By Adam Nyhan
Investors and entrepreneurs in the past few years have shown great interest in shaking up the legal services industry. That’s not surprising. Consumers of legal services have complained for years — no, generations— that lawyers and law firms charge far too much, among other grievances. No wonder some startups and their backers have seen the potential for disruption and innovation.
And so the recent explosion in startup companies has not spared the legal industry. Dozens of emerging companies have explored new takes on the provision of legal advice and related lines of business. Rocketlawyer and Legalzoom, for example, provide do-it-yourself legal documents. Jurify and Judicata aim to improve legal research, the former by crowdsourcing lawyers’ work product and the latter through something mysteriously called “the legal genome” (more info to follow, presumably, when the company launches publicly).
But by far the largest number of legal-industry startups involve attorney-client matchmaking. That is, they offer those in need of legal services a way to meet and interact with lawyers who may be able to handle their matters.
For example, Shpoonkle claims to take the stress and hassle out of finding a lawyer. Just submit a short description of your legal problem, the company’s site instructs, and “wait for the attorneys to compete for you.” UpCounsel, Lawdingo and at least a dozen others work much the same way.
The jury is still out on which of these sites — if any — will succeed. While matchmaking sites are fairly young, already some consumers using them have found their roster of lawyers to be less than useful. This was the case with some reports by users of Lawpivot, for example. Several lawyers have explained to me why, from the attorney’s side of the table, this may be. To be blunt, they say, the best lawyers don’t have time or the need to trawl for clients on websites; they have their hands full with paying clients already.
Fair or not, this is the type of criticism that legal matchmaking sites will need to take to heart if the model is to succeed. I wish them luck.
By Adam Nyhan
Changing technology can be a blessing for lawyers: all these cool new mobile apps! Predictive document coding brings sanity back to e-discovery costs! The cloud solves my data storage dilemma!
But new technology just as often bedevils us. Scarcely a quarter passes without another horror story of a hapless lawyer bungling an e-discovery production. And while law firms continue to adopt cloud storage for their clients’ data, for example, it’s not yet fully clear whether all cloud services comply with ethical rules requiring reasonable care in safeguarding client confidences.
Recognizing these and other thorny technological issues, the A.B.A. recently saddled lawyers with a duty to know their technology. In August 2012, the Association changed model ethical rule 1.1 (Competence) to require attorneys to “keep abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology.” (emphasis added).
Who said lawyers are luddites?
This is from an interesting piece in the blog Above The Law (link above).
Though NYC remains on the top for salary…the cost of living deflates your buying power. It would be interesting to see an additional column in this analysis dedicated to job market…where are lawyers actually finding jobs? (I’ve heard top NYC firms are keeping their $160K starting salaries, but have dramatically cut class size. This means very few NYC recent grads are making $160k.)
Still, moving as an attorney means taking another bar exam. Would you move for a better cost of living?
By Jill Simeone -
My professional self-image is gender neutral.
I am a savvy business lawyer.
But when a friend recently asked me to write a few words about “why I support female entrepreneurs” I decided to take the bait…because there just aren’t that many female founders, and I’d like to see that change. Here’s my bit:
Women represent about half of the workforce and half of all college graduates, but according to the Kauffman Foundation, only 35% of business startups are founded by women and only 5% of tech startups have female founders. Why the gap?
In my mind, it’s a function of chicken and egg economics. Women historically have been less financially empowered than men, and starting a business requires capital. Banks, VCs and the Angel community are male dominated and invest in business ideas and entrepreneurs they can relate to. Women lack access to this money. Without a network or funding, they aren’t drawn to entrepreneurship…and thus continue to remain under-represented in the startup/banking/Angel/VC communities.
By supporting female entrepreneurs, I believe that I am helping women “hack” the startup money network. They can self fund. If they create winning products and I buy them, they make their own money, get to keep ownership of their business, and ideally pay it forward by investing in the cutting edge ideas of other women who follow. Sounds like a golden egg to me.
By Jill Simeone -
I recently had a great conversation with a startup founder M., who is building a product that’s a bit e-lance meets LinkedIn…collaborative portfolios and networking for at-large “knowledge workers and creatives”. Though the company just launched its public beta this fall, she is already seasoned in her approach to managing legal work. Here are some snippets from our chat.
J: When you started this business, how did you deal with your “day one” legal issues, such as incorporation and figuring out ownership?
M: Although we talked about using Legal Zoom [and some other low budget do-it-yourself options] when we first started, we knew we had a bigger founding team and wanted to raise money right away, so we decided to use a real firm and make sure we got everything right.
J: You are in Chicago; did you look for local counsel?
M: We know that we’ll be raising our money in the Bay Area, and what we discovered is that startup legal work is incredibly standardized in the Valley. When we talked to lawyers in Chicago, we got lots of legally sound options (LLC, S-Corp, C-Corp). In California, we got the strong feeling that if we want to play the Silicon Valley game, we need to have a Silicon Valley Lawyer. We ended up choosing a firm that is three times more expensive than local counsel…and good…but not three times as good! But for us, this was about access to capital.
J: Do other small business owners you know in Chicago also follow this strategy?
M: I think there is a big “Entrepreneurship” scene in Chicago that is very loyal to their local lawyers, as they should be. But to me, “entrepreneurs” or people starting their own small business, are very different from startups. They have more direct access to capital.
J: Without getting into specifics about price, what was the value proposition that your Silicon Valley lawyer offered you, and that you have found attractive?
M: Deferred costs for startups are pretty standard in the Valley. (They aren’t in Chicago.) Also, for a fixed fee, we got a startup package of formation documents, convertible debt agreements and term sheet. But what I really appreciated was that the relationship reduced my stress. They foresaw issues way better than we did. It feels like if something goes wrong, they have us covered.
J: So would you recommend that other startups stick to Valley firms?
M: I don’t know. We go to lawyers in Silicon Valley not because they have better answers, but because they have a set way of doing things and doing it any other way makes you look like an outsider.
J: How does your Valley law firm help you deal with day to day legal matters that pop up in a new business?
M: Well on the one hand it’s free and on the other hand, it’s expensive. They have a bunch of standard basic documents available free of charge (to anyone) right on their website. But if we call them for help, the clock is running. Probably in the near future, we’ll have to learn to do a lot of this basic stuff ourselves.
J: Would you consider seeking help from a young lawyer or a law school clinic, and if so, what would you advise them to offer as key services to startups?
M: I’d like someone to help us on employment issues, terms of service, NDAs maybe. But for that to be helpful they need to understand business. It is really important that law schools not teach lawyers just “how to get a job”, but how to run a business…their own business. They need to develop a brand. And they need to “get” my business, too.
By Adam Nyhan
Years ago I was at a large dinner that Rupert Murdoch held to thank his longtime chief lawyer, Lon Jacobs, for his years of service. Murdoch gushed, crediting the lawyer for much of News Corporation’s success.
Let’s stop right there. If you’re like many entrepreneurs, this makes no sense to you. Surely no self-respecting entrepreneur would thank a lawyer for his victories. After all, what do lawyers do? Two things that entrepreneurs hate. First, they cost a lot of money. Second, when you’re trying to pursue an idea, they tell you not to because it’s too risky.
So why did Murdoch have a different view? Because he has been around the block long enough to know how wrong the conventional wisdom is.
First, yes, a good lawyer costs money. But that’s called an investment. And a good lawyer gives you a fantastic return on it. Sure, at a minimum, she’ll handle the specific project you asked her about — for example, if you hire her to file your LLC incorporation papers, she’ll do just that.
But more importantly, a good lawyer will truly counsel you, raising — and helping you answer — questions that you never knew to ask. Instead of just forming the LLC and sending you her bill, she’ll help you understand its tax implications. She’ll draft the right documents to ensure that those volunteer “interns” of yours are not treated as employees under labor laws. And she may even be able to conduct a trademark search on your company’s name so you don’t get sued into bankruptcy later.
Second, a skilled lawyer doesn’t just tell you to stop whatever you’re doing that’s risky. Instead, as Murdoch’s lawyer Jacobs says, the job of a good corporate lawyer is “to find a way to say yes” despite risk.
So cheer up: you don’t have to hate your lawyer. If you do, you just need a better one. If you don’t know how to find a better one, ask around. Ask your friends, the local Chamber of Commerce, your State Bar Association, and members of your trade association. They’re out there, and the sooner you find them, the better off your business will be.
By Jill Simeone -
I went to an event at General Assemb.ly this week that was designed to answer that question.
The panel consisted of 4 bright, hardworking GCs from well-known NYC startups. Each told his/her story about landing the “dream job”: startup lawyer. But in their stories I found few relatable answers.
Three out of four had started at big firms (Skadden, Gundersun), and there was a recurring theme of being plucked at a very young age (after working on a deal that was too expensive) to go work for the client in-house. But what if (like most of us) you aren’t a junior associate at Gunderson…how do you get these jobs? There is another way.Read more
By Jill Simeone -
If you could go back and change one thing about your legal career, what would you do differently?
I recently posted this question to several groups of attorneys at various stages in their careers, and here are some of the answers.
Raymond B. “Get into politics.”
Robert W. “Stay out of politics.”
Rodney G. “Learn the economics of a legal career earlier.”
Chadwick B. “Work for a growing PUBLICLY-held company, received stock options, retired at 50! :)”
David P. “Not work so hard!! It is true that ‘Law is a jealous mistress’!”
Interesting to see that there doesn’t seem to be a strong sense of satisfaction regarding return on investment.
What is your answer?
By Jill Simeone -
Obama wrote this open letter to NY Tech Meetup outlining his commitment to entrepreneurship and the startup community:
Dear Members of NY Tech Meetup:
Thank you for carrying forward the entrepreneurial spirit that makes
us a nation of doers, dreamers and risk takers. You understand that
innovation and job creation occur when we make smart investments in
infrastructure and technology and build an environment that encourages
entrepreneurs to change the way we live and work.
Together we’ve used that bedrock American belief to recover and
rebuild from the worst economic crisis in a generation. Today,
entrepreneurship is at record levels and the number of business
startups is up almost 10 percent since my first year in office. And
this past Friday, we learned the unemployment rate has fallen to its
lowest level since I took office. As inventors, makers and thinkers
you’ve helped get us here, believing that if anyone has a solid plan
and is willing to work hard and play by the rules, we can turn any
idea into something.
By Jill Simeone -
I just got off a phone call with a young lawyer, a recent grad from George Washington Law School who passed the NY bar…and she is beside herself because she can’t find that first law job. She’s thinking of getting a tax LLM (essentially a post-graduate masters degree in tax law, at the cost of about $50K), because she’s been told there are tax jobs, but she doesn’t know if she likes tax…in fact, she never even took tax in law school. She’s applied to a million random jobs but she doesn’t have any of the “Required Skills” listed on the job postings, and no one is writing back. She’s feeling desperate.
She is facing the skills gap. Throughout the 20th century, lawyers received a rigorous education in law school and practical skills training at their first job, usually a law firm. Today, those jobs are gone.
Only about 8% of 2011 [law school] graduates landed full-time, long-term jobs at larger firms. - The Wall Street Journal
Firms are no longer hiring that many students straight out of law school because the economics of footing the bill for a two year apprenticeship doesn’t add up.
Talk to just about any partner at any major law firm, though, and they’ll tell you that first-year associates know basically nothing when they start out. Plus, a tiny fraction of the new grads they hire and train intensively actually stick around to become partners seven or so years later. And during the financial crisis, clients balked at paying the hourly rates that firms had to charge in order to cover those…salaries. - The New York Times
Here’s the advice I gave her: Go Abe Lincoln.Read more
By Adam Nyhan -
Ah, 3L year. What was it we studied again that year? Comparative Asian Jurisprudence? Medical Marijuana Law? Fun at the time, but we’re not drawing on those courses much in our practice these days, are we?
That’s a longstanding criticism of law school’s third year: it’s long on unnecessary electives, short on preparing students to practice, and just digs them a year further into debt.
Some academic voices have questioned the value of having a third year at all. In 2010, former Stanford Law Dean Larry Kramer said that the third year is largely useless. In July of this year, University of Colorado Law School’s Paul Campos suggested abolishing it.
But rather than axing the third year, law schools are beginning to re-imagine it. Today New York University Law School announced it would offer 3Ls more opportunities designed to give them real-world practice opportunities. These include a new clinic, new tracks tailored to particular practice areas and three study-abroad options.
And N.Y.U. Law is not the first to redesign the third year. Stanford Law recently encouraged 3Ls to pursue joint degrees. Washington & Lee replaced its 3L curriculum with internships and clinics. And New York Law School is planning changes to take effect next year.
The cynical take on these moves, of course, is that a law school would undertake any number of “transformations” before it would kill one third of its tuition revenue. No doubt. But that doesn’t mean the transformations under way in some schools may not serve some 3Ls well. We’ll find out in the next few years as today’s students look for jobs.