With companies like Legal Zoom and Rocket Lawyer now entering the legal market, some say that the market for legal services is set for a disruption. Can this be right? Is it possible to deliver legal services over the internet, in the same way as purchasing recorded music? If so, what are the implications for law firms?

That businesses—however well-established or profitable—are not immune from the vagaries of market forces is demonstrated by the sorry decline of HMV, which is in the process of closing down its flagship store in Vancouver. It represents the end of an era where customers would go to a record store to purchase music albums, very often as much a social occasion as a shopping one. It is retailing tradition that goes back to 1921 when HMV opened its first store in London (Sir Edward Elgar participated in the opening ceremony). And it formed a rite of passage for many teenagers, the writer included. What can have happened to bring this venerable company so low, so quickly? The answer is that its core market was disrupted and, by the time HMV faced up to that fact, it had no idea how to respond.

Most recorded music is now delivered over the internet. By offering individual tracks for sale at 99 cents each, Apple's iTunes radically altered the way that people buy music. Before iTunes the choice had been to purchase a whole album on CD in a shop like HMV (or increasingly order it online) or to download pirated MP3 versions from the internet.

iTunes is a disruptive innovation. The phrase “disruptive innovation” was coined by Professor Clayton Christensen in his book The Innovator's Dilemma to describe the simplified product or service offered to the bottom of the market. The simplified service appeals to customers, gains market share and then moves upmarket to displace established providers. The established providers cling hopelessly to the “sustaining innovation” of the originally successful business model, while the disruptive innovators eviscerate their market share.

We live in an age of disruption. Over the last twenty years in most industries from journalism to retailing to travel, it is possible to see that it is the internet that is the great disruptive force. A second, digital economy is now being created where whole swathes of manual processes involving human activity are being steamlined and automated. Almost every area of the economy is undergoing a quiet revolution, possibly as significant as the Industrial Revolution. So it is perhaps inevitable that the delivery of legal services will be affected.

It is, of course, eminently possible to deliver standard form documentation to clients to draw up a will, set up a corporation or any number of simplified routine drafting tasks. This is known as commoditized legal work. Professor Richard Susskind points out in his book The End of Lawyers? that law firms should steer clear of commoditized work because once multiple firms compete on an undifferentiated basis for this work, a race to the bottom for fees will inevitably result—to the point where fees reach near zero. This marginal work has largely been eschewed by law firms because it is only worthwhile in high volume, hence the advent of the new internet providers, such as those mentioned above, to fill the gap. Be in no doubt, however, this kind of convenient and yet low cost service is the beginning of disruption in our market.

But can disruption itself be disrupted? Should disruptive innovation take hold in the foothills of the legal market, the Christensen model dictates that online delivery will soon spread upmarket, causing the relationship between lawyer and client to change. But there is nothing inevitable about the surrender of large portions of the legal market to disruptive upstarts. Even if lawyers are slow out of the traps, all is not yet lost. If the process is managed properly, law firms can build on years and years of accumulated knowledge and know-how to offer services to clients in new and exciting ways and to adapt to changing expectations of service delivery by offering value added services and efficiency tools.

The firms that will succeed in a disrupted legal landscape are those that have carefully captured and nurtured their knowledge and are able to use their knowledge management systems to deliver legal services in flexible ways, maybe in innovative ways we haven’t yet thought of. By contrast, firms who have been haphazard and careless with their knowledge and retain manual, labour intensive processes will really struggle to deliver the value expected by clients and adapt business models accordingly.

So if you think it won't happen to the legal market or are prone to procrasinate, consider the lesson from the music industry: when disruption does come, it will be unexpected and swift. The consequences of dogged reliance on an existing business model may be severe. Most of HMV's accumulated value from the twentieth century was eroded within the first ten years of the twenty-first.