Innovation in Philadelphia: Part Two of a Conversation Between Ajay Raju and Christopher Wink

Philadelphia Skyscrapers

On Friday, May 15, Ajay Raju (TEMPLE ’92; LAW ’96), Executive Chairman and CEO of Dilworth Paxson, LLP, and Christopher Wink (CLA ’08), co-founder of Technical.ly, met for a wide-ranging conversation about technology and innovation in Philadelphia. Jonathan Lipson, the Harold E. Kohn Chair and Professor of Law at the Temple University Beasley School of Law, facilitated the discussion. The participant’s comments and opinions have been edited for clarity and organized under topics or themes of conversation.

Editor’s Note: The below conversation is part two of two. You can read part one of this conversation here.

Jonathan Lipson (JL): Ajay, you are a lawyer advocating for innovation. This is unusual for the profession. How do you see your role?

Ajay Raju (AR): A fundamental element of the American legal system is adherence to precedent. It’s how we can rely on our justice system to provide predictable guidance and impose predictable consequences. As important as this concept of fealty to precedent is to the practice of law, my view is that it’s unnecessarily, and frankly, detrimentally, too much a part of the business of law. For generations, American lawyers took the same approach to their industry as they did to their profession. In other words, they brought to bear the kind of narrowly focused, incremental mindset that works well in litigation to their revenue models. In this post-economic collapse era, when clients demand exponentially more of their counsel for substantially less in return, that approach is a recipe for stagnation at best, and failure at worst.

I’m a lawyer by training, an entrepreneur by disposition, and a booster of this region by affinity, and I see my role as being an advocate of a new approach to the practice and business of law. I want to be among those who spark a revolution in Philadelphia, certainly, but I’ll also be the first to admit that this is as much a defensive posture as it is a progressive one. Put simply, law firms must adapt or die. As technology advances, as legal process outsourcing and offshoring advance, more and more of what used to reside within the exclusive wheelhouse of attorneys will be done by non-attorneys. Having acknowledged that reality, the next step has to be finding new avenues to bring value to the clients and industries we serve. That imperative is a large part of what led us to establish the Exchange at Dilworth Paxson. The goal with the Exchange is to create a platform, or a watering hole if you will, for entrepreneurs, investors, and of course, lawyers, to collaborate and create together. This is relatively uncharted territory in a sector where predictability has long been the watchword, but initial indicators are strong, at least as far as the Exchange is concerned. We’ve closed six deals in the past year and have eight more in the pipeline. Both the innovation and investor communities are excited by what we’ve launched, and my hope is that we can be a model for what a 21st-century law firm can really do.

Chris Wink (CW): I’m still having trouble understanding why you (Ajay), Dilworth, and its lawyers are doing this? Why does this make sense for you to invest your time and resources in it?

AR: Dilworth Paxson has an ironclad legacy here in Philadelphia. It’s as much a part of our civic landscape and history as City Hall. That legacy is what initially attracted me to the firm, but what really got me excited was the realization that Dilworth is not bound up by its legacy at all. That is to say, no one here thinks this firm should rest on its laurels and coast on its name. My colleagues are focused on the future, eager to embrace change, and committed to providing counsel, not just legal services, to our clients. At the risk of overstating the comparison, I’d posit that Wawa provides a decent analogy for what we at Dilworth see as our role in the legal sector. Wawa realized that in an increasingly competitive environment, it’s not enough to sell just gas or just hoagies; you’ve got to sell them both. And as incongruous a combination as that seems, Wawa has made it work. So why can’t a law firm offer both legal advice and an innovation exchange for entrepreneurs in the information industry?

I’d like to see more of Philadelphia’s large companies realize that every company is a tech company now. Every business needs to employ technologists and should be thinking about how technology will influence their business.– Christopher Wink

Christopher Yaracs (CY)Ajay, what you want to do with the Exchange reminds me of what Tony Hsieh, the founder and CEO of Zappos, is trying to do in Las Vegas with “The Downtown Project.” Essentially, Tony wants to create spaces for “collisions” between people with different expertise and resources. The theory is that these collisions will lead to collaboration and creation, which will ultimately lead to urban development in Las Vegas.

CW: What is interesting and challenging about the Tony Hsieh story is that he represents a single point of failure for the Las Vegas ecosystem. In the 1990’s, Philadelphia suffered from a similar problem with Safeguard Scientifics. Today there are multiple points of failure. For instance, Josh Kopelman is a point of failure, the N3rd Street cluster is a point of failure, what is happening in University City is a point of failure. What Ajay is doing with the Exchange could be a point of failure. Having multiple points of failure is good for an ecosystem because when one fails the entire ecosystem does not necessarily fail with it.

AR: What we’re doing with the Exchange may be sui generis in Philadelphia’s legal sector, but the philosophy underpinning it isn’t outlandish, or really even that radical. I think there’s plenty of evidence for that in the fact that the Exchange has so quickly been embraced by the investment and innovation communities. Since collaboration is at the heart of the Exchange’s mission, I’d welcome imitators and competitors; the broader and more diverse the pool of players, the greater the opportunities for collaboration.

JLWhat role is Comcast playing, and what could it be doing differently?

CW: I think the biggest complaint with Comcast, besides customer service, is that there is only one of it. We want more. Comcast has recognized the strength of Philadelphia’s tech community and is participating in it. For instance, and in full disclosure, Comcast was the lead sponsor of this year’s Philly Tech Week, which Technical.ly organized. I think we are reaching a point now where if you go to a random Philly tech event, it is likely that a Comcast employee will be there. I’d like to see more of Philadelphia’s large companies realize that every company is a tech company now. Every business needs to employ technologists and should be thinking about how technology will influence their business.

JLI’m reminded of the role HP played in the early history of Silicon Valley. It ended up creating a lot of competitors.

AR: The big guys – the Comcasts, Googles, and Apples of the world – create competition and spawn new companies. This is beneficial to everyone. We need leaders to take advantage of those opportunities. I’m concerned that government does not understand what is happening. I don’t think they are malicious. I just don’t think they understand it.

CWMayor Nutter has been good for the tech community. He got out of the way and allowed the ecosystem to develop. He also attracted private sector talent to the city IT department and working for municipal government is now an exciting opportunity for some members of the tech community. The test will be whether the next mayor can sustain this excitement.

AR: The bulk of our city government’s priorities are still very much tied up in the analog world. The government is overwhelmed with social and economic exigencies, so the public sector is not paying enough attention to the knowledge revolution. And that’s a shame because we could more effectively address a lot of these pressing issues by taking innovative, tech-focused approaches. That’s where innovators in the private sector come in; we need to show the political class, either by example or persuasion, that they need to be an active partner in this revolution and not a stumbling block.

JLPhiladelphia is America’s poorest big city. Is there any way we can connect some of the progress we are seeing to communities struggling with entrenched poverty?

CW: I think the first thing that we all want to talk about when the issue of poverty comes up is public education, which undeniably matters. But the more I read about housing policy, the more I think that adapting housing policy to promote mixed-income communities could provide the most viable long-term solution to public education. Adjacency matters. Commercial real estate development creates some jobs, but housing policy that promotes mixed-income communities may be a better long-term solution.

AR: What Philadelphia needs to do is identify, cultivate, and above all engage its next generation of leadership toward the greater good of our region. This is our responsibility. Wherever the next Venus and Serena Williams or Michael Jordan may be, they are bound to be discovered and their talents developed because there is an extensive pipeline – an ecosystem – to guide them every step of the way. But why should this be a privilege of only the athletically gifted? That’s the problem we’re trying to solve with the Germination Project, one of the initiatives of the foundation that my wife and I endow. The goal of the Germination Project is to identify Philadelphia’s next leaders as high school students, train them, connect them with today’s leaders, and commit them to plying their talents in service of the city. It’s by no means a fast and easy approach, but a long-term, 50-year investment in securing the brightest possible future for Philadelphia.

JLThanks for sharing your thoughts on the future of innovation in Philadelphia. At least one takeaway seems to be that Philadelphians would benefit from seeing themselves as innovators in ways that may be foreign – but not new – for many of us. With luck, sharing these (and I hope future) conversations with readers of the 10-Q will remind us of the benefits of innovation – and the costs of failing to take it seriously.