Law Publishing is Changing and Moving into the 21st Century

(Thanks to David Restorick)



The Ark Booktower above was part of an exhibition of small spaces at the Victoria and Albert Museum this summer. I especially liked this one which was a booktower, enclosed by books with occasional seats at different levels, so one could stop and browse. If I had one I would never leave it.

I mention this because I have juist been reading an interview with Alan Childress of Tulane Law School in Law Librarian Blog: Part One and Part Two. (And HT to Legal Blog Watch.)

Alan has started a new publishing venture that I've mentioned before, called Quid Pro Books. It's based on publishing primarily in eBook formats (many of them) as well as print when needed. As a long time user of Kindle, Alan could see the benefits for scholars and students in using these formats over print.

Two main lines to his venture are republishing lost classics and bringing PhD dissertations to market quickly. The discussion of Holmes' The Common Law illustrates what Alan is doing:

Joe Hodnicki: That brings us back to your just released corrected and annotated edition of Holmes' The Common Law, which, to remind readers, can be acquired directly from Quid Pro Books and on Amazon in print and Kindle editions.
Alan Childress: I am actually proud of what I did there, and not just did for others. The Annotated Common Law is a new book that I believe will become a standard in every library or prelaw-student’s gift basket. I took a great book and decoded it with some 200 notes. All Holmes’ historians remark what a “difficult” read it is. Not really, if you just explain some basics to readers as they go, like “case” is a writ and what a writ is, or translate Latin and Greek. Some of his speech patterns are quite old but sound like my Southern uncles—in fact my ancestors may have shot Holmes. I think I deciphered him well and I explain legal terms, like chattels and bailments, for nonlawyers. I’m surprised no one did this before. Plus again with the proper footnoting, nice presentation on the page, true page numbers, etc.  Its value in digital is simpler: every previous digital form of the book traced back to a poor scan which left out words from the margins and had him saying modem and docs. Holmes is hard enough without guessing his every eighth word.

And most recently, Alan has published my colleague's, Lisa Webley, book, Adversarialism and Consensus? The Profession's Construction of Solicitor and Family Mediator Identity and Role. I will write about this more anon.

But do read the interview. It's full of interesting titbits as well as informing us about the future of legal publishing.

Law Publishing is Changing and Moving into the 21st Century

Are Partners Any Good at Running Law Firms?

I was interviewed today by a legal journalist on the future of law firms once alternative business structures (ABS) enter the market in October 2011. The focus was on how partners and business managers/investors would work together.

This pre-supposed an image of integration and colleagueship within a new order. I am not optimistic. As my interlocutor remarked law firms have virtually shed whatever thin layer of management they had to maintain profits per partner (PEP). PEP is that mythical measure that signals to lawyers (and to suspicious corporate counsel) that I'm doing better than you. In the last year we have seen how the maintenance of PEP has stripped any sense of collegiality out of many firms as they have laid off associates, professional support staff, salaried partners, and even equity partners.

Yes, we've seen the final demise of another myth: that there is a tournament to partnership. I doubt there is even an "elastic" one anymore, or it's stretched beyond its limits.

There's a great film that's been re-visioned many times. Punishment Park was a typical 70s Nixon-era film, done in cinéma-vérité style, that follows a group of "convicted" hippies across a desert as they attempt to out run National Guardsmen. If they reach the flag location they will be freed. Of course when they reach the flag, there are the guardsmen and police waiting for them. I leave the rest to your imagination. This is a closer representation of the tournament today.

Once ABS arrive many partners are going to find themselves in the same situation as the hippies in Punishment Park. Investors and managers of the new law enterprises--law firm won't be a relevant term--will have definite ideas about what they want their human resources to do, what targets to achieve, and how decisions will be taken. Partnership, being notoriously inefficient in their eyes, will die out and self-governance will wither.

Why would this happen? Lawyers under the new regimes will find the managerial burden lifted and taken on by others. This will allow them to focus on--the law, what they like. But that is not where the power will lie. Lawyers will let this happen because they dislike management, but having ceded control, well they won't be able to get it back.

So the answer to my question is not very good. And it won't matter how many managing partners are sent to Harvard Business School, we are going to see a dramatic change in the business of law. The profession of law will still be there but much smaller than it once was.

And, finally, if you haven't seen Punishment Park, it's very worth catching if only to ponder its relevance now.

PS. Stephen Harper over at The Belly of the Beast has an interesting post on Biglaw and the Black Swan which picks up on analogous themes to the above post. It's worth reading.

Are Partners Any Good at Running Law Firms?

Diversity in the Legal Profession?

(Thanks to Karishma Daswani)

Neil Rose at Legal Futures reports that the Legal Services Board (LSB) is to compel law firms and barristers' chambers to disclose information on diversity, which would encompass:

• age
• disability
• gender
• race
• religion or belief
• sexual orientation
• working patterns
• social mobility

This should come into effect in February 2011. And not before time.

My colleagues Lisa Webley and Liz Duff have been doing research on this, in conjunction with scholars from Leeds, for the LSB. Their report is due shortly and at Westminster we will be holding a seminar on this on 13 October. My guess is that their findings will not make happy reading for the profession.


This is an aspect of the legal profession which has remained under-researched and misunderstood for a long time. Both solicitors and the Bar have been reluctant to provide figures, except in aggregate, on gender and ethnicity. We do know that there are severe distortions in numbers between entry to law school and those in practice.

Lawyers and the legal profession have been good at portraying themselves as meritocratic and having removed the last traces of noblesse oblige. Yet without the statistics how do we know?

Discussion groups on Linked In have been grumbling about "heavy-handed" regulation from the LSB over having to collect and disclose this information. But they have only themselves to blame for not taking the lead and actively seeking to resolve the problems endemic in the profession.

Unfortunately when it comes to change the legal profession is snail-like. And this is one of the reasons the Legal Services Board exists--to overcome the inertia of the profession. Maybe it will begin to get the message, if it's prepared to listen. But....

Diversity in the Legal Profession?

Do We Know How to Present Information/Data?

I recently adopted a new wallpaper for my computer. Here it is:

(Edward Tufte gets real)

Edward Tufte is a hero of mine. I know that I will be soon seeing endless PowerPoint presentations being screened in the lecture rooms of the university. For what purpose, I wonder? That's why I'm with Edward on this. We aren't very good at this.

Tufte's book The Visual Display of Quantitative Information ought to be required reading for every graduate student. It contains what I am certain is the best graphic display of complex information I have ever seen--Minard's map of Napoleon's march on Moscow in 1812

Napoleon started with over 440,000 men on the left; at Moscow he had 100,000; and by the time he arrived back he had only 10,000. The map plots numbers, the course of the invasion, rivers, cities, temperature and time. (You can find out more here.) If Minard could produce such an elegant and fascinating visualization in 1869, we have to wonder why the kitten population isn't thriving instead of being decimated.

 (gratuitous picture of kittens)

Every time I read a draft of a PhD dissertation I come across graphics that float alone on the page, disconnected from text, idea or analysis. What the hell are they doing? Very, very rarely are these things self-explanatory. My response is automatic: read Tufte and don't come back until you have. It sometimes works.

I think I have found a worthy accompanist to Tufte in the guise of David McCandless, a British journalist, turned data visualizer. McCandless believes passionately that information is beautiful if you present it in the right way. He spoke at TED this year. And I am going to show his talk to my research methods students. McCandless has a way of taking vast amounts of information from sources such as Facebook and military budgets and putting them into a visual context that makes immediate and intuitive sense.

Watch....

Do We Know How to Present Information/Data?

What Optima Really Did Wrong and Why It Was Sanctioned by the SRA

 (Thanks to BusinessAttorney)

The Lawyer published a more detailed analysis of where Optima Legal Services (see here 1 and here 2) went wrong when it jumped into bed with Capita.

The SRA accused Optima of not having an arms-length relationship with outsourcer Capita and therefore had become an Alternative Business Structure (ABS). According to the Lawyer:

Optima was established in May 2006 when Capita supplied the financial backing for the OLS directors to buy the volume property arm of DLA Piper. Over the next three years Capita lent the firm in excess of £35m, enabling it to make a series of acquisitions, including ­Pathway, the volume legal property services division of Walker Morris in September 2006, and Dickinson Dees’ volume arm D3 Legal in November 2009.

Furthermore

The SRA found that ­Capita did indeed have too much control over Optima. Its loan facil­ity was too ­”onerous” on the firm and OLS’s “extensive” reporting obligations to Capita were in “excess of a normal commercial lender arrangement”. The regulator also found that five of the nine managers on the firm’s operational board, including former chief ­executive Adrian Lamb, were paid by Capita.

 So any investor must now wait, patiently, for October 2011 before they start pumping money into legal practices. Despite this brouhaha Capita

has given no indication it is about to back away from the profession. In a statement released to The Lawyer last week, it acknowledged it went further than the rules allowed but added: “Optima continues to be a business in which we’re happy to invest.”

Finally, Neil Rose, at the LegalFutures website discusses the warning shots made by the Council of the Bars of Europe (CCBE) about the threat of ABS. The CCBE, along with the ABA, perhaps, is saying that the issue could end up in the European Court and

the CCBE’s argument centres around article 11 of the Lawyers Rights of Establishment Directive, which stipulates that member states have the power to ban from their jurisdictions any law firm that is not completely lawyer-run, if it were deemed contrary to public policy to allow them to operate.

 If it does end up in the European Court then it won't bode well for ABS. The ECJ has typically taken a national pro-profession line rather than a pan-European one when it comes to the legal profession. It appears that the ECJ has a knee-jerk reaction to these moves as the Wouters and Arduino decisions clearly demonstrate. For a good analysis of this see Richard Parnham's discussion at Jotwell.com.

It's certainly not going to be plain sailing into the new dawn. There will be the occasional nightmare or siren call along the way to ruffle the waters.

What Optima Really Did Wrong and Why It Was Sanctioned by the SRA

What is the Legal Services Board For?

As I looked for images to insert in this post, my search brought up two that seemed out of kilter with my theme, but nevertheless here they are....

This Australian lawyer has been fighting a move by the Victorian Legal Services Board to remove her license to practise. In this photo she is posing for GQ magazine, just as most lawyers do...

At least this one popped up on the Legal Futures blog in reference to the LSB.

However, the real purpose of this post was to consider a negative opinion on Lawcompli.com about the value of the Legal Services Board. The introductory paragraph sets the tone:

Some may wonder what use the LSB is.  Some have called for it to kill itself off once ABS’s are introduced next year.  All must want it to prove its value as well as its value for money.  It risks adding little of value, for either the consumer or the profession. 

I fundamentally disagree with this view. First, I should declare my interest that I am a member of the LSB's Research Strategy Group.

To most observers it is clear that in the case of some professions--law, accounting, medicine, for example--self-regulation has failed. It has failed to protect clients/consumers and it has failed to open up the professions to all who wish to join. In the classic formulation the professions have ensured the continuance of protection of production of producers by producers and the protection of production by producers.

The last 30 years have intensified the call for external regulation. Now that the legal trade bodies, eg. the Law Society and the Bar Council, have had to separate off their regulatory arms (the Solicitors Regulation Authority and the Bar Standards Board), we needed a system to ensure that they carried out their regulatory responsibilities properly and in accordance with clearly defined principles.

The Legal Services Act 2007 set out those regulatory objectives and it is worth revisiting them.

They are:

1. protecting and promoting the public interest
2. supporting the constitutional principles of the rule of law
3. improving access to justice
4. protecting and promoting the interest of consumers
5. promoting competition in the provision of services
6. encouraging an independent, strong, diverse and effective legal profession
7. increasing public understanding of the citizen's legal rights and duties
8. promoting and maintaining adherence (by authorised persons) to the professional principles

While the legal profession itself promoted some of these, there were others that received a fairly lukewarm reception. This is one of the reasons why it was considered necessary for there to be an independent regulator not beholden to any legal interests to oversee the implementation of these objectives. Hence the Legal Services Board.

If we examine the current state of regulation it appears ad hoc, random, and even accidental. Take the divisions between the roles of barristers and solicitors. There is no fundamental reason for them except historical accident and a series of turf wars during the 19th and 20th centuries.

Indeed, pretty much most of the regulation is in this form. Take reserved activities:

• the exercise of rights of audience (ie appearing as an advocate before a court)
• the conduct of litigation (ie managing a case through its court processes)
• reserved instrument activities (ie dealing with the transfer of land or property under specific legal provisions)
• probate activities (ie handling probate matters for clients)
• notarial activities (ie work governed by the Public Notaries Act 1801)
• the administration of oaths (ie taking oaths, swearing affidavits etc).

There is no rational justification for why the list has to be composed of these activities and not others. Again, it's historical accident which has been continued.

What we haven't done yet, despite the OFT reports on the professions, the Clementi Review, and the Legal Services Act, is to undertake a rational review of the purpose of regulation. What is it for? What should be regulated? What doesn't need to be regulated? How should regulation be justified? What form should it take?


Fortunately, this is one of the tasks the Legal Services Board has taken on. Without this kind of fundamental thinking the regulatory apparatus and thinking will continue its haphazard way. And so will the kinds of views put forward by Lawcompli.com above. The Legal Services Board gives us the opportunity to stand back and frame a rational and contemporary system of regulation that will serve both consumers and producers in a complex and globalizing world.

What is the Legal Services Board For?

Optima Part Two (Or Why I Am Confused...)

(thanks to Kennedy's)

The more I think about what happened to the Optima-Capita link, the more puzzled I become. Although the SRA promoted the arrangement between the two as a breach of rules (and jumping the gun before the introduction of ABS in October 2011), it gave Optima the lightest of sanctions.

All very peculiar.

What has prompted my perplexity is that a few months back Anthony Davis brought to my attention the fact that Dewey and LeBoef in New York raised $125 million in a bond offering. Note how Bloomberg reports this

Debt in a private placement is sold directly to institutional or private investors and isn’t registered with the U.S. Securities and Exchange Commission. Law firms typically rely on bank loans and partners’ contributions to provide capital rather than outside investors, according to bankers and consultants.

Anthony then asked the obvious question: "Can somebody explain to me why this is different (or should be differently regulated) from raising equity capital?"

There is no doubt all kinds of conditions attach to this offering as Tony Williams commented: "Deterrents include fees, which can exceed $5 million, and loan covenants that may require the borrowers to maintain certain levels of cash flow or profitability."

Of course the fundamental difference is between debt and equity and this one falls on the right side of the line. So that's OK then. But let me follow up with one more observation that ties together what Davis is saying with the comment by Williams.


Peter Lederer, of Miami Law School, has noted that Citibank which is a favoured lender to many New York law firms has been enforcing the loan covenants because of the recession. The result? Partner and associate layoffs to bring profitability back into line. This is not the action of an investor but the lender. However, one can be certain that an investor's decision matrix wouldn't be any different, perhaps harsher, who knows.


So, to return to Optima: it borrowed from Capita. There was no investment. It outsourced its back office to Capita. Other law firms have outsourced their back office operations without a squeak from the SRA. Maybe the most contentious point is that Capita was awarded share options that would only be exercised when the ABS rules changed. Share options are not equity.


So, how is what Optima did any different from Dewey's bond offering or any other loan from a bank?


Though we say we are waiting for the ABS rules to switch on (a bit like Christmas lights), the reality is that it has already occurred through the back door.


Let's put this at its most blunt: the power exerted by banks (via loans, etc) and insurance companies (via PI insurance) is immense. They may know more about the operations of law firms than any other institution. What does that say about the independence of the legal profession? It adds to the multiple layers of regulation from the state level to the private, informal level, which this is. In the case of Optima we see how confused it gets when the two mingle. The question is: which is more important and to what extent is it accountable?

(thanks to save-and-learn.com)

Optima Part Two (Or Why I Am Confused...)