Legal Costs: Time For a Bigger Scalpel
We now all agree that the economic downdraft of late 2008 to the middle of 2010 severely impacted the legal industry. I have contended for some time that client-driven cost saving concerns predated these macro-economic trends and will continue even after a tepid rebound with slow job growth.
While there was not as much legal work the last few years, there was more time to talk about it. A good summary of the state of part of the legal industry comes from the just released Hildebrandt Baker Robbins/Citi Private Bank 2011 Client Advisory. It is available here and is a fine piece of work, written for present and (hopefully) future clients of the sponsors (mostly large law firms). Here is an item from the concluding paragraphs of that report (p. 17), illustrating both the promise and the challenge of change:
Clearly, in the present environment, many corporate clients are looking to their law firms to provide not just competitive rates, but also genuine added value in the services the firms provide. In its simplest form, this may mean offering clients complimentary services – such as secondments, debriefing sessions, shared training programs, and the like. But at a deeper level, it means focusing on legal work processes, project management skills, and knowledge management to insure maximum efficiency in the delivery of legal services.
It is a good summary, it is all true. And at the same time it reads like the syllabus for the latest "Legal Costs 2011: Navigating the New Normal" conference, coming soon to New York, Chicago, Los Angeles, London, Sydney and Hong Kong.
The promise? Bottom-line results. The challenge? Doing it in our lifetime.
Right now, the biggest clients (say Fortune 500 or FTSE 100) and their biggest firms (AmLaw 200) maybe have time to lead with this stuff. For most of the rest, not so much. Some legal processes aren't worth improving. More than a few legal projects will chafe under well-intentioned micro-management. And there are more legal matters than you'd think which aren't worth an AFA when you can get lawyers to do it who are GEA (Good Enough Anyway) and also AHOALC (A Hell of a Lot Cheaper).
On Wednesday, I want to give a real-world example of deep cost cutting in action, something that goes way beyond a quick nick at the margin. Friday, I will offer a reason or two why it's hard to get legal cost control to move from slogans to solutions.
Filed Under: Cost Control, Legal Resources
Google Targets Legal Search – Part 2
Now that the dust is settling a bit on the new legal functionality at Google Scholar, a few things seem clear:
1. This is something Google has been working on for some time. Googler (and attorney) Rick Klau gives some of the background here. This wasn't coded in a rush and released into the wild for comment. Google offerings typically improve consistently over time. "Iterate" is the mantra, I think.
2. Free doesn't mean "lacks value." As Ernie Svenson notes, Google Scholar is already quite good, and we have really already paid for the information; Google just presents it in a highly useful and usable format.
3. There will probably be integration with other Google offerings. It doesn't take too much imagination to think about a mobile version of Google Scholar with an app on Android, Google's nascent mobile phone OS. Here's a link to a case on Google Scholar; I sent it to my BlackBerry, and it's very readable on the small screen. Heck, the base version at scholar.google.com already works well on my smartphone.
These questions (and more) will likely be covered by Denise Howell in the next This Week in Law (Friday at 11: 00am PST; featuring Google's Rick Klau).
(Update: Here's a good review of Google Scholar, via Ernie.)
What will Google Scholar mean to the major incumbents, such as LexisNexis and Westlaw? Probably not much in the short run, in the sense that they have been moving upmarket for years (premium content for premium cost; see some of their reaction here). Smaller firms, solos, and thrifty law departments will undoubtedly give it a hard look and watch for updates.
As for other legal research companies? The jury's out on that. This option, which hits my Gmail account far too often, might need to reconsider the subject line of yesterday's message:
Filed Under: Legal Resources, Technology
Google Targets Legal Search
Google announced today a long-anticipated move into legal search. From their Official Blog:
Starting today, we're enabling people everywhere to find and read full text legal opinions from U.S. federal and state district, appellate and supreme courts using Google Scholar. You can find these opinions by searching for cases (like Planned Parenthood v. Casey), or by topics (like desegregation) or other queries that you are interested in. For example, go to Google Scholar, click on the "Legal opinions and journals" radio button, and try the query separate but equal. Your search results will include links to cases familiar to many of us in the U.S. such as Plessy v. Ferguson and Brown v. Board of Education, which explore the acceptablity of "separate but equal" facilities for citizens at two different points in the history of the U.S. But your results will also include opinions from cases that you might be less familiar with, but which have played an important role.
This new resource is couched in terms of allowing average citizens to access legal information. Some of those citizens may also work in law firms and legal departments.
I thought this would happen about four years ago. Please consider the "Law 2.0" references therein youthful exuberance.
Hating the Rating
A recent dust-up involving anonymous online feedback may give some insight into future ratings for lawyers.
The website involved, TheFunded, purports to offer information on VC firms and deal terms from anonymous entrepreneurs, allegedly with experience. One recent feedback posting involved EDF Ventures. Rather than repeating it, there's more on it here.
EDF didn't like the posting and somehow thought it was advisable to subpoena TheFunded to discover the identity of the poster. One of EDF's founders was quoted in this week's Crain's Detroit Business (scroll down) as saying:
With anonymous postings, you can either let something patently untrue just sit there, or you can try to find out who it is. We want to talk to them and set the record straight.
You can probably guess how this turned out. EDF has succeeded in one sense: putting a rather large exclamation point on the matter.
When we move from the VC shpere to the legal space, the case of TheFunded shows that online ratings and feedback have pitfalls for the raters and the rated.
The problem isn't just that the feedback's anonymous–that's actually a cornerstone of most client surveys. It can be honest and constructive or vindictive and brutal.
Any feedback about lawyers that's not anonymous will almost always be favorable, when you think about it. The queue to give a signed low public rating to a bellicose litigator will likely be a short one.
Lawyer rating site Avvo drew some fire when it started out; it has now emerged from beta and is scaling well, targeted more at consumers than the corporate counsel crowd. That latter market will do what it's always done: rely on personal referrals when possible. Increasingly, however, the search may start by looking at a rating in a gated legal community or a recommendation in a lawyer-only network.
The other lesson: if you have the urge to "go after" something published online about your company, consult two lawyers: (a) one about how to do it, and (b) another about whether you should. And first make it clear to lawyer (b) that she won't handle the matter.
Seems like overkill; probably cheap in the long run.
Filed Under: Legal Resources, The Client Speaks
Amorphous Support Services
Sometimes outside counsel ask me why so many GCs seem preoccupied with costs. What about results? What about the best in legal services? What about covering your @ss?
Well, I submit as Exhibit A an opinion piece in the Financial Times by Luke Johnson, chairman of UK's Channel 4 and founder of Risk Capital Partners, a private equity firm.
Mr. Johnson's article is entitled "The truth about the HR department," and at first blush it appears as yet another screed against the intrepid souls in HR:
The brilliant Avis boss Robert Townsend in his book Up the Organisation suggests firing the entire personnel department. Indeed, I have radically downsized HR in several companies I have run, and business has gone all the better for it.
But before in-house counsel can get complacent, Mr. Johnson expands his field of view:
HR is like many parts of modern businesses: a simple expense, and a burden on the backs of the productive workers. Other divisions that can become the enemy include IT, legal and marketing. They don't sell or produce: they consume. They are the amorphous support services.
To complete the connect-the-dots exercise on operating-related legal services: to someone with Mr. Johnson's DNA, if you are retained by one of the "amorphous support services," guess what you are by association?
So if your friendly neighborhood GC seems like a one-note-band on costs (and trying to master another note, demonstrating value), try to be a little understanding. Mr. Johnson may be the CEO in the office down the hall. And he just called that very GC into his office after reading the revised forecast for outside services.