Innovation

A time-sensitive matter comes in. An experienced hand is needed to help. Where to look for that help? In Biglaw, the answer is usually an easy one: call up Partner No. 37 in distinguished branch office No. 6, and keep the billable hours rolling — with a happy nod towards a successful “cross-sell,” and instant validation of the underlying “size is good” concept behind so many of today’s firms. But is Partner No. 37 really the best lawyer to help out? Hard to believe that the answer is “yes” more often than not. Because Biglaw firms are constructed the way they are, however, there is a premium on making sure that existing firm resources are utilized as much as possible.

At the same time, we know the legal industry is struggling to cope with demand fluctuations, or all too often a lack of demand for expensive legal services. In the current environment, it is not a surprise to see Biglaw firms contorting themselves to reach optimal size, whether through mergers, layoffs, or lateral growth. Despite their efforts, there are very few firms that are optimally size-calibrated in relation to the demand for their services. For those firms fortunate enough to experience the occasional demand spike, retaining the ability to be nimble on staffing can mean the difference between a satisfied client or one who looks elsewhere “next time there is a big need.” Firms want repeat business, and being able to incorporate experienced additional lawyers — within the budget for a particular matter — onto the legal team can make a real difference in whether or not that repeat business happens.

But where else can firms (of all sizes) go for experienced help on short notice?

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Alma Asay

It’s the one about the tech-illiterate Biglaw associate (I know, you’ve heard that one) who walks away from her promising career at one of the most prestigious law firms in the country . . . to invent a new category of software. . . for litigating! A magical software program that makes you better as a litigator and is so cool that you wish you thought of it yourself.

For this next profile in legal entrepreneurship, I’m excited to introduce Alma Asay, creator of Allegory. You may not have heard of Allegory yet, but pretty soon, it will be a household name for every litigator who wants to be at the top of their game.

Alma’s story has a special place in my heart because she is living my dream: bringing her success in Biglaw to the whole legal community through the wonders of technology. I met Alma earlier this year in Palo Alto, where she was embracing her inner Silicon Valley and I was speaking at Stanford Law’s awesome CodeX FutureLaw conference.  We chatted over cocktails about the legal industry, law firm shenanigans, and life after Biglaw for those of us who didn’t run away screaming. I loved her stories of adventures in legal startup, and her product. Hopefully, you will too.

(Did I mention I get paid by the click?  I’m kidding, but really, keep reading . . . this is a good one).

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You may have heard about a behavioral science experiment involving monkeys and a ladder with a banana at the top of the ladder. When one monkey would try to climb the ladder to reach the banana, the researchers would spray all of the monkeys with a hose. After a while, when a monkey tried to go towards the ladder, the others would stop him so that they wouldn’t get hosed. The researchers then switched out one of the monkeys with a new monkey who didn’t know about the hose. When he would go towards the ladder, just as before, the others would stop him. The swapping continued, and the new monkeys would join in stopping newer monkeys from going towards the ladder, not knowing about the hose treatment, but learning from the example of the original monkeys that going towards the ladder is bad. The researchers eventually swapped out all of the monkeys so that none of the original monkeys were together, but all of the new monkeys would try to stop each other from going towards the ladder.

There is some debate online as to the origins of that experiment, or whether it ever happened, so I’ll just call it the “parable of the monkeys who just do what everyone else does without understanding why” — or, for short, “the parable of the associate.” If you work in a law firm, you probably recognize the above fact pattern and can analogize it to your colleagues.

I’ve come across a bunch of lawyers since I started my legal career ten years ago. Some of them were really good, some were really bad, and most of them were just somewhere in the spectrum of not being memorable. The lawyers who were bad were all bad for about a thousand different reasons, but the lawyers who were good, almost always shared one quality: they were outside-the-box thinkers….

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Joe Borstein

Since the launch of alt.legal, Ed and I have received a lot of very interesting emails and feedback. It is apparent that many of you read ATL literally all day love working in Biglaw, but most many have considered taking a walk onto the alternative side (sounds far more erotic than it is).

What we hope to prove to you through this ongoing column is that legal entrepreneurship is exciting, prestigious, lucrative, and, most importantly — to the many resilient lawyers out there who have remained idealistic in the face of back-to-back all-nighters — your best chance to change the legal system for the better. Moreover, despite what you think, innovation in the law is NOT just in e-discovery. Turns out, there are problems worth solving associated with almost every practice, and with each, there are entrepreneurs and innovators ready to change the game. (My co-author, Ed Sohn, is planning to write more on this underground world next time.)

Today, we profile one such entrepreneur, Adam Nguyen, who saw inefficiencies in the always-exciting process of contract review for due diligence (hey litigators, it turns out M&A lawyers have to do document review too), and leveraged $150,000 worth of Harvard Law-branded problem solving to create an innovative technology solution called eBrevia.

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Ed Sohn and Joe Borstein

Ed. note: Please welcome our newest columnists, Ed Sohn and Joe Borstein of Pangea3, who will be writing about the alternative legal services market and the future of the legal profession.

Stop what you’re doing! Take a journey with us to the alternative side of the legal profession for the next few minutes (and through our ongoing column). There is a revolution happening in the practice of law. And you should join it. Or, at the very least, break out the fanny packs and the binoculars and watch. For now, stop your SmartTimer and get off the clock… because as it turns out, reading this is NOT billable. Maybe try your favorite non-billable code, like “professional development.”

Here’s the newsflash: entrepreneurs and innovators are changing the legal profession for the better, having fun, and making real money in the process. The unstoppable forces of modern business — technology, globalization, the need for sleep/food/conjugal visits — are at the gates and climbing the highly defensible ivory tower….

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Bruce Stachenfeld

Of all the regrets I have in life, one of my greatest is that I never had the chance to meet Peter Drucker before he died.

Drucker is one of my intellectual heroes. He was able to look at the same world that everyone else was looking at but see things that others couldn’t see. He literally invented a science. And like all science, it is around you from the start but you just can’t see it till someone shows you the way.

The science he invented was the science of “management.” Before Drucker, people just ran things and sometimes good things happened and sometimes bad things — no one really delved too deeply into the “why” of it all. But then along came Drucker, who made order out of chaos and realized that there were principles that, if followed, would increase the likelihood a business would be successful.

All those leadership books you sometimes read, all those “how to” books you sometimes read, all of that thinking evolved from his groundbreaking analysis into the science of “management.” Drucker’s books are utter masterpieces. Indeed, there was an epiphany for me on every single page of his amazing book Management (affiliate link). I think I learned more about how to run my law firm successfully from Drucker than from any other source.

Here are two thoughts from Drucker that hit me like a bolt of lightning when I read them. Honestly, my business — and even my whole life — was never the same again.

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Bruce Stachenfeld

I give credit for the inspiration of this article to a writer named Seth Godin who wrote a book called The Purple Cow (affiliate link). My law firm benefited hugely from this book.

The theory of the Purple Cow in a nutshell is that you should try to STAND OUT like a purple cow would stand out from the other mere brown cows. If you don’t STAND OUT, then you just blend in, and you are nothing at all.

Okay, so that is a good point – as if you didn’t know that already. But it is not that simple. And here is why. Our instincts and everything we learn every day – our emotions, our colleagues, and our loved ones – all lead us in the safe (and wrong) direction.

And the reason for this is very simple:

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Bruce Stachenfeld

In my article of two weeks ago, I threw out the proposition that if you are running a law firm — or a department or practice group in a law firm — the critical mission is to “attract, train, retain and inspire talent.” If you can do this, you are probably going to accomplish great things — and the converse. So the question now is, how do you do it?

Below is the best I have been able to come up with. It is (mostly) from a speech I gave at an IMN conference in 2011. (You can read the original speech here.)

First — and foremost — Talent wants to be with other talented people. They crave it in their souls. They will put up with major “not nice people” and even poor working conditions, if they are convinced that other very talented people are doing it with them in the trenches. Consider Apple and Steve Jobs. He wasn’t thought of as a nice guy; indeed, quite the opposite. But when people looked around the room, they were awed at the skill sets of those in the room with them, and boy did they want to stay in that room, in the worst way. So they put up with Jobs’s not–niceness. (Of course, I do not advocate being this way as a boss — far from it.)

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I previously wrote about the depressing prospects for graduates of all but the top ten or twenty law schools (“Two Law Grad Markets”). And yes, these were statistical generalizations, and the experience of specific individuals with particular skills and backgrounds will always be different, pro and con. But as an industry, if you care about our supply chain for talent, many law schools are burning platforms.

There are actually some closely connected problems driving this dynamic:

  • More JDs are being turned out each year than there are (a) full-time, (b) long-term jobs, (c) requiring bar passage, (d) at current salary levels;
  • perhaps the primary reason for the mismatch between supply of JDs and current demand for them (about two supplied for every one today’s market is demanding) is that clients increasingly resist paying for junior associates, which makes it uneconomic for firms to invest in traditional training;
  • but/and at the same time, every sentient observer is painfully aware that vast segments of the U.S. population — consumers and businesses alike — remain underserved by lawyers.

This would prompt any economist to ask, almost instinctively, “Why isn’t there a market-clearing price where supply and demand can meet?” Which is another way of asking, “What if there were a way to address both these problems at a single stroke?”

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Bruce Stachenfeld

Ed. note: Please welcome our new columnist, Bruce Stachenfeld of Duval & Stachenfeld LLP.

What is a law firm? Unlike a lot of businesses, there are really no assets except the lawyers and (in some instances) the brand name. For most law firms — especially newer firms and start-ups — there is no brand name; that leaves the lawyers as the only assets. And for brand-name law firms, if the talent starts to leave, eventually the brand dies.

As one of my partners once said to me: “Bruce, all of the assets of this business go down the elevator every night. Your job is to get them to come back up in the morning.” He just said it casually, but it hit me strongly later on as I realized he was completely right. The entire point of running a law firm was to keep the lawyers in the firm. You can always get more clients if you lose them, but without the lawyers, you have nothing to sell and it is game over.

Accordingly, to answer the question posed at the outset as to what a law firm is…. it is a collection of lawyers who are together because they wish to be together. If they don’t wish to be together any more, then they leave, and that is the end.

And what is a great law firm?

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