I couldn’t have timed it better.
After the GME fiasco and Robinhood, there can be no doubt about the way wall street rigs the system against the retail investor. The "free market" principle seems to have its caveats, the refs have been bought.
The next move follows from the Breakpoint theory we explored previously. It's important to note, people's behaviour are motivated by two factors:
Attraction to something new and promising, and;
The existing models causing enough pain due to failure to perform, mismanagement or mistrust.
This is exactly what's happened here. In an small time frame people have lost faith in traditional finance and investing because of a bias by Robinhood to really take care of the hedge funds rather than the people.
It is perfect irony: "Robinhood", based on the premise of robbing the rich and giving to the poor, in this case chose to side with the hedge funds to the detriment of the retail investments their entire business model was based on.
This failure has caused pain, not only directly to the people affected but in the loss of faith in the religion of wall street and traditional (fiat) investment. The game is rigged against the retail investor. So, back to the Breakpoint theory: people are flocking to alternative currency because at a minimum, the decentralised system cannot be rigged against them. First stop for mass adoption is going to be companies building sufficient on-ramps for fiat to turn into cryptocurrencies and this is already happening.
Besides preparing for mass adoption, we cannot ignore the fact that GME was a test run. Even if the next declared stop is Silver (which could potentially shake the foundations) the point is there is a clear move to continue this trend to upend the current system. One important thing to note: this time, there is a viable alternative.
Consider your approach to Technology Strategy
So how does this affect Professional Services and the Legal Industry? Well, the obvious connections is that your retail clients will want to use that currency for payment (and sooner than you think!) But, they will also want to use it for settlement, transactions, mergers and acquisitions - potentially without you. Don't be blind to the fact that an entire generation of emerging and existing private clients will hold a portion (some a majority) of their wealth in decentralised, highly transportable assets.
Maybe you’re part of a law business that services top companies in your jurisdiction. If you know your customer and your market - then there would be no objections to the statements made here. You know, at least in America, institutional investment as well as converting corporate treasuries into cryptocurrency en-masse is upon us in a few days: Feb 4th, save the date.
These are only two factors contributing to this movement and as far as i’d like to share in here and now. There are a plethora of seismic movements occurring across the globe as I write this. The Legal Industry’s big players would face insurmountable obstacles to thrive if it fails to truly catch up and fundamentally reconsider its business models and how they deliver for their clients. This scale of change is not merely having the latest app, it is acknowledging that some of our time-honoured services will be automated and decentralised: they will be replaced. We will still be needed and can still deliver value, but cannot rely on the “way things were done before” posture because they will be fundamentally different.
So here we have the birthing pangs of the fiat system being presented with a new paradigm, a new form of currency which has many benefits - not the least of which is decentralisation (resistance from dominant control by a few). People will think differently about the way they trade and the structures by which they engage each other in business. A powerful currency brings with it a multitude of creative new means to engage with each other - understand that it is a matter of time before you will be left in the dust by your clients unimpressed by the rhetoric of ancient business models and practices.
The apparent dichotomy for professional services, and in particular lawyers is also fascinating to contemplate. On one hand, the business of law would default to chasing bottom line and increasing it. On the other hand the ethics and principle of law would see Justice and Equity available for the society in which we serve. Both Law and Technology have influence, both have a role to play.
I would venture to say this dichotomy is in fact a false dichotomy - it really is not the point of tension and truly is the opportunity for change.
For those who cannot understand the bridge between the two, their fate is sealed.
This was a free post from the Future of Law Lab.
Here’s what you missed this month:
Learnings from the Lab #3 - the latest write up and video summary breaking down insights from one of the live workshop sessions I recently ran with some Industry experts at FutureLab.Legal.
Breakpoint - How a change in the way we engage in trade and commerce will be the most strategic point of intervention (and crystal ball) to define steps toward the future of law.
Tow the Line (Part 2) - Having reflected on whether our current actions are sustainable in Part 1, we paint our ideal canvas in order to create actionable momentum and do better moving forward.
The future of law is in our hands 🔥
Q.