3 Geeks and a Law Blog

I attended a wonderful conference in New York yesterday (and am subsequently writing this post from LaGuardia airport during a snowstorm and hoping to make it back to Houston today.)  The Ark Group/Managing Partner Magazine's 4th Annual "Best Practices & Management Strategies for Law Firm Library & Information Service Centers" focused on topics ranging from Libraries getting back into Knowledge Management (KM) initiatives, unique ways to enhance research training techniques, to high-level management skills needed in today's large global firms.  As you can see from the topics, you probably guessed that this conference was focused on the BigLaw environment.

There were a few comments made yesterday that I thought were worth sharing:

• Law firm librarians that are just reactive in their services won't be here in 10 years.
• Remember that analysis and adding value to the information you provide is the new mission critical model for Libraries and KM.
• Libraries and KM need to help integrate the 'practice of law' and the 'business of law'.
• Taxonomies are important to enterprise research.  Don't just expect your lawyers to research using the "Google" method.
• Upwards to 80% of attorneys use Westlaw or Lexis, but almost 100% of them use Google when conducting legal research.

The presenters were excellent, and gave us all some insights on some of the projects they have managed.  Steve Lastres of Debevoise presented on how Libraries must get back in the Knowledge Management initiatives.  I have mentioned before that I thought that if IT keeps completely managing KM initiatives, that KM would slowly die a painful death.  Although Lastres didn't come out and say it that bluntly, he did think that over the past few years that KM suffered from the lack of 'creativity' and 'understanding' that most IT departments don't have.  In a very polite way, we were told that KM needs a blending of the IT and Information Services groups in order to succeed.  IT provides the plumbing (infrastructure), and Information Services provide ways to improve the overall process and results of KM initiatives.  Julie Bozzell of Hogan & Hartson aptly reminded us that human intervention in KM is critical, and that KM is not all about IT (to which I said "Amen!!")  Alirio Gomez of Milbank, Tweed mentioned that Libraries and KM initiatives should remember that the facilitation of the information should not end with the user, but rather the users should be enabled to share that information with others after he or she receives it.

Not all way peaches and cream on the Knowledge Management front, however.  There were a couple of comments made throughout the day that showed the cracks that are in the KM foundation at law firms.  One of the most telling comments was when a couple of people mentioned that when they work on KM initiatives, they do not mention the phrase "KM" or "Knowledge Management" to their attorneys.  KM has suffered from being viewed as an "IT Project" where the goal is to "complete the project, and check it off the list."  The other telling comment was that when Jean O'Grady from DLA Piper surveyed the firm's associates, 33.5% of the attorneys didn't even know that the firm had a KM resources at all.  In addition to this, almost another 16% said that they didn't use KM resources because they had bad experiences with them or didn't understand what those projects did.  So, it sounds like KM might need to repair its image within the firm.
[Note: My apologies to Jean O'Grady for leaving out her name when I initially posted.]

Librarians are also struggling to 'prove their worth' within the firms and trying to figure out the best way to add value while at the same time reduce overhead costs (whether that cost is subscriptions or salaries.)  Gitelle Seer of Dewey & LeBoeuf reminded the audience that the library should be ever vigilant in teaching attorneys and researchers the most cost effective methods of legal research.  I actually got to expand this by demonstrating how to use research capturing resources like Research Monitor or others we reviewed here to make researchers better by exposing them to how they currently conduct research.  The library can potentially bring enormous value to practice groups by identifying trends in how they conduct research, and potentially working with the groups to produce practice checklists or best practices documents.

It was interesting listening to comments mentioning some important aspects of the law firm environment that tend to get ignored.  For example, Jean O'Grady mentioned that in the past most firms didn't worry about what was going on during the 'non-billable' time as long as there was plenty of 'billable time' on the books.  In other words, when times are good, firms didn't exactly work to become more efficient.  However, as I've mentioned in previous post, the time of passing costs on to clients is a business goal that cannot be maintained. Cost recovery is still a business goal of firms (and will be for the foreseeable future), but if your firm's cost recovery goal is "don't loose money," then you need to seriously rethink that goal.

As I mentioned earlier, Librarians are constantly being asked to prove their worth to the firm.  It seems that the universal consensus amongst the group was that in order to do that, you have to have "The Metrics" to back it up.  At first I was excited, but then I realized they said "The Metrics" and not "The Matrix".  Proving ROI and overall value to the powers-that-be in a law firm means that you need statistics and solid numbers backing your department.  This isn't a new game in the library world, but it may be the most important one that you at least know the rules to.  The library management team should also understand what data needs to be captured in order to make the metrics mean something to others.  Specifically it was mentioned that there are certain pieces of information that is needed for cost recovery, and that the information may be different from client to client.  If the information isn't captured at the library level, that cost may not be recoverable at the finance level.  The other hint was that librarians need to work closely with vendors and leverage that relationship to realize better cost recovery methods.

It was nice listening to what others are doing during this time of significant change that is affecting the law firm environment.  It wasn't a giant pity-party at all. Instead it was a rather valuable insights into a few of the great minds of the large law firm libraries.  Listening to how others handle similar challenges is a great motivator for the participants to go back and modify what they learned to their own situation.  I hope I get a chance to attend the 5th annual conference next year... this time without the giant snowstorm!!

One of the ideas behind hiring consultants is that they bring experience and expertise into your organization and help guide you to where you need to go.  Many times, however, we end up using consultants to verify what we already know, but cannot get others within the organization to trust in our decisions.  Sometimes we come out of meeting with consultants and tell each other things like "see, we're not that far off."

Of course consultants also give us a view of ourselves without the veil of our internal biases.  Sometimes it is good to hear someone ask us "why are you doing that?"  If the answer is "because we've always done it that way" then it gives us a chance to either justify our processes, or be made aware of the bad processes so that they can either be changed or eliminated.

Consultants can also be a wall that we can throw spaghetti at and see what sticks. Sometimes the consultants are the 'spaghetti throwers' by making suggestions that we may not have thought of on our own.  It is this quality that exposes the previous experience and expertise that we want our consultants to bring to the table.  Many times the spaghetti slides off of the wall, but sometimes it sticks and gives us a fresh approach on how to solve a problem or accomplish a goal.

I had mentioned in my projections for 2010 that this would be a great year to be a consultant.  Because so many of us need to make changes (sometimes make dramatic changes) to how we conduct business in a recovering economy, having a consultant come in and vet our approach to achieving our goals may be money well spent.
[gl]

With all of the fuss surrounding the launch of new premium legal research tools and the increased pricing, or 'modest premium', that comes with these resources, it got me to thinking whether a practicing attorney really needs to use one of the Wexisberg products in order to practice law.  I'm sure there are thousands of attorneys that don't have subscriptions to these services, but my social and professional circle doesn't seem to cross paths with these attorneys. I think this is a serious question, and I'd love it if someone has examples of attorneys that practice without specifically subscribing to either Westlaw or LexisNexis.

As far as I know there is no State Bar requirement or ethics opinion that says specifically that not using Westlaw or LexisNexis constitutes a violation of professional responsibility.  One can still Shepardize cases the old fashion way (hopefully your county law library still subscribes to the print version.)  And, although the theory behind having Westlaw or LexisNexis is that it makes your legal research easier, there is also the perception that not having such a tool exposes you to malpractice issues.  But does that perception match up with reality?

Let's say that instead of spending thousands of dollars for Westlaw or LexisNexis (or Bloomberg), how about if I rely solely on one of the more basic research tools?  In Texas, one of the benefits of being a member of the bar is having access to "Free Legal Research".  Any problems with an attorney relying upon this service as his or her sole source of online legal research?  Are you already doing this??
[gl]

Two recent blog posts (when combined) make for an excellent observation (indirectly) on the ability of the legal market to compare pricing at the fee level -and not the hourly rate level. I have previously made the point about a how market transition from rate pricing to fee pricing makes sense. Clients have no market price for fees to use in evaluating pricing. But this shift to fee-level price comparison has to start somewhere. By combining the lesson of the two blog posts, you see this happening.

Jay Shepherd points out that savings for a law department won’t come from discounted rates. He instead suggests "open pricing" which is another way to say "not by the hour." His three options for saving on fees are: 1- Buy less, 2 – Buy cheaper, or 3 – Use open pricing. The point to take from this is that clients should look at the whole fee (in terms of his open price) instead of evaluating price at the hourly rate level.

The second post (article really) explores how Levi Straus went to 100% AFAs. Fees for 2010 were "determined by a review of historical spending trends and planned work for 2010." They looked at the legal work they bought last year and how much they paid. Then they projected how much work they would need in 2010. Levi Straus figured it out. They evaluated their legal spend at the fee level instead of the rate level.

This is easier said than done. For one thing, you have to free yourself from the ‘hours equal value’ mindset and trust your approach. Levi Straus is not asking for hourly bills to make sure they guessed right. Instead their GC states: "My internal lawyers are the most valuable asset I have, and I felt they should be spending their time creating strategic advantages for the business instead of managing outside counsel."

Perhaps its just me seeing trends I am looking for, but I believe these two posts together demonstrate both the value and the ability to move away from the hourly rate pricing market. Clients can function in a world where they evaluate prices at the fee level. With this fee-level pricing market emerging, more and more clients will feel comfortable comparing price at this level. This will put them in a much better position to manage their legal costs going forward.

Toby and I have talked to a lot of folks about the profits that legal research vendors (AKA Wexisberg™) make and how they are lagging indicators during a down economy.  Mostly because they have locked firms into multi-year contracts --some with built in annual increases.  It seems that our thought were verified today when LexisNexis' parent company announced it had a "Robust" 2009.  Sales were up 14% and operating profits 13%.  Not too bad in a year that had most of its customers scrambling to slash budgets as much as possible.  Not as good as those 30% profits that ThomsonReuters are claimed to have, but not too shabby.
There were two things that caught my attention with this announcement.  First was the funny comment I saw on Twitter:










And second was the 'corporate-ese' that backed up Toby and my beliefs that they are lagging indicators in a down economy.  Take a look at this sentence attributed to Reed Elsevier's Chairman, Anthony Habgood:

"The late cycle nature of some of our markets makes for a tough environment in 2010."

How could you not love a phrase like "late cycle nature"???  I'm definitely saving up that phrase for my next contract negotiations!
[gl]

Well, it has been a year since I plunked down $60 for a Magic Jack device, a cheap cordless phone, and a year's worth of phone service.  Last week, I got a notification that it was time to renew the service.  I immediately pulled out my credit card and ponied up another $60 to extend my service for 5 more years.  Overall, I'd say that I've been pretty satisfied with the Magic Jack phone service, but that I did have a few issues throughout the year.

The biggest issue I had was a "you can hear me, but I can't hear you" issue.   About three months in, the Magic Jack would ring, I could answer, the person on the other end could hear me, but I couldn't hear them.  It was an inconsistent technical issue, that would happen from time to time.  I reinstalled the software, tried a different phone, but it would still happen from time to time.  About a month later, the problem went away...  from what I could tell it wasn't because I fixed it, it seemed to have fixed itself.

Some of the other issues are mainly annoyances.  Remember that your computer has to be on, and connected to the Internet for the Magic Jack to work.  When you boot up your computer, the Magic Jack window will pop up and stay in front of anything else until it is completely ready to go.  Sometimes, this takes a couple of minutes and can be very annoying when you are just wanting to check email or post a blog, or log into Club Penguin, but have to wait until that darn screen goes away.  Perhaps the most annoying thing is that the Magic Jack logo that pops up tells you to be patient.

The caller id option did not work on my cheap cordless phone (but, I've seen that it does work on other cordless phones.)  It also is hit and miss with the answering machine that is built into the cordless phone.  I love the fact that if someone leaves me a message on the Magic Jack voice mail, it gets sent to me via email.  However, there are times when the Magic Jack voice mail doesn't pick up fast enough (supposed to after 4 rings) and it rolls over to my answering machine.  Again, not a big deal, but can be a bit annoying.

I'm not a big phone talker, but I now have one teenage daughter, and two more waiting in the wings.  They've been pretty good about using the Magic Jack to talk to their friends during the day (I'm on Sprint now, so my 'nights and weekends' begin at 7:00 PM.)  So, it has kept me under my 1,500 shared monthly minute plan (which any of you with teenagers know that can be eaten up in no time at all!!)

I joked last year about running Magic Jack off of a 3G connection.  Well, that's no longer a joke.  If you have a netbook or 3G card enabled computer, you can run Magic Jack off that connection. I'm still too cheap, however, to buy a 1968 Dodge Dart so I can pretend I'm Mannix.   They've also expanded to run the software off of Macs (Intel processor), and I just discovered that they have a Magic Jack Conference Calling option (available for anyone, not just Magic Jack users.)

So, one year into the experiment of can I continue to live without a land line, and still keep my cell phone bills under control, I'd say that it has been a pretty good experience so far.  I'll let you know if five years if I'm still using Magic Jack or I've found that 1968 Dodge Dart.
[gl]

I feel like I've been picking on the folks at Thomson Reuters regarding the launch of WestlawNext, especially with this post last week.  I expected a quick response from Thomson Reuters on my questioning their approach to pushing this out to law firms and more specifically to law students.  The response came this morning from Anne Ellis, Senior Director of the Westlaw Library Relations team.  I thought I'd push this out on the blog as a more reasoned response than the one we got from the anonymous 'A Westlaw Rep.'  In fact, I hope that Anne cc'd all 'Westlaw Reps.' on this so that they can give a better response to the specific questions we had on the roll-out. The first three paragraphs are mostly 'corporate speak', but Anne goes on to answer some of the questions we had on the effect that law students will have on the new search algorithm (which was my primary concern.)

There are three points I’d like to address, where it seems speculation has been incorrect and has understandably caused concern: 

Rolling out WestlawNext to law firms. Our sales team will make trials of WestlawNext available to customers based on customer needs and priorities. Customers can learn more about WestlawNext by visiting westlawnext.com. 

Rolling out WestlawNext to law schools. In a previous note, I said that we would begin showing WestlawNext to law schools in a phased rollout of trial passwords, beginning with librarians and faculty this spring, and that we were making plans for launching WestlawNext to law students, with possible introduction as early as the Fall 2010 semester. It appears that it was understood by some that this meant that WestlawNext would be in all law schools by the fall of this year. To be clear, we are still determining timing for our rollout to law schools, and will work closely with law schools and the legal profession overall with the goal of helping them make better potential lawyers as we have always done. 

Questions relating to inexperienced researchers informing the search results. This is a really interesting discussion. I talked to the technology team behind WestlawNext, and student research was never to be part of the algorithm to inform search results. It was a very good question though, and I wish we had spoken to it in our original discussion about the artificial intelligence technology.

WestlawNext is an entirely new platform, and we worked hard in the days around launch to provide the right information to the right individuals. I think we all understand now that there will be questions popping up for awhile as people ask smart questions and as strategy and planning unfold.

We will continue to scan the blogs and listservs for comments that reveal gaps in the discussion, and I will try to speak to those points on a regular basis on Legal Current, the corporate blog for Thomson Reuters, Legal. I invite your questions and comments and I appreciate being part of the discussion.

Anne Ellis
Senior Director, Librarian Relations
Thomson Reuters

Anne's response makes me feel a little bit better, especially regarding the issues of allowing the 1L's to affect the algorithm of the WestlawNext search results (which apparently they won't).  As the product gets pushed out to more law firms, we'll keep an eye on how firms react and use the new research tool.

I'm seeing some articles of how times seem to be getting better in the large law firm world.  Some associates are back up to the $160K pay range, and that those hard-hit practice areas (Capital Markets, Real Estate, and Corporate) are finally picking back up. So many of you may be thinking that we can start getting back to "normal" now that demand for legal services seems to be rebounding.  But don't get too happy, because partners say that the best thing they did in this economic downturn was slash budgets [pdf] (politically correct term is "reduce expenses.")  Even firms that jumped ahead of the curve and began offering alternative fee agreements to their clients seem to be having a hard time collecting on those agreements.
As I was reading through the [pdf] article written by Andrews Kurth's Amy Sladczyk Hancock, PD Vital To The New Way Forward: Insights from Five Managing Partners (interview of Managing Partners of Andrews Kurth, Bracewell Guiliani, Dickstein Shapiro, Sutherland Asbill, and Steptoe Johnson), I got to thinking about what these BigLaw Managing Partners were seeing in their crystal balls.  As I told some of my peers in a personal note, I usually take my comments from Law Firm CEO's like I take my eggs -- with a grain of salt, but this article got me thinking if there is 'opportunities' within the library [KM, IT, etc.] to support professional development.  The big quote of:

"Competitive advantage in the new economy will depend entirely on having better trained lawyers who have been trained more efficiently and more quickly, and [professional development] departments and professionals are vital to helping law firms establish that advantage." [emphasis mine]  

Seems like that knocking that many of you on the 'administrative' or 'professional' side of law firms are hearing might be opportunity.
[gl]

Google Tinnitus = When you see a constant buzzing in your Gmail, and it won't go away, more than likely, you have Google Buzz tinnitus.

We're usually big fans here of social media, but I don't think that Google Buzz has won any of the three of us over yet.  So, one of the first things I saw this morning when I logged onto my social media standby (Twitter) was "How Do I Shut Off Google Buzz??"  That's a great question in need of a "How-To" answer.





Easy Way - Scroll to the bottom of Gmail and Click "turn off Buzz"


But, if you're just not sure you want to completely turn it off, but just want to 'hide' it until you think you're ready, then you can do it this way:

Step 1:  Open Gmail and click on on the "Settings" link in the upper right-hand corner. 

Step 2: From the Setting Page, click on "Labels" at the top center.

Step 3: On the "Labels" Page, under "Systems labels", click 'hide' in the Buzz row.

I was a little shocked (I think it may have raised to the level of 'ticked-off') yesterday when I read that WestlawNext (WLN) was being rolled out to law schools this Spring, and law students would get access to WLN as soon as the Fall 2010 semester.  While I have no issues with law librarians and faculty at law schools having access to WLN (apparently at no additional cost to the schools), I have to say that I'm extremely disappointed in the people at ThomsonReuters that decided that giving this new product to law students was a good idea.  In fact, it specifically flies in the face of what I and others who traveled to Eagan, Minnesota last month were told.  When Jason Eiseman shot the video of a group of us discussing WLN, if you move up to around the 5:05 minute mark of the video, you hear me specifically applaud the ThomsonReuters decision not to roll this out to law students.

The discussion got pretty heated one of the Private Law Libraries listservs last night and the concensus is that exposing law students to a product that hasn't been adopted by law firms smacks of a 'marketing ploy' to try to force the hands of law firms to accept the new WLN platform, along with its "modest premium" price increase.  As of this posting, there was no response to the list from ThomsonReuters (though I do expect one sometime today.)

Many of the law librarians were even questioning why this new platform wasn't just included as part of the current contracts rather than as a premium upgrade at an additional cost.  To be fair to ThomsonReuters, I jumped back in the conversation and explained the reasoning that the people on the Project Cobalt team gave me for the "modest premium" upgrade charges that your local Reps will be negotiating. Here are the reasons they gave me:

• The WestlawNext platform is completely separated from what is now on Westlaw.com.   
• The infrastructure is completely new, the programming is new, and the search engine is new. 
• This project (formerly know as Project Cobalt) took about 5 years and an investment of over $1 Billion. 
• WLN breaks down the 30,000 databases and allows you to search all of them (regardless of what your contract covers) without any extra costs (no additional costs would be incurred until you 'opened' or 'downloaded' one of the out of contract documents. 
• In the eyes of ThomsonReuters, this is not simply an upgrade to the product, it is a major redesign of the product from the ground up. 
• ThomsonReuters will not maintain both WLN and Westlaw.com - with the .com product eventually being discontinued (no time was mentioned)

Yesterday I received a notice about Google releasing Buzz. So I followed the link to … my Gmail account. Huh? Strike One. After going back to the release notice, I finally found a statement that said something like, “Oh yeah – you might not have it yet.”

Still nothing this morning when I checked it again. Then about 9:30 I went to check my Gmail and there it was (and my Gmail wasn’t). So I started playing with it. I could see my normal gmail ‘friends’ and had the option to add some others. Whoopee. I sent a note to Greg as one of my ‘friends’ to see if he was there. He didn’t have it yet (even though he showed on my network). Strike Two.

Although another friend of mine must have also got their Buzz going and commented on my post/message to Greg. This got me checking. By default anything you post is public. Strike Three. So I called Greg and we further explored Buzz as he had made it in. To make something private to him I had to create a ‘group’ and add his name to it. Like I’m going to do that for everyone or every group. Strike Three.

My first post/comment was “Looks like a dumbed-down Wave.” Just like Wave the message threads become very long, which is good for collaboration. However they don’t collapse, so all I can see is the thread I’m in. Strike Four.

Then I went back to Gmail. For every Buzz ‘comment’ I get an email. Back to Buzz to see how I can turn this off. No Buzz settings option found. Strike Five.

Then I looked for a way to add Buzz as a gadget in iGoogle. There are some Buzz Gadgets. Of course, not Google Buzz. Strike Six.

Ten minutes into Buzz and we have two batters out and no desire to send another to the plate. After chatting with Greg, we can’t see why anyone would switch over from everything else they use for social networking that works and start using this.

Judgment. A definite Social Media Buzzkill.

The Financial Times reported at the end of January that "Evan Williams, the chief executive and co-founder of Twitter, which has been credited with helping anti-government protesters in Iran to organise resistance, said software developers were working on 'interesting hacks' to stop any blocking by foreign governments."

Is it just me or did this bother anyone else?

To me, there just seems to be something intrinsically wrong with a company essentially declaring war against a country. Basically, Evan is saying he and all of Twitterdom were going to flame China.

Let me say this again: Twitter is going to flame China.

Think about that. Why is that any different from someone from some former Eastern Bloc country sending a trojan horse into all of the banking firms in the United States and essentially crippling our economy?

We would not tolerate it. Commerce would be screaming with outrage. The Hill would be holding forth on the dastardly deeds of these horrible hackers.

So why didn't any one step over to Mr. Williams' office and tell him to tone it down? Maybe they did. We will never know.

But this is exactly the point that I keep making over and over again: the web is a brave, new world. In this virtual world, there are no sheriffs, no boundaries, no laws. And the people that rule are the ones that can break and make the secret code the acts as the DNA that creates the protoplasm that is the base of all the organisms in this new world.

So watch these tech companies. Don't be so naive to think that their ambitions are singular. Just like Tears for Fears said not so long ago, "everybody wants to rule the world."

I have been thinking about the new iPad.

Call me crazy, but I think it looks like a huge Etch-A-Sketch. I just want to shake it to see if it will clear the screen. Add two big round button in each of the bottom corners so I can scroll over the page. Is there an app for that?

Plus, aren't you guys worried about that screen? Don't you think it is going to get scratched up? And it is kind of big for when you are running down the runway to make that plane, juggling your iPad, your iPhone, your iPod and your one bag of luggage.

So you are just begging for a murse.

You do know what a murse is, right? It is the male equivalent of a purse.

All of you Apple types should be okay with that--you are a pretty liberal group, if I am any kind of judge.





Two more points about the iPad. When are they going to let us women have a go at these things? Don't they realize how hard it is to use touch pads when you have acrylic nails? Come on you guys, let us have a seat at the testing table.

So you know what's coming, right? a plug-in, retractable keyboard for the iPad.

And what's this about not being Adobe-friendly (Market Place Media's Apple Adobe at war over iPad)? I get that Stevie-o may become credited with being a visionary, swaying the tech marketplace to drink the HTML5 kool-aid. But I think that is being very David Koresh-like, Mr. Jobs. Now your messing with my shows. I like my Hulu and my Netflix.

Seems to me that you, Steven, are doing a bit of market manipulation through product design to move the economy you way ... just sayin'.

So until I get a murse, a retractable keyboard and Adobe Flash, I won't be getting an iPad.

Unless Mr. Jobs feels so inclined to give us 3 Geeks each one for testing purposes. But we are still waiting on those iPhones so I don't guess it will be coming any time soon.

Last year, I took the government's money and traded in my old minivan for a nice new 2010 Toyota Prius. When all of the Toyota recall issues hit the news, I breathed a sigh of relief when I read that the recall for floormats, and then gas peddles did not include my Prius. But it didn't take long for me to start seeing things pop up on Twitter about the 'Woz' having cruise control issues (and feeling slightly proud that the Woz got clocked doing 105 in his 2010 Prius -- yes, they can go that fast.) Then the big news that a recall of the 2010 Prius was probably coming due to a braking issue. The braking issue is something that I've had first-hand experience with, but found it more of a 'feature' than a recall worthy issue.
This morning I get a email from Toyota saying that Jim Lentz, President and COO of Toyota Motor Sales is going to give a live interview on Digg Dialogg:

For more than 50 years, Toyota has produced safe, reliable, quality vehicles and provided first-rate service. Because your safety and confidence in Toyota is of the utmost importance to us, we want to ensure that we are providing you with the latest recall information. To get further details, please visit toyota.com. Additionally, Jim Lentz, President and COO of Toyota Motor Sales, U.S.A., Inc., will be interviewed live on Digg Dialogg on Monday, February 8, at 2 p.m. PST to answer the top questions as voted on by the Digg community. Watch the interview here. Your safety is important to us, and we will continue to do everything we can to keep you informed.

It will be interesting to see how this 'Digg Dialogg' interview goes. I don't think they will be taking only softball questions, and I was impressed to see that Jim Lentz had a generic link to other Digg conversations about the Toyota recall issues, that were not cherry-picked by someone in the PR department. Toyota has taken a black eye on all the recall talk, both in the traditional media and in the social media. For a brand that is built on quality, safety and owner loyalty, Toyota should be working hard to make sure that it also understands that today's public not only gets its information from traditional media, but also 'talks' to a wider social media audience. The email I received this morning at least it makes it seems that Toyota 'Diggs' where we're coming from.

After years of listening to my friends tell me why they "looooovvveee" their Macs, and how it is "sooooo" much easier to use than a PC, and that I'm an idiot (not a Mac/PC issue apparently), I think I'm finally feeling some empathy for them. Not because I'm going to rush out after 20 years of using a PC, but because I went out traded in my old Windows Mobile 6.0 phone (BlackJack I on AT&T) and bought an Android phone (Samsung Moment on Sprint).  All of those times I had to listen to "when are they going to port that to Mac?" or "but my Mac can run that 50 times faster than your PC!" or "Geez, Greg... you're a frickin' idiot!!" (again, apparently not a Mac/PC issue), I'm saying the same thing to them about my Android versus their iPhones.

So, in the SmartPhone world, here's the breakdown of how phones compare to computers:

• iPhone = MS Windows
• Android = Mac
• Blackberries = Mainframes
• Palm OS = Linux
• Windows Mobile = OS/2

Jim Hassett’s post on Keys to New Business finally put me over the top on the whole Loss Leader thing (Jim was actually quoting a lawyer – so these were not his words). In my AFA role I have seen numerous examples of low-ball bids from law firms desperate to get the work in the door. These deals are consistently referred to in the market as Loss Leaders.

What is a Loss Leader? Originally this term applied to advertising items at a price below the actual cost (thus the loss) to ‘lead’ customers into the store and sell them other products. One example of this is the car advertised with monthly payments of $229. There’s one car on the lot that with $4000 down you can have for that payment (subject to your credit). The car you actually want (and end up purchasing) has a $500 payment. This concept was eventually renamed more appropriately as the “Bait-and-Switch.”

The Loss Leader concept then evolved to include pricing certain commodity items at a loss, with the full intent of having the customer simultaneously purchase other, high-in-profit products to offset the loss. Grocery stores do this with eggs and milk, which are placed in the back of the store, forcing customers to pass by and pick up the high margin items.

So how are law firms actually treating the Loss Leader concept? By pricing the non-commodity, high-end stuff at a loss. I would argue that M&A deals and complex, large dollar litigation cases would not technically fall into a Loss Leader category. This is akin to the car dealer selling Escalades at a loss, hoping you’ll buy … maybe some nicer wheels? Law firms using this technique are expecting the customer to be so happy they come back next year and buy another Escalade - at full price. The likelihood of this: Zero.

What law firms are actually doing is getting into price cutting wars. And they will be much better off if that see it as such and treat it accordingly. In the words of Yogi Berra, “The future ain't what it used to be.” We’re not going back to full rate deals. Smart firms will face up to that – dropping the whole Loss Leader charade.

Sticking to our recruiting theme for this week, I thought I'd address the issue of recruiting lateral partners.  According to Vivia Chen at The American Lawyer, during the first twelve months of the Great Recession there was a movement of "2,775 partners [who]  left or joined the biggest firms in the country."  That's a 10.7% increase from the previous twelve months, and a trend that many in the industry think will not slow down for some time to come.  Gone are the days where a firm brings in a first-year associate and grooms them to become a partner at the firm.  To borrow a baseball analogy, it seems that firms are bringing on partners through free-agency rather than through the farm system.  Sometimes that works out great, but many times the firms discover that this lateral partner looked a lot better on paper than he or she did in action.

I've been discussing this with a number of people lately and one of them said that in a market that is built upon recruiting talent from other firms, you have to be careful not to recruit the "third-stringers".  By that, they mean that there are a number of lateral partners that are riding the coattails of others in their firm, getting their names on important matters, or assigned to important clients, but haven't really done anything great on an individual basis.  This sort of thing happens in almost all industries.  Where you bring someone in during an interview, they look and sound great, have an impressive resume, tell you all of the people they've worked with and all the deals they've worked out, only to bring them on board and discover that they don't quite live up to your expectations.  These third-stringers hint that they will have a number of people that will follow them to your firm and that the clients will jump ship from the previous firm and rush to bring all their legal business to your firm.  Six months after the lateral joins the firm, you look around and the only person that followed them was a secretary (whom you didn't really need.)

So how do you avoid these third-stringers?  One answer I got said that you could cut through the smoke by asking just a few questions and watch how the potential lateral partner answers those questions.  When a potential lateral starts mentioning all the General Counsels (GC) they've worked with, ask this simple question - "Have you ever had [name of GC] over to your house for dinner?"  Watch to see the expression on their face.  If they answer 'yes', then see if they begin telling you about the experience, why they had dinner, and what their current relationship status is.  If they fumble around on this question, then perhaps their relationship isn't as close as they are saying.

I also saw a series of questions posted on the Lateral Attorney Report back in November 2009. These are much more straight-to-the-point questions to back up the statements that the potential lateral partner has made.  Dan Binstock uses the phrase "narrow-pause" to define that period of time when the potential lateral is trying to conjure up an answer for which they were not prepared.  Questions like "How were your reviews?" or "Were you asked to leave your current firm?" and how they react to those questions can let you know if this is a quality lateral, or a third-stringer.

One thing you should probably keep in mind during this era of 'free-agency recruiting' is that all of those partners that you've managed to push out of your firm because they either didn't fit the personality of the firm or didn't create the book of business that he or she should have given their position, they usually wind up somewhere.  So, for all the times you thought "thank goodness we off loaded that partner", or chuckled when you read on law.com that a peer firm "raided" one of your third-string partners, someone else might be chuckling and saying the same thing about that third-string partner you just brought in to your firm.
[gl]

I remember reading Thurgood Marshall's comment of sitting in his first day of law school and hearing Charles Hamilton Houston tell the class "Look at the man on your right, took at the man on your left, and at this time next year, two of you won't be here."  This was an extreme version of the Harvard Law School (HLS) model of "Look to your left, look to your right, because one of you won't be here by the end of the year." Of course law schools, even Harvard Law School, no longer takes this extreme approach to teaching law school.  Now, it is a matter of doing well as an undergraduate, doing well on the LSAT, and having the funds to go to law school.  Law School administrations determined some time ago that raising the bar to get into law school creates an environment where there is no longer a need to dismiss one-third or two-thirds of your students in order to have graduates ready to enter the profession.  Not only that, but let's face it, if law schools kicked out a third of its students most of them would go out of business.
When I read Toby's post from yesterday on hiring the 'C' students, it got me to thinking about the type of first-year associates that firms hire and whether we should bring back the old HLS model for first years.  Imagine the situation where on the first day of starting a firm the associates were told by the Managing Partner that a third of you will not be here this time next year.  That would be a scary thought for most associates, perhaps preventing many from even taking a job with a firm if they knew that they might be cut after a year. It might, however, be the best thing that a law firm could do.  It could also open opportunities for graduates that would never be on a law firm's radar. Perhaps the firm refers to this first year as a 'clerkship' thus creating a way for even those that get laid off to spin this as 'experience' rather than not making the cut at a firm.
My thoughts behind implementing the HLS system in first-year associate hires would go something like this:

1. Cut your current associate wages by at least one-third.
2. Hire one-third more associates than you planned. (This could get you some of those 'C' students that Toby mentioned.)
3. Assign the associates to a group of partners that will mentor and monitor them throughout the first year.
4. Set specific goals for the first year's.  The goals should surround all facets of law firm life... traditional legal work (hours or projects worked), training (both mandatory and voluntary), research and writing skills, and pro-bono work, just to name a few.
5. All first year attorneys would be 'staff attorneys', and would not be called 'associates', or put on 'partnership' track until after they make the cut at the end of the first year.  
6. At the end of the first year, make a decision on who stays and who goes.

A chance conversation with my AFA counter-part lead to a dialogue on the suitability of lawyer personalities to a successful law practice. In part, this was out an outcome of Lisa’s post on the sales skills of lawyers. In our conversation, we decided that to be truly successful these days a lawyer needs 1) Technical skills, 2) Leadership/Business skills and 3) Relationship (a.k.a. sales) skills. Without too much thinking, it’s obvious these are typically three distinct and mutually exclusive skill-sets. Finding a lawyer who has all three of these is rare at best (think Lisa’s super-model).

Then our conversation turned to law schools and the types of personalities and skills they are designed to attract and build. One of my favorite quotes on this subject is from a law school dean, “We are academic institutions, not vocational schools.” Which is to say, law schools focus exclusively on technical skills. And even then, it’s more on the academic side of technical skills – and not much of hands-on, practical skills.

And what’s worse, when law firms recruit from law schools, they want only the best … technicians. As we talked through this subject it became apparent this is yet another aspect of the profession that needs to change. In the past, legal technical skills were all that was needed to succeed. But now in the days of price competition and utilizing what everyone else calls a “business model,” firms need broader skill-sets from their partners.

Harry S. Truman said “The ‘C’ students run the world.” The gist of that statement in our context is that C students are the ones with the relationship skills. For them school wasn’t about getting the best grade. Beyond learning, it was about enjoying the people you met. These C students are the ones that make business happen It’s their relationship skills that get and keep clients and make the business a success.

Firms recruiting at law schools might want to keep this concept in mind. The Law Review students may make the best technical lawyers, but they likely won’t be the ones that will drive the success of your firm.

Perhaps George W. Bush said it best. “To those of you who received honors, awards and distinctions, I say well done. And to the C students, I say you, too, can be president of the United States.”