Nebraska Law Review Volume 97 | Issue 3 Article 3 2019 Legal Education: A New Growth Vision Part I—The sI sue: Sustainable Growth or Dead Cat Bounce? A Strategic Inflection Point Analysis Hilary G. Escajeda University of Denver Sturm College of Law Follow this and additional works at: https://digitalcommons.unl.edu/nlr Recommended Citation Hilary G. Escajeda, Legal Education: A New Growth Vision Part I—The Issue: Sustainable Growth or Dead Cat Bounce? A Strategic Inflection Point Analysis, 97 Neb. L. Rev. 628 (2018) Available at: https://digitalcommons.unl.edu/nlr/vol97/iss3/3 This Article is brought to you for free and open access by the Law, College of at DigitalCommons@University of Nebraska - Lincoln. It has been accepted for inclusion in Nebraska Law Review by an authorized administrator of DigitalCommons@University of Nebraska - Lincoln. Hilary G. Escajeda* Legal Education: A New Growth Vision Part I—The Issue: Sustainable Growth or Dead Cat Bounce?** A Strategic Inflection Point Analysis ABSTRACT Legal education programs now face strategic inflection points. To survive and thrive long-term, education programs must embrace entre- preneurship, technology, innovation, platforms, and customer service as the means by which to navigate through strategic inflection points. Imagination, adaptability, agility, determination, and speed will sepa- rate market leaders from laggards. Scrappy, entrepreneurial, and ac- tion-oriented programs that deliver omni-channel, lifelong knowledge and skills development solutions are the movers that will radically redefine and likely dominate the legal education industry. Slow, tradi- tion-bound programs resistant to change are non-movers that face extinction. © Copyright held by the NEBRASKA LAW REVIEW. If you would like to submit a re- sponse to this Article in the Nebraska Law Review Bulletin, contact our Online Editor at [email protected]. * Ms. Escajeda has practiced tax law in Colorado for twenty years and serves as an adjunct professor at the University of Denver, Graduate Tax Program. She was blessed to work on this Article series with brilliant new lawyer Megan Fugier. Special thanks to Susan M. Zvacek, Ph.D., and Professors Roberto Corrada and David I.C. Thomson for their comments and encouragement. She also thanks Professor Edward J. Roche Jr. for presenting her with a question that formed the seed idea for this Article; honors the visionary leadership of DU education entre- preneur Mark A. Vogel, J.D., LL.M., whose teaching innovations inspired the new growth vision set forth herein; and gratefully appreciates Professor John Wilson and Cindy D. Goldberg, Esq. for allowing her to be of continued service to the Graduate Tax Program. Any errors are the author’s alone. ** “A dead cat bounce is a temporary recovery from a prolonged decline or a bear market that is followed by the continuation of the downtrend.” Dead Cat Bounce, INVESTOPEDIA, https://www.investopedia.com/terms/d/deadcatbounce.asp [https:// perma.unl.edu/J37A-QRE6]. 628 2019] LEGAL EDUCATION: A NEW GROWTH VISION 629 Entrepreneurial education leaders committed to program growth know that since competitive advantages are transitory, they must cre- ate and nurture opportunities for continuous innovation. They also rec- ognize the nexuses between customer satisfaction, institutional relevance, program solvency, and employee job security. These mindset shifts, coupled with a bias for action and modernization, will provide fruitful paths for new doctrinal and skill transfer services by legal edu- cation programs. While tinkers to student admissions and traditional business mod- els may temporarily buffer the forces of creative destruction, the market will ultimately sort winners and losers. Because technology does not respect reputations or legacies, incumbent institutions face significant risks from flexible, adaptive and shape-shifting competitors that ex- ploit emerging technologies. These shape-shifters rapidly respond to market changes by re-engineering and reinventing their business mod- els, platforms, systems, and processes to capitalize on emerging trends—with an end goal of human-AI integration. Bottom line: innovation represents the only firewall to obsolescence. TABLE OF CONTENTS I. Introduction: Creative Destruction and Digital Convergence .......................................... 631 II. Assessment of the Current Legal Services Ecosystem . 634 A. Technology Will Transform the Knowledge Professions ........................................ 635 1. Omni-channel Experiences ..................... 640 2. Platform-Based Services ....................... 648 3. Hybrid Human-AI Services and Virtualization . 650 B. Status Quo Under Threat ......................... 654 C. The Business of Legal Education .................. 659 1. Education and the Marketplace ................ 660 2. Langdell Model for Legal Education ............ 668 3. Business Model Shift to a Referral-Based Service Provider ............................... 670 III. Strategic Inflection Points ............................. 675 A. Identifying and Responding to SIPs ................ 676 1. Step 1: Determine Whether SIP Has Arrived . 677 2. Step 2: Analyze and Act with an Outsider’s Objectivity .................................... 679 B. The Mover Advantage ............................. 684 C. Navigating Through SIPs .......................... 687 D. Winners and Losers ............................... 691 IV. SIP Analysis of Legal Education....................... 693 A. Legal Education Ripe for Disruption ............... 694 B. The SIP Facing Legal Education ................... 698 630 NEBRASKA LAW REVIEW [Vol. 97:628 1. SIP Indicator: Student Enthusiasm for Legal Education ..................................... 701 2. SIP Indicator: Funding Changes and Uncertain Economic Outlook ............................. 706 3. SIP Indicator: Law Schools Accepting GRE in Lieu of LSAT .................................. 710 4. SIP Indicator: Personal, Professional, and Financial Well-Being .......................... 713 5. SIP Indicator: Marketplace Dissatisfaction with Graduate Skills in New Landscape of Professional Services .......................... 718 6. SIP Indicator: Technological Disintermediation . 724 7. SIP Response Options: Reinvent or Dig in? ..... 727 8. SIP Reality: Market Will Decide ............... 731 C. Planting Seeds for Truly Sustainable Growth ...... 735 1. Build Startup Culture ......................... 736 2. Embrace New Technologies .................... 738 3. Scout for Opportunities in Adjacent Markets . 738 4. Prepare for a Human-AI Future ............... 740 5. Move and Innovate ............................ 747 V. Conclusions ........................................... 748 Appendix I: T-Shaped Skills for Knowledge Professionals...... 750 Appendix II: Multimedia Resources ........................... 751 Appendix III: Glossary of Key Terms ......................... 755 SERIES OVERVIEW This three-part Legal Education: A New Growth Vision series in- troduces the overarching hypothesis that when a strategic inflection point threatens traditional law schools, the strongest survivors will be led by forward-focused, innovative, and agile education entrepre- neurs. Part I of this series questions whether law schools are in the midst of a dead cat bounce, and it also completes a strategic inflec- tion point analysis of the current legal education ecosystem. Part I concludes that law schools indeed face a strategic inflection point and argues that the spiraling downward trajectory can only be up- turned through digital, business model, and education services in- novation. To capitalize on the opportunities uncovered by the combined market forces of creative destruction and strategic inflection points, Parts II and III then lay the groundwork for developing customer satisfying innovation ecosystems, transforming business and teach- ing models, and building organizational dexterity so that survival- oriented law schools can move toward an end goal of being human and digital. 2019] LEGAL EDUCATION: A NEW GROWTH VISION 631 I. INTRODUCTION: CREATIVE DESTRUCTION AND DIGITAL CONVERGENCE Entrepreneurship rests on a theory of economy and society. The the- ory sees change as normal and indeed as healthy. [T]he entrepre- neur upsets and disorganizes. As Joseph Schumpeter formulated it, his task is “creative destruction.” —Peter F. Drucker1 Law schools have enjoyed long and, until recently, positive and productive relationships with law, accounting, and other professional service firms. Now, turbulent economic, demographic, and technology changes threaten the traditional education business model.2 Borrow- ing from the language of business, a “strategic inflection point”3 (SIP) has arrived for legal education programs. The “business as usual” ap- proach no longer presents a viable path forward as legal education becomes increasingly digital and global.4 Over the last three decades, information and communication tech- nologies (ICTs)5 have delivered a new era of “digital convergence.”6 1. PETER F. DRUCKER, INNOVATION AND ENTREPRENEURSHIP 26 (1985). 2. Tim Bajarin, This Will Be the Most Disruptive Technology Over the Next 5 Years, TIME (Jan. 12, 2015), http://time.com/3663909/technology-disruptive-impact/ ?iid=sr-link1 [https://perma.unl.edu/9AEX-P82S] (“[M]ore people will come online for the first time over the next five to ten years than ever before[,] [which] will have disruptive global implications.”); see generally Jon Marcus, Graduate Pro- grams Have Become a Cash