This is what our legal system aspires to be and do.

 

 

 

 

 

 

 

 

 

This is the very different purpose for which patent litigants are using the legal system.

 

 

 

 

 

 

 

What’s wrong with patent litigant’s use of the courts is explained in the RPX Blog:

Today, NPEs and operating companies are transacting [patent] value transfer primarily through the legal system – an inefficient, imprecise, time-consuming and highly risky way to price any asset.

Thus it will always be.  Our legal system strives – as it should – to deliver blind and impartial justice premised upon discovering all possible relevant and competing viewpoints and then weighing the competing viewpoints against one another in a public forum.  John Locke’s notion of discerning truth through a competing marketplace of ideas is a far cry from the markets required to efficiently monetize patents.

Nonetheless, the recent high-profile patent litigations Oracle v Google and Apple v. Motorola manifest a desire on the part of their respective trial judges to remake the litigation process into a more rational marketplace for transacting in patent assets.

Continue Reading Using Court to Price Patents: What’s Wrong With This Picture?

Last week a prospective litigation client suggested we use Dropbox to share confidential and proprietary information relating to a technology startup.  This gave me access to the information that I needed to price the matter, the information was far too voluminous to simply attach to an email, and, perhaps most important in the client’s eyes, “Dropbox is free!”

Dropbox is an intriguing cloud based storage solution: your data is stored on your own computers and servers, and synchronized and accessible from servers in the cloud.

Still, as lawyers, we are supposed to take “reasonable precautions” to safeguard confidential and proprietary client information.  Dropbox says that transmissions and storage are encrypted, are password protected, are “hardened against attacks for hackers” and kept on secure Amazon servers.  Even assuming you know what all this means, are you ready to give up physical control of your client’s media and place it in this environment?  Does simply relying on Dropbox’s no doubt sincere assurances equal “reasonable precautions”?

Dropbox has been the subject of an FTC complaint alleging Dropbox misled users about the privacy and security of their files as well as a class-action lawsuit (since dismissed) based on an alleged instance in which Dropbox accounts could be accessed without passwords for four hours.  Whether well-founded or not, allegations such as these place lawyers on notice that they need to be proactive when taking advantage of Dropbox or any other cloud storage service.

Lawyers should take the additional step of encrypting, or pre-encrypting, client data before we give it to Dropbox or any other cloud-based storage solution.  This way the Dropboxes of the world have zero knowledge of the contents of your data.  You, your client and your malpractice carrier sleep much better knowing this precaution has been taken.  Even Dropbox thinks so:

Dropbox: Yes, we have always recommended third-party encryption solutions for advanced users who are comfortable managing their own encryption keys.

(From Michael Kassner’s post Dropbox: Convenient? Absolutely, but is it secure?)

Thanks to my paralegal, Janet Ho, I’ve learned how to use the archiving and file compression features that come with Windows to do the encryption.  Here’s how:

Continue Reading Should Lawyers Use Dropbox?

 

Matt Homen ("Six Minutes on Client Service Design") suggests breaking down the client service experience to identify and deliver value on what “drives the client freakin’ crazy” about the experience.  For example, waiting in an airport check-in line is part of the experience of going to the airport. By focusing on what the person in line is thinking and feeling you can identify what they value most at that particular point in time – “I want the line to move faster.”

I’ve recently helped a client retain outside counsel. Getting the chance to participate in this process from the client side of things revealed that retaining counsel is itself part of the client service experience. Even if the outside counsel pitching the work is not successful, if they’ve delivered on the value the client places on the experience, they create a relationship that likely will give rise to future work from this client or others with whom the client shares the experience.

Take that part of the retention process where the client is interviewing the short list of lawyer candidates. What does the client want in that moment? The answer, in the client’s voice, is that “I want to the interview to be more productive.” 

How to deliver on this value? What must you do to make the interview more productive?

Continue Reading Getting Interviewed by Client: Be Less Annoying

Not unlike many of my colleagues, I’m spending what is turning out to be an amazingly beautiful Spring weekend in the Bay Area preparing tax returns due next week – most specifically those of my law business, Confluence Law Partners.

What I’ve discovered is that there are key components of Confluence’s model that don’t fit neatly within standard accounting practices, resulting in higher bookkeeping and tax preparation costs and exposing me and the firm to potentially higher tax liability.

While its going to take some time for the new normal shop to reduce bookkeeping and tax preparation costs, there are some things that can be done now to protect against inflated tax liability.   Furthermore, on reflection, its not surprising that current bookkeeping practices are not easily applied to the new normal model’s aggregation of outside legal and non-legal services; status quo bookkeeping practices are directed to serving insular status quo hourly law firms that don’t rely on significant outside collaborations to deliver legal services and whose model dissuades its lawyers from using outside legal services.  More after the jump.

Continue Reading Tax and Accounting Practice Lags Behind New Normal Model

The NY Times’ declaration that we have entered the Age of Big Data suggests we are ever closer to realizing author Richard Susskind’s ("End of Lawyers?") predictions for lawyers.

What is Big Data?  According to the NY Times:

A meme and a marketing term, for sure, but also shorthand for advancing trends in technology that open the door to a new approach to understanding the world and making decisions. There is a lot more data, all the time, growing at 50 percent a year, or more than doubling every two years, estimates IDC, a technology research firm. It’s not just more streams of data, but entirely new ones.

These developments create a huge need for persons who understand and can manage, analyze and apply the flood of data – including among other things posts, blogs, images and video on the Web and streams of sensor data from industrial equipment, automobiles, electrical meters, shipping crates, the environment and people (think sensors that measure and communicate location, movement, hear rate, vibration, temperature, humidity, even chemical changes in the air) – in meaningful ways:

A report last year by the McKinsey Global Institute, the research arm of the consulting firm, projected that the United States needs 140,000 to 190,000 more workers with “deep analytical” expertise and 1.5 million more data-literate managers, whether retrained or hired.

These developments suggest we are that much closer to realizing Mr. Susskind’s "Five Types of Corporate Lawyers Predicted for the Future" (Law.com, 10/19/09), which describes how lawyers who embrace emerging technologies and novel ways of sourcing legal work will continue to be successful, while those unwilling to change will struggle to survive.  Mr. Susskind predicts that there will be five types of lawyers in the future: expert trusted advisers and enhanced practitioners, who will look much like contemporary lawyers, to be joined by legal knowledge engineers, legal risk managers and legal hybrids.

Of the predicted categories, there will be far less need for lawyers in either of the first two categories and conversely a much greater need for "legal knowledge engineers," as stated by Mr. Susskind:

If I am right and legal service will increasingly be standardized and (in various ways) computerized, then people with great talent are going to be needed, in droves, to organize the large quantities of complex legal content and processes that will be need to be analyzed, distilled and then embodied in standard working practices and computer systems.

Legal knowledge engineering, in the 21st century, will not be a fringe show at the edge of the legal market.  It will be a central occupation for tomorrow’s lawyers.

Doesn’t Mr. Susskind’s 2009 essay on legal knowledge engineers sound like a specific application of Big Data in the legal services market?  Are our law schools missing an opportunity to team with their engineering departments to develop this type of specialist?  Have we even scratched the surface of thinking about the application of Big Data in the legal services area?

Internet naming is going to get a lot more interesting now that generic Top Level Domains (gTLDs – the word to the right of the dot, as in “.com,” “.org,” or “.net”) are expanding from the 22 options currently available to domains ending in brands, products, hobbies, political causes and just about anything else.

Canon Inc., the camera and printer company, already plans to apply for ".canon." And Apple could go after not just ".apple," but also ".ipad" and ".iphone."

Groups have already formed to back ".sport" for sporting sites, and two conservationist groups separately are seeking the right to operate an ".eco" suffix. Trade groups for bankers and financial-services companies are jointly exploring applications for ".bank," ".insure" and ".invest" for their member companies.

The incentives to apply for a gTLD are compelling. Among others:

  • Protecting your brand name from a similar brand owned by a third party (e.g. Avery labels and Avery Outdoors);
  • Concern that competitors in your market may claim the gTLD for themselves (e.g. Plantronics competitor Blue Ant seeks “.headsets” or “.bluetooth”)
  • Channel management by combining a unique top level domain with second level domains (e.g. “personal.citi” and “business.citi”)

Unfortunately, as has been well-documented, see, e.g., WebTM, the barriers to applying may outweigh the benefits:

  • The application is voluminous (250 pages), takes nine months or more and requires expert vendor assistance (e.g. domain registration consultants and specialized counsel) of which there is limited supply;
  • Practically speaking, if you have not yet started to prepare for the first round applications due Jan. 2012, you are too late and will have to wait over a year until the next round;
  • The upfront application costs, all in, exceed $300K and there is a minimum 10 year commitment to operate the new domain adding additional costs exceeding $1M.

Assuming these barriers are too great for most companies, there is nonetheless a near term, low cost strategy that even these companies should consider.

Continue Reading Low Cost Response to New Internet Naming Options

HInt: it’s not how many hours they bill; in fact, we’ve studiously avoided setting a target number of billable hours.

Another Hint: it’s not following the sage advice (for associate survival in BigLaw) given to me by one of my hardened BigFirm associate cronies: "Don’t Panic and Assume Nothing"

Instead, to quote from the memo we gave our new attorney on our expectations (and then sat down with them to discuss):

Your success, like that of every other person at Confluence, is judged on your contribution to increasing the firm’s net profits over the cost of producing high quality legal services.

Check out the memo in its entirety after the jump:

Continue Reading What Makes Associate Successful in a Flat Fee Firm?

A safety valve in a flat fee litigation agreement that puts off for a later date the negotiation of fees for late phase activities such as trial should probably include at least a default hourly fee pending the re-bargaining of a new flat rate.  (Yes, notwithstanding my strong bias in favor of flat fee pricing, I’m suggesting a possible, limited application of an hourly-based fee.)

My flat fee engagements for litigation services tend not to cover trial or the 60-90 day run-up to trial but instead propose to negotiate a mutually acceptable terms if and when the matter reaches this stage.  This "safety valve" protects against a situation where the time required to provide effective representation increases dramatically due to circumstances not reasonably foreseeable at the outset of the engagement.

There are very good reasons for  building in such a safety valve.  The legal services provided in connection with trying a case are shaped by a myriad of strategic decisions that are made by client relatively close in time to the commencement of trial and these decisions in turn are heavily influenced by case developments occurring over many months if not years.  It often is too difficult at the outset of the engagement to gauge pricing for trial with any precision.

While the presumption is that budgets and workplans should be “sticky,” no client wants an honest firm working at such a deficit such that the lawyers involved are incented to look at how they can cut corners or complete the matter more quickly than advisable. Thus, it is necessary for value-based fee arrangements to consider what kinds of “safety valves” can be triggered in the event the time required for effective representation increases dramatically due to unforeseen circumstances.

“Navigating Professional Ethics Issues in the Changing Legal Service Paradigm,”  discussion draft from Susan Hackett at the Association for Corporate Counsel (available to Legal OnRamp Members here.)

Inserting the safety valve is rarely a deal killer in eyes of the client, who, at the outset of a matter, are focused on reducing the cycle to resolution or achieving a favorable outcome in the near term – trial, in their minds, is far off in the future and easily left for another day.  And why should trial counsel seek to disabuse them of this attitude where the great, great majority of litigations are resolved prior to trial?

However, leaving the re-bargaining of trial services for another day has it’s own issues, as explained (and solved) after the jump.

Continue Reading Hourly “Safety Valves” for Flat Fee Litigation

Quora, the hot new Q&A site, has people asking whether it is "the biggest blogging innovation in 10 years?"  the "Next Red-Hot Web Start-Up"  or could be "Bigger than Twitter"  ("[i]t’s smart. Really Smart"). 

We couldn’t resist seeing whether the Quora community had tackled the subject of hourly  vs. flat fee pricing of legal fees.  Literally the first search response was: "If a lawyer says that $30k has been charged up on the clock, how much are they typically prepared to write off?"

While there is some thoughtful discussion (realization rates, size of the client portfolio and so on), far more important and compelling is the premise underlying the question, namely: if your lawyer is charging you "on the clock" you will want to "cut fees" at the back end of the project.

What consumers of legal services intuitively get is that hourly-based pricing of legal services incents behavior that is not aligned with their interests (hence the assumed need to haggle down the fee at the end of a project).  They know that the behavior they get with hourly pricing is more time billed to their matter and by more people, longer cycle to resolution, and people trying to do everything as opposed to what they are truly good at.

The far more compelling question for the connected, tech savvy and knowledgeable Quora community is why the relevant consumers continue to accept hourly-pricing as the standard pricing model for legal services?  What has to happen to tip the model in favor of flat fee or other efficiency-based pricing?

There’s no question that prospective clients of non-hourly priced legal services can’t find the "new normal" firms offering these services unless the firms are doing some shouting online, see our Nov. 30 post.  It’s equally as clear that the shouting can be done ethically, see our Dec. 18 post. 

But is Google AdWords, one of the most widely used online marketing tools, worth the cost? 

According to Google’s snappy tutorials, the answer is yes so long as the revenue earned on each click on the lawyer’s ad is greater than the cost incurred by the lawyer in generating that click.  However, good luck reaching agreement within your firm on revenue resulting from a specific prospect clicking on your ad and being directed to your website.

The better approach, it seems to us, is to ask what happens when a client prospect types in the "key words" most relevant to the lawyer’s practice.   If the lawyer’s website does not appear on the first page of the search results, then it’s probably worth the cost to use AdWords to help get you there.

As explained in Agency San Francisco’s recent tract Guerrilla Marketing for Attorneys:

Getting on Page 1 of Google when people type in your law firm’s "key words" is by far the most critical Internet marketing that your law practice can do. Most of your potential clients that use search engines will never go beyond the first page.

The case for using the appearance on Google Page 1 as the test whether to pay for AdWords after the jump.

Continue Reading Should Lawyers Use Google AdWords?