How law firms can innovate by providing third-party services to other law firms

The Economist wrote in 2011 about the end of the legal industry’s lofty heights, saying of one large but ill-fated American firm:

Howrey’s boss, Robert Ruyak, blamed two new trends for his firm’s demise. Howrey had begun acceding to clients’ demands for flat, deferred or contingent fees, causing income to become clumpy and unpredictable. And the rise of specialised e-discovery vendors hollowed out another source of revenue.

Legal services continue to unbundle as traditionally firm-based work like document review is outsourced and electronic discovery becomes more complex. Chicago-based law firm Winston and Strawn is bucking both trends, performing e-discovery for not only itself but other firms and forgoing staffing agencies to directly hire and provide benefits to its document review attorneys.

The firm’s e-discovery division brings in little revenue compared to the firm’s other practice areas. But it has seen three years of growth amid increasing demand for a la carte e-discovery services from other law firms and non-clients. This is a classic example of a business disrupting itself before outsiders irreparably damage it. Ben Thompson wrote an exhaustive case study of Apple’s own self-disruption that perfectly illustrates the strategy.

Many firms are still trying to cope with the boom in third-party legal services providers and complaints about the cost of good legal representation. Formerly bullet-proof business models no longer guarantee the luxurious profits to which so many law firms were once accustomed. And law firm leadership, like publishing and music executives before them, must find innovative ways to provide new value to clients and industry peers.

That’s why law firms like Winston and Strawn are doing more ancillary legal work in-house. I wonder whether more firms will pitch those services to their competitors. It sounds counterintuitive to provide valuable services to competitors, but I think there’s a case to be made for it as a way to revitalize the legal industry.

Many law firms could use guidance on business process improvement, e-discovery, technology, management consulting and more. No one is more qualified to provide those service to law firms than other law firms. Two factors should minimize the fear of deliberate sabotage by a firm you have hired in a non-legal consulting role. The first is a reputational consideration and the second is an ethical one.

Law firms providing their own third-party services to clients and non-clients, including other law firms, have the opportunity every business has when it is among the first to market with an innovative high-value product or service. That opportunity is the chance to become the gold standard, to set the bar high and be the first name that comes up when someone seeks out that product or service. It makes good business sense to treat that first-mover reputational advantage as you would any valuable asset, with great care and cultivation.

Law firms, via the attorneys who helm and staff them, are subject to myriad ethical requirements. The same processes currently in place at most large law firms to manage conflicts of interest, particularly with regard to walling off potentially conflicted attorneys from a given client or matter, could be easily applied to the firms consulting clients. In fact, the team within a firm which provides third-party consulting services to other firms could be completely walled off from the firms legal work, insulating the consulting services from concerns about endangering relationships with and the interests of current, former and prospective clients.

Larry Lessig fighting for campaign finance reform with Mayday PAC

Lawrence Lessig’s Mayday PAC is using the very system it decries to attempt to bring that system down. In other words, Lessig et al are hijacking the virus (the influence of big donors on American politics via election contributions) to deliver the vaccine (funding for politicians committed to proposals which would limit big political contributions).

If you support the cause, be heartened: Lessig likes to fight, and is good at it.

If you don’t support the cause, it’s probably time to start taking Mayday seriously. Your candidate’s job may depend on it.

Facebook is not free

If you use Facebook, this article is a must-read. It’s now common knowledge Facebook is always watching and analyzing how you use the service. But the breadth and depth of the company’s participation in the data brokering economy is staggering. The worst part? You literally signed up for it.

Facebook obviously doesn’t charge its users money, but the mere act of creating a profile affirmatively grants the company total access and usage rights over everything you do on the site. It even shares its data about you with data brokerage firms whose business model is monetizing you.

This is all stuff I have personally known and accepted for a long time, but as the ability to easily aggregate dossiers on anyone and everyone increases, it’s more important than ever to educate yourself and those you care about. Facebook is not free, and in fact it’s worth asking whether the price most people pay by clicking a harmless-looking “I agree” button is really worth it.

Why we don't speak up at work

This piece by Claire Lew at Signal v. Noise doesn’t exactly fit into my general topics of law, technology and design, but it’s so important I that feel obligated to share it. I mention in my article about the role of metrics in editorial strategy that I’ve been present for some poor decisions and didn’t speak my mind.

Claire’s post explains exactly why I failed to speak up, and it’s an important read whether you’re a manager or not. Unlike more navel-gazing, hand-wavy articles in the management advice realm, she actually offers some practical advice.

For the NSA, we are the haystack

Barton Gellman, Julie Tate and Ashkan Soltani, reporting at the Washington Post:

Nine of 10 account holders found in a large cache of intercepted conversations, which former NSA contractor Edward Snowden provided in full to The Post, were not the intended surveillance targets but were caught in a net the agency had cast for somebody else.

Facebook COO Sandberg apologizes for emotional contagion experiment

R. Jai Krishna, reporting on the reaction of Facebook Chief Operating Officer Sheryl Sandberg to the outcry over the company’s experiment on the emotions of nearly 700,000 unwitting users:

We take privacy and security at Facebook really seriously because that is something that allows people to share” opinions and emotions, Sandberg said.

The telling part about Sandberg’s reaction is that those who take privacy and security seriously don’t have to say it very often, if at all.

Podcast of the Week: This Week in Law

When it comes to my own website, editorial calendars always give way to real life. I’m back with the latest in a series that would be more accurately called the “Podcast of the Month.” I really need to step it up with these, as I still have about 70 of them to which I listen with some regularity.

I’m featuring This Week In Law, a podcast covering technology, privacy, intellectual property and other areas of the law relevant to the internet and its users, for a couple of reasons. The first is that the most recent episode (embedded below), entitled Monkeys, Ducks and Unicorns, discusses the Aereo case as well as a recent Fourth Amendment case about cell phones, both decided by the Supreme Court in June.

The second reason I’m featuring This Week in Law is because I have probably listened to more hours of this podcast than any other. It got me through law school by education, entertaining and inspiring me, even while I was studying far less interesting areas of the law. The voices of Denise Howell and Evan Brown, in a way that only happens on the internet, more familiar to me than some of my longest friends’ voices.

Subscribe to This Week In Law in iTunes, Pocket Casts or RSS.

Perverting the Metric: The Role of Metrics in Editorial Strategy

HuffPo and BuzzFeed co-founder Jonah Peretti recently said in a long and fascinating interview by Felix Salmon published at Matter:

I love metrics and I love thinking about optimization, but I think that the optimal state is being slightly suboptimal because as soon as you try to actually optimize, particularly for a single metric, you end up finding that the best way to optimize for that metric ends up perverting the metric and making the metric mean the opposite of what it used to mean.

This reminded me of an idea I’ve been kicking around for a while about how best to approach digital editorial strategy: it requires an ability to wield metrics, vision and instinct in just the right proportions.

Read more

Houston, We Have A Public Domain Problem

Parker Higgins of the Electronic Frontier Foundation, lamenting the recent removal of a public domain NASA clip he posted on the audio sharing site SoundCloud:

The real goofy bit is that before I started at EFF, I worked at SoundCloud. I actually uploaded this Apollo 13 clip, along with sounds from Apollo 11 and others, as part of a project to attract more historic and archival audio and really celebrate the public domain as a rich source of sounds.

Copyright law has been trending in favor of rights holders for a long time. That’s precisely why unlawful claims of copyright over public domain works are so despicable.

Facebook experimented on its users' emotions

Aviva Rutkin, reporting in New Scientist:

A team of researchers, led by Adam Kramer at Facebook in Menlo Park, California, was curious to see if this phenomenon [of contagious emotion] would occur online. To find out, they manipulated which posts showed up on the news feeds of more than 600,000 Facebook users. For one week, some users saw fewer posts with negative emotional words than usual, while others saw fewer posts with positive ones.

Forget about the filter bubble, Facebook is (and has been since at least 2009) a Petri dish.

Click through to find out the results.

Related: Even the Editor of Facebook’s Mood Study Thought It Was Creepy

Budgets and egos

Mark Headd, Philly’s first Chief Data Officer, who quit in spring of 2013, talking to Juliana Reyes of Technically Philly about why he resigned the post:

“A self-certifying website is a 20th century answer to the problem of tax deadbeats,” he wrote in an email. “An open data API is a 21st century answer to the problem. And that was my single biggest frustration during my time at the city — we were constantly using 20th century answers to problems that required a 21st century solution.”

I know from personal experience and talking with friends that this is a common complaint of tech-savvy government employees, especially leaders ostensibly authorized to do something about it but never truly empowered.

Budgets and egos slow technological (and many other forms of) progress to a glacial pace in many government settings.

I once spent valuable time collecting requirements for a piece of vital software, researching and recommending a reasonably priced and effective off-the-shelf solution.

Instead, someone decided to shoehorn the new use case into an aging enterprise software suite that had never seemed anything more than an ugly utilitarian GUI on top of a fancy backend of connected spreadsheets.

There was no line-item cost to the shoehorn solution, so it naturally looked like a winner when it came to budgeting. But the person-hours wasted reinventing the wheel easily outweighed the out-of-pocket cost of the solution I had proposed.

And aside from cost, persons in positions of power are often averse to being educated by twenty-somethings. That is especially true when it comes to technology, which most leaders know is important but few truly understand.

Budgets and egos.

Anyway, go read the rest of the article. It looks like Mr. Headd replies to comments, so it’s worth asking him any questions you might have.

Avoid Facebook's all-seeing eye

Violet Blue, reporting at ZDNet:

Facebook also announced Thursday it will begin tracking its users’ browsing and activities on websites and apps outside Facebook, starting within a few weeks

Her article is full of great advice for people who want to minimize Facebook’s tracking ability across desktop and mobile browsers. Be sure to have a look if the recent changes freak you out.

Journalism and tomatoes

From a May 2013 editorial in the Columbia Journalism Review:

Perhaps journalism can learn from the mistakes of the food industry, which bred a perfectly red, flawless-looking tomato, giving the edge to looks over taste, since that’s what consumers were buying.

Redesigns focusing on side door web traffic will all be for naught if the product in that shiny new package languishes under clickbait headlines and SEO-heavy ledes.

AT&T, acquiring DirectTV, "vows" to stick to FCC's Open Internet rules for 3 years

Nathan Mattise, reporting at Ars Technica:

The two companies will demonstrate “continued commitment for three years after closing to the FCC’s Open Internet protections established in 2010, irrespective of whether the FCC re-establishes such protections for other industry participants following the DC Circuit Court of Appeals vacating those rules.”

My first draft of this post was cynical and incredulous, as I am wont to be. But on second thought, it would behoove AT&T to stick to it’s “vow,” if for no other reason than to grease the skids for regulatory approval of the deal. Like I said about Moves and Facebook, it’s hard to blame a company for seeking growth.

While the FCC’s Open Internet rules have been struck down since they were first imposed in 2010, Comcast still abides by those rules pursuant to requirements imposed by the FCC on its purchase of NBCUniversal.

Now that those rules have been struck down, and we’re in limbo while a new rules proposal goes through its comment period, AT&T committing to the Comcast restrictions presumes the FCC will have similar concerns about their purchase of DirecTV. So the worst case scenario for AT&T is that the FCC achieves similar restrictions via the new rules, in which case AT&T is already prepared. And the best case scenario is that the new rules are more lenient than the 2010 rules, and AT&T is even happier.

In fact, the only losers here are consumers. While there is some question about whether this consolidation in the connectivity/content space will cause immediate market overlap and thus a significant reduction in local competition, it’s hard to see how things will get better for consumers as a result of this vertical integration over time.