Like millions, I was counting the days until I could watch season 3 of “House of Cards”. Netflix released all 13 episodes on Friday, but I restrained myself and watched only two over the weekend. (As a side note, I wasn’t wowed by the episodes. Maybe all that anticipation raised my expectations too high.)
The venture capitalist Marc Andreessen, who co-invented Mosaic, an early commercial Internet browser that later became Netscape, has said, “TV in ten years is going to be one hundred per cent streamed. On demand. Internet Protocol. Based on computers and based on software.” He said that the television industry has managed the transition to the digital age better than book publishers and music executives, but “software is going to eat television in the exact same way, ultimately, that software ate music and as it ate books.”
As I’ve written about before, there are lessons the legal profession can learn from Netflix and the television/streaming content industry.
Address Client Dissatisfaction
Streaming content addresses viewers’ dissatisfaction with two aspects of traditional television: programming is interrupted by commercials and promotional messages for other shows; and programming is set at specific days and times that may be inconvenient. Netflix, like other Internet content providers, carries no commercials; its revenue derives from subscription fees. Viewers pay a set fee, now eight dollars a month, in order to watch their choice of films or shows, whenever they want, on whatever device they want. “Think of it as entertainment that’s more like books,” Hastings said. “You get to control and watch, and you get to do all the chapters of a book at the same time, because you have all the episodes.”
Are there aspects of the delivery of legal services that are inconvenient, either due to the method by which they are being delivered or the time at which they are being delivered? You bet. Many people balk at having to take time off work, travel to an attorney’s office, find parking, and then be charged for conveying information back and forth before the analysis even begins. And if you don’t have an existing relationship with an attorney, how do you go about identifying candidates and selecting one?
This client dissatisfaction is being addressed by various organizations, for example, Avvo and LegalZoom—while most lawyers and law firms continue to continue to do things the way they always have. We as a profession need to be aware that many innovative services are being set up to deliver low-cost, generic information to clients “on demand” or at their convenience. These services are in large part being provided by those who don’t possess a law degree.
What if more lawyers were doing this too? And lawyers have the advantage of wisdom and experience to apply the law and facts to unique client circumstances that can be a huge value add to the generic information services that are out there on the Internet. By addressing client dissatisfaction, lawyers can find themselves clawing back from the brink of irrelevance into influential and productive places in the lives of our clients and society.
Hire and Promote Employees Who Embody the Firm Values
Netflix prides itself on a distinctive culture which is enshrined in a 124 slide presentation that apparently is legendary in Silicon Valley. I read the presentation—it’s quite interesting and provocative.
The first of the seven cultural aspects laid out in the slide presentation is “values are what we value.” The slides go on to explain that many companies have nice sounding value statements displayed in their lobbies, such as:
In fact, these values were displayed in the lobby of Enron. Enron’s leaders went to jail and the company went bankrupt due to massive fraud. Obviously, these wall-display values were not really valued at Enron.
A company’s actual values are reflected in who gets promoted, rewarded, or let go. They are the behaviors and skills that are valued in fellow employees. Netflix describes and defines its nine values as: judgment, communication, impact, curiosity, innovation, courage, passion, honesty and selflessness.
Embracing civility in the workplace, the slides explain that “brilliant jerks” are not tolerated—the cost to teamwork is too high. Diverse styles are okay, but each employee must embody the nine values.
One fascinating aspect of the culture is that hard work is irrelevant because the firm cares not how many hours someone works but that they accomplish great work. The slide presentation includes, “Sustained B-level work despite an A for effort generates a generous severance package. Sustained A level work despite minimal effort is rewarded with more responsibility and money.”
This culture is difficult to harmonize with lawyers who are used to measuring their worth in time increments. I have often seen that mediocre lawyers keep their jobs, indeed are promoted, not for excellence in work but quite the opposite, because they are able to bill a lot of hours. We need a different metric of success for rewarding lawyers. One that is compatible with excellence, not time increments. And what are the values of your firm or organization? Do they mesh with your personal values?
Increase Employee Freedom
One of the reasons for Netflix’s success, according to an article written by Timothy Stenovec in the Huffington Post, is that it treats employees like grownups. Stenovec points out that salaried employees at Netflix have unlimited vacation days, don’t have to get expense reports approved, and don’t have to sit through the dreaded annual performance review. Policies aren’t necessary for everything. The slide presentation notes that Netflix has no clothing policy, yet people don’t come to work naked.
This philosophy behind eschewing policies or process is the belief that focusing on process stifles the ability to flexibly respond to changes and drives the highly talented employees out. As most companies get bigger, they get more complex and because the business becomes too complex to run informally, they tend to curtail employees’ freedom. Procedures tend to be adopted because it feels good compared to the “pain of chaos”. Process brings seductively strong near-term outcomes because it requires minimal thinking, few mistakes are made but few of the “curious innovator-mavericks” remain as efficiency trumps flexibility. Then, the market shifts due to new technology or competitors or business models, but the company is unable to adapt quickly because employees are trained to follow process and the company gradually “grinds into irrelevance.”
Does the Netflix approach, rejecting process as anti-innovation, apply to the legal field? Certainly some of the more forward-thinking lawyers and firms are attempting to break down legal services into processes that more efficiently serve clients. But in terms of internal management, can some of these approaches have application to the legal field? One thing we can likely agree about: we don’t want the legal profession to “grind into irrelevance.”
Netflix has enjoyed some great success in a turbulent industry. It is worth considering why and gleaning any lessons that will help the legal profession. We want the legal profession to thrive like the show “House of Cards,” not fall like a precariously-built house of playing cards.