So this post is an appeal to investors. Start thinking outside the cow, and outside the ranch. If you truly believe in free markets, then start believing in free customers, and in the development projects that make them not only free, but able to drive sales at a 100% rate, and to form relationships that are worthy of the word.

Those five options included maintaining articling as it currently stands; replacing a pre-licensing transition requirement with a post-licensing transition requirement; and abolishing articling in favour of a practical legal training course. There is also the option of maintaining the status quo with quality assurance improvements to be determined at a later date, and a choice of either an articling requirement or a practical legal training course requirement that would be taken either after law school or during law school.

The business model of large law firms works – they make a lot of money. Clients could effect radical changes tomorrow in the industry that would unleash a wave of innovation by making significant changes in their buying decisions. They’d be some collateral damage and whether it would aid diversity is another matter. But there would be change aplenty. However, by and large, clients haven’t made those kind of decisions. The bottom line is that law firms are a bit like governments – you get the ones you deserve. The ones you choose. Law firms developed this model because it delivers financially, generally provides a good service and it is what clients signed up to. Is anyone surprised they’re not rushing to change?

Good lawyers will continue to exist. Poorer lawyers will go out of business and that’s the market share we are going to grab.”

The Co-operative Group has today announced plans to create 3,000 jobs in the legal sector over the next five years as it laid out its ambitions to create the largest consumer law business in the country.

A niche property law firm in Oxfordshire has become the sixth alternative business structure (ABS) to be licensed by the Solicitors Regulation Authority (SRA).

the meantime, it is smaller firms that have been seeking out global alliances. For example, DAC Beachcroft, a British-based global law firm with niche specialties in health, insurance and real estate, has just announced an two-year alliance with Toronto-based McCague Borlack LLP, a litigation firm with 70 lawyers and strengths in insurance litigation.

In a statement issued last week, DAC Beachcroft said the deal, which will see the two firms share resources, is a precursor to a

Our survey confirms the views of many family lawyers and judges that the key reason for not having representation is the lack of financial resources and ineligibility for legal aid. However, many are choosing to not have a lawyer because they believe that their money is better spent in other ways. Many of the unrepresented are being helped by increased access to information and feel reasonably comfortable dealing with the family justice process.

Activity Based Regulation versus Professional Identity

ALMOST two-thirds of Australia's law graduates are not working as lawyers four months after they have completed their degrees, according to a study.

The Graduate Careers Australia survey of 1313 recent graduates from all over the country found that 64 per cent were not practising law between 2010 and 2011.

Is the LETR being treated like a doormat? I don’t think so. Will the eventual conclusions and recommendations of the LETR land on the doormat with the thud of a well-meaning and worthy, but ultimately unfulfilling, enquiry? Not necessarily. But unless there is more overt challenge to the established hegemony of existing stakeholders in the education and training of lawyers, we will miss this once-in-a-generation opportunity to re-conceive for the better a key component of an independent, strong, diverse and effective market, of which the legal professions must, rightly, remain a part.

The story launched many an attempt at humour on Twitter, but I will gladly put them to one side. One can see some challenges for this venture, not least that while Eddie Stobart is a well-known brand, especially among motorway travellers, it is not known for delivering any services, let alone professional ones, to consumers. You couldn’t describe it as core to a logistics business that owns a couple of regional airports and sources biomass among other things. It will be interesting to see how prominently the service is promoted.

The company filed for an IPO with the SEC last week that could raise as much as $120 million. It’s couch change next to Facebook’s zillion-dollar offering, sure, but LegalZoom aspires to take a big bite out of the $266 billion legal services market in the U.S. And it already has spawned competition in the way of BizFilings, RocketLawyer and The Company Corp.

Should law schools help "incubate" solo practicioners?

King & Wood Mallesons looks West for international expansion

AIM-listed online conveyancing company In-Deed – which last year became the first business to announce its intention to invest in law firms – has today begun its acquisition programme after admitting that its direct-to-consumer model is not growing as quickly as hoped.

in 2009 28% of managing partners thought more use of contract lawyers was a permanent trend, this year, 66% do.

Stobart Barristers, which offers access to a UK-wide network of specialist barristers for any area of law, uses a pricing model under which its clients agree and pay a fixed-fee through a ‘pay-as-you-go’ model during the litigation process.

The new division, headed up by the group’s legal director Trevor Howarth, has been formed following Stobart’s decision to employ its own barristers without a solicitor in 2008, a move which the company said has created “significant savings”.

Legal consulting firm Altman Weil released its fourth annual “Law Firms in Transition Survey” on Wednesday, which revealed that since the survey’s inception in 2009 there has been a major shift in attitude among managing partners and chairs at 792 large U.S. law firms. Trends that were largely seen as temporary in 2009 are now viewed as becoming part of the job for good. Here are some of the key findings from the survey:

Why the spike in costs?

Law firms that put off big investments, such as technology upgrades, in the years after the recession finally coughed up the dough, said Mr. DiPietro, chairman of Citi Private Bank’s Law Firm Group, which provides financial services to more than 600 U.S. and U.K. law firms and more than 35,000 lawyers.

“What appeared to be expense savings in 2009 and 2010 were actually just kicking the can down the road,” he said on Monday.

Of even greater concern to Mr. DiPietro: an ongoing 100-hour gap in lawyer productivity, compared to output in the years leading up to the downturn.

Of course, many would argue that replacing the “functions” of lawyers is exactly the point. In fact, in the comments to the original post at 3 Geeks, Jordan Furlong did just that:

Canadian lawyer and consultant Jordan Furlong of Edge International recently spoke with Canada’s chief judges, warning them of the steady advance of technology-driven dispute resolution and the burgeoning private legal market, which effectively provides competition to the courts. Furlong says, “There are so many ways to resolve disputes beyond going to the courts or face-to-face negotiation, mediation or arbitration, particularly the technology-powered options that can provide faster, cheaper and sometimes better results.”

Furlong notes that another reason for the rise of internet-based dispute resolution tools is a proliferation of low value cross-border cases, particularly over e-commerce oriented transactions, which are not appropriate or attractive for lawyers due to their low yield potential. He explains, “These are disputes that will never see a lawyer’s desk – they’re too small for the court system, but they’re not considered small by the parties involved in the disputes. Online dispute resolution technology taps into this latent market, providing recourse for parties that don’t want to pay lawyers’ fees to settle their cases.”

Offer the partner a deal based on a thought experiment. Imagine a jar containing 100 balls, 70 of them red (since the estimate was 70% likelihood of a successful resolution), 30 black. Give her a choice. Draw one ball from the jar and if it’s red, the law department will pay the firm $250,000 (or some substantial amount). If the resolution of the case is not a success – as defined in advance and represented by a black ball – the firm rebates $250,000. The estimate was legitimate and confident if the partner agrees to the game; she will modify her estimate if not. A de Finetti test ultimately establishes a correspondence between subjective possibility and frequentist possibility.

Why would this happen? As Janiszewski and Uy explain in the February issue of Psychological Science, people appear to create mental measuring sticks that run in increments away from any opening bid, and the size of the increments depends on the opening bid. That is, if we see a $20 toaster, we might wonder whether it is worth $19 or $18 or $21; we are thinking in round numbers. But if the starting point is $19.95, the mental measuring stick would look different. We might still think it is wrongly priced, but in our minds we are thinking about nickels and dimes instead of dollars, so a fair comeback might be $19.75 or $19.50.

LegalZoom will, inevitably, put many solos and small law firms out of business as it grows and expands its suite of services. For a related analysis on my theory about the venture capital industry and disruption in the legal industry see video at: Legal Startups - An Overview at PointOneLaw ].

I have lived inside this culture since I joined the academy in 2002. And I can attest that very few people inside the academy believe that we are living the high life on the backs of our students. But in the year 2012, that perception does not matter very much. Rather, the perception that matters is the one from the outside looking in.

The last three AmLaw firms to face a partner exodus all wound up in bankruptcy court, and lawyers interviewed for this story say Dewey's bankruptcy is virtually certain. And once it comes, the resulting slew of litigation will be especially ugly for partners. Apart from the usual claims brought against former partners in bankruptcy court, Dewey's former partners, including California rainmakers, could face a threat that Heller, Thelen and Howrey lawyers didn't: litigation with the firm's bondholders.

Analysis KM IS the future. And since I have previously mentioned Kingsley Martin's KIIAC product on this topic numerous times, I thought I would point out the Lexis Search Advantage Matter Experience (LSA ME) system on the Elephant. For some time the LSA product has been moving in a KM analysis direction, being able to analyze and determine document types. This year Lexis rolled out the Matter Experience module of LSA. The LSA ME system (in addition to having a laborious long name) takes the analysis concept a step further. One of the biggest challenges for implementing AFAs is understanding the cost of services being provided. To address this challenge, LSA ME analyzes time entries and documents and then provides valuable meta data about these BLOBs (http://en.wikipedia.org/wiki/BLOB).

I think we should be focusing instead on the identification and performance of lawyer functions. What do lawyers do? Make a list: in any practice area you choose, it'll be extremely lengthy. Then ask: which of these functions can be performed at least in part with an automated process or system? The answer, I think, is: virtually every one of them. And that includes the supposedly safe old standbys like "strategy" and "counsel": huge databases of business and legal intelligence will be able to provide increasingly reliable indicators of how various tactical approaches will pan out. Prediction markets that assess probable outcomes have tremendous potential to change litigation strategies. And just wait till game theory really gets on track in the legal industry.

lient Service Lessons from a Large Law Firm Secretarial Cut

True long-term success requires businesses to improve continually and reimagine how they operate in the face of changing competition and market forces. Yet this innovative urge, which drives so much of the rest of the American economy, is largely absent from large law firms.

April 30 (Bloomberg Law) -- Big law firms may be headed into a down cycle they haven't seen since the 1930s, according to Atlanta lawyer Michael Trotter, who has written the forthcoming book "Declining Prospects" about the economic cycles of the nation's largest law firms. He tells Bloomberg Law's Josh Block that the Great Depression lasted 30 years for the nation's largest firms, before billing by the hour, rather than by the matter, caught on in the 1960s. That led to a decades-long boom at big law firms, with profits and the number of lawyers employed by the firms growing exponentially, before the rise of in-house legal departments led to the current backlash against the billable hour, he says.

. Access to firm precedents - £20k per annum.
2. Access to precedents plus 2 hours consultation on any first drafts produced in-house using firm precedent - £30k per annum.
3. Provision of first draft agreements for twenty unspecified agreements over the next 12 months - £30k per annum.
4. Quality assurance audit of 15 random contracts produced by in-house team - £5k per annum.
5. Intensive training over the year for an in-house team to obtain an accredited qualification in a specialist subject (e.g. copyright) - £10k per annum.

So I was surprised when I got sucked into a recent Harvard Business School article by Carmen Noble detailing Red Sox general manager Theo Epstein’s two-year campaign to acquire star performers with extraordinary multimillion-dollar, multiyear contracts.

When they look back at this era, Internet historians will mark Facebook’s Instagram acquisition as the symbolic moment when the Great Shift was confirmed. Significantly, it also came soon after Steve Jobs’ death. The device that Jobs created had, within the space of five years, allowed a 551-day-old company with 14 employees to become worth $1 billion.

“Last year was our best ever in financial terms,” Poor said. The firm saw revenue rise 7 percent, to $484 million, and profit per equity partner increased by 11.2 percent, to $816,000. Meanwhile, the Atlanta firm where Trotter now practices, Taylor English Duma LLP, represents a back-to-the- future model. It hires mostly experienced attorneys, keeps leverage and overhead low, and undercuts competitors on rates. Since 2006 it has grown from six attorneys to more than 100.

There are now far more capable lawyers and law firms than there is work for them to do. The financial costs of legal services have gotten so high that most clients are determined to reduce them. Many legal services have become commodities that can be supplied by a large number of firms with sufficient quality to meet the needs of most clients in most situations, and corporate general counsel now know that they can get what they need at a lower cost if they force the major firms to compete for the work.

Riverview Law, the combined law firm and barristers’ chambers that sells fixed-fee advice to businesses, is to shift its strategy of organic growth to one of acquisition to meet unexpected demand just two months after it launched.

The Solicitors Regulation Authority has given Australia’s Slater & Gordon (S&G), the world’s first listed law firm, the green light to take over Russell Jones & Walker (RJW) after granting it the fifth alternative business structure licence.

A law firm that aims to offer a white-label personal injury service to insurers and brokers yesterday became the Solicitors Regulation Authority’s fourth alternative business structure (ABS), and first in Wales.

U.K. Magic Circle firm Linklaters and Australia's Allens Arthur Robinson announced on Monday that they have entered into an exclusive alliance from May 1 and will form a series of joint ventures across Asia.

“Lawyers focus very much on the intellectual aspects of their work and tend to think management will take care of itself,” said Mitt Regan, a Georgetown law professor and lead faculty member working on the executive education program. “A typical path at law firm is first you have to prove yourself as a good lawyer. Once you do that, you might move into a management position, but typically without any systematic training or guidance. Often, the skills that are necessary to be a good lawyer are not necessarily those that are required to be a good manager and leader. That gap has become more and more apparent.”

Crucially, the contents of the code were endorsed by Lord Justice Jackson at its launch. The judge is an advocate of TPF, which he believes can be ‘beneficial’ to access to justice, provided safeguards are in place. Jackson had called for a voluntary code of conduct for funders in his final report on civil justice reform, suggesting that the heavier tool of statutory regulation should not be considered until this nascent market matures. In the House of Lords in February, justice minister Lord McNally rejected Thomas’s call for the government to regulate TPF, saying that it preferred to see how the voluntary code developed first. So the code has successfully shielded the industry from government regulation that might have stifled its development, and it seems unlikely that government will revisit this approach for a few years. But while ALF has now issued applications for membership, it has yet to appoint its first member; this development is expected soon.

The forces driving this convergence are as impersonal as the Great Recession and as individual as a dream. For the talent, project-based work has simply become more attractive than the alternative. Today technology makes it easy to plug in, the corporate social contract guaranteeing job security and plush benefits is dead or dying, and 80-hour weeks are all too common in high-powered full-time jobs. The surprise may be not that top talent is looking for “permanent temp work” but that anyone who has a choice would want a traditional job.

That is the title of an essay posted on blog of the The Atlantic magazine. Jordan Weissman, a journalist who formerly worked in the business operations side of a major law firm, reviews the profitability of the most elite law firms pre-crash (2001-2007) and post-crash (2007-2010). [See charts below] The slide into lower profitability is what is causing the run-on-the-bank at Dewey LeBoeuf, a storied firm on the brink of collapse.

After two years of studying how to make often frazzled law students worry less about marks and actually enjoy what they’re studying, the U of T law faculty is considering a plan to ditch its seven old letter grades (A, B+, B, C+, C, D, F) and introduce five broader categories of marks; High Honours, Honours, Pass, Low Pass and Fail. It’s a system adopted by the law schools of Berkeley, Harvard, Yale and Stanford.

In our experience, the approach that works best most often is to start with just-in-time training for a small group of influential partners who are open to change. We introduce LPM basics very quickly and then get them to immediately apply key concepts to actual matters. The focus is on changing behavior to produce tangible results. When these lawyers are successful, they can motivate other partners to embark on the same journey. Case by case, lawyer by lawyer, the firm begins builds its experience in LPM and AFAs, and gradually changes the way it meets the needs of its clients. For an example of how this worked in one firm, see our recent post entitled Legal project management in the real world: The case of Williams Mullen.

The plans to open up ownership were strongly opposed recently by a group of nine leading general counsel in the US, who argued that it would damage lawyers’ professionalism.

They said the proposal “opens the door to arrangements that make the practice of law more like other businesses and less like the distinct profession it has always been”.

Their letter to the commission provoked a response in the UK from Karl Chapman, chief executive of new legal business Riverview Law, who said he originally thought it was a spoof – such was his surprise at the views expressed – and then predicted that it could in time prove to be a “watershed moment”.

He said: “In 10 years, commentators will look back and draw connections between alternative business structures, entrants to the legal sector, changing customer demand, lawyer complacency, and this (by then) infamous letter, and identify 2012 as the year the market really started to change.

“The nine GCs have unwittingly played as significant a part in escalating this change as law firms do by publishing their profit-per-equity partner figures, thus demonstrating to clients the excess profits they make.”

He said that if he were the chief executive of any of the companies involved, “my first question would be, ‘Tell me, what were you thinking when you signed this letter?’, and my final observation would be, ‘I’ve asked the chief financial officer to conduct a review of our in-house and third-party legal spend over the last three years’.”

The first reason is the creation of the Legal Education Foundation. £200m is a lot of money and that gives the Foundation the power to have a powerful influence on legal education. Initial emphasis has concentrated on the possibility of the Foundation funding students. That has a certain symmetry to it, given the oft stated critique of the monopsonic providers overcharging students without training contracts, and is good PR. Give the students something back and everyone applauds. Go beyond the lipservice paid to diversity concerns and there will be some cheering. David Yates, Chairman of the College’s Governors words remind us that the College of Law’s specific object is the advancement of legal education. Improving funding for students who cannot afford it is certainly to be desired but I’d expect a more strategic approach from any Foundation that seeks to develop and improve legal education. To do so at arms length from any commercial interest would be quite a legacy from any sale; although naturally enough it is easier said than done.

London, 17 April 2012. Following a comprehensive Strategic Review, the Governors of The College of Law (“College”) today announce that the College’s legal education and training business will be separated from its on-going charitable activities. The Governors have agreed the sale of the legal education and training business, which will continue to be known as The College of Law, to the leading European private equity firm Montagu Private Equity (“Montagu”) under the terms of a conditional agreement.

“The commission considered the pros and cons, including thoughtful comments that the changes recommended in the discussion draft were both too modest and too expansive, and concluded that the case had not been made for proceeding even with a form of nonlawyer ownership that is more limited than the D.C. model,” Gorelick and Traynor said.

Although it will not propose any changes to ABA policy on nonlawyer ownership of law firms, the commission will continue to consider how to provide practical guidance about choice of law problems that are arising because some jurisdictions, including the District of Columbia and a growing number of foreign jurisdictions, permit nonlawyer ownership of law firms

Even if Polaroid or Kodak could have developed Instagram, it’s likely that the project would have been killed anyway. What would be the reaction of almost any executive presented with a business plan to save the company with an iPhone app that had no prospect for revenue?

Where, then, is the public interest case for lawyer-only ownership? In the battle between assertion and evidence, assertion is best for lawyers because there is no evidence that external ownership is bad for clients or law firms.

Many of the lawyers who have only just woken up to the prospect of non-lawyer ownership of firms (a sizeable group, I’d wager) generally react with horror. The argument I hear all the time – exemplified by the letter signed by nine general counsel in the US – is that it will dilute the professionalism of lawyers, damage the lawyer-client relationship and lead to dastardly non-lawyers strong-arming lawyers to put profit before ethics.

I’m suggesting nothing revolutionary here. Many in-house counsel have developed these kinds of relationships with their preferred outside counsel and are managing them effectively. What the current shift in bargaining leverage has done, however, is provided a window of opportunity for others to do the same. Because many law firms are more worried than they used to be about having enough, and sufficiently profitable, work to retain their partners and sustain their profits, they are more likely to be willing to make the investments required to be a good strategic provider. They are more likely to be flexible about staffing, outsourcing, project management, and billing arrangements. They are more likely to be willing to invest the time and attention required to manage their side of the relationship, even if it means getting better at budgeting and spending more time working side-by-side with their clients to make the necessary trade-offs as a case or transaction evolves. That’s the kind of fundamental change in how law firms and clients work, which if made now, can pay dividends forever, regardless of where the bargaining leverage may lie in the future.

There can be little doubt that in the current environment, some clients will continue to look for metrics that allow them to precisely define value and tie it to payment. But we predict that many lawyers will see the example above as excessively complicated, with a whole lot of arithmetic and price uncertainty. So it is far less certain how many clients and law firms will ultimately develop and use metrics like this.

After thinking about it, I believe that in my organization, the library has always been about service from the librarian perspective, but may have been about place from the lawyer perspective. My team and I regularly deliver "service bubbles" in many ways:

print based current awareness – compiled by others
email based current awareness – compiled by others
print and email based current awareness that is clearly compiled by our library team
intranet content that is proven useful – measured by its location in our top 10 intranet pages
speaking engagements (often services demos or training) with practice groups
regular training sessions with students
office visits – hand delivery of research product when appropriate
walk arounds – poking our heads in the office of people we don't often hear from
attendance at firm social events
attendance at some client functions

uring the presentation, I asked the students to reflect on the inherent structure of the justice system. Being bright law students, they perceived that it is:

Synchronous: All parties must attend the court house at the same time.
Serial: Each case follows the one before it on the docket in order to be heard or processed by the presiding judge or court official.
Expensive: Each bricks and mortar courthouse has to be built and staffed.
Geographically Tied: All parties must attend the court that is hearing the case.
Jurisdictionally Tied: For the most part, each case is heard according to the laws of the jurisdiction where it is filed.
Involves Transactional Costs: Not only are there hard costs involved in filing the claim or action, the parties involved suffer a loss of opportunity cost – the time that they put into the claim or action represents time that they could have used otherwise. The longer the resolution time, the greater the transactional costs.
Involves Delays: A case takes time to weave its way through the court system. In some cases that delay is relatively short – in other cases it is quite long. We are seeing headlines today on the increasing delays in the justice system. We all know that justice delayed is justice denied.
Limited Availability: It used to be that courts and bankers kept the same hours. However, today, courtesy of the internet, banks are open 24/7. Courts, however, are not.
Involves a Judge: For the most part, a case must be heard and determined by a judge (yes you can go before Masters and the like but they can't make final orders). This means that the judge represents a bottleneck in the system.

A Wharton School professor has analyzed the performance, and pay levels, of external hires vs. internal staff promotions. He used personnel data from a division of a major US investment bank for 2003—2009, and the characteristics of that talent market are remarkably similar to our own:

Several recent posts by Paul Lippe have highlighted the problems currently being encountered by Dewey & LeBeouf. Already this year, more than 45 partners have abandoned the firm, and American Lawyer recently restated, rather dramatically, Dewey's revenue and profits per equity partner for 2010 and 2011.

Google has released Vault, an archiving and e-discovery tool for its business users. Priced at an additional $5/user/month, Vault offers these features:

archive + manage: all email and messages are archived and managed in place on the Gmail platform. According to Google, ‘Governance policies are applied directly to the native data store, eliminating the need to duplicate data in a separate archive and helping to reduce the risks associated with data movement and from spoilation. A robust trail provides complete visibility across the archive.’
retain business documents: businesses can define custom retention policies through Gmail and chat, based on content, labels and metadata - automation reduces risk of spoilation, according to Google.
find relevant documents: e-discovery tools allow entities to search across domain for data that may be relevant to a matter; email can be exported for further review.
security: the connection to Google is encrypted, and also includes redundant backup, built-in disaster recovery and sharing control

“We built a civil justice system. We built a walled garden. Now the challenge is more and more transactions are happening outside the walled garden. That’s what UNCITRAL is trying to do,” said Rule, who is currently writing a book for the American Bar Association on what a justice system for the Internet would look like.

The proof ultimately will be in the product created. Until then, the world is waiting to see what the UN group recommends. “On the question of how helpful UNCITRAL is in enhancing ODR, that matter may still be uncertain, in terms of whether an agreed set of rules is ultimately created, how many states choose to implement and what the uptake rates are among users,” Thompson said.

I’ve floated over the financial and technological hurdles to making this happen simply to emphasize the point that throwing away past digital editions is foolish. While the authors and editors of these titles may not care what happens to words written long ago, there are many researchers who do. Perhaps as libraries disappear, legal publishers will recognize their unique role in preserving precedent, both primary and secondary. Maybe then the past will become as important and profitable as the present. Until then, I would encourage the Crowd to take a moment and stockpile as many print titles as it can.

Assuming graduation levels are flat, i.e. ~44,000 as they were in 2010, then we have 440,000 new law grads for 212,000 jobs, a projected employment rate of 48 percent.