Thursday, May 30, 2013

The Evening Law Student Solution:An Overlooked Asset in the New Legal Marketplace.

Last  week I attended the 100 Year Anniversary of  my alma mater  the Fordham Law School Evening Division.  When Fordham was planning an earlier reunion, Assistant Dean Robert Reilly discovered that the school didn't even keep a separate list of evening division grads. The school regarded the day and evening divisions as equivalent programs. Everyone got the same degree. A 2012  article in Fordham Lawyer highlighted the many notable evening division grads who include the late Congresswoman Geraldine Ferraro, the first woman ever nominated to run for Vice President. But  law firms often take a dimmer view of night programs. Evening Law students are generally not courted by large law firms, a fact which has always baffled me. Is it not obvious that night students have a very special capacity for endurance? .... but it baffles me even more in the current legal market. 

The Night Student Advantage. In fact, night students are probably better suited to work in the today's efficiency driven law firm than most full time students. A recent article in Law Technology News  Big Law Whipped for Poor Tech Training underscores the advantages in hiring students with more sophisticated technical experience and attuned to the need for efficiency.


Here are just a few of the advantages of evening program law grads:
  • They have a high tolerance for pain
  • They are experts at multi-tasking 
  • They have demonstrated mastery of time management 
  • They know all about working 2,200 hours a year. 
  • Their mutual need to survive makes more collaborative and they are less likely to regard classmates as "the competition."
  • Having worked in a business environment they will arrive with  a skill set and industry     knowledge that can be leveraged in both practice and client development.
  • They likely have spent more time using their computer for Excel than for Facebook.

A Word About Teamwork One of the key characteristics of  night school students is their willingness to help each other out rather than viewing each other as "the enemy."  They tend to have empathy for each other's unique "juggling act." There are the famous stories of vicious competition among day students. That is not at all common among  night students who develop a very unique bond and special forms of team work  to help other "cross the finish line." Night students excel at  collaboration which is a touted as a key strategy for law firm success.

The Night School Grind. In retrospect I do wonder how I spent 4 years leaving home at 6 am carrying 20 pounds of books to the train, worked a full day as the Director or Legal Information  Services at Shea & Gould,  attended class and returned home at about 11 pm.  Night school is not for the "faint of heart."  People who attend night school are not about the glory. But too often in fact we simply "get no respect."
 
At the reunion, one classmate recalled going on "white shoe" firm interview. The partner asked her why she had no extra curricula activities on her resume.  When she responded that her "extra curricula activity" was her day job, he quickly ended the interview. Now she is a General Counsel in a corporation and I couldn't help but chuckle to myself  at the prospect of the tables being turned.
 
 
Are the Tables Turning? She like many other evening grads had ended up "in-house."  The shoe is on the other foot now as partners compete to gain favor and business from GCs.  Let's hope she is more open minded than the white shoe partner if he shows up to pitch work to her.

In light of the market upheavals, it may be time for law firms  to seriously consider the advantages of evening  law students as strategic assets in the "new normal."

Tuesday, May 14, 2013

Bloomberg Law Not Impacted By Bloomberg Terminal Privacy Breach. But Can We Ever Stop Worrying About a "Big Data" Hack of a Legal Research Provider?

Last week Bloomberg acknowledged that Bloomberg reporters had used the infamous "Z"  and  "UUID" functions on the Bloomberg terminal to access "customer data."  Reporters had access to the names of users at an organization, how long the account had existed, when the account was last used and what broad categories of data they had accessed, e.g. news, bond data, etc. My reaction was "huh?" Given the shrillness of the press reports I assumed that that reporters were seeing actual search queries or trades. That kind of knowledge could be a real "market mover" but that was not the case at all. According to a  story in the New York Times, reporters had used account inactivity to prompt a question to Goldman Sachs about whether a partner had been fired. A recent Washington Post story said that the Federal Reserve and Treasury Department are now examining whether their employee's activities were also tracked by Bloomberg reporters.

The Ethical Wall in Newsroom. The real controversy is not the extensiveness or the granularity of the data - which as quite limited - but the very fact reporters were able to cross the ethical threshold into accessing any customer data at all. In fact, the same data should be accessible to Bloomberg customer support personnel. Bloomberg has now disabled the "z"  and "UUID" functions in their newsroom only.

The Bloomberg Response. Dan Doctoroff CEO of Bloomberg is quoted in the Times story: “To be clear, the limited customer relationship data previously available to our reporters never included access to our trading, portfolio, monitor, blotter or other related systems or our clients’ messages,”  The Times story, also notes that Bloomberg recently centralized its data security efforts, including the appointment of Steve Ross, a senior executive, to the newly created role of client data compliance officer.


 No Impact at Bloomberg Law. According to Greg McCaffery, CEO of Bloomberg Law, reporters have no access to the Bloomberg Law user data. Bloomberg Law resides on a separate cloud platform, not on the same platform as the Bloomberg terminal data. Bloomberg Law doesn't even have the same "command" functions which the reporters used to access customer data. He also pointed out that the Bloomberg BNA reporters who write the Bloomberg BNA newsletters have no access to the customer data. McCaffery stated that "Bloomberg Law takes the privacy of its customer data very seriously. To be clear: no journalists at Bloomberg News or BNA have ever had access to customer research activity on Bloomberg Law.

There are Bloomberg Business Terminals in Law Firms. The fact is that there are law firms which subscribe to Bloomberg business terminals under separate contracts from Bloomberg Law, so presumably reporters were also able to view the limited account activity described above. The Bloomberg business terminals are generally used by researchers and not law firm partners, but we now have assurance that reporters can no longer access any law firm Bloomberg terminal customer information or usage. However, Bloomberg does need to do some outreach and provide assurances to law firms with "the terminal."

Bloomberg Thumb Scanner
Bloomberg is No Stranger to Privacy and Confidentiality. Bloomberg is the last information provider I would have expected to be accused of violating privacy. Bloomberg is all about closed systems and  being locked down and buttoned up. They are unapologetically restrictive in how their subscribers use their products. When you subscribe to the Bloomberg business terminal they retain the right to come to your office and inspect the installation. The earliest version of Bloomberg Law used the Bloomberg terminal platform, but required a lawyer use a biometric card which validated their thumbprint in order to logon to the terminal. I repeatedly warned them that biometric card was "thumbprint too far" for most lawyers and they now use a more traditional username and password approach.

The Big Data Question  The recent  Bloomberg privacy issue is really a journalistic ethics issue about the wall which has always existed between news reporting and the  newspaper or news service subscriber data. I believe there is a bigger issue lurking out there for all the large legal research providers. What really scares me is the prospect of a rogue internal or external hacker who could analyse all of the search queries of a law firm and draw some conclusions about things like M&A activity, litigation research or government investigations.  Law firm research queries are a treasure trove of leads... pretty innocuous standing alone - but probably an interesting "data map"  of law firm client support activity if  viewed in the aggregate. In 30 years I have never ever heard of a breach  or misuse of this kind of data at LexisNexis Westlaw, Wolters Kluwer or Bloomberg but I think it is time that these companies provide more information to customers about how they protect law firms and their clients from the threats of a "big data" hack.









Tuesday, May 7, 2013

Bloomberg Is On a “What’s Wrong with Big Law?" Roll

This morning I attended a  presentation at Bloomberg HQ given by Bruce  “growth is dead” MacEwen. He has so many unique insights I definitely recommend reading his book to absorb them all. He showed some amazing slides on the  configuration of the legal industry before  and after the  2007 crash.

 One interesting “aside,”  focused on the corrosive effect of “profits per partner.” The PPP ranking was created the American Lawyer and is a  metric which is particularly susceptible to manipulation. Yet it has become the vehicle for not only measuring success, but also a key driver of rampant lateral poaching, which in turn has contributed to the cratering of many firms.

One  partner in the audience only half tongue in cheek suggested that it was time to move up the alphabet and perhaps a legal publisher name starting with a “B” should create a new  and more reliable competitive metric for   measuring the success of law firms.

The Bloomberg BusinessWeek issue of May 12th sported a cover “What do you do with 176,000 lawyers lying at the bottom of the ocean?” Howrey's Bankruptcy and Big Law's Small Future. 

The article focuses on the collapse of Howrey, but predicts continuing disarray in the legal market. And oh by the way, the Bureau of Labor Statistics predicts that  by 2020 the US economy will create 73,600 lawyer positions and law schools will graduate 24,000 new lawyers a year. This they suggest will result in  176,000 excess lawyers. But is not the real problem that law school are grooming lawyers for the 20th Century Law firm instead of the 21st century law firm?

 Bloomberg Law TV Interviewed Richard Susskind on May 2nd:  With Radical Changes Law Firms Can Beat the Recession.  Last week Lee Paccia interviewed legal "futurist" Richard Susskind who had  a completely different take. Here are some surprising "take aways" Outsourcing is Temporary and  Technology is the Future. We don't have an oversupply of lawyers we have an undersupply of legal knowledge engineers!





Why Now? There is a further irony that Bloomberg has chosen to enter the legal information market at a time of such wrenching displacement in the legal market... unless Bloomberg has calculated to enter the breach and take advantage of the disruption.

Thursday, May 2, 2013

News You Can Use! Wolters Kluwer Continues to Bring Sanity to Digital Licensing and Oh Yes Releases Two New Daily Newsletters (Banking & Finance and Products Liability)

 News You Can Use! For those of us who toil at the intersection of copyright and human behavior, any publisher who keeps making it easier to legitimize the natural impulse of lawyers to embrace every venue for highlighting their accomplishments and share news and insights with their clients gets my endorsement. Last July Wolters Kluwer launched a new series of daily newsletters, The Wolters Kluwer Daily Reporting Suite which allows subscribers to forward stories to clients and colleagues. Today Wolters Kluwer is expanding their policy by granting a license allowing law firms to post Daily Alert stories which mention the firm or individual lawyers on the firm's website and to include reprints of these stories in promotional materials 7 days after the initial publication. I once again applaud Wolters Kluwer for respecting the integrity of their subscribers enough to allow the reuse of these stories. This is a great business strategy which in marketing terms, creates "stickiness" between the publisher and it's subscribers. It creates enormous good will by supporting the marketing and business development needs of firms.
 
 
 
And they also released 2 New Newsletters in the Wolters Kluwer Daily Reporting Suite

Today's release expands suite of current awareness products which are focused on the "hottest"  and most complex practices. The Daily Reporting Suite now includes: Antitrust, Securities Regulation, Health Law, Employment Law and Intellectual Property, Banking and Finance and Products Liability.

The Press release quotes WK Legal Market Leader Robert Lemmond:

“The response to our Daily Reporting Suite has been extremely positive and we are pleased to be expanding the topics to include the key areas of product liability, insurance and banking and finance. Legal professionals consistently tell us they need a reliable news source to keep them fully briefed on breaking legal news, court decisions, and legislative and regulatory developments that impact every aspect of their practice.  At Wolters Kluwer, our team of attorney-editors have enabled us to expand our Daily Reporting Suite and continue to make the critical challenge of staying up-to-date with relevant cases, statutory changes and new rulemakings a much faster and more streamlined process.”

The Content.  These daily news services will deliver breaking news from both the federal and state level, the latest rulemaking and updates on litigation as well as a complete summary of the daily legal news. legislative and regulatory activity and highlights of state agency enforcement activity.Access to all links to cases, state laws and regulations,and other primary source documents.
 
Banking and Finance will cover all of the hot issues of interest:
 
Bank Secrecy Act , Volker Rule,Capital and Basel Accords, UDAAP,Consumer Financial Protection Bureau ,Truth in Lending, Dodd Frank Act,  Securities and Derivatives Enforcement Actions, Equal Credit Opportunity, RESPA, Fair Credit Reporting, Identity Theft, Mergers and Acquisitions, The Federal Reserve Board
 
Products Liability Law Coverage includes:
  •  Full summaries of products liability decisions issued by federal and state supreme, appellate, and district courts, including the presiding judges and names of the attorneys representing the parties
  • Consumer Product Safety Commission and National Highway Traffic Safety Administration regulatory and administrative developments, product recalls, agency enforcement activities, and more
  • Access to all links to cases, Federal Register Issuances and other primary documents
  • Federal consumer product safety legislative activity
Products Liability Law Daily Topics include:
Design, manufacturing and warning defects, Defenses to liability, Damages, Expert Evidence, Preemption, Consumer product and motor vehicle recalls, CPSC settlement agreements, Product testing and certification, Motor vehicle exemptions and Import rules
 
Mobility Rules The products will be delivered via email, RSS feed, and mobile apps for iPad, iPhone, Blackberry, and Android.

Here are the standard Daily Report features: 
  • Daily email summaries written by knowledgeable attorneys and industry experts with links to the full text of any new cases, regulatory or statutory developments, and breaking news 
  • Seamless access to information from ANY mobile device without being prompted for logins/passwords. Other legal news services require logins creating unnecessary time delays.  
  • The ability to customize content by topical area and jurisdiction so users can view the content that is the most relevant to them 
  • Built-in copyright permissions that permit legal professionals to instantly share information with clients or colleagues without having to download or reassemble information. 
  • Time-saving mobile apps with customizable home page, ability to filter by topic/jurisdiction, note-taking capabilities, favorites folders and email functionality 
  • A searchable archive on Wolters Kluwer’s proprietary online content delivery platform, IntelliConnect.
In the Pipeline  Wolters Kluwer is also planning to release a daily insurance product in June.
 
Wolters Kluwer continues its assault on the  topical legal "newsletter" niche which has been  dominated by Bloomberg BNA and Law 360. However WK seems to have an edge in customization of both content and delivery. They are remain  ahead of the entire market in advancing policies which allow lawyers to legally "socialize" their content and maximize it's marketing value for the law firm... which is no small benefit in this fiercely competitive legal  market. Time will tell if these distinctions and the quality of the WK proprietary analysis translate into market share.
 
Related Stories:

Wolters Kluwer Launching Daily Reporting Suite: Built for Collaboration and Copyright

 

ALM Releases 2013 Alternative Fee Arrangement Report: Still Hazy After All These Years

American Lawyer Media Legal Intelligence Released their report "2013 Alternative Fee Arrangements at Legal Departments and Law Firms"

There is nothing simple about AFAs. There isn't even a simple definition of what it means and in reviewing the inconsistent responses of law firms and legal departments, I couldn't help but wonder how many of the respondents were using the same definition. My favorite part of the report is the addendum that lists and explains the wide variety of AFA agreements as defined by the Association of Corporate Counsel,  The list  include: Blended rates, capped fees, contingency fees, defense contingency, flat fee, flat fee with shared savings, holdback, partial contingency or success fee and phased fee. The only thing each variant has in common is they are not "the standard hourly rates."
A careful reading of the report shows that the real drivers of the AFA movement are not the GC's but the corporate executives and often the procurement departments who have been charged with rationalizing  and reducing legal spending using the same tools they use for the procurement of office equipment.  And yet both in house and law firms responses indicate  that the effectiveness of AFAs need to be determined on a case by case basis.

Legal Project Management Is Critical To Success

The most significant take away is that right now many firms are treating AFAa as a loss leader with the expectation that it will bring in more work from the counsel. But if firms don't have the discipline and the tools for managing  their own efficiencies  it is likely doomed to failure. So the real question is whether firms will invest in the development of real LPM specialists who have sufficient authority to establish best practices which become the firm's standard procedures.

Other key findings include:
  •  More than half of the Law Departments and Law Firms surveyed said their volume of AFA’s had increased from 2012
  •  Over 60% of Legal Departments said that Law Firms were cooperating more with AFA’s then when they took  the survey in 2011. 
  • AFAs are used predominantly by large companies with more than 10,000 employees (44% of respondents )
  • 59 % of law firm respondents said that AFA's make up between 11 and 25% of all firm billings 
  • Several GCs articulated the goal of lowering lawyer rates by $100 an hour. 
  • Law Firms are not at all confident that AFAs are profitable. 
  • Most firms view AFA's a the price of admission. A loss leader which they hope will result in growing the relationship. 
  • More firms are hiring pricing specialists. 
  • Half of the respondents have participated in" reverse auctions" in 2012 
  • Litigation is the activity which is most often targeted by legal departments for AFAs. 
  • Only 4% of law firms responded that AFAs were more profitable than the billable hour. 
  • 34% of respondents report that they lost money on AFAs. 

The Up Side of AFAs. Alternative career paths. Maybe law firms should start recruiting law grads with project management skills. Certainly there is a pool of second career candidates who in a prior life worked in as IT project managers. Take an unemployed law grad off the street and invest in a new kind of associate who can help build the workflow disciplines of the future. If that doesn't work look around the law firm for other staff such as librarians and knowledge managers who have skill sets ideally suited to Legal Project Management.

The Dark Side of AFAs. Several weeks ago law.com published a story Orrick's Next Act which contained the following comment: "some partners worried that the firm's embrace of alternative fee arrangements gave the impression that it was moving down market." So herein lies the cognitive disconnect. Large Law firms see themselves as Neiman Marcus but now have to market themselves  as if they are Walmart. Bruce MacEwen, of  Adam Smith Esq.  has pointed to the risk of "suicide pricing" which leaves firms  blindly competing for business without the tools for analysing profitability. What law firm really wants to win this "race to the bottom?"