U.S. Law Firms Mark Best First-Half Revenue Growth in Ten Years

Citi Private Bank reports in The American Lawyer that the first half of 2018 was better financially, in particular for small- and large-sized law firms, than was the first half of 2017. In fact, overall revenue growth across the industry in the U.S. contributed to the strongest first half since 2007.

Citi Private Bank’s Law Firm Group, which produces the semi-annual “Law Firm Leaders Confidence Index,” surveyed 186 small-, medium- and large-sized law firms; they concluded that 2018’s first-half growth could be attributed to “a pickup in demand and solid rate increases, together with moderate expense growth…”.

In their article for The American Lawyer,  John Wilmouth and Gretta Rusanow of Citi Private Bank indicated that the positive trend is likely to continue at least through the balance of the year. They point out, however, that the positive results apply primarily to international or global firms and small boutique or niche firms, rather than to those closer to the middle.

“[AmLaw] Second Hundred firms continued to struggle,” they write, “as they have since the beginning of last year. Revenue was up only 1.3 percent, as a decline in demand tempered an increase in lawyer billing rates. …  [T] his was the only segment for which expense growth exceeded revenue growth.” Boutique or niche firms, by contrast, “actually posted slightly stronger revenue growth (6.9 percent) than Am Law 50 firms.”

The report offers an intriguing look into details of trends in various areas of law-firm operation, including consumer demand, length of collection cycle, number of lawyers, number of salaried vs. equity partners, expense growth and inventory, as well as financial data.

I would be very interested to hear your comments on the Citi Private Bank study – or any other matter relating to the law. Leave your comments below, or contact me directly via email.

 

Pull up a Chair: The Virtual Lunch Meeting

In an interesting fusion of technology and food, a company called eatNgage is offering users the opportunity to participate in virtual lunch meetings with groups of staff, clients, colleagues or others.

The rationale? People are more likely to look forward to, and show up for, a meeting that involves a meal than one that takes place during traditional working hours. eatNgage reports that to date, those who have used their service have an average of three times better attendance than they previously experienced.

We partner with many restaurants and users can order food through our platform. We also replaced the pricing with a ‘budget bar’ that the host can set. People joining meetings can order food without worrying about costs, creating a more carefree, friendly meeting environment. – Rachel Yelin, VP of product development, eatNgage

Based in Huston, TX, eatNgage can be used to host small gatherings as well as ones involving many attendees and different organizations. The service was created when eatNgage combined its lunch meeting platform with Zoom, which specializes in video conferencing, using Zoom’s application programming interface (API).

The company cleverly offers to tell you more about its platform… over a virtual lunch.

Let me know your thoughts on this or any other matter related to the law, either in the comments below or directly via email.

Find Previously Inaccessible Treasure Using Litigation Data

Much news about legal technology focuses on the latest invention or development. In several areas of practice, however, we have already reached a point where enough data is available to significantly improve our work: all we need to do is to find it, and to use it.

One area that is rich for mining is in the field of litigation. Nicole Black points out in an article in the ABA Journal that with existing software, “The foundational technologies needed to support machine learning have made advanced data analytics and sophisticated language processing possible on a scale never before seen.”

Black says that “These capabilities are particularly useful in the litigation arena. Court data and filings provide a wealth of information about judges, their rulings, the litigants, their attorneys, expert witnesses and more. [L]itigation analytics software […] accesses and harnesses relevant data sets and then makes sense of them and provides the user with the information needed to make informed decisions about the course of a litigation matter.”

Black points out that one of the problems associated with the current abundance of data is the issue of “garbage in; garbage out,” and that several companies including Thomson Reuters (for which Black works), Bloomberg Law and LexisNexis are moving into the business of sorting the useful data from the junk. Specialized computer programs from these and other sources offer insights into a range of litigation-related areas, such as details about judges’ past decisions, analyses of specific cases, and many others.

Black provides a thorough overview of the litigation data-analysis services now available so that readers can consider which may be of use to them, and she points out that several companies offer free trials of their technology. With this kind of software now available to lawyers in many locations around the world, those who take advantage of it are likely to see bottom-line improvements for both their clients and their firms.

I invite you to share your thoughts on this or any other matter related to the law, either in the comments section below, or directly via email.

 

 

World’s Wealthiest Man, Jeff Bezos, Says Customers Today Are “Divinely Discontent”

I read with great interest Jeff Bezos’s 2017 letter to Amazon shareholders. I believe we can learn a great deal from a man whose company annually ranks number one on several distinguished surveys of customer and employee satisfaction.

Bezos’s theories and suggestions – which he  confesses he has gained not only through Amazon’s successes, but also through “billions of dollars worth of failures” –  are relevant (and timely) not only in the retail industry, but also to those of us who are working to offer professional services to highly demanding clients. Furthermore, what he has to say about running a company is of value not only at the scale at which he works (Amazon employed 560,000 people in 2017!), but also to those looking to improve the smallest enterprise on the planet.

Let me pique your interest with a couple of quotes from the letter:

  • “One thing I love about customers is that they are divinely discontent. Their expectations are never static – they go up. It’s human nature.”
  • “You cannot rest on your laurels in this world. Customers won’t have it.”

Bezos believes that customer satisfaction requires a multi-faceted approach, of which a key element is the creation of a culture of high standards (“widely deployed and at all levels of detail,” he says). He then explores the question of whether high standards are “intrinsic or teachable” and whether they are “general or domain-specific,” and discusses other factors that need to be considered in their creation and deployment.

Along the way Bezos poses such intriguing questions as “How long does it take to learn to do a perfect free-standing handstand?” and “How can a six-page memo be more effective than a PowerPoint presentation?” The answers to these questions will likely surprise you, as may one of his conclusions:

“… finally, high standards are fun! Once you’ve tasted high standards, there’s no going back.”

Let me know your thoughts on this or any other matter related to the law, either in the comments below or directly via email.

 

EY, Proving Itself to Be a Leading Disruptor of Legal Services, Acquires and Expands Riverview Law Globally

Following the acquisition of Riverview Law by EY, a new entity named EY Riverview will expand the accountancy firm’s legal-services reach into the global marketplace. Riverview Law’s growth could lead to an increase in staff from its current 120 to as many as 3,000, to be located at offices around the world.

In case you missed this remarkable announcement: Riverview Law is a UK firm widely recognized for its innovative approach to legal practice, including such initiatives as fixed-price-managed services for in-house teams, and the use of virtual assistants. (The technology Riverview Law developed to facilitate clients’ legal work, known as Kim Technologies, was not part of the acquisition, although EY has signed a ten-year contract to use it.) EY – once known as Ernst & Young – is, of course, one of the largest accounting companies in the world.

On August 7, LegalFutures published EY’s announcement, along with a statement by EY global law leader Cornelius Grossmann, who said, “This acquisition underlines the position of EY as a leading disruptor of legal services; it will provide a springboard for current EY legal managed services offerings and bolster the capabilities that we can help deliver for EY clients.”

LegalFutures writer Neil Rose reported that the collaborative purchase of Riverview Law by a group of seven of EY’s EU offices means that the reach of the new legal-services entity will not be restricted to one country; in fact, it has a particular eye on gaining a foothold in the U.S..

A followup article on August 14, LegalFutures quoted Chris Price – currently EY’s global head of alliances – tax, who will become CEO of EY Riverview – as saying that “EY Law was not looking to compete with the likes of Slaughter and May or Freshfields for the so-called ‘bet the farm’ work – they meet ‘a particular client need brilliantly well.’ Rather, EY Law’s mandate is to integrate legal with other services offered by the wider firm and target client need that is currently not being met – such as a managed legal service.”

Price seemed unperturbed by the backlash from lawyers who are concerned about EY’s new capacity to compete with them. “Long may this view continue,” Mr. Price told Rose. “Our read of the market is that clients want something different. As long as [those lawyers] fail to see the future and react to it, they’ll be creating a market for us.”

I invite you to share your thoughts on this or any other matter related to the law, either in the comments section below, or directly via email.

 

How Will US Law Firms Compete with International Firms Offering Equity Outside the Legal Profession?

Two recent, related articles announce the details of a $21m investment by growth equity investor Highland Europe in INCOPRO, a leading machine-learning brand and intellectual property protection business that was co-founded by the UK law firm Wiggin. INCOPRO will use the investment for “the development of its Talisman online brand protection technology to help businesses safeguard their brands from counterfeit and piracy threats online” and to expand its operations in China, the US and Europe.

The announcement raises interesting questions regarding how US law firms will maintain their competitive edge on the international stage.

These are the articles:

UK Law Firm Wiggin raises $21m Investment for its AI-driven AP tool (from The Artificial Lawyer)

INCOPRO Raises $21m from Highland Europe to Scale Its Online Brand IP Protection Platform (media release) And here are the questions:

  • How can US firms compete with international firms that can raise money through offering equity?
  • How long will it be before US firms will look for clever ways around US restrictions?

Let me know your thoughts on this or any other matter related to the law, either in the comments below or directly via email.

“The Industrial Era Ended, and So Will the Digital One”

 

Screen Capture: Harvard Business Review

In an article in the Harvard Business Review entitled “The Industrial Era Ended, and So Will the Digital One,” Greg Satell – innovation writer, speaker and author of Mapping Innovation (McGraw-Hill, 2017) – casts an eye over the history of technologies like electricity that have, in their time, taken the world by storm and transformed the human environment.

“Every technology follows a similar path of discovery, engineering, and transformation,” Satell says. However, he points out, they share another common feature: eventual decline.

“Today digital technology is all the rage because after decades of development it has become incredibly useful. Still, if you look closely, you can already see the contours of its inevitable descent into the mundane.”

Satell sets out three reasons why he believes the digital era that has revolutionized every aspect of our lives is now entering its “twilight” – and then goes on to forecast where the next loci of innovation are likely to appear. Writing in Digital Tonto, he says:

We need to start preparing for a new era of innovation in which different technologies, such as genomics, materials science, and robotics, rise to the fore.

Law firms have two interfaces with their external world. They must not only assist clients in coping and dealing with that world, they must also optimally operate in that world themselves. Among other challenges, that means staying ahead of the game by watching the trends and adapting as necessary when the focus of technological innovation changes.

Some lawyers are up to speed on technological progress and ready for their clients’ questions; others have barely entered the digital era themselves. Which ones are more likely to succeed in the years to come, and which to enter their own “twilight” long before they are ready?

I welcome your feedback on this or any other matter related to the law, either in the comments below or directly via email.

 

Young Lawyers Challenge Profession over Mental Health Concerns

I commend The Young Lawyer Editorial Board at The American Lawyer for their powerful piece on the debilitating and even life-threatening risks of working in the legal profession – a profession that, they point out, “[tops] the league tables for loneliness, substance abuse, depression, anxiety, stress and suicide.”

Although they acknowledge that mental health problems can present at any age, of particular relevance to the group that wrote the editorial: “Data suggests that lawyers in the earlier stages of their careers are at greater risk than lawyers who have been in the profession for 15 years or more.”

Why, the group wondered, was such a pervasive fact of legal life not receiving greater attention from the profession in general, and at the firm level in particular? Why wasn’t everyone talking about this?

They developed a questionnaire to try to help answer their questions, and learned that while half of the lawyers surveyed felt that practising law had affected their mental health in a negative way, few would consider seeking help through their own firms. They felt they might be seen as weak, or that admitting to problems might impede their career advancement. Interestingly, but perhaps not surprisingly, they felt they would not judge others as harshly as they expected to be judged themselves.

With straightforward wisdom, the editorial group concluded: “Shaking the stigma attached to mental health concerns will require an ideological shift within the legal profession. This requires the full engagement of law firms and lawyers.”

Break the Silence

The Young Lawyers Editorial Board presents a well-thought series of initiatives that law firms and individual lawyers can undertake to address mental-health problems among their colleagues, from providing resources and support programs at the firm level to increasing lawyers’ awareness of mental-health danger signs. Far more difficult, but also far more important, is tackling the underlying issues that lead to the erosion of mental health.

Reading this article is not going to solve any mental-health problems in individual law firms, but it will be a good start… especially by those who subsequently take up the challenge thrown down by the Board:

In order to minimize the damage done by mental illness, we call on law firms to implement necessary changes and to break the silence on mental health. We call on lawyers to support their firms in doing so and to show compassion to any colleagues who they suspect may be suffering from a mental health concern. – Young Lawyer Editorial Board, American Lawyer

As always, I welcome your thoughts on this or any other matter related to the law, either in the comments below or directly via email.

Blockchain: An Ounce of Prevention

In an article in Above the Law, technology consultants David Perla and Sanjay Kamlani warn lawyers of the perils of learning about blockchain “on the fly.” One lawyer they work with knew nothing about the technology until his client was charged with an SEC violation for selling equity in his company on a public cryptocurrency exchange. The lawyer called Kamlani in a panic.

“If you’re a lawyer,” they write, “and you think you don’t need to worry about blockchain, think again. At this very moment, there are criminal lawyers, securities lawyers, corporate lawyers, employment lawyers amongst others, learning about blockchain in a crunch because their clients are pressed with an urgent matter.”

Perla and Kamlani point out that many lawyers have ignored the need to learn about web-based finance on the basis of forecasts that question the permanence of  Bitcoin and other cryptocurrencies.

“Blockchain is not Bitcoin,” they remind their readers. While Bitcoin may well turn out to be a “21st century tulip bubble […], blockchain and the broader ‘distributed ledger technology’ likely have as much staying power and relevance as the internet. Why? Because it eliminates friction.”

I encourage you to a) read the cogent reasons for Perla’s and Kamlani’s confidence in the future of blockchain, and then b) immediately start learning about the technology. Don’t wait until it is your client phoning in a panic – and expecting that you will have the answers they need… and have every right to expect.

I welcome your thoughts on this or any other matter related to the law, either in the comments below or directly via email.

 

A Niche Law Firm Built on Blockchain

Angela Angelovska-Wilson, DLx Law: Photo capture from ABA Journal

“Blockchain technology [has] captured the imaginations of startups, financial institutions and government agencies. Angela Angelovska-Wilson and Lewis Cohen are taking a gamble that the law is next.”

So begins an article by Jason Tashea entitled “New firm looks to embrace blockchain technology ethos” that was published recently on the ABA Journal website. Tashea goes on to explain that Angelofska-Wilson and Cohen have launched their new firm, DLx Law, out of their conviction that no matter how it evolves, blockchain (aka distributed ledger) technology “is going to force fundamental changes in financial and regulatory systems.”

Lewis Cohen, DLx Law: Photo capture from ABA Journal

Although Angelovska-Wilson and Cohen – both experienced lawyers – are not exactly sure how blockchain technology will evolve, the article says that they have designed their small firm in a way that they hope will be able to address whatever forms the technology takes in future – and whatever legal issues it engenders.

We have talked about the potential impact of blockchain on the law for a year or two at this point. The establishment of DLx Law  – and similar niche firms that are sure to follow – is evidence that the impacts of blockchain technology on our profession are not just hypothetical any more.

What are your thoughts on this subject? I welcome your feedback on this or any other matter related to the law, either in the comments below or directly via email.

 

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