I go up to pay the bill. This highlights the problem with using lawyer-based measures, rather than client-based measures. Now you mentioned productivity and pricing and so forth. These are important things, of course, no matter what kind of business you're running.

Yes, productivity is important, but where a lot of law firms go off track is that they measure productivity in terms of how many hours they billed. That's incredibly narrow-minded and unidimensional, when there are so many different ways in which a lawyer or any person within a law firm is contributing value to the firm and to its clients. It’s the same thing with pricing. Of course, you need to know how to price your work. But pricing it according to your time and effort was always questionable, and doing it at a time when there's a machine being installed in your office that's going to turn hours into minutes or seconds is a really bad idea. So, it's not a matter of going away from a focus on productivity and price or anything else like that. It's about moving away from measures that are based around lawyers, this whole lawyer-based fixation. We've got to get out of our own worlds and spend more time in the real world where people live, where problems actually occur and look at things more from the perspective of the people we're here to serve. That mindset shift alone is not a small one. But if you can make that change, you are more than halfway there to the process of making a better and different business going forward.

Are there any other comments that you'd like to get across to law firm leaders today?

Law firms have to take their talent, their individual people within the firm a lot more seriously. There are way too many firms that are looking at their lawyers, and their younger lawyers especially, as billing machines, as cogs in the gigantic contraption of law firm profitability. I have to remind law firms that the great majority of people who enter your firm are going to leave someday. The number of people who start off at your law firm as a first-day associate and retire 50 years later – getting the gold watch or whatever it is we're giving away at that point – that’s in the single digits. Most everybody else is going to leave at some point. If you don't gear your talent development towards this idea that they're only here for a brief time, that they're going to go somewhere else, then you're losing out because you may only see them as billing cogs. You may only see them as service drones, but they see themselves as people who have lives. They come to your work, to your business in order to make a living, yes, but also to gain skills and gain experience and expand their network so that the next job they take, wherever it is, will be more fulfilling and will pay better. That’s what they care most about, and if you are not aligned with that, if you are not actively assigning resources and time and money and energy to helping them with that, then you are at loggerheads with them and they will go sooner than later – and you'll be left shaking your head saying, ‘Why are we losing so many people?’

This article is an edited version of a podcast interview. To hear the full interview, click here.