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...)

Alternative Business Structures Have Arrived...and Gone Already!

(Thanks to Jim Guckin)

Optima Legal set itself up to offer property and litigation services to the UK lending market. According to The Lawyer it went one step further than most other law firms and this raised trouble with the Solicitors Regulation Authority (SRA).

Optima borrowed heavily (£35m) from Capita in 2006, the outsourcing company, to fund a buyout of a volume arm of Dickinson Dees. Optima then outsourced its back office services to Capita which also took share options for when alternative business structures would be allowed (October 2011).

The SRA didn't like this and following a three-year investigation--starting in 2007: why did it take so long?--it reprimanded Optima for jumping the regulatory gun. Everything had to be put back as it was before the deal, including the 234 back office staff currently employed by Capita. The share options had to be cancelled too. Apparently Optima had taken counel's advice on the move.

Come October 2011 it can all be changed around again. What a roundabout!

Do read the comments to the story as they represent the polar opposites of views. Some, eg. Peter Rouse, ask, "Did services suffer? No, then what's the problem?" Others accuse Optima of hubris. The comment by Tony Guise raises the pertinent question of whether in fact borrowing money was wrong and that the SRA has overlooked the commercial realities of legal life.

I bet in the run-up to ABS this is going to get worse. Poor SRA...

Alternative Business Structures Have Arrived...and Gone Already!

Legal Outsourcing to India Attracts Lawyers from West

(Lotus Temple in Delhi)

The New York Times has published an insightful article on legal process outsourcing (LPO) to India (which my colleague, Oliver Phillips, has extracted below). Every member of the legal profession and those interested in it should read it. This is a real future, not the only one, but definitely part of it.

The gist of the article is that LPO has become an unstoppable force and has now reached a level of maturity that Indian LPO firms are hiring western lawyers.

Here is Leah Cooper's experience:

Leah Cooper left her job as managing lawyer for the giant mining company Rio Tinto in February to become director of legal outsourcing for CPA Global, a contract legal services company with offices in Europe, the United States and India. Before hiring Ms. Cooper, CPA Global added lawyers from Bank of America and Alliance and Leicester, a British bank. The company has more than 1,500 lawyers now, and Ms. Cooper said she planned to hire hundreds in India in the next 12 months.

Admittedly, Cooper is one of the early acolytes of this movement and therefore proselytizes forcefully. But, as I mentioned in a post on the ILEC IV Stanford conference, David Wilkins at Harvard has been researching this area and he agrees that it is a fundamental change in the lawyering process.

What is changing is that instead of being seen as an inferior form of life, LPO companies are now attractive to lawyers. This is comparable to two earlier movements.

For a long time inhouse lawyers were considered second class citizens of the legal profession. Now look at their power, authority and clout compared to private practice lawyers. No one considers them inferior now.

Software development is another comparator. For a long time companies in Silicon Valley took Indian programmers because they were good and cheap. Then Indian software companies started growing and moving into Silicon Valley. Indians were being hired in San Jose and Bangalore as well as Americans.

I imagine similar things will happen to LPO companies, especially when the big consulting firms move in as they will.

If you want to judge the reaction to this movement, read some of the 219 comments attached to the article: I'm afraid they are rather forlorn and reactionary.

All of this is augmented by an article in the Economist on law and globalization which looks at restrictive practices by countries (eg. India, Canada, China) wanting to limit international lawyers.

Finally, this all fits in with the moves towards global liberalization of services, including legal services that I commented on below. Lawyers and the legal profession must start thinking creatively how they want to meet this new world. 

Legal Outsourcing to India Attracts Lawyers from West

California Judge Reverses Prop 8 Decision Banning Gay Marriage

For a full transcript of the decision, see here.

But in the meantime, in order to see how clearly the judge repudiates the conservative arguments, see the following.....
...Tidbits (courtesy of Talking Points Memo):

A federal judge in California has ruled that Prop 8 -- the voter initiative that banned gay marriage -- is unconstitutional.

Supporters of Prop 8 (that is, opponents of gay marriage) have already promised to file an appeal.

From Judge Vaughn Walker's decision:

Proposition 8 fails to advance any rational basis in singling out
gay men and lesbians for denial of a marriage license. Indeed, the
evidence shows Proposition 8 does nothing more than enshrine in the
California Constitution the notion that opposite-sex couples are
superior to same-sex couples. Because California has no interest in
discriminating against gay men and lesbians, and because Proposition
8 prevents California from fulfilling its constitutional obligation
to provide marriages on an equal basis, the court concludes that
Proposition 8 is unconstitutional.
Prop 8, approved in 2008, created an amendment to the state constitution that defines marriage as only between a man and a woman.

More from Walker's decision:

In the absence of a rational basis, what remains of proponents' case
is an inference, amply supported by evidence in the record, that
Proposition 8 was premised on the belief that same-sex couples
simply are not as good as opposite-sex couples. FF 78-80. Whether
that belief is based on moral disapproval of homosexuality, animus
towards gays and lesbians or simply a belief that a relationship
between a man and a woman is inherently better than a relationship
between two men or two women, this belief is not a proper basis on
which to legislate.
And:

The arguments surrounding Proposition 8 raise a question similar to
that addressed in Lawrence, when the Court asked whether a majority
of citizens could use the power of the state to enforce "profound
and deep convictions accepted as ethical and moral principles"
through the criminal code. ... The question here is whether
California voters can enforce those same principles through
regulation of marriage licenses. They cannot. California's
obligation is to treat its citizens equally, not to "mandate [its]
own moral code."
"Moral disapproval alone is an improper basis on which to deny rights to gay men and lesbians," he wrote.

In his findings of fact, Walker pointed out that California "has never required that individuals entering a marriage be willing or able to procreate."

He also notes that slaves were unable to marry.

"The states have always required the parties to give their free consent to a marriage. Because slaves were considered property of others at the time, they lacked the legal capacity to consent and were thus unable to marry. After emancipation, former slaves viewed their ability to marry as one of the most important new rights they had gained," he wrote.

Walker also noted that past marriage inequalities have included the prohibition of interracial marriage and coverture, in which a woman's identity is subsumed by her husband's.

California Judge Reverses Prop 8 Decision Banning Gay Marriage