Some Nightmares Just Won't Go Away...

Hot off the press, this one. Rick Kordowski, creator of Solicitors from Hell website, is appealing the judgment against him.

So far the Law Society's actions have failed to close the website, which has resurfaced as Solicitorsfromhell.net (see below), and now Kordowski is back to challenge Mr Justice Tugendhat's decision.

Kordowski said, "[he] was tempted to leave it alone and let it go down in  history as one of the most ‘archaic’ judgments of all time."

However, Kordowski further said, "the individuals who accompanied the Law Society on the claim against him failed to follow the Pre-Action protocol code. [He] is also perplexed to why these individuals had not (and still haven’t)  contacted [him] to ask who the authors of the words complained about were."

One other interesting aspect of this is that the Law Society complained to the Information Commissioner (IC) about Solicitors from Hell, but received a less than helpful reply. The IC said although he found some of the comments offensive, other accounts of clients' experiences were credible.

Moreover, the IC can't be expected, nor is it his role, to police websites. And, he says quite definitely, that it isn't his role to "rule on what is acceptable for one individual to say about another, be that a solicitor or other individual. That is not what my Office is established to do." That's where libel comes in if you want to take action.

But accepting that we now live in a socially networked world, the Information Commissioner suggests that the best route is for solicitors to approach Solicitors from Hell directly to negotiate changes where there are factual inaccuracies.


In a final recognition of the new world order that professionals and others have to live within, the IC effectively tells the Law Society "live with it". There are plenty of websites that rate people and products and if you kill one, then it will pop up elsewhere....just as Solicitors from Hell has done.

It is an unwinnable battle.


Given that Hugh Tomlinson QC of Matrix Chambers who is acting for the Law Society can't be cheap, I hope the Law Society has the support of its members for the costs of this litigation. They clearly aren't going to get any money from Kordowski.

I still have my doubts about shooting the messenger. It can make the Law Society look like a bully if it's not careful, no matter how justified it may think it is.

Some Nightmares Just Won't Go Away...

94th Session of the Philosophical Foundations of Law and Finance

Dear All

In the 94th Session of the Philosophical Foundations of Law and Finance (Friday, Dec 2, 2011, 18:00 - 20:00, room 516, University of Westminster, 309 Regent Street, London), we will explore the concept of the "Invariance of Default." We shall examine the concept of "Invariance of default" using first Aristotle's theory of knowledge, i.e. predication as universals and universals as models of general precise reasoning. Then, we shall explore the concept of Invariance of Default in terms of a slightly modified Cheng-Lauda (2004) heuristic strategy of (1) Ideal, (2) Ideological Interpretations of the Ideal and (3) Technical Realisations of the Ideal. To this heuristic, we add the Nullity as a necessary element that allows the theory of the Invariance of Default to be transformed into a monoid, and as a monoid become a model for an Algebra of Law and Finance. I know this all sounds like abstract nonsense. It's at this point where we start making bets...afterwards for a drink and TEXMEX at Texas Embassy across the street from No 1 Pall Mall, near the Sainsbury wing of the National Museum...from say 8:30pm. BTW TEXMEX if done properly is BETTER THAN ITALIAN! Ha ha!

Joe

94th Session of the Philosophical Foundations of Law and Finance

The Troika Rampages Across Europe...

The effect of the Troika's actions on the regulation of Irish legal services has been severe and radical. The combined might of the IMF, the EU, and the European Central Bank is considerable.

Ireland, however, is only one of its beneficiaries. Italy, Greece, and Portugal are also feeling the heat of change chasing them. As I said yesterday, there's nothing like a good crisis to compel change.

When the apparatchiks of the IMF visit they are very good at fossicking out illiberal tendencies in trade and professions. This means that lawyers can no longer hide behind their former privileges. In Ireland's case the Troika saw that the Competition Authority had reported on professional legal service change in 2006. 

With a hat tip to Jonathan Goldsmith the Troika isn't holding back. Its demands include the implementation of ABS, freedom of association among lawyers (and other professionals), external ownership and investment of law practices, all of which must shock average Continental (and perhaps civilian) lawyers.

Their historical collaboration with the state, as opposed to the legal profession-market relationships of Anglo-American lawyers, appeared to protect them against radical change since state and profession aims were identical. (See Dietrich Rueschemeyer on comparing professions.) No longer it seems. If the labour market is inefficient then it must opened.

The IMF sees these changes as streamlining the public sector as well as liberalizing markets. Effectively government must be reigned in, and state enterprises privatized, while the market (hopefully) flourishes.

For example, in Portugal the IMF proposes judicial reform along with a revision of the civil code of procedure to reduce case backlogs and increase judicial efficiency. It also says all limitations on practice to be eliminated unless justified or proportional (see page 94 of IMF report).

The IMF reports (linked) for Greece (one and two), Ireland, and Portugal are available. Italy is yet to be drawn up.

What has been viewed as an English peculiarity is now becoming the norm--external investment, ABS and more. Don't waste a crisis.....

The Troika Rampages Across Europe...

Tesco (Ireland) Law?

Ireland is about to head towards Tesco Law. Turns out that Tesco is in Ireland also, so that helps. Last Friday (25 November) I spoke at a conference at University College Dublin on Regulating the Legal Profession.

Ireland has introduced its own Legal Services Regulation Bill (PDF of Bill here) which is based on a report by the Irish Competition Authority published in 2006. The first sentences of the executive summary are trenchant

The Competition Authority has concluded that the legal profession is in need of substantial reform. The profession is permeated with unnecessary and disproportionate restrictions on competition which should be removed so that consumers can benefit from greater competition in legal services.

That these changes are occurring is testament to the intensity of the financial crisis in Ireland. Among the many changes required by the IMF, the ECB, and the EU (the Troika) in exchange for a rescue package was 

To increase growth in the domestic services sector

Government will introduce legislative changes to remove restrictions to trade and competition in sheltered sectors including:

- the legal profession, establishing an independent regulator for the profession and implementing the recommendations of the Legal Costs Working Group and outstanding Competition Authority recommendations to reduce legal costs.

One journalist at the conference joked that "You should never waste a good crisis if you want to get something changed." The Irish government was given slightly less than a year to introduce these changes. The Irish legal profession had been successful before at fighting off change until now.

The conference, organized by Colin Scott, Dean of UCD Law School, attempted to bridge the divide between regulators and practitioners and academics so that a useful conversation might flow. Something flowed at least.

For Julian Webb (who spoke on the Legal Education and Training Review) and myself it was like looking back through a time tunnel to five years ago in the UK when the legal profession was so defensive about the changes being introduced by the Legal Services Act 2007.

The Irish bill essentially proposes the same things that the British have done--separate and external regulator, separating representative and regulatory elements of professional legal bodies, reformed legal training, more open and unrestricted access to lawyers' services either through firms or ABS, and external complaints procedures.

The practitioner speakers at the conference saw these proposals as threats to the integrity and independence of the legal profession. They desire to kill the bill. That isn't going to happen. If they want to pick a fight that they have some chance of coming out of alive then it will be in the negotiations over the details of regulation after the legislation is passed. They know this but still feel as if they must go through the motions. It's a waste of political capital.

I feel we've started a dialogue of sorts. This was helped by trying to put the Irish experience in a less parochial context. Lynn Mather of Buffalo gave a keynote speech on lawyers, the market and the state which theorized some the issues that legal professions face. I placed the regulatory push into its global context. And Colin Scott distinguished meta-regulation from mega-regulation which you can get an idea of from his inaugural lecture, Regulating Everything.

From both economics and sociological perspectives there is no doubt that these changes will occur. More conferences and workshops will be needed to develop the conversations.

Tesco (Ireland) Law?

What Should We Be Teaching in Law School?

(thanks to New Yorker) 

There is one thing wrong with the question in the title and that is whether in fact we should have or need to have law schools. The more I think about what the UK Legal Education and Training Review has to do, the more I feel for them. Probably since the days of 1870 at Harvard Law School has there been such an air of turmoil around legal education.

It's clear we don't know what we are doing or why. David Segal's article in Sunday's New York Times, "What They Don't Teach Law Students: Lawyering" speaks to an American dilemma but one that shortly will become an English one too.

The gist of his article is that law firms have to take on the task of training their associates to be "real" lawyers, not just pretend ones out of law school who don't know anything. Moreover, law faculty have no incentive to change this because their reward patterns aren't directly tied to their students getting jobs but to the articles they publish. Teaching also takes a junior role to scholarship.

In part this is because law schools appeared to be trade schools without any serious role in the academy except to bring in money. Now this has become institutionalized because the entire economic infrastructure of law schools is built on a state-guaranteed loan system. Some might say redolent of Fannie Mae and Freddie Mac. For Brian Tamanaha they're a drug.

Law firms are finding that clients refuse to pay the costs of training associates straight out of law school:

Last year, a survey by American Lawyer found that 47 percent of law firms had a client say, in effect, “We don’t want to see the names of first- or second-year associates on our bills.” Other clients are demanding that law firms charge flat fees.

Law jobs as a result are harder to get. Recently in New York a lawyer, who is an adjunct professor at one of the elite law schools there, told me how all adjunct faculty at the elite schools in the north east of the US are being asked to try and place their students. It seems not all are getting jobs.

Whether law schools should become trade schools again isn't the reason I'm writing. There is something wrong with law schools and legal education and they need fixing. Their curriculum follows a path that seems to lead nowhere. And this is true in the US and the UK.

Students are bored, overworked and frustrated. We ought to be able to design a curriculum that excites them and commits them intellectually and emotionally to law. Unfortunately I don't think the legal profession is good at doing that.

Law Without Walls--which is entering its second year--has begun the redesign process and has generated more excitement than any other legal educational venture that I can think of.

So, do we need law schools? While we ponder this I'm sure new educational ventures will come along and stealthily extract the law school consumer base and it could be too late for law schools to repair the damage. Is the law school the best medium in which to learn law?

UK law schools are about to commit seppuku soon. They are to charge tuition fees considerably higher than hitherto but with no concomitant increase in quality or innovation in the curriculum. Indeed, most likely students will be paying more for less as universities freeze hiring or make staff redundant. It won't make the "student experience" anymore satisfying. Indeed, I think it will lead to law schools closing down or shrinking so much that they become adjunct departments to business schools or such. They might as well become paralegal training centres.

All law students--here and in the US--should read David Graeber's Debt: The First 5,000 Years. It's a tremendous read showing how the phenomenon of debt is at the root of our social and economic structure. Law students, and others, need to understand the phenomenology of debt and how it rules their lives. If they do, law schools will have no option but to reform. But how?

What Should We Be Teaching in Law School?

92d Session of the Philosophical Foundations of Law and Finance

Dear all,

For the 92nd Session of the Philosophical Foundations of Law and Finance (Friday, Nov 18, 2011, 18:00 - 20:00, room 516, University of Westminster, 309 Regent Street, London) , we shall try to resurrect God. There is a lot of ungodly stuff written about the death of god (Nietzchean pysch-pop syphilitic anti-moralising cookbook style to the super-ego-erotic Lacanian matheo-consciousness), but I prefer the grand line of attack from Aristotle's pith-plint Metaphysics book XII through St Augustine, St Thomas, Cantor, Reimann, Weyl, Wigner--in other words, from the simple dimensionality of Euclid to the utterly compressed fractal (non-conformal) dimensionality of Poincare and Mandelbrot. God appears everywhere -- just look at Duns Scotus Eriguena and his fourfold argument of God and nature for formal proof. Kierkegaarde continuously tried to resurrect the Aristotelian god. But today with everyone hooked in instantaneous chatter, God is the subdermal stillness-in-the-absence. Today, we have God despite any text and God not for believers but for those who are incapable of believing. 

See Alfred North Whitehead: 

http://www.forizslaszlo.com/filozofia/folyamat_es_valosag/Whitehead_PR_Part5_Final_Interpratation.pdf.

Joe

92d Session of the Philosophical Foundations of Law and Finance

91st Session of the Philosophical Foundations of Law and Finance

Dear all,

Tonight, Friday November 11, 2011, for the 91st Session of the Philosophical Foundations of Law and Finance, we will remind ourselves of Aristotle's concept of objective knowledge categories and objects across the theoretical, productive and practical sciences, clarify some mistakes made by Heidegger and Wittgenstein re "Categories," and push on with my theory on "the Invariance of Default" and "the Great Cycles of Default" as applied to the Euro crisis.

So far our predictions from theory to markets and politics have been spookily accurate from about late 2007. For those following my blog, the next phase encoded into subliminal social actions is [B][B]->[B][I]. 6 - 8pm, room 516, 309 Regent St, London.

Drinks and dinner nearby (maybe Japanese, Persian or Thai) après lecture.

Joe

91st Session of the Philosophical Foundations of Law and Finance

Warfare in Cyberspace

In an article for The Times newspaper yesterday, Iain Lobban, director of GCHQ, spoke of attacks targeting the IT, technology, defence, engineering and energy sectors, referencing a “significant” but unsuccessful attempt on the The Foreign Office over the summer.

“Most experts see cyberspace as tomorrow’s theatre of war but, in the absence of specific international legal rules on cyber warfare, we are left with very little guidance as to how to deal with a cyber attack originating from other states,” said Dr Marco Roscini, reader in international law at the University of Westminster, commenting ahead of the London Cyberspace Conference.

“Cyber attacks don’t employ traditional weapons, but in this day and age there is no reason why only those attacks involving physical weapons with explosive effects should be treated, potentially, as an act of war,” he added. “The use of other non-kinetic dual-use weapons, such as chemical and bacteriological, would undoubtedly be treated as an ‘armed’ attack and a cyber attack should not be treated any differently should the consequences be comparable.”

Warfare in Cyberspace

“We are moving from Capitalism to Talentism”

Watch live streaming video from worldeconomicforum at livestream.com

Professor Klaus Schwab, founder of the World Economic Forum (WEF), at his opening speech at the WEF’s Special Meeting on Economic Growth and Job Creation in the Middle East, Jordan 2011

I had the opportunity of attending the WEF last year in Marrakech as a participant, and this year in Jordan as a co-chair. I was invited as I am part of a global network called “The Global Changemakers” sponsored by the British Council. Through this network more than 700 young leaders have access to amazing opportunities to drive change in their communities through projects affecting 3.2 million people worldwide.

The unique thing about the WEF this year is its timing, and I must tell you, the spirit is indeed very different. After all the changes the region has been facing since the beginning of the year, with millions of youth revolting in different cities of the Arab World calling for: bread, freedom and social justice, it has become impossible to ignore the urgency of creating jobs, offering better education and imposing new measures to combat corruption, encourage transparency and social justice.

We are a generation that’s connected; open to the world, driven and impatient. Enough with waiting for the governments to do everything, a shift has to happen in the role of government from a provider of growth to an enabler of growth. So yes of course the government has a role - and a very vital one. It has to revise its taxation policies, red tape, encourage more investment and entrepreneurship.

As for businesses, some concepts need to be redefined. FDIs cannot remain a way to get cheap labor, use up the resources of the host country, pack up and leave. I do believe that in all FDI agreements it has to be clearly stated that employees should not be paid below minimum wage, they should not exceed maximum working hours and the work environment should be respecting of human rights and dignity. Knowledge as well has to be transferred so that we can have a new generation capable of starting their own businesses afterwards. There is a shift in today’s economy where entrepreneurship is highly encouraged and Corporate Social Responsibility is no longer a choice, but a must.

Civil society and young people, fill in the gaps, encourage communal initiatives and SMEs, organize yourselves and keep posing pressure on governments and businesses to change. Yes, we are moving towards talentism, so unleash your talents and don’t spend years waiting for a government job.

Change is really taking place in the region, we should build up on the amazing momentum that has started, it’s our time!

Yasmin Mohamed

 LLM International Law

“We are moving from Capitalism to Talentism”

You Wanna Be a Lawyer?

You Wanna Be a Lawyer?

89th Session of the Philosophical Foundations of Law and Finance (Friday, Oct 28st, 2011, 18:00 - 20:00, room 516, University of Westminster, 309 Regent Street, London)

Dear all,

For the 89th Session of the Philosophical Foundations of Law and Finance, and thanks to the ever eagle-eyed spotting by Edmond Curtin and Heather Roberts, we shall investigate the Note on the financial reform from the Pontifical Council for Justice and Peace. See: http://www.news.va/en/news/full-text-note-on-financial-reform-from-the-pontiff and http://www.telegraph.co.uk/finance/financialcrisis/8846595/Vatican-sides-with-anti-capitalist-protesters-and-attacks-global-financial-system.html.

In a heavy but benign anti-hypnotic antidote to what appears to be the Papal call for a global and therefore dominant political authority, we will also read from Dostoevsky’s Grand Inquisitor. BTW & IMO, the Grand Inquisitor, about 30 pages within The Brothers Karamazov, is the best piece of political-religious-spiritual writing in about 2,500 years--one of the great gifts to humanity.

 Joe

89th Session of the Philosophical Foundations of Law and Finance (Friday, Oct 28st, 2011, 18:00 - 20:00, room 516, University of Westminster, 309 Regent Street, London)

88th Session of the Philosophical Foundations of Law and Finance

Dear all,

for the 88th Session of the Philosophical Foundations of Law and Finance, I will give a brief talk on "Post-Modern Finance and Other Revolutionary Etudes." Last time, we had a strong group of poets, lawyers and investment bankers. The best part of the evening is sharing gossip. You can learn so much from indiscretion. It's a great luxury to go slow. Our pace is about one paragraph of Aristotle's Nicomachean Ethics per hour. Comments are unconstrained by any -ism. The sessions remind me of watching the English weather...very changeable from "hungry clouds" swaging on the deep to instantaneous transformations of exaggerated and piercing sunlight. 

Room 516, 309 Regent Street, London, from 6 to 8 pm, Friday, Oct 21, 2011.

Joe

88th Session of the Philosophical Foundations of Law and Finance

87th Session of the Philosophical Foundations of Law and Finance

1. For the 87th Session of the Philosophical Foundations of Law and Finance, we will continue reading Aristotle's Nicomachean Ethics and discuss the question:

2. Is the US Fed constitutional? 

3. See John P. Hussman's brilliant little law and finance analysis at:http://www.hussmanfunds.com/wmc/wmc101122.htm. Quoting from the article, he states:

"Ever since the Bear Stearns bailout, I've been insistent that the Federal Reserve is increasingly operating outside of its statutory boundaries. As I noted in the March 31, 2008 weekly comment (What Congress and Investors Should Understand about the Bear Stearns Deal):

"The clear historical role of the Federal Reserve has been to manage the composition of Federal liabilities (by varying the mix of Treasury securities and monetary base - currency and bank reserves - held by the public). The recent transaction is a dangerous break from that role, in which unelected bureaucrats are committing public funds to facilitate private business transactions and selectively defend the holders of corporate securities. Only Congress has the Constitutional right, by the representative will of the people, to commit public funds. The Bear Stearns deal is a dangerous precedent and a dilution of Congressional prerogative.""

4. Venue: room 516, University of Westminster, 309 Regent Street, London.

5. Date and time: Friday, Oct 14th 2011, 18:00 - 20:00

6. Dinner at The Galleria from 20:30 at 17 New Cavendish St. 

7. RSVP jnjtanega@gmail.com or text 07748186880.

Joe

87th Session of the Philosophical Foundations of Law and Finance

...And Complaints Can Be Bad for You

In my previous post, I vainly hoped lawyers could learn from the complaints process they now have to follow. Unfortunately (h/t to Legal Futures) they haven't quite absorbed the lessons. This is definitely a case of being placed on the naughty step.

Two law firms refused to follow the Legal Ombudsman's orders to compensate clients. The result was the LeO went to court to get enforcement orders with the consequence that in addition to paying the compensation the firms had to pay the LeO's court costs.

Stupid? I think so. Law firms aren't going to get anywhere by being adversarial. As the LeO says:

“The cases are a reminder that ombudsman decisions, once accepted by complainants, are binding. Lawyers need to remember that our decisions are enforceable through the courts and that failure to comply promptly can mean an unnecessary expense.
“Those who don’t comply are likely to have to pay costs ordered by the courts, and risk being referred by us on conduct grounds to their regulatory body.”

I'm sure the legal profession must be thinking the world is conspiring against it. All we need is the next step to name the law firms. They should have warning stickers.

...And Complaints Can Be Bad for You

Complaints Can Be Good for You...

While people argue over Rick Kordowski's Solicitors from Hell, the complaints bandwagon rolls on and on. The Solicitors Regulation Authority has issued new requirements to law firms on how they are to collect information on complaints.

The SRA's starting point is clear

A perception of poor complaints handling by the legal profession was one of the drivers for the Legal Services Act 2007 (LSA). In response, a fundamental requirement of the LSA is that approved regulators must ensure legal service providers have effective procedures in place for the resolution of complaints. Section 112(1) of the Act also requires an approved regulator to make provision for the enforcement of those requirements.

This is the result of the Legal Services Board's YouGov research on complaints handling, which ought to be compulsory reading for all lawyers. So the SRA will now require law firms to collect data on first-tier complaints in a new way.

The complaints categories down the left hand side are those used by the Legal Ombudsman. The row across the top is self-explanatory and covers the previous 12 months. I will be curious to see what gets inserted into the box marked "other". I also wonder if the categories will capture the full extent of consumer satisfaction. The categories seem to me very much "lawyer-type" ones.

The SRA, following the Financial Ombudsman Service approach, will use the data to construct waves and trends of complaints to allow it to see if there are systemic issues in complaints. The data will also inform the SRA that it has a problem with law firms that aren't handling their complaints properly. (You can see how the Financial Ombudsman Service analyzes its data here.)

This is all part of the risk-based approach to regulation now in train. My guess is that lawyers may well be in for a shock when they start seeing the results of the analyses.

My ever-eager curiosity also wonders how much--if any--of these data will be made public. Some redaction might be needed, but it should be there in the public domain, so at least we could see if things are improving.

Complaints Can Be Good for You...

Google Law!

(thanks to thegioiseo.com)

It's happened. Google has entered the law business! Google has invested in Rocket Lawyer according to Forbes magazine which says Rocket Lawyer has 70,000 users a day. Paul Lippe also covers this at the New Normal.

I've been giving presentations for the past couple of years where I have always finished with a picture of Google's logo and said, "There's the world's next biggest law firm. Beat that if you can." It was usually met with disbelief.

Google analyzes information very well and law is information. At some level there will be the need for sophisticated interpretation via human thought but for how much longer?

First it was Tesco Law and now it's Google Law!

Rock on....

Google Law!

Mea COLPa and the Lawyer's Gone Bust...

(thank you)

Two separate items in Legal Futures raise concerns about lawyers and their relationships within their own firms and with their clients. They tell different sides of the same story, from inside and outside the law firm.

The first is that many firms haven't begun to train their staff in risk and compliance for when outcomes focussed regulation begins October. Yes, three months.

The second is that there has been a steep rise in compensation claims against solicitors. The figure is now over £200 million.

New figures from the Solicitors Regulation Authority (SRA) said the value of the 1,952 open claims against the Solicitors Compensation Fund at the end of June was £205m, £76m more than at the same time in 2010, even though there were almost 1,000 more claims open then.

I wrote before that law firms are confused and perplexed by who should be their compliance officer for legal practice and what that officer ought to be doing. By October 2012 the COLP has to submit a report on the preceding year. That means having all the reporting and accounting systems in place now, or by October at the latest.

If law firms can't get their compliance act together then how are they going to respond to client complaints? How will they catch dishonest lawyers? Note that law firms have also to appoint a COFA (compliance officer for finance and administration) too. If these processes are fully functioning will clients have confidence?

Perhaps, instead of trying to kill off Rick Kordowski's Solicitors from Hell, the Law Society and Bar Council should be prompting their members to start thinking and acting to ensure clients are satisfied, well-served, and confident in the legal profession.

Adam Sampson, the Legal Ombudsman, wrote recently that customer service will be the key criterion

What is important here is the introduction of the concept of customer service as a basic standard against which barristerial actions are to be judged.  I know from my own experience that the vast majority of barristers take their responsibility to their client as their central, driving motivation.  However, there remain a small number of the profession who see customer service as something which is wholly the responsibility of the solicitor and therefore not a matter with which they need to concern themselves.  It is this small group who may struggle to adjust to the new reality.

Barristers, it seems, have not yet adjusted to a non-adversarial complaints system where they can "prove" their innocence. That will be only one part of the process.

Lawyers must realize that the new world of legal services won't wait for them to catch up from the 19th century to the 21st. We know other suppliers will jump in and begin to mop up. It might be Coop or it might be Quality Solicitors, but it won't be the lawyers who stand there with question marks over their heads. Whoever works out that consistently good service across all fronts to all clients improves business will win.

Mea COLPa and the Lawyer's Gone Bust...

Lawyers, the Comorra, and Dutch Auctions

(thanks to movieaddicts)

There's a scene in Gomorrah (about the Neopolitan Comorra) where dress-makers compete to win an haute couture contract for a major clothing designer. They are asked to bid for the work in money and time--the lowest amount for each. Pasquale pleads with his boss not to go below a certain number of days which of course he does to win the contract. It's a reverse auction. These are also known as Dutch auctions, in contrast to "normal" English auctions where the price ascends not declines (see Smith 1990: 120). Later in the film Pasquale sees Scarlett Johansson on TV wearing one of his dresses.

Dutch auctions are very desirable for buyers of services although not so good for the sellers. Lawyers are now finding out what it is like to be on the receiving end of a Dutch auction. With a hat tip to my friend, Peter Lederer, the Wall St Journal has run a fascinating article on the machinations of corporate counsel to impel lawyers and law firms to embrace reverse auctions. (Here's an alternative location if it's hiding behind Murdoch's paywall.)

Here's the opening:

Spurred on by budget pressures, companies' use of a controversial auction process to negotiate contracts with law firms has surged in recent years, a trend that could eventually reduce the revenue attorneys can expect to reap from clients.

Several big companies—including GlaxoSmithKline PLC, eBay Inc., Toyota Motor Corp. and Sun Microsystems—have used the tactic, known as reverse auctions or competitive bidding, to pressure law firms to lower prices, especially on high-volume work such as tax filings and intellectual-property transactions. Many lawyers now worry these auction-based pricing strategies are spreading to more complex projects.

"Is it making all of us uncomfortable? Yes. Especially when you start to move away from the more routine sort of work," says Toby Brown, the director of pricing at Vinson & Elkins LLP.

What is interesting is that this isn't being done through beauty parades and pitches but instead through websites where law firms bid against each other and against the clock. Sounds like a chess game, no?

Despite the tender feelings of law firms and lawyer that this might all be a bit infra dig--"not very professional is it, old chap?"--it's gathering pace and market share.

Ariba Inc., the maker of one of the main reverse-auction software tools, claims that around 40% of today's market for legal work—a threefold increase from just a few years ago—is contracted through electronic, online means, most of which involve a reverse auction, according to Sundar Kamakshisundaram, a marketing manager for the company.

And David Baumann, general counsel for TechNexxus LLC, which helps companies cut down on legal, technology and business-services costs, says more than a third of the work they do involves reverse auctions, about four times more than in 2008.

Lawyers will plead that their work is complex and varied and can't be priced like other products. It doesn't really wash when one sees investment banks pricing complicated deals every day. How many other suppliers are able to say, "I won't tell you the price now. Wait until I think I've done enough, then I'll let you know."
As one general counsel so aptly put it:

"Every lawyer will tell you that every piece of work they do is incredibly important and risky and has to be custom-made, and that's just nonsense," says Jeff Carr, FMC Technologies' general counsel. "No matter how legally brilliant you are, there is always an alternative."

What's the difference between a loaf of bread and a lawyer? You eat one and the other eats you.

*****************

Smith, Charles W. 1990, Auctions: The Social Construction of Value. California.

Lawyers, the Comorra, and Dutch Auctions

Waiting for Godot...or ABS?

October will pass without Alternative Business Structures and it looks likely it will be the end of the year before we see them, unless you are a licensed conveyancer that is. In part this is due to the way parliamentary business is done and also to the manner in which appeals against Solicitors Regulation Authority decisions will be conducted. There is also the vexed question of what criminal convictions have to be disclosed by potential investors in ABS.

I'm sure we'll get there in the end even if parts of the legal profession wish this would all go away.

I was struck by Dan Bindman's column on Legal Futures, "Are you an ABS optimist or pessimist?" It's worth reading for the views represented on the potential effects of ABS. Dan ultimately says,

One thing is certain: the new entrants will have little regard for broader notions of access to justice, or the social value of having an independent legal profession to police the three-way interface between the state, the market and the individual.

We don't know this of course. And Dave Edmonds, chair of the Legal Services Board, comments,

Dan Bindman’s article poses the right questions. But I quarrel strongly with his assertion that new entrants will “have little regard for broader notions of access to justice”. Why will they not? Many of the most ambitious and innovative lawyers operating in the present marketplace have a very high commitment to this fundamental cause. My belief is that extending the ability of citizens to secure affordable legal advice from new forms of law firms (which will be in the main run by lawyers and properly regulated by regulators for whom access to justice is an underlying principle) will enhance access to justice, not diminish it.

Read the other comments also--there's good stuff there.

When it comes to dynamic change the legal profession has always been in the vanguard of resistance. It's almost a reflex action. Legal aid was resisted when introduced in the 1940s. Then lawyers learned how it would benefit them. They love it now! But that's going.

Lawyers were opposed to neighbourhood law centres because they thought they would take away business. Instead they promoted it. Their funding is being cut now.

The legal profession has a good eye for resisting winners and on that basis I think they might be on to something with their opposition to ABS. Just don't leave too late...

Waiting for Godot...or ABS?

Is Solicitors from Hell a Conspiracy Against the Legal Profession?

(thanks to Byfield)

As I came out of the BBC yesterday with Des Hudson*, the chief executive of the Law Society, he said Rick Kordowski was a criminal. I reminded Des that the police didn't think so. He wasn't happy.

We'd both been invited to discuss Solicitors from Hell on Radio 4's You and Yours consumer affairs programme. For those of you who might not know Solicitors from Hell allows disaffected clients to write their stories about their dissatisfaction with their lawyers. At times the voices are plaintive, frustrated, and upset. A number of lawyers have sued Kordowski for defamation, except he's got no money. And recently a judge suggested the Law Society and the Bar Council take action against Kordowski and his website.

The BBC has put the story and the difference between Des and myself on their news website. You can listen to our discussion here: we are Chapter Three.

My view is quite simple. Whatever one thinks of Kordowski or his website, it serves a need. It demonstrates clearly that people need an outlet to express their feelings and concerns about how they are treated. Instead of attacking Solictors from Hell the Law Society should be doing something about those complaints. It should be preventing the need for a website like Solicitors from Hell. If there's no felt need, then no SfH.

Lawyers are improving their game--don't get me wrong--but far too slowly. In the first six months of setting up the new Legal Ombudsman received nearly 40,000 calls which turned into close to 4,000 complaints. And there is a backlog as well. But that's far too many complaints for a profession to have landing on its doorstep. It's still not an easy process to complain about bad legal services. It could involve the Ombudsman or it might the task of the Solicitors Regulation Authority. Certainly the Law Society website doesn't make clear about how to go about complaining except to give a link to the Legal Ombudsman. Take a look at its website home page and see how easy it is to locate the complaints section. It's not.

This is one of the reasons why government decided the professional bargain was no longer working and passed the Legal Services Act in 2007 and established an entirely new regime of regulators for the legal profession and legal services market. Professions have to be accountable to the public.

--------------------------------------

*Here's Des in a better mood and you can read previous posts on Solicitors from Hell from March, April, and June.

Is Solicitors from Hell a Conspiracy Against the Legal Profession?

82nd Session of the Philosophical Foundations of Law and Finance (15 July, 6-8pm, room 516, University of Westminster, 309 Regent St, London)

Dear all,

Have you ever wondered why the world monetary system walks the path it does, a segment of which we are living in? Do you ever wonder whether there is indeed an invisible hand that "puppets" the world's monetary system and certainly not behaving in the pattern of the famous Adam Smith's invisible hand? Theories of the "invisible hand" have famously circled the world for hundreds of years either as part of scientific argumentation (e.g. the human drivers) or conspiracy speculations (e.g. clans of new world order). However not so known to the ordinary man, but at the same time so intriguingly powerful, comes the speculative statement that such an invisible hand exists and it is called the Exchange Stabilisation Funds (ESF). With its unaccountable authority to no one else, except from the President and the Secretary of Treasury, its hand on the gold reserves of the United States, its institutional influence on the world monetary policy (IMF, World Bank) and its legal authority to "....provide financing to foreign governments", among others, it is difficult to be sceptical about the supremacy of such a hand. 

Congress created the ESF with profits from the nationalization of gold—and adjustment of the gold standard for the dollar—in the early 1930s. With the passage of the Gold Reserve Act, the government stash increased in value by $2.8 billion; most of that money was then diverted into a new fund to help the Treasury manage the exchange value of the U.S. dollar in times of crisis by buying and selling foreign currencies without congressional approval.

ESF funds are devoted not solely for foreign exchange. The secretary can, with the approval of the president, use the money to "deal in gold, foreign exchange, and other instruments of credit and securities." (i.e. ANYTHING on securities market) 

Some sources to further intrigue our curiosity:

http://www.slate.com/id/2200816/

http://en.wikipedia.org/wiki/Exchange_Stabilization_Fund

http://www.youtube.com/watch?v=mj_lSydKB8M

http://www.youtube.com/watch?v=2ssrcD5GdPQ 

http://www.treasury.gov/resource-center/international/ESF/Pages/esf-index.aspx

Afterwards can head for drinks at the beautiful bar at the Langham's hotel. See you tonight.

82nd Session of the Philosophical Foundations of Law and Finance (15 July, 6-8pm, room 516, University of Westminster, 309 Regent St, London)

80th Session of the Philosophical Foundations of Law and Finance (24 June, 6-8pm, room 516, University of Westminster, 309 Regent St, London)

Dear all, 

1. This is the third lecture by Joe to re-characterise and translate Hohfeld's analytical jurisprudence into an n-Categorical algebra.

2.  There are many symmetries embedded in Hohfeld's octonic discrete projective mapping which are really dual quatronic. In a previous lecture we showed how Hohfeld himself perhaps unconsciously missed perfecting his beautiful gem, indicating that he was not fully aware of the deep symmetries of his model.

3.  Is it not obvious that Hohfeld's 8 legal relations constitute a set? But sets tell us nothing of dynamic structures; they order but do not inform.

4. In the lecture, we explain how the 8 legal relations as jural opposites and jural correlatives relate to category theory. We dig even deeper and ask why this must be so.

5.  We show how the 8 legal relations are idempotent endomaps in the framework of jural opposites of a single human being, ie, in the monadic.

6. To map jural correlatives, however, we must use functors which are defined as morphisms which preserve in a one-for-one correspondence the objects and morphisms of two categories. Or, simply, a functor is a morphism between categories.

7.  One big result is that jural correlatives are not idempotent endomaps but rather isomorphic free and forgetful functors between categories of individuals (monads).

8. Not lazily resting on this discovery, we hypothesize (1) that systemic risk and the great cycles of default are left and right adjoints of pre- and post-default subsystems and together form a Dun Scotus-like fourfold cyclic symmetry; and (2) that short cuts through the great cycles of default via tinkering financial regulation only accelerates the centrifugal forces against the good.

See you soon, 

Rezi & Joe

80th Session of the Philosophical Foundations of Law and Finance (24 June, 6-8pm, room 516, University of Westminster, 309 Regent St, London)

Proof It's Time to Teach Ethics--Part Deux

(thanks to New Yorker)

Proof It's Time to Teach Ethics--Part Deux

Proof It's Time to Teach Legal Ethics in the UK...

City law firms are ticked off because government legal procurement doesn't seem to be going their way. Legal Week reported on government's reliance on one or two firms for its banking crisis work, well, mostly one--Slaughter & May. During the Northern Rock crisis it billed government £20 million in fees.

The latest beneficiary is Freshfields, which isn't on the panel, and partner Barry O'Brien of Marks & Spencer conflicts of interest notoriety.

However, what really intrigues me are the comments following the article. They represent the polar extremes of formalism and professional responsibility. My take is that lawyers are superb at avoiding accountability but then their forensic training ensures they make these distinctions. For example, the way the SRA Code of Conduct is used to justify positions is rather like the way evangelical preachers on TV use quotations from the Bible. In a country where legal ethics is not properly taught, now is the time.

I've added the comments below:

Sick

I think that lawyers are the last people who should be moaning about this since they were partly responsible for causing the financial crisis and have never been punished for it. The law is not just something for partners to make money out of – it was designed as a system to govern and protect society. That includes lawyers involved in corporate and banking law.
In respect of the complex financial products and mechanisms that were created during boom times e.g. securitisation etc and the complex deals that took place, it was the responsibility of lawyers to advise their clients that these could end up in a financial crisis scenario. The lawyers should have been alert to the fact that, although operating in a soft law type environment, these deals were harmful to principles such as market confidence, protection of the consumer, as well as protecting the system as a whole. It was the lawyers' duty to deter the clients from conducting these deals and they should have reported their concerns to the Government, FSA and international bodies and refused to act for the client. A client may well think these deals are smart, but it is for the lawyer to consider the legalities – that does not just mean loyally making it happen for the client so they can bill and buy an Aston Martin, but also looking at the bigger picture.

So City lawyers are reaping what they have sown here. And if lawyers wish to argue that they could not anticipate the financial crisis then that is more reason to say they are responsible and should be brought to book because it would be negligent for any lawyer advising on finance deals to not have a firm grasp and understanding of economics related to the deal and how the deal fits into the economic system as a whole within that economic climate (e.g. a boom period).
And £20m is sick – why on earth don’t the government deal with this in-house, probably at 1/10 of the cost? And why are these firms on any kind of a panel in which they initially advised on the deals and the institutions that went belly up? This is another example of the David Cameron 'jobs for the boys' mentality that the current Government promote (i.e. work for the Eton and Westminster School alumni, stuff the rest). It is a total disgrace.

Megatron -16 Jun 2011 | 13:13

A few facts

Megatron

Clearly facts aren't your strong point, but the panel was created by your friends in the last government. Do you remember? The ones who set up the system of financial services regulation and who advocated "light-touch" regulation. The ones who virtually bankrupted the country. Do try to retain some grasp on reality.

Rant over -16 Jun 2011 | 14:59

Cleansing the Augean Stables

Megatron,

Let's get it all out in the open. Where were the lawyers when the Japanese earthquake struck, eh? Didn't they warn Tepco about the risks of water-cooled reactors?
What about Southern Cross? Shouldn't they have predicted the squeeze on local authority spending and refused to act for Blackstone on the freehold sales?
When Cardigan ordered the charge of the Light Brigade, shouldn't the lawyers have known what would happen and injuncted the Russian guns?
I'd be interested to hear your thoughts.

Scattergun -16 Jun 2011 | 15:34

@Megatron
I can only assume that you are not a lawyer. If you are a lawyer then you clearly weren't listening in your conduct classes. Rule 1.04 "You must act in the best interests of each client." Not in the interests of the country. Nor of the government. Nor of Mrs Miggins.
Your duty as a solicitor is to help your client achieve its aims within the law. It is not and never has been a professional duty of a solicitor to second guess his client's commercial decisions and aspirations or to place his own value judgments about a transaction's social utility above the interests of his client. Those are the responsibility of financial regulators, not solicitors in private practice.
Your position is just a commercial law version of the old canard put to criminal lawyers: "How on earth can you defend rapists/paedophiles/armed robbers etc?" And the response is just the same: they are entitled to legal representation and their lawyers are bound to act to the best of their abilities in the client's interests (and not society's at large). It's a fundamental premise of the rule of law.

Vercingetorix -16 Jun 2011 | 18:17

Maths

@ Vercingetorix

I don’t think you are a lawyer either to be honest based on what I just read. Lawyers are not allowed to represent rapists and paedophiles if they are guilty and then try to claim they are innocent. I think you are missing the point. FSMA said that financial institutions had to act in the interests of market confidence, protection of the consumer, as well as protecting the system as a whole. Therefore, law firms had to assess whether the deals breached those rules and if they did (which clearly they did) they should have refused to act for the client and reported to the FSA and Treasury that financial institutions were conducting deals and activities with huge systemic risk implications. So, these deals were not "within the law" (as you claim) otherwise there would not have been a financial crisis would there?
As for quoting the code of conduct by the SRA to justify City firms' oversights in regard to those deals. Please! The SRA is protectionist toward large City firms – They wouldn't dare invent a Code that might in any way, shape or form offend a City firm.
Also @ Vercingetorix - I think it was stated that the law was "not designed" in the interests of City firms and partners. I don’t think people like Plato really put much though into creating a legal system designed to help partners get a good PEP every year!
The incompetence of the lawyers point is interesting too. How could these lawyers spot systemic risk dangers? Many of the clients (i.e. employees of these banks) have very technical and high level economics and mathematics degrees. There is no way the majority of lawyers working on those deals have anywhere near those intelligence levels. There is an argument that the lawyers were not trained properly to work on those deals (from an economics perspective) and that their knowledge was limited to working with precedents and writing board minutes. This should fall at both the door of the advising partners and the SRA / Law Society for allowing lawyers to act on deals that they don’t have the technical expertise to understand.

Maths -17 Jun 2011 | 10:13

@Maths
Where in my post did I say lawyers could assert innocence on behalf of clients they know to be guilty? I didn't.
But even if they do know of a client's guilt, they still defend their client. It is quite possible to test the prosecution's evidence and find it wanting such that a client is acquitted without ever asserting a client's innocence. It happens every day in criminal courts up and down the country.
You really were asleep in your ethics classes weren't you?
As to the rest, you seem to be completely confused as to the difference between a City solicitor and a financial regulator. One is not the other.

Vercingetorix -17 Jun 2011 | 12:39

Maths

Time to re-read FSMA, Maths. The FSA has those obligations ("objectives" in fact), but financial institutions do not.

Sarpedon -17 Jun 2011 | 12:46

reality check

Reality check: the regulators should have regulated. Or worst case the banks should have seen what was coming. Legal advisers advise on, shock horror, legal issues. Financial institutions advise on, shock horror, financial issues. Admittedly there is some crossover, but to assert that lawyers shouldn't be working on deals that they don't 100% understand from an economic perspective is frankly absurd and highlights a 'bash the banker/lawyer' attitude promulgated by a government that fundamentally failed to protect the economy.

People are out for themselves. It is the responsibility of the government to check this, unless something is actually unlawful (which everything referred to above was not, it was merely inadvisable). If it were unlawful, only the government could have made it so.

reality -17 Jun 2011 | 14:56

-------------------------------------------------

A friend sent me another picture of a lawyer at work which I thought I'd include here. Indeed, it's quite accurate....

Proof It's Time to Teach Legal Ethics in the UK...

79th Session of the Philosophical Foundations of Law and Finance

Dear all,


For the 79th session of the Philosophical Foundations of Law and Finance (Friday, June 17 · 6:00pm - 8:00pm, Room 516, 309 Regent Street, University of Westminster), we will apply the concepts of a Categorical Algebra of Law and Finance announced in the 78th session [see notes thereto in the Facebook group] to Hohfeldian analytical jurisprudence with special reference to: (1) political phenomena and (2) categorical theory and financial instrument patents. 

Under (1), we will examine the concept of executive vision as per Ron Paul [see the YouTube video: (3) http://www.zerohedge.com/article/complete-ron-paul-highlights-last-nights-new-hampshire-debate] and note how his vision differs from Obama's in categorical Hohfeldian terms.

With regard to (2), see (4) http://www.google.co.uk/patents?id=_kKnAAAAEBAJ&printsec=abstract&zoom=4#v=onepage&q&f=false and and (5) http://www.google.co.uk/patents/about?id=7C3kAAAAEBAJ.

Sometimes, I'm asked what is the point of all this formalism, ie Categorical Algebra of Law and Finance? I guess there's a hopeful answer that goes along the path of formalism post Newton and Leibniz, where the conception of a coordinate system allowed the calculation of movement of objects, and that these systems of simultaneous equations got us amazing answers to many problems facing the development of the human species. With the quantum mechanics of the 20th century, something broke in our general view of physical calculations and ultimately, about our sense of having a genuine mathesis universalis. The great symmetrists, Herman Weyl and Eugene Wigner, the former tried but failed to pin-down quantum mechanics to a totally symmetric view with group theory and the latter, elegantly showed us how to calculate with group theory sub-atomic phenomena using Heisinberg's "ugly random symmetric matrices," could not come up with a wide enough view of nature including consciousness because basically, in my view, they placed bets on the wrong type of formalism! If only category theory had been invented in 1900 rather than 1947! [Sigh!]. Then Einstein and Poincare would have come quickly to the same conclusions! And even Hohfeld, the well-trained chemistry major, would have been able to erect a much more direct superstructure. Here's the trick I've learned in formal logic way back when I was a teenager studying under Prof Hart at the University of Hawaii, who at one time, edited Copi's standard textbook on Logic, that the more fundamental premise, the wider the applicability, but without instantiation, the framework is too wooly to be of any real use. So I've been on a long search for just the right set of premises (the Goldilocks premises) which can unlock and link. So far, category theory comes closest to the ideal. It's very useful. Instead of checking for and arguing logical fallacies, you can sketch a few straw and ball diagrams and get to the essence of quantum mechanics, special relativity, Hohfeldan analytics, Plato's Laws, Aristotle's Metaphysics, all with a bit of gracefulness and light humour.

As always, after the intensity of philosophical discussion, we can most deservedly unwind at the Galleria Restaurant at 17 New Cavendis St, from 8:30pm onwards.

Ciao
Joe

79th Session of the Philosophical Foundations of Law and Finance