Alone among the professions—I submit—we are statistically innumerate and implacable in our refusal to entertain probabilities, odds, reasoned judgments, and cost/benefit tradeoffs. Doctors know when heroic measures will be unavailing; engineers stress-test models of everything from bridges to airplane wings to calculate acceptable failure modes; architects can guess which roofs will blow off in Category 5 hurricanes; even dentists, for heaven’s sake, know that fillings, caps, and crowns will eventually fail.
And entrepreneurs, of course, know that failure comes with the territory.
Much has been written about Silicon Valley’s tolerance for, even celebration of, failure. Now that people have actually studied it, they’ve found it makes sense. Here’s why, as explained a few months ago in Inc.:
"In the start-up world, failure is almost synonymous with learning experience. Being a founder who has failed before signals to the community that, one, you’ve done this before, and, two, you’ve gathered information on what doesn’t work and are better armed to create something that does."
Daniel Isenberg, the founding executive director of the Babson Entrepreneurship Ecosystem Project, says to truly understand failure, it’s necessary to look beyond the individual blip of a single start-up failing to gain wide user traction and going belly-up. It’s also necessary to look past a given entrepreneur’s track record.
In Isenberg’s eyes, it’s a much broader picture. When geographies and their governments embrace start-up failures, they catalyze economic growth.
"If you look at really entrepreneurial countries or regions, you see very high failure rates," he says. "Lots of businesses opening and closing. That churn is failure."
In other words, not punishing failure leads to stronger long-term growth.
Other industries, and companies, learn through failure. We bury our failures.
But this fault – and make no mistake, it’s a categorical fault – is in our nature as lawyers.
We cannot willingly enter into situations where failure comes with the territory. We can’t weather the criticism, can’t risk the second-guessing, don’t have the emotional fortitude or resilience to explain why what we did was a thoughtfully calculated risk and one we’d do again.
I submit that our rigid intolerance for failure is so extreme and ultimately perverse that it disables us from being capable of sound decisionmaking.
Going forward will require a different mindset.
Are we capable of it?
As it turns out, I lied. There will be another installment in this series.
Zero-sum gain does not apply to law. Remember the old adage ” A single lawyer will starve in a small town that will easily support two.” Granted innovation is long overdue, and will be welcome should it ever come.
Glad to see another installment as I was looking for ideas on how to get rid of the “old boy, knows it all’ mentality. Please consider including concrete or at least jello-like ideas on how to out-maneuver those cemented in tradition, YHX!
In every important way, **** was the best lawyer with whom I ever worked. He had been a Special Forces non-com, came back to the World to finish school, and then went to work for the CIA. While at the Agency he completed his J.D. He returned West in 1975 to a distinguished career in civil litigation. I was privileged to work as an expert on three or so of his actions, and he provided fine and very successful service to his clients in those matters. Very late in his career, ill but still acute and active, **** focused on special support projects for the management team at his firm and on pro bono work. His last case was a pro bono effort against his erstwhile colleagues at CIA over claims for service by two spies who resettled here but were ultimately financially terminated by the Agency. Taking an extremely original line, based on liberty interest and contracts, *** prevailed through CA review. At SCOTUS the government changed their basis from Totten (a Civil War espionage case) to state-secrets doctrine, which mooted all the rest of the law. Doe, which is to say ****, lost 9-0. We lost him not long afterward.
A failure? Well, on the scoreboard, certainly yes. I suppose it was for the Does, too, as they had no visible means of support absent their contract’s terms. And a fair old chunk of Firm resources went into it over the years of this case. In what was always going to be the longest of long shots. What, if anything, does it mean for the hypothesis of extreme risk aversion that a law firm would accept long odds of failure on a pro bono matter? I take it as significant in this respect that *** was effectively an emeritus partner at this stage, and that the partnership presumably had already discounted annual IRR for costs of pro bono work. Perhaps this is the exception – because it is not “real” litigation – that proves the rule? Perhaps law firms can do the risk analysis and can undertake sound decision-making under uncertainty, but a sort of institutional sclerosis controls how that process applies to the “core” business.
Mark
Glad to hear we’ll get another installment! Never thought about it this way before reading this installment – the traits necessary to be successful in operating a law business are increasingly diverging from those old-line “good lawyer” traits that are still important in working on projects for clients
Bruce, I have really enjoyed this series and thought is has been spot on. For the first time, however, I just don’t agree with you that lawyers are hard-wired to fear failure and that is the reason BigLaw may not be able to adapt to the changes ahead of them. I would posit that BigLaw has gotten too fat and slow because of the unprecedented growth it has previously experienced (essentially protected as a monopoly). While there are certainly lawyers worth the $1.4 million PPP AmLaw 100 average, most are not. And given the partnership model of law, it is exceedingly difficult to weed out the equity partners not carrying their weight. In the past, the answer was to simply hire more overbilling foot soldiers and charge more for them. As you have pointed out, those days are over. And with the emergence of social media making the world a whole lot smaller and very efficient, it is not a good time to be a dinosaur. It’s not fear of failure holding BigLaw back, it’s too many overpaid equity partners who have no chance to make that kind of coin anywhere else. Facing those prospects, I’d keep my eyes closed and pray for the best too.