Andrew Finkelstein discussed the issue of non-lawyer ownership of law firms in the U.S. “One of the core elements that is broken is the ownership opportunities within law firms and their ability to partner with non-lawyers. That silo that lawyers are forced to stay within prevent innovation that law firms are facing.”
Mr. Finkelstein discussed his firm’s attempt to break down these barriers by challenging the law in order to promote innovation. “Our initial complaint sought to overturn absolute prohibition on investment from non-lawyers. The statute states that law firms cannot partner with non-lawyers for the reason that the sanctity of the law must be preserved. In our opinion, this is unconstitutional,” said Finkelstein.
The conference discusses company tendencies “to innovate faster than their customers’ needs evolve. As a result, most organizations eventually end up producing products or services that are too sophisticated, too expensive, and too complicated for many customers in the market.
Companies pursue these “sustaining innovations” at the higher tiers of the markets because this is what has historically helped them succeed: by charging the highest prices to their most demanding and sophisticated customers at the top of the market, companies will achieve the greatest profitability.
However, by doing so, companies unwittingly open the door to disruptive innovations at the bottom of the market. An innovation that is disruptive allows a whole new population of consumers at the bottom of a market access to a product or service that was historically only accessible to consumers with a lot of money or a lot of skill.
Characteristics of disruptive businesses, at least in their initial stages, can include: lower gross margins, smaller target markets, and simpler products and services that may not appear as attractive as existing solutions when compared against traditional performance metrics. Because these lower tiers of the market offer lower gross margins, they are unattractive to other firms moving upward in the market, creating space at the bottom of the market for new disruptive competitors to emerge.” – Clay Christensen, Keynote Speaker.