Legal Transformation: The Changing Legal Profession

Thank You Larry Ribstein.

2011-12-27T10:00:00.001-05:00

I learned last evening of the passing of Larry Ribstein – a legal scholar but more than that a provocateur of the legal profession. I had the pleasure of meeting Larry in March 2010 at Georgetown’s Center for the Study of the Legal Profession conference “Law Firm Evolution.” It was there that I heard Larry speak about the “Death of BigLaw.” Listening him speak unabashedly about the problems and accompanying arrogance of the BigLaw law firms – whose business models are destined to fail once the egos and reputations that currently support them retire - was refreshing. He was direct and articulate in his approach – a matter-of-fact manner that distilled a lot of the noise one hears and reads in this arena into sound arguments and logical observations.

The conference as a whole was spectacular but it was Larry’s presence and presentation that stood out for me. It is not exaggeration or a morbid opportunistic ploy to state that Mr. Ribstein helped ignite in me my passion to provoke change within the legal profession. For that I am truly grateful. Thank you Mr. Ribstein . . . you are already missed.

For a glimpse of that presentation here is a video of Larry speaking with Gregory Bufithis of ThePosseList.com.

Capitalism: A Lawyer's Role

2011-11-14T15:23:00.000-05:00

Our world is a complex one. While global markets converge, market capitalism has been a dominate force in social, political and financial realities – really the world economy. Recently however there has been a corresponding divergence of national and political rules and regulations and market capitalism has taken a beating both by populist distrust and by a weakening tide. While it has served as a serious engine for wealth creation over the last few decades we have witnessed recently (see 2008) the fragility of our institutions, governments and businesses. We have dealt with a too-near collapse of the US financial system and now we are dealing with an economic crisis in the Eurozone. While governments fail to create solutions, businesses are caught in a state of “wait and see” as new regulations, new regimes, and new rules emerge out of this global transformation of public and private concerns. Disruptive forces are upon us and will only continue to develop. As governments flounder, business has an opportunity to pick up some of the pieces and preserve if not advance capitalism within the markets. Lawyers working inside and for these businesses can be positioned at pivotal stations which would allow for influence and change-making. That is if lawyers think to be or even want to be in these roles.

In 2008, Harvard Business School celebrated its 100th anniversary of its Global Business Summit. Prior to this event, the school polled numerous business and government leaders around the globe to learn what issues should be on the agenda. Communicated by all was concern over the sustainability of the global markets. In other words, will capitalism survive? Some of the key trends that were cited for raising this concern were volatile financial markets, pressure on free trade and the rise of state-sponsored capitalism, widely divergent industrial policies, and failure of the rule of law. Harvard took the position that in order for capitalism to prosper it is incumbent on businesses to innovate new strategies that turn the systemic problems into opportunities for growth. Further, Harvard promotes an activist model whereby business looks beyond its own balance sheet and works to mobilize coalitions of companies and government in an effort to support and strengthen current market infrastructure - even develop new institutions which will sustain the system. In order for business to succeed in this mission lawyers will have to play a key role. Some are already doing so.

There are two related concepts that are in play here for lawyers to advance the most influence on markets – the rule of law and globalization of law. The rule of law (as mentioned above as one of the disruptive trends) is a very capacious concept with many different definitions. Read Robert Gordon’s piece The Role of Lawyers in Producing the Rule of Law: Some Critical Reflections from the Yale Faculty Scholarship Series for a detailed discussion. During a recent conference, I was in the audience to hear Frank Steeves, General Counsel of Emerson Electric Co. speak about the globalization of law. While the two concepts are similar in terms of their focus on building legal frameworks to foster stability and predictability in the law they differ in their targets for such creation. The focus of rule of law is on governments and political institutions. Globalization on the other hand addresses the laws and regulations of private interests in dealing with one another and the markets. According to Steeves, in globalization there are no agreements between sovereigns but rather between private parties. This in turn weakens sovereign borders and their ability to impact society and the markets. In a way it subverts international law and is in many ways the advancement of private law making.

Developments in technology of course have played a role in allowing globalization to occur - the grease on the wheel so to speak. The wheel is trade and commerce. With the dynamics of the global trade markets changing this has created the opportunity and outright need for globalization of law to expand. With the advance of the BRIC nations and other developing countries coupled with the retreat of formerly powerful trade countries such as most in the Eurozone, the leverage points have and are being altered. To use Steeve’s words, “[this] movement of different power is just really a product of millions of different commercial transactions between businesses and government [and] customers . . . all those commercial transactions have to have rules for things to be able to move. Where are those rules? Well standardization of contracts clauses.” So as the global trade and power structure adjust to the corresponding transactions – those transactions take new forms as new parties contract with one another and formalize agreements. What happens is that the incumbent trade party will use an existing contract, modify it to fit the situation and look to the new party to agree to it. Rather than start from the scratch both parties recognize the value in doing this. While this is a gross simplification of what occurs it nonetheless represents the reality out in the marketplace.

Steeve’s used the example of reviewing employment contracts for his company’s China division. In reviewing them they seemed quite similar to what he recalled from his time as a lawyer in Wisconsin. Upon further research he not only found that the majority of the provisions were identical to the State of Wisconsin’s but that there was a common thread across other subject areas beyond employment law. To explain this he stated, “[i]t really came into being as a result of private law making within the contracts. It’s got nothing to do with governments or government enforcement. The global markets are pressure for uniform contract and commercial terms obviously because you can’t function otherwise; the business doesn’t work. Private agreements take on a uniformity and that uniformity then becomes a global standard you see in this country and this country, wherever else you deal with it.”

Fortunately for US lawyers, the US is still the global leader in many rights. And English is the universal language of business. Therefore, there is a tremendous gravitation pull exerted from the US in the adoption and use of our contractual language and practices. This is one of the key elements that place lawyers in the pivotal positions to exert influence and impact market capitalism around the world. If you are an in-house lawyer for a global company doing business in a developing country where perhaps there is less developed law and practice in a certain arena, you will be able to influence that arena through the use and adaption of US law and your own company practices. This in turn will create a standard for the foreign company that they may use in future dealings, and so on. This is how globalization of law works. To bring the point more close to home. If you have ever dealt with the commercial behemoths such as Walmart, Apple, and ExxonMobil you know that it is typically not a negotiation but rather an acceptance of terms. Take a look for yourself how Walmart allows for zero ability to negotiate. From their FAQs for new supplier process this language appears.

“After the buyer reviews this questionnaire, the supplier will receive an email granting the vendor agreement. The supplier will complete and sign the vendor agreement by clicking the ACCEPT button. This will start the approval process”

This is a prime though somewhat atypical example of how globalization proliferates. By being in the dominant role, Walmart is able to extend its own contractual language across borders. Another example would be to look at how the US FCPA or UK Bribery Act extends their reach into any foreign jurisdiction in which one of their companies are doing business in. These do not look to foreign governments to grant jurisdiction rather each exercises jurisdictions based on private action – that is that due to the fact the a company is located or does business in the US or the UK – these governments then have the right to monitor and act in any foreign nation the company acts in. In both instances it can be said that the US and UK are exporting their own versions of the law and demanding that companies comply regardless of local custom or behavior.

Granted the globalization of law is more evolutionary than revolutionary it nevertheless represents a significant influence on global commerce. Since the US is a market-based economy and one that subscribes to capitalism as the underlying philosophy, our business practices reflect this. Business practice is not something found in an employee handbook or spelled out in some policy or handout. Business practice consists of culture, behavior, language (jargon), and people and how these elements combine to interact with other companies, consumers, and governments in conducting its business. One of the key troves of tangible evidence of business practice can be found in the language of a company’s contracts and how it utilizes these instruments to conduct its business. Lawyers typically control this language and so have real power to control the transaction and thus the market.

While lawyers have the ability to strengthen capitalism by exporting these commercial legal assets we must be careful to limit or avoid exporting other uniquely US legal elements into the world economy such as extensive litigation and tremendous expense. But then again such work creates jobs and increases transactions so in some sick way our legal system –though broken in the minds of some – also promotes a healthy market of activity. So it can be said that litigation itself promotes capitalism. Ok I wrote that last sentence just to see if you were still paying attention.

2011-07-07T12:21:00.000-04:00

Now Comes Proportionality in Sanctions: Or Rather Sanctions Based on Proportionality in Process.

2011-05-10T16:45:00.001-04:00

Last week a federal District Judge Susan Wigneton in Newark reduced a previously awarded sanction from $246k to $10k. She found the original to be “extremely unreasonable” given that this “was merely a discovery matter.” The underlying discovery issue here was one that was born out of a third party action to collect relevant documents and the costs associated with this effort. On its face it appears to be a rather typical matter – that is a primary party needs documents held by a third-party. The primary party subpoenas, collects, reviews and analyzes these documents in helping to build their case. This effort costs money and so they ask the judge to award them these costs.

What is interesting in this case is what constituted the underlying costs. To state it simply - it appears there was a severe lack of proportionality in terms of the process and staffing used in this regard. It was disproportionate in that the true costs were upwards of $800k plus. The magistrate judge who initially awarded the sanctions found it excessive that a twenty three member team billed over 2100 hours on this project. She thus awarded the $246k (See the Conclusion in her written opinion for details of costs). The federal judge found this “clearly erroneous” and reduced the sanction to $10k. There was no reason given for this decision by the federal judge.

The New Jersey Law Journal has more coverage on this.

Legal Services Act comes to US

2011-04-06T16:28:00.000-04:00

UPDATE 4/5/11: The ABA released an issue paper through its Commission on Ethics 20/20 seeking comments on allowing Alternative Business Structures (ABS). As the paper states it is looking at how "core principles of client and public protection [can] be satisfied while simultaneously permitting U.S. lawyers and law firms to participate on a level playing field in a global legal services marketplace that includes the increased use of one or more forms of alternative business structures.” Basically this would allow for active participation of non-lawyers in law firm operations and business models. The smart folks at Legal Futures have a good overview here.

North Carolina State Senator (and lawyer), Fletcher Hartsell, Jr., introduced a bill into the NC General Assembly that seeks to allow non-lawyer ownership of law firms – known as Bill S254. UK’s John Flood asked the question briefly “[h]as the US finally adopted the legal services act?” Those familiar with the LSA know that it is a transformational law within England and Wales that is changing the landscape of the legal profession – to what degree remains unclear. The ABA Journal also reported on this NC bill simply providing the name of the State Senator and the basics of the bill.

While the NC bill is referred to the Judiciary Committee (and I admit I am not a NC parliamentarian so have no idea on the course this will take or time line) it nonetheless represents at least some effort here in the US to change the way in which law firm ownership is controlled – moving from an lawyer only private equity partnership model to non-lawyer owned share-based model.

Who cares and what could this mean? Well it is worth noting that the bill in its current form only allows up to 49% ownership of nonlicensee (non-lawyer) so control of any organization pursuing this model would still rest presumably in the hands of licensees – barred lawyers. While not as significant (yet) as the LSA it nevertheless is a serious effort to alter the way in which firms are structured and operated. While I am not sure what Senator Hartsell’s motives were for this I do hope that they were similar to that of the UK’s Ministry of Justice – as stated on its home page:

The Legal Services Act reforms the way legal services in England and Wales are regulated and puts the consumer interest at the heart of the regulatory framework.

It is worth noting that Senator Hartsell himself is a lawyer and is a named partner for his firm Hartsell & Williams, P.A. – what can be considered a small regional firm. I note this as this is not a Big Law initiative - something that I at least thought any movement on this topic would originate from.

More to come . . .

UPDATE:

Most recent articles:

1. Forbes - expanded coverage

2. The Lawyer - quoting Georgetown Law's Mitt Regan
3. Legal Futures - who contact the NC Bar for more info

Proportionality in Ediscovery: Getting Beyond the Academic and Practitioner Perspective

2011-04-04T17:44:00.000-04:00

The concept of proportionality in discovery is not new. In fact it has been around for awhile and I will not add to the technical or academic dialogue here. I have spoken on this recently at the ACEDS conference and will be talking more about this at the upcoming InsideCounsel SuperConference.

Today I am at the Enterprise Data World conference and perhaps that is why I am thinking 'data' in terms of of bits and bytes. The vast array of information contained in data is staggering and the proliferation of data across society and in our organizations continues to accelerate. The folks at this conference are struggling to get hold of this data and organize it for better quality and accessibility. Ediscovery, to this crowd, would be a small fraction of the overall challenge they are tackling.

So in this post I am seeking to simply frame proportionality as an inevitable development resulting from the profound expansion of the data-verse (data universe) not to mention social media.

Point 1: The expanding digital universe will exceed 35 zettabytes by 2020, IDC predicts.

In 2009, global diital data topped 800,000 petabytes and was projected to reach 1.2 million petabytes in 2010. Storing 1 million petabytes on DVD would generate a stack of discs that reaches the moon and back. However, that rate of growth—62% in one year—pales compared with IDC’s prediction that the figure will top 35 zettabytes (36.7 million petabytes) by 2020, or 44 times as much as 2009. That stack of DVDs would reach halfway to Mars.

(following graphic originally posted by Tech News Ninja here)

Point 2: Usage of Social Media is increasing: (from comScore's US Digital Year in Review 2010)

Point 3: Social media represents significant ediscovery challenges:

The SCA is a formidable obstacle for parties looking to collect data from a social network. Often the only option is to seek voluntary waiver by the person of interest. Needless to say, more often that not any request to collect and analyze this type of data will need to be targeted and precise so as to avoid privacy concerns and other rights. If the information is available on a public-facing portal of a social network then the collection may be easier to accomplish though the ability to do a targeted collection is somewhat limited by the user interface and/or local API. Further it is difficult to think of this dynamic and changing data as a "document" under traditional ediscovery practices and so reviewing and analyzing presents unique challenges.

Point 4: Data Governance is becoming a stronger practice and discipline - it is also on the rise: (graphic created by DAMA.org)

Conclusion: Data - how we use it, how we access it, where we create it - is changing. All of this leads to more and more data from more and more sources. The MDM/Data Governance movement is seeking to organize data inside organizations and seeks to make information (which is what data contains and transports) more accessible. So while the universe of data grows so does the ability to seek and capture only the relevant or useful information (See graph below for a non-scientific illustration.) So proportionality could eventually be "built into" our ediscovery methods and practices - it simply will not be feasible any other way.

Do Lawyers Have Artificial Intelligence?

2011-01-28T11:57:00.003-05:00

Artificial Intelligence (AI) is almost here. Lawyers rely on knowledge and intelligence in practicing law. Technology has made lawyering more difficult by increasing the amount of data that represents potential evidence while making it easier to search, retrieve and review such data. AI represents the potential to better organize the ever-increasing amount of data and make "finding" data easier. Implications for Law? Many. Below is just an overview of some.

Most readers of this blog are familiar with the name Richard Susskind. His most recent book “The End of Lawyers” has been a fixture in the legal transformation debate and has slowly penetrated the everyday lexicon of the legal practice – though there are still many lawyers who have not heard of him. The name Watson – most people will recall as Arthur Conon Doyle’s fictitious sidekick to Sherlock Holmes. There is a new Watson however and like the literary character this one could put Holmes and any of us through our paces in terms of reasoning and having the answers.

Watson is an IBM supercomputer that was built to advance the theory that computers can and will be able to “understand natural human language.” Note: the computer was named after IBM founder Thomas Watson not the literary figure. Its predecessor, Deep Blue, rose to fame by beating the Chess World Champion in 1997. Watson took what Deep Blue was many steps further in that it can listen to/read language as spoken by humans and respond accordingly. To do this requires amazing amounts of processing power and storage. Watson must be able to detect nuance, puns, emotive language, whether a statement is a declarative or a question, and overall – understand what is a person “saying.” Its processing power is an astounding 80 trillion operators a second which allows it to scan its brain (consisting of 200 million pages of content) in 3 seconds. This brain was developed by scanning in everything from encyclopedias and books to move scripts. Watson is not small – it is roughly equivalent to 10 refrigerators. This bring to mind the first computers ever built that filled rooms and had roughly the computing power of a throw-away solar powered calculator that sits on many of our desks today.

Watson is powerful to be sure - so powerful that it can compete against humans on the game show Jeopardy!. And it wins! The show proceeds like any other where there are three human contestants expect in this case the show takes place where Watson is located. The host reads the answers as he would on any other show and the contests are to “buzz in” and respond with the correct question. Watson participants just like any other contestant but for in place of a human body there is the logo for Watson – behind which is Watson itself.

Moore’s Law + Kryder’s Law = AI

Most people are familiar with Moore’s Law which basically states that the number of transistors that can be placed on an integrated circuit doubles every 18-24 months – doubling the power and memory of a microchip. A lesser known but equally critical law (though debated as to being an actual law) is that of Mark Kryder which states that the amount of information that can put placed on a hard drive doubles every 13 months. Later research has found that it is more close to 18 months. Regardless, the trends on both fronts are advancing and so we are getting much faster computers able to store much more information. Watson is the current barometer for this potent combination. While today it sits inside a room and has an enormous foot print – so did the world’s first computers. How long will it take the capabilities of Watson to be delivered in a computer the size of a pocket calculator (or an iPad) – or even just in a more manageable size of a typical rack server?

In Susskind’s 1999 book “The Future of Law” he briefly touches upon some implications for the law for when artificial intelligence becomes a reality. “The shift from data processing, through information processing on to knowledge processing is all about increasing performance, range, and scope of computers, moving technology from mere number crunching and data storage and retrieval to task which would depend on knowledge and intelligence” Susskind writes. Knowledge and intelligence has been “the line in the sand” separating humans from computers since the dawn of the technical age. If computers are to step over this line, the future of law (and other professions e.g. health-care) will be here. In other words we will then witness artificial intelligence and are on the brink of convergence (or The Singularity). In terms of AI’s impact on the law, Susskind uses the example of computerized judges. Making the distinction between matters that involve moral judgment (something Susskind recognizes may be the next challenge for computing) and those that involve mere factual issues. He states that there is some “promise of systems which will help choose between diverging accounts of facts of cases – by applying probability theory together with the rules of evidence.”

Obviously another potent use of this type of AI would be to make ediscovery as simple as collecting data and then literally asking the computer to find all relevant information. Actually if we had AI, ediscovery would be easily eradicated. The implications on data management for any organization would be that business intelligence, risk management, compliance, knowledge management, information governance, and records management are made to be so easy and intuitive that there would be no need for ediscovery as we know it today. I predict that we would look back on ediscovery and think of it similar to how we view VCRs in today’s iTunes on-demand Netflix smartphone world – clunky and redundant. Nick Brestoff wrote a piece in Legal Technology News earlier this week that looks specifically at AI and ediscovery. Nick draws a similar conclusion as I have - the true power from a legal perspective of AI would lie not with making dispute resolution easier but rather making dispute-avoidance a reality.

The Future is Now!

If this all seems too distant or too nerdy-techy to resonate with lawyers, I invite them to watch Watson on Jeopardy! on February 14 through 16 via their iPad (or Slingbox). They will be watching "the future" now on a device that would have been as crazy an idea back in the VCRs days as AI may appear to be today. Changes in the legal profession are coming. Law has already become more technological (ediscovery is just one example). Lawyers will continue to further interface with technology – technology that is gaining in knowledge and intelligence.

An Image Problem? Legal Outsourcing

2011-01-25T09:04:00.000-05:00

Two recent articles in the legal press continue the on-going discussion around the reality, potential value and inevitable outcomes of law firms outsourcing. The first article looks at the recent acquisition of Pangea3 by Thomson. In it the merits of this acquisition are examined from the perspective of the outsourcers. Naturally they see this type of event as a smart, if not natural, path to take given the growing pressure on the legal industry to establish lower costs and deliver services in an efficient manner. Sounds familiar – typical talking points of other industries that have proceeded to adapt their business models and incorporate outsourcing.

The second article looks specifically at the outcome of an outsourcing deal in the UK. Last year UK firm CMS Cameron McKenna (“Camerons”) announced it had struck a deal with Integreon to replace its entire back office operations. This week we are seeing the outcome of this deal – Camerons has announced that it will be laying off one third of its support staff. Ultimately over 400 business service roles will transfer to the direction of the outsourcer. That is unquestionably a deep impact on this firm’s business operations.

While the debate rages specifically within the US legal market as to the merits and adoption of legal services outsourcing – forward thinking organizations and foreign competitors are simply moving ahead. That said it is no secret in the US that many law firms use legal outsourcers in some capacity – they simply to do publicize or talk about this in public. So perhaps the “debate” is over and now we are just dealing with acknowledgement. Legal outsourcing is here to stay. It is helping to change business models. It can be competitive to law firms while also being a competitive advantage. Why is it such a secret in the US? My answer: Image. Firms want to portray a certain image – that of the traditional white collar trusted advisor firm that conducts legal business (aka Traditional model). Perhaps the smarter image is that of a smart and agile Business which offers legal services (aka Sustainable model).

Note: If you are new to this topic you should check out two books: UNBOUND: How Entrepreneurship is Dramatically Transforming Legal Services Today & The End of Lawyers?: Rethinking the nature of legal services

Do Lawyers Have a Role in Data Management?

2010-11-20T10:42:00.000-05:00

Having attended the ACC annual meeting in San Antonio last month, I have many fresh ideas and thoughts in my head as I listened to and participated in numerous conversations around the challenges GCs are facing. If you look at any of the Twitter updates coming out the conference (#accam10) you will notice a focus on using data. No, I am not talking about ediscovery.

Discussions out of panels addressing topics from the ACC Value Challenge to project management to setting fees - incorporated in some fashion the concept of gaining visibility into one’s own data. Using your own data to gain insight sounds logical enough but in practice it is a rare find in corporations. Rarer still inside the GC domain – well let’s just say the legal domain as a whole. Lawyers both fear and quest for data (depending on the matter and side they are on). Data represents a treasure trove of information that is used by adversaries in the discovery process. Ediscovery has awoken lawyers to the idea that “data” is ubiquitous. But it has also led to misconceptions on it use as too often data is used in only an adversarial manner. This is unfortunate as data represents a virtual treasure trove of information to any business person looking to know more and do more to help their organization.

Too often when data is mentioned the first thing that comes to mind of most lawyers is the dreaded “ediscovery.” Yet that represents only a fraction of the data-world. Corporations are literally swimming in data. We talk about data being in silos, or something IT controls, or being overwhelmed with data in our professional and personal lives or even worse – data being our enemy as it can expose us and break down privacy. But from a corporate perspective data should represents intelligence first and foremost. BI (Business intelligence) folks understand this. But BI is a foreign concept to most lawyers regrettably. And those that are aware of it tend to regard it as some secret ops team that no one knows of or knows of what they do – so basically they ignore them. While BI is arguably a crucial component of any corporation looking to increase operational excellence or market performance it too represents only a portion of how one can use data.

The question is really who does “own” the data of a corporation? Own in the sense of manage and/or control or better yet govern? It seems that just now there is a growing awareness that GCs need to dig deeper into their organizations data assets to learn more about how to manage legal services. It is becoming more commonly known that using data regularly collected by time keeping systems has been immensely helpful in understanding fees better. What has been missing is an internal view in to the corporation itself to look for and learn about what other data sources may be helpful to GCs and the business as a whole.

So who should take “ownership” over an organization’s data? This is a difficult question because “owing” data it often misunderstood – this is due to how one generally thinks about data. Most people would say IT owns the data. But as stated in a recent article by Martin Hansen at Information Management:

“Storing the data is an IT issue, but understanding and interpreting the data is a business issue done by the business functions. This is one of the primary challenges when trying to place the ownership. Data is not owned, but partly managed by IT, and business doesn’t want to own anything that ‘smells’ like IT. This is typically the reason ownership is not anchored, and hence, falls between two chairs.”

I would add to this that the legal sector in a corporation currently neither wants to own nor manage data. However, lawyers often have to “deal” with the data and more often the “data” is outcome determinative in legal events. Arguably legal needs to take a more active role in its organization’s data. I am not suggesting by any means that legal needs to own or even manage data but rather instead of addressing data in a reactionary method – having to address data issues as they arise in response to discovery – legal has a vested interest in the on-going or living architecture of the its organization’s data ecosystem.

As data convergence (or information convergence) continues to accelerate and diversify – lawyers will continue to confront data issues – issues that may have been able to be remedied by other practices, initiatives, or internal business groups prior to the lawyers’ involvement. By taking an active role in data management lawyers have a lot to gain and little to lose.

Note: For some decent reading on this and related topics - IT Savvy: What Top Executives Must Know to Go from Pain to Gain

ACC Twitter Transcription

2010-10-29T10:48:00.001-04:00

New dad and new job equals lack of posts . . . But stay tuned. I will be posting soon enough.

In the meantime I put together a Twitter stream transcription from this week's ACC (Association for Corporate Counsel) annual meeting that was in San Antonio. Enjoy it HERE.

Stossel, Lawyers and a Missed Opportunity

2010-07-12T08:24:00.005-04:00

This past week, Fox Business’s, Stossel – a show featuring reporter/journalist John Stossel – ran a segment with the theme “The Trouble with Lawyers.” While it did focus on lawyers, it specifically zeroed in on the plaintiff bar and tort reform. While the show had the typical arguments for and against trial lawyers and unfortunately featured less than convincing guests, it also ignored the true problem with lawyers. And the true problem has nothing to do with politics, ideology, or whether you are plaintiff or defense orientated. The real trouble with lawyers is not the lawyers themselves but the process of our legal system. In short – it is much too costly and too complicated for any person or organization to navigate on their own. Further you know that a system has failed when the very threat of just getting caught up in the system- regardless of eventual outcome – is enough to change behaviors and squelch rights (“Bleak House” anyone?).

It is always funny to hear plaintiff lawyers and defense lawyers along with tort reformers argue back and forth. It is obvious that all perspectives are valid and indeed we as a society need each of these stakeholders. However, both sides of the bar abuse the process of our legal system to “game” one another and drive up costs, add delay, cause emotional harm, etc. And it is not as though it takes a superstar lawyer to do this. The process of litigation in particular is so easy to abuse that it has become the norm. We as society have come to accept that it will cost us money to defend ourselves against baseless claims and/or pursue our legitimate rights and claims. In essence we are optioning our rights.

While it is always instructive to have programming on lawyers and our legal system, Stossel could have had a deeper impact if he steered clear of attacking plaintiff lawyers and instead attacked the process that is abused by all lawyers. The process is the main cost obviously and is where anyone serious about fixing our legal system should look. Like it or not, lawyers are and will be necessary but that is not a bad thing. Change the process of our legal system and you can change the behavior of the lawyers. But do not expect lawyers to lead the charge despite the posturing, proclamations and blame on the other guy. Those with a vested interest in the status quo typically do not have cause to change it but rather defend it and keep it.

Training & Building Better Lawyers.

2010-06-10T10:30:00.002-04:00

There is growing interest within the US in examining how lawyers are educated and trained to better perform in the changing legal practice. Legal educators themselves have recently stepped up efforts to advance this dialogue and promote the conversation of this topic. This year has already seen three conferences that specifically address legal education put on by New York Law School, University of Maryland Law School and most recently at the University of Southern California, Gould School of Law. It can be generalized that each of these conferences were convened in order to bring together legal educators and professional leaders with the goal of examining current practices and methodologies of legal education along with those of the profession itself in order to:

1. identify the “gaps” in skills and foundational training.

2. learn how to move forward in a way that better prepares lawyers for the life of practice and of serving clients.

3. create a sustained effort devoted to ensuring that legal education adapts and grows as the profession itself changes.

While each conference was productive and brought new ideas to the table, the most recent was held at the University of Southern California – entitled “Building Better Lawyers” and sponsored by the Southern California Innovation Project (SCIP). It is this effort that is perhaps the most ambitious.

Professor Gillian Hadfield of USC was the architect behind this event held on May13 & 14^th. Prof. Hadfield is a well-published scholar on this topic and on legal transformation in general. She along with other legal education, client company and law firm representatives convened with the specific purpose of getting beyond debate and to a place where there is true commitment to exploring ways in which legal education can be more effective in developing the core skills that are necessary in today’s legal practice.

In attendance were partners from leading law firms such as Wilmer Hale, Howrey, Skadden, and Fenwick & West to name some. Along with these partners there were a number of General Counsel from companies such as Cisco, HP, IBM, Apple and CDW. Law schools such as Stanford, UC Berkely, Notre Dame, and Columbia were represented. Finally there were the entrepreneurs and transformationalists such as Paul Lippe of LegalOnRamp, Patrick Lamb of Valorem Law Group, Gerry Riskin of Edge International, and Sasha Mrozoff of Axiom Law to name just sum. All in all this was a gathering of some of the leading minds and ambitious innovators currently participating in the global legal markets.

There were three main goals or tasks that this event looked to execute on:

1. Decomposing legal practice to identify the core components of effective practice

2. Identifying methods of evaluating performance to improve the capacity to select and develop effective lawyers

3. Identifying methods of teaching/training lawyers to improve performance throughout their career.

Based on the post conference report it is apparent that the participants see that there are changes within corporate legal departments and that this is presenting serious challenges to practitioners and legal educators. The concept of “new” lawyering was emphasized time and time again as compared to the traditional model of lawyer.

“New” lawyering consists of:

asking the right questions of the client on a continuous basis
acting in a team mentality with the client and the rest of the legal team
being proactive
looking at the problem as a whole and not just an exercise to deploy a series of legal tactics
converging legal analysis with that of business analysis – allowing for more useful and germane advice to corporate legal departments
making actual judgment calls and providing actual answers not just analysis with a “it’s the client’s choice” mind frame
assessing risk and providing alternative strategies rather than just identifying risks

It was generally accepted that changing the institution of legal education will be an arduous task and one that is fraught with such basic challenges of finding a common language. Nevertheless this group seems poised to continue pushing ahead. Where a lot of conferences and events may stop once dialogue and debate have happened this effort is looking to keep moving ahead and provide actual outputs.

Two initiatives have been outlined for this group to continue building their efforts upon and through. One is the Building Better Lawyers (BBL) Test Group and the other is an executive education component.

The BBL Test Group will be a group of corporate counsel and law firms that are committed to finding ways to test for higher-value performance of “new” lawyering. This is human capital endeavor that will look to evaluate candidates for not only employment but also once employed their ability to serve on different teams and within practice groups. This effort will focus on looking at new ways to evaluate students with something other than grades.

Specifically this group aims to develop a suite of tests that will be given to new associates to both ascertain their candidacy as well as their on-going developmental/training needs. Simultaneous to this effort (most likely dues to the participating members) the group will then look to identify and secure commitment of corporate counsel to actual hire lawyers who perform well on these tests. Finally there will be a satisfaction measurement of those who take the test to learn of their reactions and progress.

The Execute Education initiative will look to create workshops for new, mid-career and senior lawyers deliver in one to two day sessions. A key component of these workshops is that they will include participation of in-house counsel as well so there will be both in-house and outside counsel working and learning together. Some possibly examples of areas of study/learning/training could be:

1. Post-case reviews in which clients and their counsel look to gain a deeper understanding of how the matter could have been handled differently. For example an area of focus may be on how the law firm could have better controlled client spending while providing the same level or service or even better value.

2. Simulations consisting of business challenges so that lawyers are allowed to unburden their perspective of legal constraints and look at a problem as a business executive see it.

3. Failure exposure though simulation to allow for greater comfort for failure and how to respond

4. Teaching through case-study – employing business school educational methodologies for both legal educator and law firm educators.

Certainly this effort by Prof. Hadfield and the folks at SCIP is ambitious and transformational in its commitment and goals of on-going actions. But it is not the last word on the topic of legal education and change. There is one more conference scheduled for October of this year. It is part of the Future Ed program of New York Law School but will take place at Harvard Law School. It slated to be a robust program and attended by dynamic leaders and committed educators.

The Thin Line Between Legal & Business Advice

2010-06-07T11:36:00.000-04:00

Reading the most recent Inc magazine (June 2010 edition) I glanced over the Street Smarts section. For those of you not familiar with this section it is where veteran entrepreneur, Norm Brodsky, answers questions submitted by various businesses and entrepreneurs. Most of the time it focuses on such primal entrepreneurial issues as how to compete better in a local market or the best strategy for running operations. In the latest version however, there was a question submitted by a lawyer (hopefully this lawyer and I are not the only two lawyers who read this magazine). The gentleman asked how entrepreneurs can get the most benefit and the best value from their [lawyers].

Before I read Norm’s answer I reread the question again and focused on “benefit” and “value.” In most businesses and professions the definitions of these two words are well established and known. In the law however it appears we are in a time where these two concepts are being debated and fleshed out. Certainly the traditional services of a lawyer are well understood and arguably therefore so are the accompanying benefits and values. We know the benefit of having a will drawn up and its value both in terms of cost in the immediate term and in the long term by having clarity over disposition of property. In the corporate sense we know the benefit of having our lawyers review potential transactions for liabilities or outline a proactive sexual harassment training/avoidance program. The value represents both the cost of the legal services and the prospective avoidance of future legal liability.

What happens though when a business faces an issue that touches both upon a legal issue as well as a business issue? After reaching this point in thinking I returned to the article to read Norm’s answer. In short Norm states quite clearly and emphatically that lawyers should stick to giving legal advice and not business advice. He goes on further to state that business advice when given by a lawyer is almost always bad advice. The point – there is no benefit or value to seeking business advice from a lawyer. This is fairly damning language about the legal profession by a well-regarded businessperson so I took Norm’s point seriously and not as a cynical pot shot at lawyers (considering he is one himself).

So can lawyers ever give sound and useful business advice? Or better yet, where is the line drawn between legal advice and business advice? Is it not foreseeable, if not unavoidable, to have a scenario where a legal question directly informs a business decision or strategy? Or vice versa?

To use a medical analogy; when a person goes to their doctor should they only listen to “medical” advice? How can one determine what is medical advice versus other types of advice, such as lifestyle advice? When a doctor says to a patient “you should exercise more often” – is that medical or lifestyle advice? Thus in the business context when a lawyer says to the entrepreneur that they should be protecting their assets, is this legal advice or business advice or is it both?

A lawyer is in many ways like a doctor – they have seen many different patients/clients with similar problems and therefore have a perspective that the individual may not possess. There is value in this experience - though it may not directly apply to every situation. How one evaluates and considers advice is the key. Just because advice is given does not mean that it should be followed. It is worth remembering that lawyers dispensing legal advice may not always be 100% correct but that should not make their advice of no benefit or value. In fact getting a lawyer to proclaim that their legal advice is 100% accurate may be a Herculean task. Nevertheless their advice is considered valuable.

I do agree with Mr. Brodsky when he states that most lawyers, by training and habit, think differently than business people. I do not agree however that therefore their business advice should be avoided. As always it comes down to the individual lawyer – some may be great with business while many if not most may not be (despite what they think). Certainly the profession can and should move towards a more business capable mindset. But I leave that issue to debate for another day . . .

So while Mr. Brodsky’s advice should be respected it is somewhat shallow in that it does not recognize that the two types of advice are not so neatly decoupled and isolated from one another. In fact, as many businesses come to recognize, the challenges that are most perplexing and worrisome are the ones in which business and legal concerns collide. In these situations I would argue it unwise to forgo any type of advice – that said it should all be weighed and evaluated. In the end though most businesses, especially entrepreneurs have to rely on something even more innate yet powerful – they own street smarts.

One final thought: In the wake of the BP oil spill the convergence of legal and business issues and advice can be seen vividly. I would invite Mr. Brodsky to watch the commercial where BP CEO Tony Hayward states that BP takes full responsibility for the tragedy and that BP will “honor all legitimate claims.” Was Mr. Hayward following business or legal advice using the language he did?

The "Required" Skills of Lawyers

2010-05-18T21:32:00.000-04:00

Hard skills, soft skills, lite skills, skill gaps and skill bridges, and so on. There is growing talk in the legal markets over just what set of skills a successful lawyer is to have. Setting aside labels for the moment I have outlined below the skills that appear to be most relevant and important for any lawyer – in-house or at a firm – junior or senior. It is important to note that I craft and explain these skills not based so much on my own opinion (though I do agree obviously) but on the words of lawyers and clients themselves. Or in some cases based on my direct observations when working with clients and witnessing the interaction/intersection of Law and Business. I will insert my opinion to say that too often the lack of these skills in the legal market is quite simply tolerated – so much so that most folks do not even think about them. One could say that this is evidence that they are unimportant – as if to say if it does not have a lawyer’s attention it must not matter (and a lawyer actually did proclaim this to me).

Commerciality or Business Acumen:
Layers are geared and hard-wired to approach problems from a legal standpoint first and foremost. Often we tend to have a laser-like vision on detecting and identifying all possible pitfalls and risks associated with a certain event or deal. This is all fine and indeed what the typical role of lawyer has been. But what if we saw the bigger picture? The forest from the trees? What if we not only had a deep understanding of the legal landscape but also had a deep understanding of the business of our client and the markets in which our client operates within? Having this potent combination of perspective and intelligence could arm a lawyer with the ability to offer value to the greater business interests of the client not just the legal. This allows the legal function to move closer to the overall business function therefore becoming more aligned with the overall decision making of the client. More importantly this allows a lawyer to move from typical to unique- a differentiator, a valuable resource.

Accountability and Ownership:
Too many times in counseling clients we hide behind the built in uncertainty of the legal process. Instilling confusion, uncertainty or even fright in the minds of our clients by pointing out that a jury could decide anything or the judge can be erratic or the mediator’s job is to make sure both parties walk away unhappy. Surely there is inherit risk within our legal and regulatory system but that should not excuse a lawyer from pronouncing their advice with a sense of confidence and ownership. We need to make decisions for our clients not just present the options and say, ”choose wisely.” When we make these decisions we also need to stand behind them and take the good with the bad not just take the good and blame someone else or the system for the bad. Lawyers too often want to be the hero but not the loser – who does? But our clients pay for our advice and so when it does not turn out well we need to own up to it. Ideally in these cases we would also follow up with the client and review the process and events to help craft a better approach in future matters.

Option Orientated versus Risk Orientated:
We are trained and educated begin day one in law school to identify risks. What we are not provided in our education and later in practice is instruction on how to acknowledge these risks while also pursuing a specific plan or goal. Too often lawyers say, “you cannot do this” or “you should not do that” even when it is not in regards to criminality or legal liability. The client may want to pursue a new direction or allow a group to embark on a new project that carries with it some risks of failure and potential liability for the client. A lawyer rightfully needs to point out all possible risks and negative implications. However, the lawyer needs to recognize that if this is a business goal of the client then they ought to work to find the best potential plan that achieves the goal while controlling for the most risk. A lawyer can then say something akin to “you can do this and here is how and what we need to be careful with and watch for.”

Resourcefulness (the 80/100 Rule):
Knowing when to turn over every single pebble and knowing when to focus on boulders is more art than science - and less obvious than this metaphor depicts. Yet most lawyers approach almost every client issues looking for every pebble and begin looking for why this case/issue is different than any others. We are so strong at reading content and then arguing for or against the principles within it that we have lost the ability and sometimes willingness to first see similarities in the overall matter. Without going into the billing paradox embedded as part of this sentiment – we do not and should not look to reinvent the wheel with each new issue that our client presents us. Rather successful lawyers are excellent at leveraging prior knowledge and work to their and their client’s advantage. Sometimes bringing an answer to the client quickly but only being 80% confident is extremely more valuable than bringing an answer feeling 100% confident much later. Business moves swiftly at times and a lawyers needs to understand that they ought to be operating at the clients pace not their own. Plus generally the time it takes to get from 80% to 100% compared to the value it brings tends to flatten and stagnate. Put another way –many times an 80% solution that is ready now is better than a 100% solution that is ready later.

Consistent Diligence:
Lawyers need to strengthen as best they can to ensure our advice is based not just on diligent analysis of all the relevant facts and concerns, applying the relevant laws, regulations and/or policies. We need to do this while taking into account the business context in which events occurred and the solution is now being applied in. In doing so we need to ensure that we capture and are able to explain how we arrived at the advice we have. This helps in building trust with the client as they may ask for further explanation or question our level of confidence in our counsel. It is during these times that we must be able to honestly demonstrate our command of the situation as a whole not just some part of it.

The balancing act that lawyers need to perform is that of Resourcefulness with Consistent Diligence. They are not polar opposites but rather two distinct efforts that can be individually calibrated per each situation.

Back to the labels that started this article: Labels may be useful to draw distinction in some contexts but I would rather call all of these skills simply “required skills.”

Legal Innovation: Outside In

2010-04-29T16:03:00.003-04:00

This past week there was a conference held in the UK that looked at the Future of Legal Services. While much of the conference certainly focused on innovations and developments coming from law firms there was a growing dialogue around innovation from outside the traditional legal circles. As I have worked with clients in the UK – both firms and corporations – my envy has grown over their more open competitive landscape as compared to ours in the US. The UK does not have the “unauthorized practice of law (UPL)” claim/defense/challenge that the US has. Further, the UK tends not to hold the legal profession as some sort of sacred cow, as the US Bars do.

In today’s Legalweek, Claire Ruckin (see article here) reports on the statements and sentiments at the conference in regards to innovation, at least within the UK market. Given the looming changes to UK’s legal markets thanks to the Legal Services Act (LSA), investors will soon be able to invest directly in law firms – something that may not be so appealing to many, at least according to some. Simon Beswick of Osborne Clark stated it plainly “Venture capitalists see more opportunities in setting up new businesses to compete with law firms, as opposed to direct investment into existing firms (as quoted by Ruckin)." This goes against both of the widely held assumptions that investors would want direct investment in firms and that innovation can only come from law firms themselves.

Yesterday I attended the Univeristy Of Maryland School of Law conference “Addressing Major Changes in Law Practice.” Gillian Hadfield of USC Law often asks the question and raised it yesterday as well “where are the garage guys of legal?” It is by no coincidence that she uses that term as she is currently at USC – close to the birthplace of so much innovation and where departing from the mainstream to go invent and create in a one’s proverbial garage has led to some amazing products as services – see Apple, Google, Microsoft. But as Gillian and others have pointed out, here in the US too often any innovation in the US is squelched by UPL claims when they come from outside the law – or even from within it. It is instructive to review the claims against LegaZoom and TotalAttorneys for evidence of this - - or just talk to anyone who disagrees with the use of off-shore LPOs.

So while the UK moves forward and loosens the constraints and barriers to entry to their legal market, the US holds fast to arguably antiquated and weak claims of self-regulation and professional protectionism. For the record I am not against law firms nor am I out to seek their Ribstein-ian death. Rather I am confident that the US market is in dire need of serious innovation in creating more options for consumers and clients - the old way can stay, just make room for some new way as well. Why is this change necessary for the US? Because every other legal market is either developing or changing as we speak – that is besides Mexico who is looking to replicate ours. My guess with Mexico though is they will embrace our distinctive advancements (Constitutionality, rights, judicial system) and disregard our ignorance and/or arrogance in not recognizing and not pursuing significant change. Then again, as I stated yesterday in Baltimore – perhaps the US is truly brilliant and we will lead by NOT changing. Call me patriotic but that does not seem to reflect the famous American spirit.

In the meantime though I tend to believe consultant Stephen Mayson (a recent Georgetown Law: Law Firm Revolution panelist) when he argues that the next five years would expose the shortcomings of the profession's business model and capital structure, arguing that law firms "don't understand value." He was speaking in the UK but his remarks apply here as well – perhaps even more so.

Addressing Major Change in Legal Profession (UMD Law Conference)

2010-04-28T17:35:00.013-04:00

This is a ”live” blog transcript for the “Addressing Major Changes in Law Practice” presented on April 28, 2010 by the University of Maryland School of Law. For more information on agenda and participants please click HERE.

This conference follows on the tails of the other recent legal conferences that have examined both the changing legal profession as well as the growing interest in changing legal education. See the Georgetown Law conference “Law Firm Evolution: Brave New World of Business as Usual.” Also the recent NY Law School “Future Ed: Business Models for U.S. and Global Legal Education.”

Readers of this may also be interested to learn of the upcoming conference at the University of Southern California in conjunction with that school’s “The Southern California Innovation Project (SCIP).” This event has been organized by one of today’s panelists and active thinker/writer in this area, Gillian Hadfield of USC School of Law. The name and focus of this event is “Building Better Lawyers.”

Live Blogging:

9:20am

Phoebe Haddon, Dean of MD Law School begins off the morning. This conference hopes to be a bit different than the recent conferences on the changes in the legal profession. She notes that the profession is calling into question whether the traditional employment model of recent grads going into law firms will remain the status quo. Dean Haddon is touching upon most of the recent conference topics. She notes that this focus is on law schools and law students and what they will be experiencing as they leave school and seek employment.

Working collaboratively and approaching problems from an interdisciplinary way are key going forward - citing the 2007 Carnegie Foundation report on legal education. It highlighted the gap that exists between legal and practical knowledge.

What should we be advising students in regards to these challenges?

In thinking of the much often touted “having a global vision” – this is a mutual and shared sense of problem solving and how we confront the social and economic problems found in the world.

University of MD School of Law has created the Leadership, Ethics and Democracy (LEAD) program – law schools have an obligation to prepare law students for the leadership roles they will find themselves in later in their career. This is a growing trend for more “leadership” within both the profession as thus in legal education.

9:30am

First Panel “Changes in Big Law Firms and the Issues These Changes Raise.”

Bill Henderson presenting “Models of Practice: Past, Present & Future”

BH: Highlighting the past models and economics circa 1948 – in short much smaller firms – much smaller profits. Then came the Cravath Model. The Chicago Lawyers study “Two Hemispheres Theory” – look at who’s the lawyers clients are - 1975 50/50 personal lawyers versus corporate - 20 years later the hemispheres shifted – 2/3 were then working for corporate interests.

Highlighting how the lawyer population has outpaced total population increase. Yet the ABA is reluctant to say we have too many law schools.

Class of 1991 entry level salary was $40k. 8% to 10% making $70-80k. In 2007 the median is $65k. 20% making between $120 to 140k per year. Law school grads have become too expensive to train – citing how more and more clients refuse to pay for 1^st or 2^nd year associates. This coincides with the on-going structural change – nature in the client/lawyer relationship is changing. GC motto is “do not let legal costs outpace revenues”

The old broken model – flipping Cravath model on its side. Associates now equal loss – partners still equal profit. New model demands expertise beyond lawyers – folks such as Specialists, Project Managers, Team Leaders, Price Estimators are more and more in demand.

Future Models

Mentioning Susskind’s Book “End of Lawyers.” Society wants us to move along the path towards commodity (iPods, Blackberrys, are innovations that are commodities yet valuable to both maker and consumer.) Lawyers need offer both to but also stay up in the specialized arenas.

9:54am

Marc Galanter: Looking at profession in year 2020. We probably know just as much about what things will look like in 2040 as we do 2020.

How much of the larger legal profession could we have imagined ten years before? Change happens in certain periods of time. Outlines 4 major periods of change in the legal profession in the US (see below).

A 1935 – 1945

B 1960 – 1970

C 1985-1995

D 2010 – 2020

Now we are facing the next ten years (2010-2020). A great deal of change can be packed into a ten years time frame. This is a greatly unstable period – perhaps more so than any previous. Legal profession is growing but much more slowly – and it is getting older in terms of its ranks. Firms are becoming more elastic – new titles and employees (true employees). Competition between lawyers within firms is higher. Firms are incapacitated in solving the lifestyle problem. Greatest challenge is the new information order that arrived in the late 70’s – proliferation of press and information technology.

Facing challenges form new areas – outside capital. Are there states that want to take the lead on this? Capitalization will accelerate the innovation and technology use by such a firm further undercutting those firms that do not.

Looking ahead all we really know is that change is ahead – status quo no longer

10:18am

Michelle Harner: We are in a time of change for the legal profession more generally. Law firms are right-sizing. That is normal part of an any organization’s evolution.

Lawyers at Big Law “add value” – To create and find solutions that are not in the forms and treatises. Clients hire creative problem solvers and skilled technicians.

Pushing back on all this talk of change – there is a lot of noise out there about how we need to fix the legal profession and the death of big law. Not sure they reflect the majority of opinions out there.

We are doing a disservice to clients if we buy into all this noise. There is room for unbundling and outsourcing. Let’s not undervalue what it is lawyers and legal educators do.

10:23am

Lisa Fairfax: Agrees with Michelle Harner’s comments regarding “noise” out there but does highlight some disconnects that must be rectified.

Disconnects in the profession:

Last year more than 12000 people were laid off yet in Sept 2009 more than 60,000 sat to take the LSAT (largest ever). We have an absorption problem – how can law firms absorb all of these folks?

We are still training lawyers as if they are in a 1947 practice.

Group decision making is yet another disconnect. Mention “group project” in law school and students run screaming. Yet in firms lawyers and other must work together – especially with clients.

10:33am

Neil Dilloff - Been in a large firms for 33 years.

1. Large law firms will not vanish – these claims are premature. BUT things have changed. Competitors are coming from “spin-offs”

Sophisticated clients hire lawyers first, law firms second. Going with the old “you do not get fired for hiring IBM” - but regardless in most cases it is the lawyer not firm that is hired

2. Firms are looking for grads with judgment, people skills, sensitive to integrity and honesty, and people that are “workplace” ready. Law firms need help from law schools in this preparation and training to make them client ready /business ready.

3. Lectures are good but practice is better – immersion. Start in 3^rd year in stuffing their heads with as much practical knowledge as possible

Truth in law firm training: If you are lucky and you are assigned to the right partner you will get opportunities to actual learn and do something. Assigned to wrong partner and you will sit in a room and what to “blow your brains out.” I try to bring the law firm into the classroom as both an educator and a practitioner.

Georgia Sorenson comment of U of MD School of Law: Articulated planned sustainable measureable change = equals transformational change

11:09am

Gillian Hadfield: The IX Challenge in her classroom: Legal Entrepreneurship - presented students with a challenge concerning a true start-up company. The CEO stated that the company was not closing deals fast enough. In part because the contract is too long boring, dry, and daunting. We all get excited but then have to deal with the contract.

So how to create a contract that is smaller, simpler and still protects us? Form 10 pages to 2 or 3? This was the project for the class. Failure – solutions longer or minimally reconfigured could not get is smaller than 10 pages.

It was a success from the teaching perspective. It reminds us that it is rally hard to teach all of this stuff.

Where are the “garage guys” in law? The young ones who drop out and go set up and innovate some cool idea to change the world. The adage in Silicon Valley is that somewhere there is a 26 year old working on killing your business model. In law we have no such thing.

Today’s lawyers and students do not have the inspiration or skills to tackle innovation. The growing value gap is increasing the dissatisfaction levels of big law.

How do we produce the “garage guys?”

Current legal education model does not allow for this as it:

-Produced judges

-Produces big law firm associates (research memos)

What would it take to produce a legal entrepreneur?

1. Deep appreciation for underlying functions, purposes of legal work.

a. NOT how many lawyers (today) think and do things

2. Problem-solving orientation and expertise

3. Able to transcend the existing models and forms

11:31am

William Hornsby – Counsel ABA

Focuses on small and solo firms –

3 dynamics changed the practice

1. In 60’70s we had consumer movement

2. In 1990s we had the internet

3. Economic contraction

Unbundled services have to cross two hurdles

1. Informed consent

2. Reasonable under the circumstances

The Rise of Niches/Specialties and innovation:

Examples:

A2J by Kent School of Law – (SJI)

11:54am

Jeanne Charn: Changes and how that impact access to justice/legal services

Pro Bono is getting better understood but it is tough to fit pro bono into every practice.

See CLASP Website for 2007 Houseman “Civil Legal Aid in the Unites States.”

12:10pm

Ward Coe: on mid-size firms

25 to 65 lawyers in this area. Mid-size firms have not been tacking large firm in terms of impact from economic downturn. Midsize business models are fundamentally different. Hardly any have lines of credit. They may be a bit more flexible in the management operations thought most do no t have formal management structures.

Mid size firms rely less on leverage of associates – as in most first year associates gain real experience sooner that big firm – further, mid-size have less of a budget for training so they train through real experience.

Lawyers may be self selected for lack of creativity. Law students do not question authority.

Harvard, Yale and NYU do not even have UCC course some not even professors yet lawyers can make a wonderful living practicing it.

Live blogging end . .

Four Quadrants of Legal Education: And Educating Thy Self

2010-04-20T15:46:00.005-04:00

Recently I have been in many conversations relating to the US legal education system. The debate is generally centered on who has the responsibility to train new lawyers – law schools or law firms? Many believe that both carry a responsibility and both are failing at it. While it is easy to pick apart the dogmatic approach taken at most law schools and it is just as easy to criticize law firms for their lack of training seldom do I hear someone examine the young lawyers themselves.

In preparing lawyers for the “real world” of practice, the education and training debates tend to focus on law schools, professors, law firms, and practitioners. I ask where does the responsibility of the actual young lawyer/student come into play? Do they not have an obligation to pursue their own personal and professional growth? Are they not the ones who ultimately carry the burden of performing?

Bear with me as I touch upon some personal history briefly.

Being a middle-of-the-pack graduate of a 2nd Tier school (now known as the Top 100 - as there is no 1st or 2nd Tier) I knew my legal career would be on a much different trajectory than those in the elite schools. I would not have the Summer Associate offers or the First year offers that follow. For me and the majority of other graduates (as most do not graduate from top schools in the top of their class - see Bell Curve) the heavenly gates of the AmLaw 200 were not open to us – if we wanted in we had to pick the lock or find a side-door – some did. Me, I chose a different path, as many do who do not necessarily even want to practice Big Law.

Recognizing early on as a full-time 1L that my path would need to be non-traditional I quickly found a job working in one of the most elite DC firms – Williams & Connolly. My job – cite checker. To this day I cannot state with any certainty where I learned more that year – in my classes or at the firm. At class I was learning Contracts and Civil Procedure (with such useful topics as the Court of Exchequer). At my job I was proofreading, editing and cite-checking Supreme Court briefs and other pleadings. At class I was called on to recite the findings of a 100 year old case. At work I had to explain to a prominent partner why his cite was wrong both in terms of style (Bluebook) as well as prevailing authority. At school I struggled to make sense of the wide disparity of law I was being taught – from Tax to Criminal Law to Property (with the rule against perpetuities). While at work I learned the dynamics of firm politics, economics, and practice as I was participating in each in some small way.

This experience provided me key insights that have informed my path and choices since. I understood there was a much deeper well of knowledge and experience I needed to draw from than just my classes. This is not to say I disregarded my schoolwork in any way but I did strike a balance between work and school that at the time appeared to be career suicide to my classmates but I argued it better prepared me in the long run. My classmates would not see the inside of a firm until their summer of second year and that would be through the notorious “Summer Associate” programs that do little to teach and a lot to woo and court.

I end my personal story here but want to highlight that beginning my 1L year and ever since I have worked to refine what I observed to be the four quadrants of a legal education.

The challenge is determining where to gain each of these. That debate will carry on for some time, as it needs to. Just now we are witnessing the awakening that the right half of the above are necessary in today’s legal industry and that a majority of new graduates as well as many of the current lawyers ranks are clueless about.

To return to my story quickly – many of my fellow classmates who graduated near the top and wrote for law review are now partners in big firms. They make decent money. But two characteristics abound: First, they are not all that happy or fulfilled. Second, they only know quadrants the left side of the graph above. As the pressure builds to gain more client work and clients apply pressure to bring more value these lawyers are dumbfounded and paralyzed in many ways - a sorry state to be in especially given today’s legal market. Who is to blame? I argue the lawyers themselves. The more important question however is who’s issue is this? I say it is every one of ours in the profession. We need to come to terms with this and address it soon – especially all those senior associates and partner who have no true sense of “business.”

Moving from Debate to Dialogue

2010-04-07T10:35:00.001-04:00

In response to a thread started on LegalOnRamp by USC’s Gillian Hadfield discussing how to “build better lawyers” I provided the following. I thought it was useful to share here as the application of dialogue over debate is certainly crucial to the ongoing transformation of the legal profession.

A useful case study for this is The Sedona Conference. It is a legal think tank of lawyer, judges, and other experts that work to produce defining principles that guide certain areas of the legal practice. Several times a year professionals from varied backgrounds and practices come together to work through complex issues and ill-defined problems. With all these lawyers in one room it could easily be a haven for uncontrolled debate and typical “lawyering.” However it is anything but. Rather the tone is one of collaboration and teamwork. Sure there are many different takes on the same issue but in the end the work product reflects a thorough analysis and thoughtful approach. So much so that Sedona is often cited in case law and statutes. The reason: Sedona is guided by dialogue NOT debate.

The key is to understand the difference between dialogue and debate. Lawyers learn to debate – arguing a point, anticipating the opposing viewpoint, countering and so on. From Day 1 in law school we are taught this technique and to “think like a lawyer.” Perhaps even before we get to law school many of us are already predisposed to argue and fight verbal battles based on logic and wit. However this type of communication is not conducive to collaboration or teamwork. In a lawyer’s mind someone will win and someone will lose. Also lawyers tend to focus on problems NOT people. On the other hand dialogue is a communication tool used to foster openness and acceptance while allowing for an ultimate conclusion to be reached. Acceptance of opposing ideas is crucial but in the spirit of furthering the conversation not to stop it or the speaker of it. Dialogue focuses on the problems as well as the people recognizing both as well as addressing them.

To return to the initial issue on this thread: Training our lawyers at any stage of their education and/or career to dialogue rather than debate will foster the change spoken of here and create a more “open” and collaborative environment. Being a co-author and active contributor to Sedona has allowed me to gain a stronger sense on how to effectively communicate and work in a team of lawyers. This exposure and experience has been invaluable to me personally and professionally. And I have heard the same from many other members.

Law Firm (R)Evolution & Gaps

2010-03-26T08:00:00.002-04:00

Earlier this week Georgetown Law School held a symposium on the on-going law firm evolution. Much reporting has been done on this focusing on different issues and components of the presentations (See Lance Godard's collection). Perhaps the most valuable and insightful information coming out of the conference was from the exchanges of dialogue between participants. There were many themes that emerged over the two days but one stood out more than any others - collaboration. There still exists a “gap” between in-house counsel and their outside counsel that is prohibiting robust and meaningful collaboration that would benefit both parties.

This gap can be best said to have three components or flavors. There can be a Knowledge Gap, a Trust Gap, and a Risk Sharing Gap. All of these gaps were touched upon at some point throughout the conference. It was noted time and again that as much as things are changing in the legal marketplace there still is an apparent lack of collaboration occurring that better aligns the interest of outside counsel with their client. Given that the traditional interests of both parties have been stated to be misaligned or in conflict it is easy to see that it may be difficult to readjust and recalibrate accordingly. What was most apparent was that both parties understood and appreciated the other’s position – for instance it is clear that most in-house counsel understand and wish for law firms to be profitable. So the issue in not necessarily in the ends but rather, in the means. In house still needs solid representation along with trusted advice and counsel, but the way in which in-house is getting this is changing and what they look for outside counsel for is changing as well.

Three Gaps.

Knowledge Gap: Lacking of knowledge about the business of the client. This gap can exist as to both outside counsel and in-house counsel. It is obvious to see where outside counsel may have limited exposure and insight into the actual business of its client because it is indeed “outside” counsel. This is not to say that this is acceptable and sustainable perspective. Perhaps more compelling and disconcerting is where in-house lacks the knowledge of their client. Paraphrasing Mark Chandler “as part of the GC office - knowing your way around the business/company and its people/processes is critical.” If in-house is not successful in gaining the knowledge of its client how can it expect outside counsel to do so? Further this knowledge of how the company runs from operations, to sales, to R&D, etc. is critical to providing proactive advice and counsel. Too often both in-house and outside counsel are brought into a matter that has already become critical rather than having been involved earlier perhaps thwarting any major issue. Proactive versus reactive.

Trust Gap: Lacking the insight into incentives and methodologies in how each party is conducting its work. For instance, in-house is reluctant to trust outside counsel in terms of how it is providing its services and what they are charging for it. This goes back to the traditional misalignment of interests – in-house knows that outside bills by the hour in most instances and there is almost no real incentive to dispose of a matter quickly and cheaply. Further, outside counsel is spare with its trust of in-house when in-house selects other firms or suppliers to work with. Leah Cooper provided a great example of this when she stated that too many times outside counsel acted as though the choices she made as part of Rio Tinto’s in-house team in selecting vendors were suspect and came from an ill-advised process. She continued to say that this notion that outside counsel carried regarding working with any other vendors or suppliers often frustrated the purpose of the project and led to too much time wasted in getting outside counsel to work effectively with the other suppliers. This lack of trust of both parties leads to much waste and frustration.

Risk Sharing Gap: Lacking the ability or willingness to properly and fairly allocate risk. Jeff Carr and Tom Yannucci had an animated exchange on the opening evening of the conference. Carr was making the point that outside counsel needs to take a more active role in the risk sharing of the matters they participate in. This was geared towards fees meaning that outside counsel should not look to just bill by the hour in instances they have plenty of experience and knowledge on. They should be willing to devise a system of billing that takes into account their prior experiences and shift some of the risk of success or failure onto their billing schemes. As Carr put it – as a GC representing only one client he does not gain the breadth and depth of experience that law firms do in representing hundreds of clients. A matter that may appear to be unique to Carr may in fact be run of the mill or at least more familiar to his outside counsel. This being the case, outside counsel should have a better handle on what these matters typically cost and what the best manner is to proceed in. Yet not only do outside counsel typically fail to offer any such guidance but more sadly they often fail to even measure or capture any such data that would be useful for such purposes. If outside counsel had a better understanding of costs and strategy they would be better able to provide in-house with a budget. Further, they could then work to devise a billing mechanism that rewards success – success as defined jointly by in-house and outside counsel. Thus sharing both the risks and rewards is more easily achieved.

Filling any portion of the gaps should allow for more effective and collaborative work between in-house and outside counsel. It is clear that as William Perlstein of Wilmer Hale put it, in-house needs to take up the challenge of managing more both in terms of their client and in actual legal matters. It is no longer acceptable to be in the GC’s office and never reach into your own client to learn and always reaching to the phone to have outside counsel take care of everything. Also, outside counsel have to move beyond focusing on their clients in terms of matters and cases. They need to view their client more organically, getting to learn the nuances of their businesses and people. As both Chandler and Perlstein emphasized – both in-house and outside counsel need to “know their client well.” The client is the company and both in-house and outside counsel need to serve it actively and knowledgeably.

Wordle for the Georgetown Law Firm Evolution conf.

2010-03-24T11:09:00.000-04:00

This is drawn from the actual tweeting from the conference. Taking Lance Godard's (@lancegodard)"What the Hashtag?" page and striping out as many names of tweeps and presenters as I could here is the Wordle for the conference.

Resource Management within Legal Project Managment

2010-03-16T19:37:00.000-04:00

Today we see increasing numbers of law firms and in-house counsel investing in project performance and project management (PM) tools. While this is still a nascent development for the legal markets it may seem premature to point out some its failures. It is necessary however in order to ensure proper growth of this area and to continue to strengthen “buy in” from the stakeholders – for one failed project is not just a single failure but also serves as reason not to deploy PM methodologies at all in the risk averse culture of a legal practice.

Here I focus on the one failure that most often sinks the entire project management effort and in most cases the actual performance of the project as well (on-time, on- budget, results, and quality). This failure centers on the ability to have the right people at the right time at the right place. Sounds simple but it is not. Another way of wording this concept is “Resource Management.” Here the resource is people.

In today’s legal landscape the human capital component of our work is dramatically changing. Considering such things as outsourcing, off-shoring, near-shoring, and captives as well as new roles and positions within departments (discovery manager/counsel, project manager, strategic development) the spectrum of labor skills and locations has become more complex. Projects are typically not initiated, managed and executed from within one office or location. The Project team can consist of internal personnel (lawyers, non-lawyers, business executives, and support staff) as well as external personnel (experts, consultants, co-counsel, vendor partners and others). A project manager may be managing a team consisting of folks in different time zones, with varying backgrounds, and with varying degrees of exposure to PM. Managing not only the project but these resources is vital. Thus, properly articulating and documenting a resource management methodology along with the associated PM processes will allow for more consistent long term benefits of the overall PM implementation.

So what is resource management in terms of legal PM? The easiest way to think about this is yet another comparison to the manufacturing world. Decades ago the manufacturing process was relatively simple – a factory made a product on-site – bringing all the needed parts and labor to the factory’s central location. As the need to produce more products for less cost increased, the industry realized that it had to learn how to eliminate costs associated with storing inventory and under-utilized labor during down cycles as well as how to respond to peaks in demand that otherwise would be lost opportunity. The industry looked to alternative methods that allowed for a decentralized approach - having certain components manufactured elsewhere and then shipped to the main factory for product assembly and completion. This ultimately led to “just in time” practices whereby a company is able to control its supply chain with such a degree of accuracy that often times dozens, if not hundreds, of individual components arrive to an assembly location “just in time” (meaning no warehousing needed) for production. Further, the supply chain is diverse enough to compensate for supply shortage and spikes in demand.

History is repeating itself within today’s legal services market. Competition is fierce, margins are tight, and the traditional business model of the law firm is being questioned. The competitive pressure to produce quality for less is a reality that firms face every day. Couple this with the increased competition from non-traditional entities (such as MDPs and LPOs along with soon-to-be annexed businesses under the UK’s Legal Services Act) and firms are facing a challenging and complex operating environment. The stakes for deploying effective management tools have risen.

Resource management can be seen as part of the initiation and/or planning phase of a project (See http://en.wikipedia.org/wiki/Project_Management_Triangle) or it can be an organizational approach to controlling costs and working more efficiently. Regardless of scale, RM constitutes 5 basic elements.

1. Identification: prior to any project it is necessary to identify the bevy of skills needed in order to perform and complete the project. These can be subject matter skills (such as tax expertise or foreign language) or operational skills (such as technology knowledge or process mapping). Though it should be a goal to outline all of the skills needed prior to project initiation, the skills needed may change throughout the project and/or certain new needs will emerge or others will become unnecessary.

2. Audit: Once identified the next step is to thoroughly examine your organization beginning with your immediate sphere of influence. This may depend on the hierarchy of your company and your placement within it, your physical location, peer group, etc. Once your immediate sphere is examined next look beyond to discover any other resources that may exist in your company but you may not have immediate access to.

Next look to outside groups and persons for the skills needed. Perhaps you are working with an outsourcer or a subject matter expert. If your project already involves these types of groups it is easy to skip this part and take it as a given that they will offer someone with the requisite skills. Nevertheless it is highly recommended that each potential member of the project team from outside groups be vetted. Beyond that, if you have visibility further into the outside groups, use it. Look to see if perhaps there is someone else who may be stronger or more “on point” for your needs that is not currently slated to work on your project – try to get them.

3. Access: Discovering what you need and where it is is one thing. Determining whether or not you can actually use a resource is entirely different. This is where compete analysis is vital. It must be determined whether or not a specific resource can be devoted to the project and what the “politics” will be if they are not in your immediate sphere of influence. It can easily frustrate the purpose of the project when a resource thought to be accessible is later - once the project has begun – not accessible.

4. Utilization: For each resource, what will be the productivity required and is this the best use of the resource’s time? As to productivity, will the resource need to commit 10 hours per week or per month? Is there more than one resource available? What are their varying degrees of competence and cost – meaning if one is more expensive but can get more done in less time versus a less costly resource but who is also less productive (e.g. senior partner versus 1st year associate). Depending on the scope and schedule of your project you may want one over the other.

Regarding “best use” of time – this is something that others may need to provide information on –including the resource itself. There may be other needs for a specific resource that outweigh your project’s need. It may be a loss to the organization to pull this resource from other more pertinent matters to commit any time to your project.

Finally under utilization, it is vital to properly scope and measure as best as possible the “optimum” utilization for each resource. This should be communicated to and agreed upon with the resource prior to engaging that person. And of course this must be measured to track performance and adjust for any deviation – whether the project direction changed and thus a new allocation of time is needed or the resource is not fully utilized for some other reason. Idle time of any resource is waste (cost) and will ultimately impact the project’s performance and success.

5. Control & Direction: Finally to what extent are you able to control the resource commitment and performance on the project? This is often an issue when a project manager needs a resource that is more senior to them – in a law firm setting think of a project manager trying to control a senior partner. This can be a challenge to any project and thus needs to be considered early on. There may be a resource that is perfect for your needs but in the end you may not have any ability to control them. If this is the case you may need to look elsewhere or more narrowly define the scope of work you need from the resource. If you fear you cannot control the resource – instead of looking to them to fulfill 100 hours on the project maybe you can define the most critical area they are need and attempt to secure only 5 hours.

Performing this analysis and conducting each step will help ensure that not only you have the right people and the right time in the right place but it will also set expectations of all team members. The more complex a project and the more member of the team, the more important this becomes.

The "work" of In-house Counsel

2010-03-10T07:51:00.002-05:00

Rees Morrison’s recent post about how most in-house counsel neither manage nor lead others - they simply “work” – truly got me thinking. The obvious question that came to my mind was “what are they working on?” I agree to some extent that in-house counsel typically do not carry large numbers of direct reports and but for the General Counsel herself, most in-house would not ordinarily see opportunities to lead really anything or anybody. Putting the daily work aside along with the effort associated with managing outside counsel is there nothing left for in-house to work on if they have no direct reports and no leadership opportunities. Are they locked in a world where managing and leading are unnecessary traits and skills? Is simply “working” enough for in-house to do? I have stated for some time that in-house not only has abundant opportunities to lead and manage others (in ways other professionals do not) but also that they have an obligation to do so. Focusing on work at hand is not enough regardless of the size of the law department or the client/company.

In working with in-house counsel over the years I have had that good fortune to meet and learn from some remarkable folks who viewed their in-house role as much more than simply doing their work. Or rather they viewed their work in terms other than performing legal duties and managing counsel. Often these individuals were active within the business itself, serving as solutions architects for different business groups facing unique challenges. On occasion I was able to speak with the business stakeholders that the in-house worked with and for about the particular lawyer. I would be told that this person “really understands our business,” “he looks for a way to get things done rather than telling us how not to do something,” “it feels like they are part of this team; active and engaged; not someone we have to go find in another part of the building and ask for a time to see us,” and so on.

While working and collaborating with in-house teams over the years I have made note of certain qualities and characteristics that appeared to be highly valuable and also led to a much more rewarding tenure for some. Below are some things to consider and questions to ask for any in-house member who solely focuses on doing the typical work or for the person who is looking to grow beyond that role:

1. How closely aligned are you with the business units you support and interact with?

a. Can you name the major competitors of your company?

b. What are the key market forces currently impacting the business?

c. What are the ancillary market components/participants impacting business?

d. What are the major opportunities for your client in the market?

e. What are the major threats for your client in the market?

f. Do you know the strongest/weakest part of your client’s business and product/service?

g. Are there new entrants on the horizon?

2. How familiar are you with the different roles within your organization? Do you understand the challenges faced by:

a. HR

b. CFO & Financial team

c. Sales & Marketing

d. Operations

e. CIO & IT

f. Facilities

g. R&D

h. Production

3. How comfortable are you with the business practices and processes of the organization?

a. Compliance and Governance

b. Vendor selection

c. Supply Chain Management

d. Labor relations

e. Insurance and Risk Management

f. RFP and Bid proposal

g. Multi-jurisdictional transactions

h. Environmental practices

4. If you lost your job tomorrow, who would hire you and why?

a. How are your communication skills? When was the last time they were tested?

b. Do you have a foundation in proactive solutions and activity?

c. How robust is your professional network? Who knows and how do they know you?

d. Could you land your client yourself if you were not in-house but rather outside counsel?

This is not meant to be an exhaustive list rather it is meant to illustrate the abundance of areas in which in-house could focus and strengthen their overall value to their client – creating scenarios in which they will lead and manage. Also I am not the first to suggest that in-house needs to operate more business-minded folks and less legal minded. Overall there are plenty of opportunities to lead and manage for the in-house counsel willing to do so in any type of organization. These opportunities may not be apparent at first but they are certainly there – one may just have to work to uncover them.

Note: This list can be used by outside counsel as well to determine where they stand on adding more value to their clients.

Yes US, there is such a thing as EU Data Privacy

2010-02-25T08:59:00.002-05:00

All too many times, it is easy to get the sense that the ediscovery market is a US one. Given the notorious American litigious nature, many people and companies are solely focused on how to react and respond to discovery within the borders of the US. Though much does indeed occur here, those of us that participate in the global arena understand there are greater interests and conflicting rules that can greatly impact one’s ability to respond to discovery. I have to admit that I have been witness to too many instances of “grabbing data” that may otherwise be legally “ungrabable.” Pardon my parochial verbiage but in these instances it appeared not so much that data was collected as it was indeed “grabbed.” This of course is where the party was aware of international regulations – most often however ignorance of such controlling law was rampant.

Enter the work of the EU Article 29 Working Party and that of Working Group 6 of The Sedona Conference (WG6 & TSC). Both groups have attempted to add some clarity to the obligations of parties involved in cross-border matters which involve the transferring of data from one jurisdiction to the other. I will borrow the words of Chris Dale here for a proper description, including his intro as I believe it sums of the lacks of awareness quite well:

I will interpose only the briefest of introductions for the benefit of those bewildered by the whole subject, a group which, alarmingly, includes many for whom it all matters very much, if only they knew it.

The Article 29 Working Party is an independent European advisory body on data protection and privacy, established under Article 29 of EU Directive 95/46/EC. Its tasks include consideration of the conflicts which arise between EU data protection and privacy laws and the requirements of foreign courts and other bodies for documents which may contain private information covered by the Directive. The Working Party issued a document on 11 February 2009 called Working Document 1/2009 on pre-trial discovery for cross border civil litigation (“WP158”). The Sedona Conference responded on 30 October 2009 with a formal Comment of The Sedona Conference® Working Group 6 to Article 29 Data Protection Working Party Working Document 1/2009.

Read Chris’s entire post HERE

Recently, Jim Daley the Co-Chair of WG6 provided an update on the conversation with the EU and TSC. You can read more in Chris’s post above but I wanted to highlight the discussion that best illustrates where the current thinking is with this group and where they want it to go. Needless to say that there is some distance still on how the EU and the US see data privacy, specifically the transferring of personal data. To quote Mr. Daley:

"We received very spirited questions from the several Working Party members regarding why anonymization was such a burden for companies responding to cross border discovery, and why recourse to the Hague convention posed practical issues. We were also asked whether we believed there is really any hope that the U.S. federal judiciary will consider data protection and privacy and blocking statutes in balancing the privacy interests of Data Subjects with the disclosure obligations of multinational corporations. The questions led to an expansion of our time to 45 minutes. We all were able to participate in the discussions.

"The Chairman, Jacob Kohnstamm [Dutch Data Protection Commissioner], concluded by observing that he felt this might provide a 'win--win' situation if we can work toward complimentary goals of minimization of transfer of personal data, and overall reduction in e-discovery costs as a result.

While I do not believe that the US will embrace a more EU-type view on privacy the fact that this dialogue is occurring and continuing does provide hope that each party will find better ways to reconcile the different views each has. In the meantime there is every reason for companies to acquaint themselves with these issues so that they can better manage data transfer issues. If nothing else, understanding that there are even such things as “blocking statutes” and specific rules prohibiting personal data usage as well as what is defined as personal data – would be a valuable exercise.

The next step for this effort is the TSC Solutions paper that is currently being drafted and that will be discussed and used to frame the future discussions. WG6’s next meeting is slated for Washington DC later this year (tentatively September) and is by invitation only. If you are interested in attending you can send an email to Jessica Buffenstein at jdb@sedonaconference.org.

A note on participation: my direct involvement with Working Group 6 was only for a short time having participated in a Bermuda meeting prior to the dialogue with the EU. I would like to be of more value to the group to be honest but in all candor the state of work and dialogue currently transpiring between TSC and the EU is of such a high caliber that only those “neck-deep” in these issues are truly valuable. I do await in anticipation the end result as these folks work to clear the path for the rest of us and provide guidance on how best to navigate the international terrain of data transfers.

Trojan Horses, Rabbits and Red Herrings

2010-02-07T12:53:00.002-05:00

For ease of reading I am posting here an on-going conversation that Steven Levy and I have been having on the role of Project Management within organizations looking to find the "hidden ROI" within their information assets. It all started with Feb. 1 post here. Once again, thank you to Steve for his comments and informative perspective. In case you have not read it yet he has recently published the book "Legal Project Management."

Steve's reply is below (link to his blog HERE)

Joshua Kubicki* of Legal Transformation published an interesting and thoughtful piece Monday on Using Project Management to Find “Hidden” ROI.

He writes that he’s drafting a new proposal for the Sedona Conference about “establishing a business case for finding the hidden ROI in an organization’s information assets.” He talks about project management as an essential — and missing — factor.

While I’m (obviously) a huge supporter of the right kind of project management in the legal arena, I wonder if project management per se is just a bit of a red herring in the case of hidden ROI.

In the business world, you wouldn’t make any major move without thoroughly considering all the aspects of ROI, an nontrivial exercise. However, the concepts of ROIC, opportunity cost, IRR/NPV, and such seem alien to the way most attorneys practice law — and indeed often to the firms themselves [abbreviations summarized below]. I’m not talking about the terminology per se; there are plenty of ways to debate the net present value of various projects and cases without ever using the term.

What may be a “better” approach would be to apply a greater degree of business logic to the mechanics of the practice of law. I don’t mean attorneys should get a dual JD/MBA any more than I think they should chase PMI certification. Rather, they should develop a certain base level of business (and project) literacy before they are considered as potential members of the partner pantheon. The basic concepts of both disciplines are easily understood; NPV, for example, is a shorthand for discussing the time value of money and opportunity cost, both of which can be applied to thinking about case management without ever cracking a spreadsheet.

I put “better” approach in quotes for two reasons. First, I think it’s essential for senior and partner attorneys to participate in the profitability of their firms or corporations, which means applying business thinking to their work, as alien as some may now find the concepts. Second, given the degree to which this is all thinking from another planet, perhaps project management is after all the right guise in which to slip business thinking into the firm’s mental drinking water.

It’s an interesting article; take a look.

My response was . . .

Steve,

Thanks for reading and then posting your response here. In your response you hit on one of the major challenges I and the other drafting team members of the Sedona paper have been wrestling with.

In scoping the framework of a business case for approaching information assets from not only what the value is today or for a particular use but what the value “could be” for others or at a later time, multiple parties within the organization come into play. Each groups brings with it their own sense of knowledge and processes. Take for instance the C-suite. This group typically addresses issues from a high level, leaving the granularity to subordinates and experts to examine. They consider market knowledge, financial positioning, shareholder return, Board response and other “global” factors. Contrast this with the RIM (Records and Information Management) professionals who are typically sequestered into a realm of paper and data storage and retention. Too often these folks are not allowed into strategic arenas where their approach could enlighten others. In fact it is only recently that they have advanced to a place where they influence such things as legal holds, ediscovery, and knowledge management. Much of this growth has come from self-motivation and bootstrapping these areas along with their traditional domain. Groups such as AIIM and ARMA have been key in this regard. Other groups necessary for this effort are IT, Legal, and front-line business persons – again each with their own sense of “how we get things done” and “what we need to do.” Each indeed injecting their own brand of “business logic.”

As I mentioned in my article – the formation of an Interdisciplinary Team is key. The various types “business logic” of these diverse members are necessary due to the broad and expansive reach of information and the kaleidoscopic definition of “value.” Gathering these different groups together to take on the challenge of finding “hidden ROI” is just the start. Finding a “leader” or rather a person otherwise responsible for the planning, tracking, benchmarking, and sustaining momentum is perhaps more vital as without this person the diverse group will have a tendency to pursue others agendas and may deviate from the overall goals. This is where I suggest a project manager is needed – if to serve no other role than as the gravitational center of the group – keeping it close, moving and always focused on the end goal.

Red herring, maybe. Better yet, a Trojan Horse. Though neither idioms are needed in organizations that claim advanced business logic and represent a culture of information sharing versus silo-ing.

Steve sums it up best in his reply and his use of a Monty Python clip to drive our idioms home.

Trojan Horse is indeed a much better metaphor than red herring. However, I fear it will prove to be a Trojan Rabbit unless the records folks learn to speak the language of business. It’s not that they’re not allowed into strategic areas, but that they neither know how to speak the right language nor understand means of gaining entree. Getting their project act together is necessary, but not sufficient, I believe, without solving these other two issues.

Using Project Management to Find "Hidden" ROI

2010-02-01T12:03:00.000-05:00

I have mentioned here before that I am currently on the drafting team for a new Sedona Conference project. This effort is a not yet a formal Working Group for TSC but it is an effort that been in play for over a year now. The focus/topic of this examination is on establishing a business case for finding the hidden ROI in an organization’s information assets. Think Business Intelligence meets Records Management meets ediscovery meets IT and you will have a basic idea of where this paper begins. Because of the nature in which organization create, disseminate, and store information – often siloed, disaggregated, unstructured, and untracked - there is a large amount of “value” that is unseen and untapped. We are seeking to lay out the plan for initiating the effort to corral this information and extract the “hidden” ROI and uncover the riches in having a more dynamic aggregated information asset model. The debut of our work was presented in draft form at last year’s ARMA conference in Orlando where it was received with generally positive reviews but further clarification and redirection was needed on the part of the drafters after hearing the feedback. We are still in the process of drafting this piece and look to have it out for public comment in the near months ahead.

While working on this topic many related subjects and issues have been co-mingled in my mind. Certainly the aspect of IT and legal convergence is of great potential in any scenario that looks to define ROI for informational value. Costing studies on implementation and financial ROI will be necessary as well for any implementation. Defining some of the many ancillary benefits of strengthening such diverse business process as R&D in product development, early case assessment in legal matter management, and improved customer satisfaction will be helpful in further expanding this topic. Perhaps the most important question however is who within an organization will be charged with this task? Records Managers have a stake and so would make a likely choice. IT obviously carries the burden from an architectural perspective as well as content access and security and so may be a wise choice. If an organization already has a BI or KM team they might also make for a strong choice. Even a techno-type out of the in-house legal team may make a solid implementer. However all of these positions currently exist and in most cases are already over burdened with their day-to-day responsibilities. Executing on a cross-organizational ROI business case that looks to mesh all informational assets into a holistic system and process that is able to extract potential value for all relevant parties will require a skill set that is adept and working with diverse groups and business functions. It will require someone who has a grasp both of the underlying objectives but also on how to organize and plan for such an undertaking.

Without divulging too many of the key elements of the paper, in it we do outline the necessary elements for it to succeed. One of the most import factors is that of creating an Interdisciplinary Team made up of key stakeholders within the organization (I mentioned some of them above). However, there is a knowledge gap in this group no matter the type or size of organization (with some exceptions) – there is no person identified that has the core project management skills of the quality that this implementation demands. A project manager would be of great value and importance. Their discipline in organization, planning, measuring and executing would add a tremendous advantage in this cross-function organization-wide undertaking.

Obviously it is our hope that this paper and business case contain therein will be a catalyst for organizations to review their current information architecture and decide to undertake a deeper, more meaningful effort of establishing the process of extracting ALL value from it. I look forward to sharing this paper with the project management community to assess its potential impact from their perspective and hear how the PM role may take part.