It all started as an innocent project to find a cheap way to conduct an online panel discussion, but it turned out to be a lesson in work place rules that left me shaking my head. First, the backstory.

I really enjoyed watching an online panel discussion that Brian Cuban did last week called “So You Think You’re a Social Media Expert.” The topic was interesting, but what I found more interesting was how Brian was conducting the panel. Using a mixture of UStream and Skype and a couple other resources, the four member panel was able to rant, and I was able to watch and listen. It was like being at a conference and watching a panel go at it. Actually, it was like being in a restaurant and eavesdropping in on a really good conversation. However, there was a technical problem that with the audio feedback that caused everything to be repeated three times, and was very, very annoying. Thus, I started my innocent project of trying to find a way to replicate Brian’s online panel format, without the feedback (still a work in progress.)
As I was working out the details, I needed someone with Skype access that would assist me in curing the feedback issue. This is where I got a rude awakening. Turns out that six of the seven people I contacted were not allowed to use Skype at their workplace. SIX OF SEVEN!!! I thought this was an anomaly, so I started asking around and found that almost everyone I knew that worked for a law firm or corporation or school district or government entity told me that Skype was banned where they work (along with a number of other Internet resources.) When I asked why it was blocked, the universal answer was “Security Reasons.”
Now, I’m not a network specialist, so maybe Skype burns up bandwidth on the office network, or maybe there is some ultra dangerous virus that gets through when I use Skype. So, if you are a network specialist and know why Skype would be banned at most workplaces, please fill me in. But, I’m thinking that “Security Reasons” really means “Time Wasting Reasons.” In other words, products like Skype are really banned because someone at the C-Level believes that you will be wasting precious firm time calling your buddy in Germany instead of billing time to the client.
When firms worry about “time wasting” that tells me two things right off the bat. First, whoever is supposed to be supervising is not doing a good job. Whether this is the Partner supervising the Associates, or the Manager supervising the Staff, there is a failure in managing your people. Second, it means that the management is telling their people “We Do Not Trust You!” If the answer to the issue is an all-out ban because it “wastes time”, then that means that the people that work for the firm are not trustworthy enough to make good decisions on their own. If that is true, then my gut reaction to those implementing the ban is “Wow, you have made some really poor hiring decisions.”
Again, maybe I’m just ignorant of the true meaning behind “Security Reasons” when it comes to outright banning of products like Skype. If so, then please forgive my ignorance. But, if you are banning products like Skype because you don’t trust your people to make good decisions… then I have to say that your people aren’t the problem.

I’ve been wondering how law firm summer recruiting programs are faring this year.

I wonder how closely partners are scrutinizing this year’s crop of summer clerks for their ability to generate revenue rather than fighting other firms for over what was once perceived as a limited pool of talent.

I suspect that prior years’ rush-type recruiting seasons are gone for ever more and that this year’s young legal eaglets are competing with one another for diminishing spots.

Just a few years ago, many of us stood back in disbelief as we watched new lawyer salaries peak at $160K a year. I, for one, was horrified because I remember how wet behind the ears I was the first day I stood before a judge in a court room full of onlookers. I just wanted to fall into a hole. Forget getting paid. I simply just wanted to disappear.

I tell ya, kids today . . . I had to walk through ten miles of mud up hill–oh, wait, that’s another story. Sorry, got side-tracked.

What I am trying to say is that sometimes the ones left behind are just as hungry and just desperate enough to risk it all.

Because I am convinced that people that do well in law school are good at being in school; they have always done well in school and love being in school. We all know those kids and how they do in real life. Yeah, they may be the next brilliant geek that will brew up a million dollars in his or her garage. But the rest of us lawyers had our first real taste of losing our wits.

And from that experience, the rest of the class learned to cope with fighting and losing over and over again. Because, as any good wrestler knows, as long as you are still standing you cannot be beat.

So invoke my principle when reviewing resumes. Check that they are graduates of an accredited law school. Set aside any resume that indicates a steady work history and solid scholastic achievement. It is a given that my “interview” pile indicates the characteristics of a lawyer: positions of leadership, civic pride and community activities. It is assumed that all of these kids are bright–they have all passed the LSAT and were all admitted into law school.

So when I interview, I interview for character. I seek to find the character of a man or a woman that makes a great lawyer: an innate drive to fight for justice, a need to to help others and the ability to lead a battle. These types of individuals are the sorts that we need now: men and women of character.

So don’t be so quick to judge a feisty kid from a lesser known school and so-so grades–they just might have the drive and the ambition to be everything you wished you could be. Let them in and show them around. You just may be introducing one of the next greatest lawyer of our times.


Having spent considerable time working with Alternative Fee Arrangements (AFAs), I am starting to see a more defined path for how AFAs might evolve within law firms. So based on my experience and all I have read about AFAs, I predict the following evolution for law firms:

1) Setting Price. Lawyers and firms are currently struggling with setting fees based on work (and value) and not hours. These prices are ultimately guesses (like all prices are), with some being more educated guesses and some just coming from the ‘gut.’ At this stage lawyers are learning that even with a wild guess, they are not risking the entire fee, but only the margin of error.

The knowledge systems involved at this stage of evolution include time and billing, as that is the primary source of information on which to base good guesses.

2) Tracking Profitability. Once a firm has a number of AFAs in place – time will pass. And with the passage of time they will begin to see how good their guesses were. As expected, some engagements will be more profitable than others. As this knowledge source grows, patterns will emerge as to which types of matters and fees are more profitable than others.

As previously noted on 3 Geeks, there is an emerging market for systems that address the question of profit tracking. These knowledge systems, as advertised, will allow firms to create, model and monitor matter budgets. As their use becomes more wide-spread, it will become apparent that firms can actually impact the profitability of engagements through-out the life of the matter. Red flags will come up during an engagement that will signal the need for altering behavior – which brings us to our third stage of evolution.

3) Project Management (PM). Once a firm sets a price and can carefully monitor performance-to-budget (a.k.a. price or fee), they will want to improve that performance. Here is where PM will come into play. Good lawyers have skills at case management, which involves managing to legal outcomes. In contrast PM is managing to a defined scope of work with known resources within a given time frame. This approach allows for changes in any of those aspects, but fees are then typically revisited.

Currently PM resources within a law firm (if they exist) are either in IT or in some form of practice support. The challenge with utilizing these PM resources is they lack the technical/legal knowledge related to case management. What is needed are project managers with the technical expertise to manage legal matters (both litigation and transactional). This begs the question: Where will this PM resource come from?

This is yet to be seen. However, I predict that when this resource comes into play, we will be witnessing the actual transformation of law firms that everyone likes to talk about. PM in play will be a recognition that law firms need to function like a business, to both their benefit and their clients’.

At least that’s the way I see it.

Most of the alternative fees posts on 3 Geeks are penned by Toby. However, after reading the articles on Seyfarth Shaw implementing a Six Sigma method; O’Melveny Myers’ leaked alternative fees memo; and Mayer Brown and Reed Smith’s discussion of alternative fee agreements, I wanted to jump in on how these changes in how the firm generates revenue affects the three-way relationship between the online legal research vendor, the law firm, and the client. Over the past 25+ years, the model of passing through the expense of online legal research to the client created a system where operating profits for the vendor were over 30%, and law firms felt immune to the total costs of using online research. Clients were paying the majority of the costs of online research, but had no voice in setting the price negotiated between firms and the vendors. Clients were told that online research created a more efficient way for lawyers to conduct research on their behalf. The idea presented to the client was that online research costs saved the lawyer time, and thus saved the client money in the end. Law firms and online legal research providers were so comfortable with this model, that many signed multi-year contracts where the vendor would build in automatic price increases of more than 10% a year. At one time, it was common for firms to charge clients more than they were paying the vendor for the online research product, and were able to make an additional profit. When the Model Rules of Professional Conduct prohibited these charges with Rule 1.5, many firms implemented a 100% recovery model where online resources could only be used if the charge could be passed to the client. That meant when a lawyer needed to do business development research, pro-bono research, or professional development research, they had to go to the books, or other resources where the costs of these resources were not passed along to clients. Although there are still a handful of “100% Recovery” firms out there, most firms now isolate “client charges” separately from “firm charges.” Out of the librarians I (unscientifically) surveyed, most say that over the past 10 years, the percentage that the firm is paying out of pocket has steadily increased from under 10% out of pocket costs, to now almost 50% out of pocket cost. Firms are now scrambling to cut costs of online resources by either cutting subscriptions, or going back to models requiring that online resource tools only be used when that cost can be passed through to the client. With firms now considering alternative fee arrangements with clients, the model of passing online research costs to clients will come under even more scrutiny. As firms start negotiating alternative fee agreements with clients, one of the items on the table is going to be online research costs. I imagine that firms will attempt to set up the agreements with the costs of online legal research being a variable rate outside the base cost of the agreement. In other words, keeping the status quo. Clients are going to want to see these costs built into the agreement as a set amount, a capped fee, or will demand that the firm include any necessary legal research into the agreement with no dollar amount listed at all. Alternative fee agreements and the general move away from the generic hourly-billing rate will mean that firms will need to have a different negotiating strategy with the online legal research vendor. No longer will online research be seen as a pass-through cost to the client. Because the client will not be paying the attorney by the hour, they will not buy the idea that online charges are saving them money because it saves the attorney time. Clients will say that firms will need to bear the burden of the online research because, if it truly saves them time, then that means they should be able to spend less time on the client’s matter, thus the savings is really a benefit to the firm. For the vendors, the fact that firms are seriously considering changing the methods of how they generate revenue means that vendors have to reevaluate how they negotiate the next contract. As clients bear less and less of the cost of online research, vendors cannot come to the negotiating table with the underlying idea that their service saves either the firm or the firm’s clients money. Those 30% profit margins are not sustainable as alternative fees become a larger percentage of how law firms generate revenue. Firms will finally come to the negotiating table willing to cut services, and demand that the built in annual increases end. The days of online legal research contracts based on the idea that the costs will be passed along to a third party are numbered. It is going to be interesting to see how it all unfolds.

While skimming through my RSS feed this morning, I ran across Scott Greenfield’s post called “This (pointing) Is A Book”. Scott discusses the issue of libraries slowly disappearing and being replaced by technology like the Kindle. He also mentions that the Millennial Generation has a general distaste for physical books, that this is a major flaw in their development, and that those that have electronic collections rather than books have no soul.
I don’t know, Scott… a lot of the books I have on my shelf, I “intend” to read some day (especially those from the Dalai Lama and former Presidents), whereas all of the books I have in my Kindle I “have” read. Don’t get me wrong, as a librarian and a GenX’er, I do appreciate personal library collections, but I’ve found that many (especially people with large personal collections) view their libraries as piece of art rather than information resources. Judging a person’s soul by the library they collect is like judging how good a lawyer is by the suit they wear to court.
Don Tapscott, author of Grown Up Digital, told a story at the TEDxTO conference last week about his meeting a Rhodes Scholar from Florida who told a panel of University Presidents that he “doesn’t read books.” Although, this was a gross overstatement (he ‘skims’ books by using sources like Google Books to find the core information, or he flips back and forth from the index to portions of the book to glean the relevant information… or as we call it in academia — “Research.”)
The language of information is changing and Don Tapscott refers to this as Generation Lap where the way information is being created and distributed is changing. It is similar to children of immigrants who learn the language before their parents. So, when you see statements like Mary Grabar’s saying that Millennials made comments like “the teacher thought she knew more than the students,” you have to think of it in the same way that the immigrant children who think they know more “about the new language” than their parents. If you take the comment with that background, the statement isn’t as asinine as it seems on the surface.
Take a look at Don Tapscott’s interview about the “Grown Up Digital” generation and I think you’ll gain a better appreciation of what really is the good and bad about how this generation learns and contributes. Those that you are categorizing as “Slackoisie” may be reading, learning, understanding, and contributing more than you give them credit.

“Always and never are two words you should always remember never to use.” Wendell Johnson A recent ‘debate‘ on Ron Baker’s Verasage site got me thinking about hourly versus value or fixed fee pricing. The substance of the debate between Ron and Colin Jasper focuses on whether hourly billing is ever justifiable. As reflected by the above quote, I am skeptical when someone claims you can “always” do one thing, or “never” do another. So I respectfully disagree with Ron on this one, noting that it is not the law firm who will decide if hourly billing is the right option, but the client. Where I agree with Ron generally is that fixed fee pricing isn’t rocket science. Engineers, architects, construction companies, even plumbers are service providers who have been doing this for years. As a provider, you develop a scope of work and then give the client a price for it. From my growing experience in dealing with alternative fees, I can tell you the scope of work effort is the part outside and in-house counsel struggle with the most (alluded to in Colin’s reply to Ron). For years both sides have used this problem/challenge as an excuse for not having fixed fees. The common reason was that “there are too many variables” to possibly develop a scope of work for a matter. Although lawyers don’t use the term ‘scope of work’ they are referring to their inability to define the parameters of a legal matter due to outside influences. This reasoning applies to both litigation and transactional matters. But let’s take a pragmatic look at this approach. At the outset of a case it may be very difficult to develop a useful scope of work. At that point, many critical unknowns may exist, like opposing counsel, jurisdiction, judge and most of all, the complete facts of the matter. In contrast, at the end of a matter all of this is known. So the question becomes: At which point in a representation do we know enough about the matter to develop a useful scope of work? Even the well-known ACES model from Jeff Carr provides for a period of time for lawyers to gather the relevant information before they give a hard budget for a matter. So based on numerous alternative fee deals, I predict something in the future along these lines for value pricing legal services:

  1. Matter comes to law firm
  2. Law firm and client agree to an investigation stage. The fee for this stage may be fixed or hourly, based on the clients’ needs and the complexity of the case. On some matters this may be done for free.
  3. At the completion of that stage, the law firm provides a scope of work and fixed fee for the matter. There may be phases priced out separately (e.g. trial).
  4. If events drive work outside the scope: a) The scope is redefined and the price re-set, or b) A fee is set for the out-of-scope work (hourly or fixed as preferred by the client)

The more routine the work, the more likely all aspects can be fixed fee (but not necessarily). The more complex and ‘bespoked’ the work, the more likely hourly billed components will be utilized. If something has changed in the legal market (and I believe it has) it’s that the excuses for developing useful scopes of work will no longer be tolerated. What will (and should) be tolerated are efforts to bring focus to a legal matter to properly develop the scope. These new efforts will bring a high value proposition to clients and lead law firms to more profitable structures. To reiterate, the hard part of value pricing and alternative fees will be developing useful and effective scopes of work. This is a new thing for law firms, and it will lead to more and deeper changes in the profession.

One of the bad things about a down economy within a BigLaw library is that you need to reevaluate the way you are spending money on your resources. One of the good things about a down economy within a BigLaw library is that you need to reevaluate the way you are spending money on your resources. In the previous post, Mark Gediman mentioned:

“Most law firm decision makers believe that actual costs, while important, are secondary to perception when it comes to budgeting decisions.”

In reality, the Partners tend not to focus on the actual cost of a resource they need, because they see it as necessary for their matter or business development (or they wouldn’t have asked for it in the first place!) But those on the Administrative side of the BigLaw library have to care about actual costs (because that’s their responsibility!) As I mentioned in the previous post, the Administrative side is generally winning this “actual cost” vs. “actual need” debate.
There is a definite paradigm shift going on in the BigLaw libraries where lawyers will no longer be able to add ‘actual costs’ to the library budgets, without showing the ‘actual need’ for the product. The justification of resources seems like a change that has been long overdue in may BigLaw firms. One of the reactions to the change that I fear is that the pendulum will shift too far the other direction and that firms will create a “slash and burn” policy when it comes to library resources. If the partners do not take the time to justify the resources they need, the Administrative team may set up a method of review where the default answer is “cut the resource.”
The “slash and burn” policy on cancelling subscriptions (both print and electronic) may start out being a good process that will get rid of resources that are not really needed in the law firm. The attorneys in the firm have demanded a lot of resources over the years, and some of those resources were used a few times, then never really used again, or were duplicates of existing resources, because a certain Partner liked the “other” resource better than the one the firm already has. With the “slash and burn” policy, all of those resource have to be defended in order to keep them. Plus, now that firms are using additional monitoring tools (OneLog, LookUp Precision, etc.) librarians and administrative bean counters now have the ability to call Partners on those resources that aren’t being used.
The problems that are going to arise over the “slash and burn” policy is one that is as old as the law firm itself. The firm is not a corporation, it is a partnership. Each Partner believes that his or her work is vital to the survival of the firm. If a $10K research tool is needed in order to help on a $1 million matter, then so be it. The true test is going to be not in the ability to cut resources and identify what is essential and what is not. Rather it is going to be stopping the firm from winding right back where it is in 10 years through placating Partner demands to add new resources. When you have dozens (or hundreds) of Partners to deal with, and each believes his or her requests are necessary expenses, you’ve got an administrative nightmare on your hands. Some firms are erecting barriers to these types of individual Partner requests, such as purchasing committees, but most of us know that it doesn’t take long for Partners to find ways around those barriers.
The reality of the current situation is that creating a “slash and burn” policy is a desperate attempt by the leaders in the law firm (both Partners and Admin) to say “Please save us from ourselves!!” There’s going to be a lot of conflict over the next few years when those tasked with controlling research costs are approached by different Partners that say “I know we’re cutting costs, but this expensive resource is absolutely needed for my important cases.” These exceptions build up over time and tend to be approved more often than not. I’m just afraid that we’re not going to learn from our past mistakes, and all we’re going to wind up with is another bloated budget, and a big stack of “CYA” paperwork to show how we ended right back where we started.

Toby pointed me toward Ron Friedmann’s post Slashing BigLaw Libraries where Ron reviewed the AmLaw Law Librarian Survey and asks whether law firms and librarians are “fundamentally” rethinking the way the library works and delivers services. I shared the following response with my good friend Mark Gediman, and Mark gave me back some comments and an alternate view. I thought I’d put both of these together to offer a couple of views on how law libraries are changing the way they service the law firm in a fundamental way. My thoughts focus on some of the problems I see with how library services are being changed to increase the overall efficiency of how the library works, while Mark’s views are more positive and lay out some specific examples of how services are changing, but continue to focus on the value that each individual contributes to the firm.
[Greg Lambert]
The “fundamental” change in library services that I’ve been seeing is one of organization. The structure of library services is changing in a way that fits what the Administrative leadership of the firm views as the most efficient method [think of “The Bobs” from the movie Office Space.] Here’s a breakdown of some of the fundamental “structural” changes in the law firm library:
  1. Library services are adopting the “IT” model of the centralized help desk.
  2. The Administrative leadership of libraries wants all of the researchers to be “generalist” rather than “specialist”. a. That way each researcher can handle any question. b. This makes scheduling easier (since every researcher is basically the same) .
  3. Attorneys still want “specialists” that are their “go-to” people on particular issues. Obviously, this creates a conflict between the “efficiency” that Admin is being asked to design, and “effectiveness” that attorneys desire when calling upon the research staff to assist in their matters
There is a conflict between what the Administrative Leaders of the firm are being tasked to do with the library and the desires of the attorneys that use the resources found within the library. The administrative side is focused on cost cutting and reducing overhead of the library. The cuts range from physical space, to electronic and print collections, to staff. The attorneys within the firm want a library that responds to their needs, on an as-needed basis.
This is not a new conflict between the Admin and the Attorney sides of the firm, but we’ve reached a point now where the Admin side is winning. My fear is that the resulting economically efficient library will no longer effectively handle the needs of the attorneys it serves.
[Mark Gediman]
I think that too little has been said about the significance of Greg’s points #1 & #3. We have adopted the helpdesk approach to wean the attorneys from calling only their go-to people as well as leverage our far-flung staff. The helpdesk approach addresses the following issues:
  1. complaints about lack of service when the attorney’s favorite person is not available.
  2. Staff located in peripheral locations are not fully utilized
  3. a frustration factor sets in as the attorney works his/her way down a directory looking for someone to assist them.
I think having everyone with basic reference skills is necessary in this time of “lean and mean” staffing. But I also feel that having specialties can enhance the quality of the library service. For example, having a legislative specialist on staff enables the firm to take costs that were originally “pass-throughs” from contract services and add them to the firm’s revenue stream. In fact, these specialists can generate revenue in excess of their salary which allows the library to provide additional admin services without being a drain on resources. Members of the library should also be liaisons/specialists to specific practice groups. Combining a helpdesk with allowing (and encouraging!) the library staff to specialize is similar to the law firm IT model where everyone provides level 1 (help desk) support, including the level 2 specialists/engineers. It also allows the firm to ensure that help is always available without making a large investment in staff.
The Library as a department needs to make itself indispensable to the firm. Performing unique specialized services that add to the success of the firm, like Competitive Intelligence / Business Development and practice specialists, serves to emphasize that fact. Most law firm decision makers believe that actual costs, while important, are secondary to perception when it comes to budgeting decisions. The Library manager needs to constantly remind the firm of why they exist and the services they provide. This is accomplished by offering to present at retreats and attorney meetings, visiting each office regularly and putting on regular CLE programs in each office taught by various library staff members. This elevates our visibility, puts a face to a voice and showcases the individual skills of the library staff as well as reminding them that we are here and we perform a valuable function.
I was surfing the blogosphere yesterday and came across an article discussing copyright issues and some of the false hurdles it creates in creativity.

Although the article was very good, it was the use of this Plato quote from Phaedrus that caught my imagination. Plato was discussing the discovery of the alphabet and writing:
“…for this discovery of yours [writing] will create forgetfulness in the learners’ souls, because they will not use their memories; they will trust to the external written characters and not remember of themselves. The specific which you have discovered is an aid not to memory, but to reminiscence, and you give your disciples not truth, but only the semblance of truth; they will be hearers of many things and will have learned nothing; they will appear to be omniscient and will generally know nothing; they will be tiresome company, having the show of wisdom without the reality.”

I thought how much this is related to what we as librarians are fighting today. I thought I’d modify Plato’s words and have it be from a “Librarians” or “Researchers” point of view when talking an attorney using Google to do their legal research:

“… for this discovery of yours [Google] will create a laziness in the attorneys’ souls, because they will no longer desire to use their research skills; they will trust to the external Wikis and Blogs rather than remember their training. The results that the search engine returns through the use of a few keywords is not adding to their skills, but rather diminishes their abilities, and the answers they receive are not authoritative, but only attempt to give the appearance of authority; they will achieve millions of results and will skim the top few; they will think they are searching all of mankind’s knowledge, but in truth will barely scratch the surface; they will tire of the true researcher, as they believe the wisdom of Google is the new reality.”

Photo courtesy of WordPlay at http://hubpages.com/hub/2008-election-clipart-Obama-McCainFor reasons I won’t go into now, I don’t watch TV. If I can’t watch it online, I’m not doing it. So when the President was inaugurated or when he was giving an important speech, I watched it online via streaming video. Tonight I missed Obama’s speech to the Joint Session. And when I went onto C-SPAN, they pulled the video while I was watching it (it is up now). So I opted to download his speech and read it (as an aside, I will continue to do this in the future–it only took 15-20 minutes to read). Anyway, my point is this: the President does not have very good grammar skills. I must have spotted about 10 typos. Now before you start thinking (if you haven’t already), “what does this have to do with online legal marketing,” let me explain. Everything. Due to the demands and expectations of our “get-it-now” culture and the speed of technology, more web content than ever before is now being posted on a daily basis. The Online Publishers Association reports that, in July, the average online user either read or posted content on over 1,000 pages–let’s be conservative and say the average user wrote 300 pages of content. It could be a tweet, a blog, web content. This means we are writing just as much as we ever have but even more people are reading what we have written. The need for proof-reading is at an all-time high. Which brings us to the law: lawyers and law firms are judged by their legal writing skills and, consequently, grammatical mistakes are not well-tolerated. But what I have learned in my business as an internet marketer is that mistakes will happen. All the time. So what I have taught my staff is one of my favorite “Lisa-isms”: “We are not perfect, we all make mistakes. All I ask is that you fix it.” So I was greatly comforted to find that even the President of the United States has problems with grammar. I do too. Despite the fact that I majored in English Literature, most of the grammar I learned was from on-the-job training. So Mr. President, on the behalf of legal online marketers every where, I thank you. P.S. Another favorite “Lisa-ism”: “everything is fixable on the web.” Photo courtesy of WordPlay at http://hubpages.com/hub/2008-election-clipart-Obama-McCain