Business · Copyright · Creative · Fair Use · Intellectual Property

A Word to the Wise for Law Firms and In-House Counsel

As Bob Dylan said – the times they are a-changin’. Business practices that function seamlessly this year may suddenly snag like your favorite tights on a new technology.

In order to succeed in such a dynamic environment, the experts advise that you specialize, think creatively, and be flexible in administering a (functional!) fee structure.

In the following, I would like to present an analysis of what I think will change and how I think professionals would be wise to address the changes that are coming compared against the mistakes made by the canary-in-the-coal-mine that is the music industry.

New technologies challenge the legitimacy of established rules.

I was a kid when Napster came onto the scene. I learned about copyright law because my history teacher told us he was only downloading music for educational purposes and in California, that is o.k.

This demonstrates what a confusing environment this was for consumers who aspired to be good role models but were undoubtedly bending the law – in spite of having the best intentions (and excellent taste in music).

Adapt or become irrelevant

We all know what happened afterwards. Record stores went broke because people could suddenly get more music – from well known artists to underground bands – for free. If a competing product enters the market that is better and also free, it won’t be long before this spells big trouble for your business.

Here is where things got interesting: Instead of adapting to the new customer demands and creating a subscription-based download format; or embracing iTunes right away, the music industry moguls took the matter to court. These events were heavily discussed in the above mentioned history class.

Over time, record labels have become a shadow of their former glory as a direct result of their aggressive, hubristic approach to technological changes.

I first noticed that many companies in foreign markets have begun to work with enormous multi-national law firms (who are large enough to have local and international office) and now I have begun to notice a different kind of company in the legal services market.

For those of you don’t know, there are several companies known as LPO’s (for Legal Process Outsourcing) who offer generic legal services. These companies have been around for a very long time but now the mass appeal of their business model has improved. If you are a company who knows that you will go through a large, temporary change, you can hire temporary legal staff to cover the increased demand during these changes and return to business as usual once the merger is completed, or the crisis has been averted. Attorneys in LPO’s supposedlz benefit because they have the flexiblity and free time to have a family and a career – at least that is what they say on their websites.

I have begun to see history repeat itself in the field of law – don’t be afraid, be SMART.

Embrace technology

Most firms already know that new technology has changed their practice drastically in recent years. Some of these changes were a relief to employees (Lexis Nexus or Inprotech) – and others have left some support staff a little… nervous (Dragon, anybody?)

These new competitors in the market are embracing technology – and using it to their advantage. It is no longer acceptable to say “we will do it the way we always have” when confronted with technological advances.

Find your niche

The record labels and publishing houses that are around today – less than 20 years after Napster became an internet sensation – either cater to a niche market or they have consolidated until they can dominate enough of the market to survive.

What services / protection can you offer that is unique? Maybe it is as simple as specializing in contract negotiation between German and Japanese auto firms – it is probably more complicated than that.


Law won’t just be a service-oriented bill-by-the-hour business forever

In an admittedly biased way I am very skeptical about the quality of work, and the available expertise a company like Axiom can provide – but that does not seem to be as important to their corporate clientele as saving money. I can understand this argument because most consumers were not as interested in the sound quality of the CD as they were in being able to find ALL OF METALLICA’S CDS EVER – FREE!!!!

These rent-a-lawyer companies’ entire business plan revolves around offering routine legal services at a premium so unless you are a large multi-national firm with offices in every country – it is advisable to find your specialization(s).

No, you won’t run a business on a “Free” payscale. The idea is as ridiculous as staying the course you’ve always been on. Perhaps you can create an attorney version of a “door deal” (LINK) – at the very least it is imperative that your billing structure is easy to understand, competitive, and extremely organized.

I would love to hear from attorneys on all sides of this change in the industry. Are you in-house counsel at a corporation? Are you a partner in a small law firm? Do you just like to browse the internet for legal news? Please leave a comment to tell me about your experience!


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