One of my favorite scenes from The West Wing—and there are many—involves the White House Chief of Staff asking two economists for their stock market predictions. It goes like this:
Leo McGarry: Luther, ballpark, one year from today, where’s the Dow?
Luther: Tremendous. Up a thousand.
Leo: Fred, one year from today?
Fred: Not good. Down a thousand.
Leo: A year from today at least one of you’s gonna look pretty stupid.
It’s in this spirit that I offer my 2022 predictions. Check back this time next year for a self-assessment of their accuracy.
1. Hybrid work dominates, and frustrates
Despite the persistence of Delta and the emergence of Omicron, and the move by many companies to continuously push back (and increasingly, indefinitely postpone) their return-to-office dates, hybrid work will dominate in 2022, i.e., most knowledge workers will split their time between remote work and in-office work. This part of the prediction is easy to make: the world has spent 2021 debating the future of work, and hybrid seems the obvious outcome. What’s less obvious is how successful hybrid will be. I’ve written about what I see as the unique disadvantages of hybrid work, and predict it will be a source of frustration for leaders and employees alike. The key to success will be flexibility and humility: don’t be afraid to say “we got it wrong.”
2. The Great Stagnation
Much has been written about the Great Resignation, economists’ term for the explosion of “quits” (what the U.S. Bureau of Labor Statistics calls resignations). The most recent data, for October 2021, reported 4.2 million quits, close to the all-time high set earlier this year. (The Atlantic has a helpful primer on why people are quitting.) This trend will continue in 2022. But for every person who quits, there are many more who don’t. A silent, but equally impactful, trend is upon us: the Great Stagnation. This is what I call the population of workers who want to do something else, but for whatever reason, don’t. They’re more likely than not to come from traditionally underrepresented backgrounds. Leaders are going to need to work harder than ever to identify and support these team members.
3. The political climate cools (a little)
This is a bold and possibly foolish prediction given control of both the U.S. Senate and House of Representatives will be up for grabs—to say nothing of the Supreme Court revisiting Roe v. Wade. Call me an optimist, but I think there’s a limit to the vitriol we can collectively maintain. It used to be that the greatest leadership challenges were related to managing career progression, compensation, and professional disagreements; since 2016, it’s been the politicization of everything. Leaders have a unique responsibility to help create common ground. The key word is create: leaders have an obligation to set a high bar for respectful discourse; promote diversity and inclusivity, including of thought; and deescalate.
4. Legal ops crosses the chasm
If you work in a Bay Area corporate legal department, have attended a CLOC or Legal Operators event, or work in legal tech, you’d be forgiven for thinking legal operations is mainstream. In fact, legal ops is in its infancy, but I predict it will cross the chasm in 2022. This will be great for legal ops professionals, with more opportunities for career progression at a larger number of organizations. At the same time, corporate legal departments will face increased difficultly retaining legal ops professionals and filling new legal ops roles, as demand for experienced candidates outpaces the talent pool for the foreseeable future. My advice to General Counsel: make legal ops recruiting a top-three priority for 2022. It will pay dividends.
5. Rise of the legal engineer
Anyone who’s ever worked in or with a corporate legal department has been told on at least one occasion that their legal tech initiative needs to wait for IT resource availability. A legal ops leader at a publicly traded company told me 80% of corporate IT team’s time is allocated to marketing, with the remaining 20% shared by the rest of the company. You can imagine how much attention legal gets. This is far too common. I predict 2022 will see the emergence of a new role that’s complementary to legal ops: that of the legal engineer. The role of legal engineer will be multidisciplinary, like legal ops, but require greater technology fluency. Spotify is already doing something like this already, and Netflix is hiring for the role.
6. Paralegals are empowered
“Overworked Big Law Can’t Find Enough Lawyers With Demand Surging,” blares the Bloomberg Law headline. Please join me in shedding a tear for Big Law, which is shelling out $500,000 signing bonuses to new associates. They have it so hard. Of course, you know what this means for corporate legal departments: higher hourly rates, larger fixed fees, and less room for volume discounting. And all when corporate legal departments want to take control of their spend! The answer is to invert the resourcing pyramid. Paralegals are among the most creative and hardworking people I’ve met, and with the right enabling technology they’ll take on work previously reserved for attorneys, reducing the need for outside counsel.
7. Investment in legal tech doubles
According to Crunchbase, legal tech companies received more than $1 billion in venture capital investment from January through September of this year. That’s two times the total amount invested in 2020, and ahead of 2019’s total of $989 million. These numbers exclude recapitalizations, e.g., Ontario Teachers’ of Mitratech (reportedly $1.55 billion) and Warburg Pincus of NetDocuments (reportedly $1.10 billion). Notable funding rounds include Clio ($110 million raised), Ironclad ($100 million), and Icertis ($80 million). Expect venture capital investment in legal tech companies to exceed $2 billion in 2022, and possibly hit $2.5 billion if one or both of the following predictions don’t end up being correct.
8. Top 10 legal tech players merge
The past 12 months have seen numerous strategic acquisitions, with Mitratech and Onit seemingly in competition for the Most Acquisitions award (I’ve written previously about how their strategy is good for investors but terrible for customers). These acquisitions have been of smaller companies. There are three reasons I’m making this prediction. First, all that investment has to be put to use. Second, software is a winner-take-most business. And third, as the top players become larger, small acquisitions stop moving the needle. I have no inside information, but a combination of DISCO or Relativity with Mitratech wouldn’t surprise me, nor would a combination of LexisNexis or Thomson Reuters with iManage.
9. Big Tech makes a legal acquisition
Big Tech commonly is used to refer to Alphabet (Google), Amazon, Apple, Meta (Facebook), and Microsoft, but in this instance I’m using it to refer to big enterprise software: Oracle, SAP, Salesforce, ServiceNow, and Workday. I expect one or more of these companies to make a legal acquisition in 2022. Apttus, DocuSign, and Icertis all are likely targets. So too is Relativity, which could be a good fit for Oracle, which is strong in compliance software. Ironclad is a long shot as the company needs time to grow into its valuation. Again, I don’t have inside information, but corporate legal departments employ too many people and spend too much money to be ignored by the largest enterprise software companies any longer.
10. Brightflag has a great year
The fuse has been lit for long-term customer success and market leadership. In the last 12 months we have:
- More than doubled the size of our customer base;
- Earned the #1 rating in G2’s Enterprise Legal Management category, and been recognized as Hot Legal Tech by Legal Operators;
- Been granted a patent for our AI, now with over 100,000 hours invested in its development, from the USPTO;
- Made our first acquisition (Joinder, now Brightflag Workspace);
- Raised $28 million in funding, for a total of $39 million;
- Expanded an already strong leadership team with VPs of Product, Alliances, People, and Finance; and
- Shipped fantastic new product features.
I hope you have a safe and happy holiday season.