The case for collaboration among lawyers

Historically, firms grew by continually increasing their billing rates, but that strategy is no longer working. As billing rates of big firm lawyers top $1000/hour, clients (e.g., Cisco and other companies) are pushing back. The impending recession will make it even harder for law firms to raise rates. The alternative to raising rates is to cut costs by leveraging techology and existing resources. The dramatic growth and consolidation of big law firms over the past 20 years will also drive firms to implement new technologies that facilitate the sharing of common resources and improve their return on investment in both people and infrastructure. The bottom line is that big firms are getting, and will continue to get, more efficient by leveraging technology. Where does that leave the rest of us?

The problem for the solo practitioner and small firm is that it will get increasingly difficult to compete. Although the Internet is heralded for leveling the playing field, the rules of the game have changed. The new game is about having real-time, virtual, and personalized access, to people, information and tools that enhance productivity, improve results, and facilitate the practice of law. How will the solos and small firms develop these new resources?

In thinking about how to grow my own practice, I feel overwhelmed by the of scope of knowledge necessary to build a first class law firm today. Sure, I can just keep doing what I have always done: use my intellect to solve client problems. However, looking into the future and seeing the obvious competitive pressures from bigger law firms, relying on my intellect is no longer enough. There is a whole range of new technology, information, and systems that must be implemented in order to remain successful. And even as a solo practitioner (or now, in a two-person law firm), my goal is provide first class legal services, not just earn a living. How can a solo or small firm keep up?

The trend of law firms getting bigger, developing their resources, and implementing new technologies is presently at odds with the typical solo practice or small firm. Solos and small firms simply do not have the time or resources to invest in infrastructure, which disdainfully adds to their overhead. Solos and small firms are painfully aware that every dollar spent on overhead immediately reduces their available cash. The mantra of the solo or small firm is “do without” rather than do anything that would reduce their cash flow.

Here is the typical thought process of a solo practitioner. I can only generate X-dollars for my time. So, why should I reduce my take-home pay by adding to overhead? No matter how many computers or software programs I have, I still have to spend an hour of my time in order to be paid for an hour of work. Where is the incentive to invest in technology or spend time developing new systems?

This traditional mindset is a threat to the continued success of the legal profession in the United States. How can lawyers innovate, deliver better results for clients, and improve profitability if they don’t invest in new systems and technology? How will lawyers compete with the inevitable outsourcing of legal functions to virtual law firms in India, Russia or China? How will the profession respond when big law firms develop knowledge management systems that enable paralegals to perform better legal work and at lower cost than work produced by seasoned attorneys who work as solos or in small firms?

In the United States, over 50% of lawyers are solo practitioners and over 75% of lawyers work in firms with fewer than 20 attorneys (See ABA's lawyer demographics). And there is some reason to believe that these percentages are increasing as gen X and gen Y lawyers increasingly choose lifestyle over money in pursuing their career goals. How will the 75% consisting of solos and small firms compete with the 25% working in big firms? Should all lawyers just join (or become) big firms? I don’t think so. Solos and small firms fervently protect their independence and freedom to control their lifestyle as well as their style of practice. Lawyers who work as solos or in small firms need access to shared resources that enable them to develop the efficiencies of large firms without joining large firms. The answer, I believe, is collaboration.

What does collaboration look like? I don’t know yet. The legal profession, historically, tends to be more adversarial than collaborative. Collaboration is breaking new ground. And getting there means trying new things to see what works. Social networking, Internet communications, and online services hold a lot of promise for facilitating collaboration among lawyers. If lawyers generate new business through these new activities, they will naturally have an incentive to collaborate in more substantive ways. This is a phenomenon that we are beginning to see in our law practice. We started by forming an informal networking group for lawyers (and other professionals) called the “Business Lawyers Network” (BLN). Over the past three years, we have experimented with a number of initiatives that facilitate collaboration among lawyers including the creation of the LEXpertise.com website.

So far, the collaboration process has been very slow in progressing. However, I am very encouraged by the results. Many BLN lawyers have generated new business by participating in the various networking events and by sharing their knowledge and information on the LEXpertise.com website. And, based on numerous anecdotes from BLN members, these collaboration efforts have improved lawyers’ satisfaction with the profession. One lawyer commented to me that he was re-energized and, for the first time in years, he was enjoying being a lawyer and building his law practice.

How can collaboration help to grow your firm? In what ways can and should lawyers collaborate?

[This is the first of, what I hope will be, many articles about collaboration among lawyers. I'd love to hear what other lawyers thoughts are on this subject and encourage readers to post their comments on this blog.]

Business Development: Turning Art into Science

Jim Hassett was kind enough to send me a preview copy of his brand new LegalBizDev Success Kit, a business development training package, complete with audio CDs, a step-by-step guide, a reference book, practice materials, and even a "quick start" card. Even if Jim wasn't a client (full-disclosure!), I would say the Success Kit is the single most comprehensive and practical tool for lawyers who want to generate new business.

I wish I had a copy of the Success Kit when I started my own law firm six years ago; it would have made growing the practice a lot easier and much faster.

In 2002, I was RIF'd from an Internet-related venture during the post-dotcom period. Rather than look for another in-house counsel position, I decided to start my own law practice from scratch. I had 30 days severance pay and a half-million dollar mortage as well as a family to support. Talk about pressure to generate business!

With limited savings, I knew that I had to attract clients fast. I set a simple rule of meeting one new potential referral source per business day. I figured that by the end of the month, I would have 20 new contacts who could refer business to me, and that by the end of the year, I would have 240 new contacts (20 x12). Even if a fraction of those contacts referred business, I would be in great shape.

The truth was that I had no clue what I was doing; but looking back on it, I eventually stumbled upon many of the key principles outlined in the LegalBizDev Success Kit. Necessity is the mother of invention, but a tough way to go. With Jim's Success Kit, you can accelerate the learning process and improve the end results.

I first got to know Jim about two years ago, and since that time I have had the chance to put many of his business development suggestions into practice. Last year, I personally worked with 75 separate paying clients. These were clients that I actually chose and enjoyed working with, not just clients or projects that I felt obligated to take on. Almost all of these clients were businesses (meaning repeat services) as oppposed to individuals (meaning one-time projects). This year, the growth of my practice has continued to accelerate; I moved into larger office space and formed a partnership that effectively doubled the size of the practice.

One of the things that I like best about Jim's approach is his focus on people. As stated in the LegalBizDev Step-by-Step Guide: "The only way to grow legal business is to grow personal relationships." How does a lawyer develop personal relationships with clients and referral sources?

I used to think that developing (and maintaining) those personal relationships was more of an art than a science. Now, having read through Jim's materials, I am convinced that he has turned this art into a science. The Success Kit breaks down the process for developing client relationships into easy to follow steps, including everything from how to first engage the client to closing new business (without being annoying or salesy).

The Success Kit is very adaptable to each lawyer's unique style and preferences. The materials can be used like an intensive sales training program for a quick ramp-up in business or they can be used as a reference tool to gradually improve business over time. The audio CDs can be played on a computer or downloaded to an MP3 player. One lawyer may want to start at the beginning by following the complete Step-by-Step Guide. Another lawyer may prefer to use the Quick Start to pinpoint specific business development skills that he or she wants to improve.

Drawing on more than twenty years of experience, Jim has developed an innovative training program for business development. Jim also draws on the expertise of other sales and marketing professionals, extracting the essence of many of their time-tested concepts and applying it to his unique methodology. Although specifically designed for lawyers, Jim's approach to business development would be useful to other professional service providers as well.

Jim's practical approach to business development is very effective, but one thing he cannot do is make the process happen for you. In his Step-by-Step Guide, he is brutally honest in saying that "finding new clients is the hardest work you can do in a suit" and he admits that it takes a long time to build client relationships. That said, it is worth the time and effort to improve your business develpment skills. By investing the time now, you can reap the benefits for many years to come.

Do you consider business development to be more of an art or a science? What does your firm do to help lawyers improve their business development skills?

How can lawyers leverage their time?

Most lawyers earn a living by setting their hourly rate and then charging for the number of hours (or fractions thereof) that they work. The biggest challenge for lawyers, particularly solo practitioners, is how to leverage their time. No matter how much a lawyer increases his or her hourly rate, the lawyer can never earn more than the amount of time he or she puts in. For example, if a solo practitioner doesn’t show up for work tomorrow, that lawyer won’t make any money. And even if the lawyer does show up for work tomorrow, he or she will only earn the amount of money based on multiplying the number of hours worked by their fixed billing rate.

So, how can lawyers leverage their time?

Not by increasing their hourly rate. Even if you charge $1000 per hour, you can only get paid for the number of hours that you work. And if the competition in your geographical area is only charging $200 per hour, raising your rate will only earn you more free time, not more money. So what opportunities does a lawyer have to leverage their time and make more money without having to work harder? I would suggest that there are four things lawyers can leverage: (1) other people’s time, (2) knowledge (information), (3) technology, and (4) packaged services.

In building the law firm of the future, I have started thinking about how to leverage these four things. I will describe my thoughts in more detail later. In what ways do you leverage your time? Care to share any examples?

Why you should buy a new PC every year!

[REPUBLISHED FORM 9/29/07 TO ALLOW COMMENTS]

The first time I used a computer was in highschool in 1972; it was a teletype terminal connected to a mainframe. It used simple BASIC programming language. I learned to write a simple program that would count from 1 to 10 or generate random numbers, but it was not very useful by today’s standards. In 1973, I purchased the "Bowmar Brain" for about $100, the first inexpensive calculator that was widely distributed; but it was not programmable and, therefore, would hardly fit my definition of a computer. In college, I majored in engineering but still had limited, if any, use for computers. A few classes required writing computer programs to solve trivial math or physics problems. The computers were mostly text-based terminals, and some had the newer graphics-type display. It wasn’t until I entered graduate school in 1980 at Dartmouth College that I first used a computer as a productivity tool. In 1981, I used a brand new “mini-computer” to perform engineering analysis and generate graphical representations of mathematical results. The mini-computer was still a terminal based computer with wired access to a central shared processor. For one experiment, I would submit a set of mathematical equations to be solved by the computer and wait 6 hours for a printout that I had to retrieve from the “computer center” half-way across campus. If there was one misplaced comma or typographical error, the printout (about 50 pages) would be useless and I would have to start-over and then wait another 6 hours. I bought my first computer, a Compaq “luggable” in 1984, while I was in law school (about 12 years after I first touched a computer). Instead of crunching numbers, I used the computer mostly for writing papers; it was a great improvement because I made too many mistakes using the electric typewriter. When I graduated law school in 1986, lawyers did not have computers, only their secretaries did. The fact that I had a computer at home made me an anomaly in the legal profession. It wasn’t until 1992, that I bought my first computer for work, which was a Dell 320N+ notebook (I was always a sucker for portability). The Dell notebook had a black & white display that operated using Dos 6.0 and Windows 3.1 (yes, you had to install them separately!) and a 10MB hard disk. In 1992, I also bought a generic desktop computer and set up my first computer network (using Windows for Workgroups). In 1994, I replaced my Dell with a new more powerful Winbook computer. In 1995, I joined a start-up software company and switched over to the Mac, buying a Powerbook with a color display and a super-friendly graphical user interface using the Mac OS 6.0 that cost about $5000! In 1996 and 1997, I acquired several old Macs using them for networking, back-up systems, fax receivers, graphic editing, spreadsheets, and word processing. By 1999, I had 6 or 7 computers operating in my house. When I joined a venture-backed start-up in 1999, I was forced to go back to the PC, being issued a popular IBM notebook. Being an employee of a computer software company, new computers every year was the rule. Technology was changing so fast that it was essential to keep up with the latest and greatest software applications, and to run those applications, you needed more memory and faster processors. The old Macs, being fundamentally incompatible with the Windows PC, were junked. If you don’t keep upgrading computer technology, the peripheral devices, software, and components all become outdated to the point of being useless within five years. Having worked inside of three computer companies, I got used to buying (or being issued) a new computer every year. When I went back to the practice of law in 2002, I found out that it was essential to buy a new computer every year. According to Moore’s Law, processing speed, memory capacity, and LCD resolution are improving exponentially, doubling approximately every two years. That means that a computer you purchase today for $1000 may be worth only $500 in a year. And, if you are like most people, you need twice as much memory to hold all of your new information (pictures, music, and documents). And with the advent of the Internet, computers are being used by lawyers for more and more functions such as communications, entertainment, and commerce. These new functions require the latest operating systems and networking technologies. A computer is different than a refrigerator, a car, or even a telephone system. Computers are productivity tools, whose technology is changing so rapidly that you must continue to replace (not upgrade) every year. If the value of the computer after one year is only $500, then in two years, it is only $250. It makes almost no sense to spend even $50 to upgrade memory in an old computer (not to mention the cost of the technician to install it). I find it very hard to justify spending money on computer repairs or maintenance services. The computer companies know this as well, which is why they try so hard to sell extended warranties. Every time I buy a new computer, I find that I am significantly more productive. The new computer comes with more RAM (processing memory), a larger hard-disk, and new more powerful software applications. The time savings increases my productivity and billable hours far in excess of the $1000+ that I spend on a new computer. Also, I prefer to buy notebook computers instead of desktop computers because they take up less space, use less electricity, and are more readily adapted to personal use (I typically recycle my old notebooks by giving them to family members). New computers also make the practice of law more enjoyable. The less time that I spend waiting for computer software to load, and the easier it is to use multiple applications, the more I enjoy the practice of law. How often do you buy a new computer? What’s your philosophy on buying computer equipment?

Don’t Take Technology for Granted!

As a virtual lawyer, I pride myself on being able to integrate technology into my law practice and to leverage technology in ways that improve the efficiency and quality of legal services. I understand that most lawyers are not as focused on technology as I am.

I understand that other lawyers may not send and receive faxes from their PC. I understand that other lawyers may not know how to convert a Word document to a PDF. I understand that they may not send bills to clients electronically. I understand that other lawyers may not know how to connect their wireless laptop to the free wifi at a “hotspot”. I understand that they may not be familiar with the latest web-based applications for time & billing. I understand that other lawyers may not even type their own emails.

However, I do know that all lawyers know how to use the telephone. And, I would be surprised if they have been practicing more than a few years without ever participating in a conference call. Well, imagine my surprise yesterday when I was scheduled to attend a meeting in Boston and they did not have a conference phone!

I have been working on a multi-million dollar transaction with a major financial institution, which is represented by an up and coming mid-sized law firm with brand new offices in Boston. The Boston-based firm organized a meeting in Boston inviting all the lawyers and their clients working on the transaction to attend. The transaction had been going on for months and the costs have been significant and steadily increasing. Since I was pressed for time, and driving into Boston required at least 90 minutes of travel time (or more with traffic), I asked if I could participate by phone. I thought, what a good idea, I can be more productive and save my client about $4-500.

Little did I know that setting up a conference phone would be a major technology hurdle. The lawyer organizing the meeting sent me a message from his BlackBerry the day before confirming yes, I could participate by phone. The meeting was scheduled for 11am at the offices of the above-mentioned financial institution. At 9:30am, I emailed the lawyer organizing the meeting and asked what phone number I should dial into to participate in the meeting. At 10am, I received an email back providing me with a conference service to dial into.

At 11am, I dialed in. Nothing, but music on hold. At 11:06am, I sent an email asking when the meeting would start. At 11:15am, I received a call from the attorney hosting the meeting that they were working on getting a telephone that they could use for the conference call. They tried one phone and the sound was so garbled that the voices could not be distinguished (even my speaker phone at home was better). They then asked me to dial directly into the conference room, but the phone line had severe and the microphone kept cutting out so that the conversation was unintelligible.

When I complained that about the static on the line, the hosting attorney asked everyone in the room, about 10 people, to turn off their cell phones (makes no sense to me). Nothing, still way too much static. I tried dialing in from a different telephone. Still, too much static. Not just a little buzz, but a kind of loud, irritating, crackling noise that makes you think no one could ever use that phone. And, the static wasn’t just due to the phone equipment because I could hear it on the line before the phone was even answered. By 11:30am, the room full of lawyers and their clients, whose time was worth at least $5000 an hour, had reached a level of frustration that caused one of them to interrupt and state that they had tried everything including turning of their cell phone.

This reminds me of a story told by my professor in law school. He said that President Lyndon Baines Johnson was once holding a press conference outside at the Lincoln Memorial. The noise of the airplanes flying overhead was so loud that he called the FAA and told them to stop all planes from flying in and out of Washington National airport until the press conference was finished.

Well, I am not LBJ, and when the conference phone didn’t work, the room full of lawyers and clients were not going to wait for me to get connected by conference phone. Midway through the process of trying to find a working conference phone, the hosting lawyer said, couldn’t you just come down here in person (as if I worked in Boston). I said no and that I thought conferencing was not new technology. The long and the short of it is that I did not participate in the conference call.

Conference phones have been around for more than thirty years. You would think this is standard equipment for law firms and financial institutions. The moral is no matter how much you think technology has been standardized, never take it for granted.
What technology do you think is standard equipment for lawyers? How about the fax machine, email or Microsoft Word? Have you ever been surprised when the other attorney says…that doesn’t work?

Growing the law practice: doing vs. saying

What has the Virtual Lawyer been doing? I have been so busy "doing", there has been no time for "saying" what I have been doing.

I know that I haven’t been keeping up with my blogging. Far from my initial goal of writing once a day, I have struggled to write once a month. Not for lack of interest, nor for a lack of things to write about. I was just too busy. As a solo practitioner or partner in a small firm, there is a constant need to juggle all the various responsibilities of providing legal services, marketing, billing, managing a business, and yes even taking out the trash, not to mention trying to grow the practice.

For the past year, I have been busy, very busy. In August of last year, I finally moved out of my home office into a shared office space. At the same time, I changed the name of the firm to the unconventional name of “Indigo Venture Law Offices”. All of a sudden, I needed to worry about ordering signage, submitting address changes, and sending announcements to clients and friends. I also needed to buy new furniture (bookcase, file cabinet, desk chair) and new office equipment (network storage server, printer, scanner). None of this stuff is hard, but it all takes time away from providing legal services to clients.

For the first 4.5 years, my practice grew slowly and steadily. Funny thing, after I moved into the new office, the practice started growing faster. The phone was ringing more often and the clients were asking me to handle bigger transactions. The work kept piling up and the usual slow down over the holidays in November and December never happened. By January, I was seriously looking to get some help and started talking seriously with other lawyers about partnerships, associates, paralegals, outsourcing or whatever.

In February, I created The Virtual Lawyer to help me think through the challenges of growing the law firm of the future and took on the additional task of blogging every day (what was I thinking!). I also realized that if I wanted to grow the law firm, I needed more space for other people to work; I started searching for a bigger office and signed a lease by the end of that month.

In March, I built a new website called “LEXpertise.com” for the network of 150+ lawyers that I organized. In April, I moved into the new office. In May, I hired a brilliant summer intern, Dave Marble, who not only helped to facilitate client matters, but also helped me to develop an innovative social networking platform for lawyers (to be released soon).

Also, in May, I reached an agreement with my new partner, John Koenig, a genuinely nice fellow and a seasoned corporate attorney who has unparalleled experience working with small to mid-sized businesses. By June, I was in overdrive. The phone kept ringing and the projects were getting bigger. I was working nights and weekends, outsourcing some client matters, and losing a lot of sleep. I was meeting with John on a weekly basis to plan the merger of our two practices. We created a new website, designed new business cards (which I never got around to after changing the firm name), ordered new phone service and planned infrastructure for the new firm.

Finally, on July 1st , two things happened: some clients went on vacation giving me a breather and my new partner John arrived. In fact, without John, I never would have been able to go on vacation. So, what do I do while on vacation? Of course, I start blogging again. I am very excited about all of the new activities Already, having a partner has made a huge difference. It’s great to have someone to share the process of growing a law firm. I am also excited about continuing to build the law firm of the future. We have a number of innovative systems, marketing plans and practice changes that we plan to implement going forward. As things progress, I’ll tell you more about it. I can’t promise to get back to writing on a daily basis, but I will try to post at least once a week.

What are your priorities for growing your law practice? How do you propose to build the law firm of the future?

Virtual Lawyer Test #2 – It keeps getting better!

I just returned from two days in NYC. My experience as a "virtual lawyer" keeps getting better. All I brought with me was a cell phone (Motorola RAZR), a laptop (Compaq v2000), and an iPod mini. Despite two days on the road, I felt almost as comfortable working out of the office as I do working in the office.

This trip was so much better than previous trips. First, there was less to carry with me. Second, it is easier to find Internet access. Third, software and web-based services are getting easier to use and more feature rich.

There was less to carry because I downsized my phone (from a Motorola MPx200 smartphone) and eliminated the PDA device. I now rely on the laptop as my PDA. It just makes life simpler. For my next laptop, I may downsize to an ultralight model. The smaller the devices, the easier it is to have a portable office.

I have also moved to the paperless office, religiously scanning documents as they come in and minimizing paper documents or returning paper copies to the client (after scanning them). Scanning documents means that I don’t have to drag any client files with me.

Traveling from Boston to NYC, I took the Limoliner bus. The Limoliner has wireless Internet (via Satellite), 120V AC for plugging in the charger for computer and cell phone, and fold-up tray tables (like the air lines). The leather seats are more comfortable than my office chair. I can work on documents, respond to emails, and listen to music. I can forward office calls to my cell phone and voila, it feels like I’m still in my office (except for the occasional bump). The ticket cost (which includes a meal) was only $158 round-trip.

I didn’t go to NYC for business; I just wanted to join my wife who was attending a conference for work (which meant I got to stay in a free hotel room). We spent a romantic evening in NYC, walking around Times Square and having dinner at Gabriel’s on W60th Street. I got almost as much work done on the bus as I usually get done in a full day (fewer distractions on the bus) and I was able to enjoy the evening in the city. I also met a friend for lunch that I hadn't seen in 30 years and I got a tour of the gold vault at the Federal Reserve (worth about $150B). As I rode the subway to meet my friend, I listened to a legal seminar on my iPod.

We stayed at the Crown Plaza, which provides wireless Internet ($14.95/day). I paid for one day access which included a 24-hour period. After we checked out, I waited in the lobby for my wife’s conference to finish. I could have gone to Starbucks, but I managed to piggy back off the Lehman Brothers conference for some free wireless. While I waited for my wife’s conference to finish, I watched a great webinar from LexisNexis on Software-as-a-Service (SaaS). I used the ear phones from the iPod to plug into my computer to listen to the webinar. I also used my cell phone for a conference call with a client addressing questions about the document I emailed to her on the bus ride down.

We planned to return on the 3pm Limoliner. However, the bus had a strange mechanical problem and was delayed. So, we left our bag on the bus and ducked into the MOMA (modern art museum), which was only one block away. We saw some great paintings (by Andrew Wyeth and Edward Hopper). When the bus was ready to go, they called me on the cell phone and we headed back. Although there was traffic on the way back, I plugged in my computer and managed to crank out a few more documents. The four and a half hour ride went by without notice.

It is not surprising that you can work while you travel. What is amazing is how easy and enjoyable it is to work while you travel. There are a few things I would improve (like having a smaller laptop), but overall the Virtual Lawyer Test #2 was a great success.

What would make work on the road easier for you? What kind of “virtual lawyer” experiences have you had lately?

What do clients want, really?

So often in business you hear “listen to your customers”, “be customer-driven,” “focus on the customer’s needs”. Companies spend a lot of money on customer surveys, focus groups and market analysis to really understand their customers. If it applies to every other business, why not the legal profession?

Well…it does! But, it is harder to do with legal and other professional services, where you are providing more intangible than tangible work product. What lawyers are selling is the application of knowledge in a personal relationship based on trust. Great legal work is not delivered in a fedex package, but in a timely, thoughtful, consistent and effective manner. Right?

Yes, and no. The quality of an attorney’s work product is not always as important as the perception of its quality. Lawyers may provide great services, but that only addresses what their clients need. Lawyers must also understand and address what their clients want. According to Seth Godin, a marketing guru, people buy what they want not what they need (from his book All Marketers Are Liars). So, how do you know what clients want?

One way is to take a client (or prospective client) to lunch. Jim Hassett, a business development trainer, suggests that lawyers specifically ask what clients like and dislike about working with law firms. Another way is to send clients a questionnaire (electronically or on paper). These are useful exercises, which I have done in the past, but seldom do clients feel comfortable answering these questions directly. And, even if they do, their responses are limited at best.

Well, an extraordinary thing happened on January 25, 2007, Mark Chandler, General Counsel of Cisco Systems, Inc., made a speech answering the question as to what clients want and detailing exactly what he as a client dislikes about law firms today. In that speech, he said clients want “access to information, strategy, and negotiation” and he challenged the legal profession to change its delivery of services and to improve its productivity and efficiency through the use of new technology. His presentation is accurate and insightful. And his conclusions are compelling.

For anyone trying to build Law Firm 2.0, the law firm of the future, I highly recommend that they read Mr. Chandler’s speech. In it, I believe, you will find the blueprint for building Law Firm 2.0. The article starts with the premise that technology is driving change in knowledge-based industries and concludes that law firm need to respond to those changes.

Based on this speech, here is a list of questions that I think every law firm must consider:

• How does the Internet, with its easier access to information, people and tools, affect the legal profession? Where and how should legal work get done today?
• What does it mean for a law practice to be metrics-driven? What measurements can be used to improve productivity and efficiency of a law practice?
• What kind of knowledge management systems are needed? How can lawyers more effectively share information and resources with clients?
• How can lawyers more effectively share knowledge or otherwise collaborate among themselves?
• How do law firms attract and retain associates today? What technologies are needed to communicate with younger associates? Is it instant messaging, online chat, forums, podcasts, RSS feeds, or some new legal management system?
• How should legal information and services be delivered to clients? In what ways should law firms change delivery of their services from 1-to-1 to 1-to-many? What information is suitable for distribution to clients on the basis of 1-to-many?
• How can legal services be billed so as to ensure that greater value is provided to clients every year? How can legal services be standardized?
• How can technology drive down the cost of delivering legal services?
• How can contracts and forms be standardized? What tools can be used for development, access and maintenance of those contracts and forms?
• How can clients assume more responsibility in the preparation and delivery of legal services that will improve the quality of the work product and lower their costs for legal services?
  

Also worth noting is the Peter Lattman’s blog for the WSJ and the comments from his readers on Mark Chandler’s speech.

How is technology driving change in your law practice? What do your clients really want?

Would you marry your business partner?

No, I don’t mean literally. Most people spend years looking for the right person to marry. But, when it comes to business, they spend very little time by comparison looking for the right person. Especially lawyers.

In order to build Law Firm 2.0 (the law firm of the future), I need to add lawyers to the firm. They could be partners or associates. I am open to either one. But, I know whomever it is will have a profound impact on the direction and culture of the firm. How do I find the right lawyers to work with?

You cannot build the law firm of the future unless all of the lawyers have (or adopt) a similar mindset. It just won’t happen. When I think about adding partners or associates (or anyone to the firm), I think about finding other people who are open to change and want to continually challenge themselves to make improvements.

Over the past five years, I have been approached several times by other lawyers asking whether I would be interested in joining them, or suggesting that maybe we could build a firm together. Each time, I approach those discussions with openness and a willingness to share my vision for the future. I explain that I want to build a new type of law practice for small business that leverages technology, increases efficiencies, provides high quality service, and reduces costs. I further explain that if the practice can be profitable with small businesses, it will be even more profitable with larger businesses.

Even before I finish explaining my vision, the other lawyers often lose their attention and start talking about what they want in a firm. Too many lawyers are looking for “bodies” or functional specialties. They think if they just have some number of lawyers (typically 5-20) with complementary areas of practice, then they can build a successful law firm. They are most concerned about physical size, physical location, and overhead. They talk about buildings, technology, and clients, but they are surprisingly silent about people, values and goals.

Don’t confuse new technology with new law firms. All of the computers and communication tools in the world will not change a law firm if the lawyers themselves are not open to change. It’s all about the people. What kind of law firm do they want to build, how will they build it, and who will be involved. Building the Law Firm 2.0 is not about technology, it’s about people implementing technology in new ways that will facilitate and improve the practice of law.

So, what does the ideal partner look like? What type of lawyer is needed to build Law Firm 2.0? Bruce MacEwen said it best when he declared that these lawyers would need to be “exceptional individuals of uncompromised vision” and suggested that they would have the following characteristics:

-deeply inquisitive
-risk-taking, open-minded, and eager to experiment
-trusting (by default – until crossed)
-instinctively dissastisfied with the a static status quo, and
-unwilling to settle for unimaginative, brute-force business models.

(David Maister's article entitled "Are Law Firms Manageable" and Bruce MacEwen's commentary are must reads for anyone trying to build a law firm today.)

In the past, I have had good partners and bad partners. Having a good partner expands my ability to generate business and be successful; the relationship breeds synergy. Having a bad partner contracts my ability to generate business and be successful; the relationship breeds mistrust and anxiety. The one thing I have learned is that it's all about the people.

What do you look for in a partner? How will that partner help you to build Law Firm 2.0?

Power of the Internet

The Internet is the world’s first expanding resource. Think about it. Water, air, oil, land, food are all limited despite their being ubiquitous. The pioneers who first came to the US in the 1600’s probably thought those resources were unlimited. However, the more people there are on the planet, the scarcer and more expense those resources become. But the Internet is different. The more people who use it, the more plentiful and powerful it becomes. Is there any other resource like that?

Never has access to information been so easy or inexpensive. Never has there been so many tools and information available for free. Everyday there is a new website providing another free service that is designed to make life easier, more organized, or better informed. As a kid, I remember my family sharing one subscription to Life magazine to see pictures of what was going on in the world. To keep up with the news, we had a subscription to The Boston Globe and occasionally purchased a copy of the Sunday NY Times. TV came along later, but the information could not be stored, indexed, or searched. Once or twice a month, we would go to the town library. Growing up there were relatively few sources of information. Today, the Internet provides news, pictures, video, and research at the touch of a button. Information is everywhere.

Never has the power of the pen been so strong. The Internet enables anyone to speak to the world, to organize and repurpose information. In the old days, you would have to own a TV station or newspaper. Maybe you could write an article or a book. Or you could send out post cards, or make telephone calls. But you could only reach a handful of people and once the phone call was over or the newspaper was thrown out, the words were gone. Only the words of professional writers were immortalized. Today, anyone can publish a website or blog for free and make their thoughts and words available to everyone any time any where, forever.

Never has opportunity been greater. Whether you are building a Web 2.0 application or a Law Firm 2.0 application, the opportunity to make a change in the world is staring you right in the face. Anyone can make an impact on the world. A huge impact. All you have to do is to think about how you want to apply your skills to change and improve the world. And then go do it!

What do I want to do with the power of the Internet?

I want to build a national network of lawyers, one that shares information and resources and fosters a culture of collaboration. I want access to tools and information that facilitates the practice of law and empowers the solo practitioner to work shoulder-to-shoulder on par with lawyers in large firms. I want a system that encourages continual improvement of the quality of legal services. I want the quality of life for lawyers to go up and the cost of legal services to go down. By applying the power of the Internet, I think all this is possible.

From an IT (Information Technology) standpoint, we currently live in a golden age of opportunity. What do you want to do with the power of the Internet? How do think the Internet can help or improve the legal profession?

Building Law Firm 2.0

The current revolution of new applications and uses of the Internet has frequently been termed Web 2.0. In thinking about how this revolution will affect the practice of law, the term “Law Firm 2.0” came to mind. Based on a quick google search, I see that I am not the first to use this term.

What is Law Firm 2.0?

Law Firm 2.0 is a way to describe the impact that technology and the web will have on the next generation of law firms.

In October 2005, I heard Carly Fiorina, former President and CEO of Hewlett-Packard Co., speak at MIT’s convocation. Having just revitalized one of the worlds leading technology companies, she had a very clear understanding of how technology was reshaping the world. She believes that we are at the beginning of a new era dominated by the power of the individual, driven by technology that is digital, mobile, virtual, and personal. (And I would add a fifth characteristic for law firms: secure).

Last month, I wrote that Knowledge Management will drive the law firm of the future. The core platform for managing knowledge will be web-based applications. The Law Firm 2.0 concept requires rethinking the web as the lawyer’s primary control center. Are lawyers using the web as their primary control center now? No. Not by a long shot!

Today, I use the web mainly to visit specific web sites, read news, and do occasional google searches. My central focus is on email. If anything, MS Outlook is my control center. First thing in the morning I check email, then calendar events, and then todo lists. I use PC-based word processing to draft and revise documents. My day tends to be interrupt-driven with telephone calls, email messages, and calendar alerts continually resetting my priorities.

In the future, I expect to use my web browser as my control center. I envision working virtually, relying more on online systems than PCs. I want to be able to work anytime anywhere without carrying my office with me. I want to have access to people, information, and tools that enhance and facilitate the practice of law, automate mundane tasks and allow me to leverage my time. The web-based tools are more suited to the style of practice I envision.

Note: I did not mention building computer networks or network storage systems. I worked in the computer networking industry and I was President of a networking software company. Although networking and storage are critical technologies, they have no place inside the law firm of the future, any more than an electrical generator or telephone switching station does. Networking and storage technologies should be provided by utilities like electricity, heat, and water. Law firms need to have these resources, but they do not need to build or manage them.

I don’t mean to offend anyone, but building a large IT department is a mistake! Instead, build a large KM department. Law Firm 2.0 is about leveraging technology and systems to facilitate the practice of law. It is not about building technology and systems.

Getting to Law Firm 2.0 takes a lot of work and a willingness to change. You have to constantly adapt and upgrade tools without disrupting work flow and client priorities. (As you can see by my sporadic postings of late, I am still fine tuning that balance).

So, what are some of the changes I envision?

Digital – paperless office; all documents scanned and stored electronically (except where original signatures are required),

Mobile – working anytime, anywhere; information should be accessible over the web and compatible with pdas, cell phones, and the latest messaging applications.

Virtual – access to people, information and tools, working in the office is an option; systems must be designed with the assumption that people may be working next door or on the other side of the globe; systems must facilitate communications and sharing of knowledge without assuming the traditional in-person contact.

Personal – the power of the individual; lawyers are extremely intelligent and each have their own style of practice; tools must allow sharing of knowledge without constraining individual preferences or inhibiting individual contributions.

Secure – trust is a foundation of legal practice; lawyers must preserve client confidentiality and maintain the integrity of the profession; systems must have access control, encryption, off-site back-up, and automated processes.

What do you envision for the law firm of the future? What technologies are critical for Law Firm 2.0?

Testing my virtual strength

On Monday, I had my first real test of virtual strength. I didn’t plan it that way, it just happened.

Every year, my son and I go away for a weekend in March to go skiing. There are two kinds of skiing. Winter skiing and Spring skiing. Winter skiing is a test of man against nature. Spring skiing is about man appreciating nature. There’s nothing like floating down a mountain of snow on a warm sunny day.

I digress…my son and I were away for our annual father-and-son spring weekend. As always for solos, getting away, even for a weekend can be difficult. For some reason, several last minute client matters arise that you feel compelled (ethically or contractually) to address before you go away. Of course, this year was no different. I worked right up to the last minute. We were supposed to leave early on Friday, and instead left on Saturday morning.

Rather than rush home on Sunday night, this year I decided to take Monday off and test out my abilities as a virtual lawyer. The skiing on Saturday was excellent (good snow, warm weather, lots of sun). But it rained Saturday night and was icy on Sunday. I looked at the weather for Monday, and it looked perfect. Being so late in the season, you can’t expect too many more days of skiing. The combination of warming temperatures, day-to-day obligations, and previously scheduled events minimizes the chances of enjoying another spring skiing day. Go for it!

But Monday was not Sunday and there was no Partner or Associate holding down the office. Was I able to maintain a professional practice remotely, any time, any where? How strong were my virtual lawyering skills? Well, this was a good test. I hadn’t originally planned to take Monday off, it was more spur of the moment. All I brought was my laptop and a pad of paper with my todo list. I didn’t even bring a pen. I had to use the complimentary pen from the hotel room.

Sometimes, as a solo, you and get away for a day without the phone ringing, and even if it does most client matters can wait 24 hours. Sometimes, you can’t.

Sunday night, I knew there were several projects which had a sense of urgency from the clients’ perspective. From my perspective, they were the typical “hurry up and wait”. You know the financing transaction that has to close this week and then the client sits on it for two or three weeks because something comes up or they’re not really sure they want to go through with it.

First, I made a deal with my son. We can stay an extra day and go skiing (and he gets to miss school), but I had to get my work done Sunday night. We stopped at the local video store rented the Star Wars trilogy for $1.25 and then I was free to work for the evening. The theory was that I could generate enough work to keep my clients busy (and happy) while I was skiing on Monday.

The second thing I did was to call my wife and ask her to forward my office phone to my cell phone (you can only do that if you are a solo attorney). That way, I could take my cell phone with me and, if something came up, ski back to the lodge to get my computer.

Third, I connected to the free wireless Internet at the hotel. I would have been happy to pay for Internet service, which they used to charge for, but this year the hotel made the brilliant decision to make wireless Internet free (probably to avoid technical support). The connection was a little slow, but I could live with it. I could receive emails through Outlook, but I could not send emails without using the web-based interface. Sending emails with attachments was quite a bit slower.

Finally, I set down to work. I read a few weekend emails from clients (I hate those!) and started drafting documents. As I worked, I realized my outstanding projects were bigger than I thought and the critical deadlines were closer than I had expected. The good news was that I was glad to be starting work at 5pm on Sunday evening in my hotel rather than driving home in 3 plus hours of traffic, packing and unpacking the car, and then trying to work at 9pm.

As it got to be midnight, my son fell asleep in the middle of the third trilogy; I was still working. I was determined to get several projects off to clients to free up the next day, even if I had to stay up late. Then, several clients (also working on Sunday night) sent emails raising new issues that could perhaps wait for Monday morning, but not Tuesday. By the time I got to bed, it was 4:30am. No problem, I would get 4 hours of sleep and then go skiing. Skiing in the warm sun would energize me.

At 8:30am, I woke up right on schedule. However, those projects that I sent to clients in the middle of the night, were already generating responses. Rather than keep the clients busy, they confirmed that the critical deadlines really were critical. Now I was in trouble. I had to file a new corporation in Delaware, revise financing documents, confer with outside counsel as well as the client, and get the financing closed by the end of the day.

The first challenge was faxing a document to the Delaware Secretary of State (“DE-SOS”). Yes, I could have called CT Corporation and emailed the document to them. But I try to keep costs down for client and I have gotten used to faxing my filings directly to the DE-SOS. I had no scanner or fax machine. All I had was my laptop. I called the DE-SOS and they said they only accept faxes; they could not accept email. If you know government offices, they were not about to make any exceptions for me or my annual father-and-son ski weekend.

The challenge was how to get an unsigned document out of my computer, signed, and faxed to the DE-SOS. First, I applied my electronic signature to the Certificate of Incorporation. Then, I saved it as a pdf to preserve the formatting. I attached the pdf to an email. All I had to do was to email to an online fax service and I was done.

Well, I had been meaning to sign-up for a PC to fax service, but had not gotten around to it. As a virtual lawyer, my plan was to forward the fax line in my office to an email fax. So, it was a problem I needed to solve anyway. Years ago, I used the free version of eFax, but I disliked having to download special software to read faxes written in a proprietary format. I assumed the fax services were better today, but I didn’t have time to research it.

So, there I was in my hotel room. The client said, “let’s go forward with the incorporation today.” It was 10am and the fax needed to be received by DE-SOS before 2pm. I can do this…I just need to signup for an online fax search. I did a quick Google search to find the most highly rated fax services. Several reviews came up quickly. One service offered a free trial. Great! Rather than take the time to compare services, I’ll just use the free trial to send out my document now.

In the meantime, there were a number of phone calls and last minute revisions to the financing documents. I still planned to buy a half-day ticket and go skiing in the afternoon. By noon, the sun would soften up the slopes and the skiing would be better.

Don’t forget to read the fine print. I sent out the fax document using the free trial, but nothing happened. No quick “confirmed” status. The website screen just said “processing.” That’s funny, in the real world, I hit the send button on the fax and it either goes through or fails within a minute or two. Instead, it just sat there “processing”. By 12pm, I got nervous and started reading the FAQs for help with the online fax service. In the fine print, I discovered that the free-trial was only good for 10 pages; my pdf document with the filing cover memo was 12 pages. Even when it gets done processing, this document was not going through.

Plan B was to go back to the reviews and, instead of the free trial, sign up for the top rated for-pay fax service. I could always cancel or change services later. I quickly concluded that MyFax and eFax were the most popular. The reviews suggested that they were equally as good, but MyFax was cheaper. I’m always in favor of supporting the underdog and saving a little money. ;-)

I signed up for MyFax, paid by credit card, uploaded my document and within minutes I received confirmation that the transmission was successful. At 1pm, I called the DE-SOS and confirmed the fax arrived. Crisis averted. In the meantime, my son was thrilled to be playing video games rather than skiing. And after two hard days of skiing, he needed the break.

Okay, so grab a quick bite to eat for lunch and then hit the slopes. Right? Nope…more client issues that had to be solved today. Each one passed the test: will a 24 hour delay adversely affect the client? If so, get it done now. By 2:30pm my hopes of catching the last few rays of the new daylight savings time were fading fast.

I finished the critical projects by 4pm. We packed up the car and drove home. No, we didn’t get to enjoy that glorious day out on the slopes. No, technology did not save me time that day. But yes, the virtual lawyer experiment had worked. I could access information, knowledge and tools from a remote location and provide the quality of service that clients deserve.

Maybe I still need to improve my life-work balance, but that will come. Already, I feel more comfortable knowing that I can leave the office spontaneously and I have acquired one more tool (PC to fax) that will facilitate working remotely.

Have you tested your virtual strength lately? What technologies have helped you to work remotely?

A virtual lawyer may need a physical office

I apologize for my absence last week. I had a greater than normal workload and spent most of the week fighting fires. I also closed the deal on my new office lease and needed to select vendors for all the normal office services.

So, why does a virtual lawyer need an office?

I started my own law practice five years ago, working out of my house. On the rear of the house is an addition with a separate entrance, which provided a perfect space for an office. The office looks out on the tall pines and mature maples trees in the woods behind the house. It is also separate from the main house so that I hear none of the family activities. And, the office has tall plate glass windows, which makes it look and feel like an office.

So, why leave? Why not just operate a virtual law practice with other professionals each working out of their homes? I did that for over four years. It was great! I kept my overhead low and built a corporate practice working with start-ups companies and entrepreneurs. Many of my clients liked the fact that my business felt like a start-up, similar to theirs. I liked the fact that I had no commute, no overhead, and more time and flexibility to spend with my family.

The problem is that after 4 years, I got to the point where I wanted to grow my business. I could have just focused on moving up the value chain, attracting better quality clients, raising my rates and letting the smaller fledging clients go. But that was not the kind of practice I wanted to build. I enjoyed working with early stage companies (as well as larger ones) and I believed that the market for small business legal services is underserved. I wanted to build a law firm that leveraged technology and provided high quality, practical legal services for emerging businesses.

To build a business, you need to work with other people. My home office could fit one or two other people, but having other people regularly show up at home would be an intrusion on my family. And no matter how great my home office was, I still had the image of working out of a “home office.” If I wanted to grow my business, I needed more space in a traditional office environment.

Last week, Chuck Newton wrote a great blog on the benefits of working at home. I agree with him and we had an interesting exchange about whether there is a need for a physical office. In my opinion, having or not having an office is all about choice. You have to decide what you are trying to build and whether a home office is a good place to start or a good place to end up. The good news is that today, with the advent of the Internet, you can choose.

In August of last year, I started to move the office out of the house. I rented a single office from another law firm that provides access to a conference room, copier, fax, and Internet. The space was great; I had the collegiality of working in an office with other lawyers without significant overhead. I also noticed an immediate increase in business. No matter how well people know your work or like you, they may not be comfortable referring business to you unless you have a traditional office.

However, there wasn’t much space to grow a practice; I had just one 10 x 13 room. I used the new office as a place to meet clients and business contacts. I used the old office (at home) to maintain files, billing records and primarily did my work there. Since the new office was less than 2 miles away, I could be there in five minutes. So, I ended up having two offices: a front office for meetings and a back office to do the work.

At the end of last year, I realized the business was growing faster than I thought. I had over seventy separate small business clients that actually paid money. That is a lot of clients for a solo practitioner. The dollar figures are not as impressive as the number of clients, but that is by design. As a small business lawyer, I constantly strive to provide value to my clients, partly for reasons of personal integrity and partly because I believe that technology should improve the efficiency of legal services and my goal is to build a model firm.

Although I enjoyed the simplicity of a solo practice, I decided that I want to grow the business and that I am ready to bring on additional people. The bottom line is that I need a physical office in which to build a team that can help provide legal services to clients. As the firm grows, I hope to add lawyers and associates both physically and virtually to the practice. For now, I plan to hire a paralegal who can handle more of the routine paperwork that cannot support my hourly rate.

I’m looking forward to the next step and would welcome your thoughts and comments on opening an office and growing a practice. Which do you prefer: a virtual office or a physical office? What’s the best way for you to grow your practice?

Virtual Lawyer vs. Virtual Law Practice

Yesterday, I helped a lawyer in a mid-sized firm by sharing some information about how to perfect a security interest in a patent. She expressed her appreciation and asked how she could help me. I said, "read my blog called The Virtual Lawyer". Her response was "Oh, I have a friend who turned down a partnership at a big firm to start a virtual law practice with a few others and they have no office. I'll tell her about your blog."

I wanted to say, "Wait! The Virtual Lawyer is not just for lawyers without an office. It's for you too!" But I didn't say that because I didn't realize it before. The Virtual Lawyer is not just for solo practitioners and virtual law practices. It's for all lawyers that want to evolve their practice virtually.

On Tuesday, I made a first attempt at defining "virtual lawyer". Upon reflection, that initial definition seemed to confuse the notion of a virtual law practice with a virtual lawyer. It makes more sense to separate them, as follows:

A "virtual lawyer" is a professional authorized to practice law, who works with people all geographically dispersed, and whose law practice is carried on by means of a computer or computer network.

A "virtual law practice" consists of one or more professionals authorized to practice law, whose law practice is carried on by means of a computer or computer network, without a physical office space.

These definitions suggest that there is a difference between a "virtual lawyer" and a "virtual law practice." The virtual lawyer may or may not have a physical office. The virtual law practice has no physical office.

The concept here is that as the legal profession evolves, most lawyers will work virtually by means of a computer or computer network even if they are sitting in the office next to you. I don't mean to dehumanize the profession or offend anyone. Virtual lawyers will continue to work with people, but their primary means of communication and delivery of work product will be by email, telephone and computer networks. This is quite different from traditional lawyers whose primary means of communication was meeting in person and whose primary means of delivery of work product was on paper.

Most of us are working "virtually" already, but we still think about the law practice in physical terms. We try to make the virtual practice fit into the traditional law practice. The next generation of lawyers is going to think virtually first. They are going to think about how to take the traditional law practice and fit it into the virtual world. This is what will open people's mind to a new and improved profession.

The purpose of The Virtual Lawyer blog is to help lawyers think about how to change and develop their lawyering skills for an increasingly virtual world. This is for all lawyers, not just solos and office-less lawyers.

What are you doing to adapt your legal skills for a virtual world? How will it affect your practice?

Definition of a "virtual lawyer"

Why did I pick "The Virtual Lawyer" as the title for this blog? It just seemed to fit my ideal notion of the future practice of law. I liked the idea of being able to work any where at any time by having access to people, information, and tools. Computers and the Internet make that possible.

But what do the words "virtual lawyer" mean? Since I adopted the name, I felt obligated to look up the definition. I was happy to see that when I googled the definition, this blog came to the top of the list (how often does that happen!). The other references on the first couple of pages used the term, but did not try to define it. Therefore, I feel comfortable defining it on my own.

First, I looked up the definition of "virtual". There were several definitions, but the one I liked best was from The Free Dictionary: "Computer Science. Created, simulated, or carried on by means of a computer or computer network." There are several other definitions like the one from Geekgirls.com that suggested the word meant "not real," but I don't buy that. Don't tell me the Internet is not real.

I am comfortable with the definition of "lawyer" offered by Princeton as "a professional authorized to practice law." So then the question becomes what does it mean to be a "virtual lawyer?"

I decided that I should look at definitions of other "virtual" things. Here is what I came up with:

Virtual call center is "a call center in which the organization's representatives are geographically dispersed, rather than being situated at work stations in a building operated by the organization. Virtual call center employees may be situated in groups in a number of smaller centers, but most often they work from their own homes."

Virtual reality is" an artificial environment created with computer hardware and software and presented to the user in such a way that it appears and feels like a real environment."

Virtual machine is "a number of discrete identical execution environments on a single computer, each of which runs an operating system. This can allow applications written for one OS to be executed on a machine which runs a different OS, or provide execution "sandboxes" which provide a greater level of isolation between processes than is achieved when running multiple processes on the same instance of an OS."

Based on the first two definitions (I threw out the last one), I came up with the following:

A "virtual lawyer" is a professional authorized to practice law, who works with people all geographically dispersed, and whose law practice is carried on by means of a computer or computer network in such a way that it appears and feels like a physical law office, yet provides greater responsiveness, higher efficiency and better quality work product.

This is just my first attempt at defining the term "virtual lawyer" and the definition is likely to change or evolve over time.

What do you think? How would you define "Virtual Lawyer?"

Information Overload!

There is too much information available over the Internet. There are news sites, newsletters, search engines, blogs, message boards, podcasts, news readers, news feeds, and wikis. I am constantly finding and checking new sources of information like widgets for weather. And, that doesn't include all the old sources of information like calendar alerts, favorite lists, voice mails, faxes, IM, and cell phone messages, not to mention newspapers, postal mail, and my favorite "post-it memos". What is the best strategy for information management?

First, you have to organize. What information is critical vs. interesting? Which are news sources vs. reference sources? Which form of communication is most efficient? How can I find the information I need quickly?

Second, you have to find the best tools. By "best", I mean which tools are best for the way you work. If someone wants to get my attention, email is still my first priority. I do everything I can to filter out nonessential email (by using the Rules and Alerts feature in Outlook) into separate mail boxes. That way only clients and personal contacts appear in my Inbox.

Third, you have to customize your news sources. I like the notion of having a personalized newspaper by selecting my favorite news feeds and favorite blogs. The only problem is that I need a personalized editor (the old fashioned newspaper kind) to avoid all the less interesting information that inevitably gets mixed in.

Fourth, you have to be inventive. There is just too much information and too many different tools. You have to continually think of new ways to use existing (meaning "free") tools that will make your life easier.

I was intrigued by Erik Heel's suggestion to use the "shared items" feature in Google Reader, which makes it easy to tag news items and share them with your friends (or your blog readers). So, I tried it. You will notice in the lower right hand column of this blog a section called "News" where I quickly tagged a few articles I thought were interesting. It's a nice alternative. Rather than post a news feeds with random articles, I simply tag the articles I want to share as I browse through my morning newspaper.

The new Google Reader made me realize that RSS feeds are essential to the distribution of blogs. No one has time to check a blog site every day. I would expect in the near future, if a blog doesn't make its content available by an RSS feed, no one will read it. Even traditionals news websites need to make available by feeds. The days of "surfing the web" may be numbered.

Today, there are more and more ways to filter out information on the Net. One example is Dave Taylor, who uses Newsgator to do sophisticated keyword searches to track the buzz about the book he authored. The blog and the newsreader may be fast converting users from actively going out and searching the web to passively specifying what information and waiting for it to be brought back from the web.

For my law practice, what I would like to do is to create a customized news readers for each different legal subject matter. For example, a customized newsreader for finding new articles on LLC formation or software licensing. I can imagine the newsreaders of the future would allow me to specify key words, author ratings, content ratings, and various style settings with smart logic that over time more and more reflect my preferences.

How do you keep track of all that information? What kind of customized news sources can you envision?

How can you attract the best clients?

The best clients may or may not be the biggest clients or the most profitable clients. For my corporate/business practice, the best clients are the ones that value my services and want to build a long term relationship. So how do you find clients that value legal services? How do you build long term relationships?

When I first started practicing law, I had this image that business development meant putting on my sales and marketing hat, heading out to some networking event, and then rounding up a bunch of great new clients (all wearing suits and ties with $100 bills spilling out their pockets). I quickly learned that it seldom, if ever, works like that. In fact, when I try "selling" my services to new clients, it usually doesn't work at all. So, how do you get new clients? Where do you find them?

Start by assessing whom your best clients are. As recommended by Jim Hassett in his new book Legal Business Development, you must first build stronger relationships with your existing clients, before trying to generate new clients. Think about which clients value your legal services the most and which clients you enjoy working with you the most. Then, invite your best clients to go to an "appreciation" lunch and ask them why they like your services. Were you right?

Also, think about which clients don't value your services very much and which clients fail to understand what you really do. Think about those clients that are difficult to collect fees from or who are trying to get more than they are paying for. Every once in a while, I get a client that has read Rich Dad, Poor Dad and believes that "money is power." Those are the clients that I have come to realize detract the most from my business. The more I weed out the bad clients, the more I begin to attract the best clients.

Clients will not hire you unless they develop some kind of relationship with you. It may be a real relationship or it may be that they just identify with who you are. In Seth Godin's book All Marketer's Are Liars , which ironically is a book about telling the truth, he says that you have to be authentic. For me, being authentic means acknowledging that I primarily represent entrepreneurs and investors of early-stage ventures, not Fortune 500 companies, and I have the practical experience of having actually owned and managed a software development business. Clients respect it when you give them a clear picture of who you are and what you do rather than pretending to be something bigger.

Developing relationships with other people requires more than just telling the truth. As business development coach, Stewart Hirsch, says "it's not just about you." Whether it is a potential client or a referral contact, you need to focus on how you can help the other person. That way you can start building the relationship. Think about how you and your whole business model can facilitate and improve client relationships.

As my long time (9 days) readers know, I have been considering various pricing models. The so-called "alternative billing" models seem to be generating a lot of buzz lately (e.g., Gruntled Employees, LawBiz, The HR Lawyer's Blog), but I'm still wary of going to anything radical like an all "fixed-fee" model. The process of billing on a "fixed fee" basis all the time means sending an invoice to the client every time a new issue comes up or a new document needs to be drafted. The problem is that very quickly the "fixed-fee" creates a disincentive for building a strong relationship with the client. Fundamentally, high-value relationships are based on trust. If the lawyer doesn't trust the client, or the client doesn't trust the lawyer, the value of that relationship will be very low and the client will likely move on to the next lawyer that comes along.

So, my advice is take a client or prospective client to lunch. Ask them what they value most in their law firm, and find out how you can be of greater service to them (whether as a lawyer or as a friend).

What makes your best clients the "best"? How do you go about attracting new ones?

How do you say "thanks" in the blogging world?

The way to say "thanks" in the blogging world is to post a thoughtful and responsive comment.

I appreciate those of you who already gave me comments in person or sent emails about my blog. I am very interested in your feedback, but I'd prefer that you post your comments on this blog site. That's the best way to express appreciation to a blogger. That's how the blogging world works. (Of course, if you want your comments to remain private, in person or email communication is best.)

Already, I had a friend stop me on the street and say. "Hey, I like the blog you wrote yesterday!" Also, a lawyer sent me email on Wednesday (after only 5 days of blogging) saying that I sounded like a “voice crying in the wilderness.” I assume that is because there are so few comments posted. I asked both of them to post a comment, but it hasn't happened yet.

If you want to encourage my writing, and have a minute, just post a thoughtful comment. Initially, just a note that says "congratulations on keeping your NY's resolution" or "Great topic, I look forward to reading it" would be fine. This tells other readers that people are already reading the blog even though it just started. Later on, or if there is a serious discussion, comments should respond more directly to the content.

Blogging etiquette is very subjective and still evolving. Each blog has a different atmosphere. It is like walking into someone's house for a party. Some are very formal, some are wild. When you join a party you have to take a look around and ask. Am I wearing the right clothes? Do I need to bring something? What can should I talk about? Blogs are the same way.

At this point, the party is just starting, but if you like the content and want to hear more, post a comment!

Which are the best legal blogs?

The great power of the Internet is the facility with which information can be shared. As a result, we all learning from one another all over the world. So, who are the best thought leaders in the legal community and how do I find them?

Now that I am officially in the blogging world or "blogosphere" as it is more popularly known, I feel compelled to find out who are the leaders of this universe of knowledge. I started by doing a search on Technorati, which Mark Doerschlag of Mark's Guide kindly pointed out was one of the key directory for blogs. Technorati tracks the links made when bloggers comment on one another's website. The more bloggers who link to your site and the more links they use, the higher your blog is ranked. After the first week, The Virtual Lawyer has 3 links from 2 blogs and is currently ranked 1,693,770 out of 69.2 million blogs tracked by Technorati (not bad top 3% in just 8 days!). I guess that means there are at least 67 million lower ranked blogs that I don't have bother reading.

So, of the roughly 1.7 million active blogs (or more if they are not tracked by Technorati), which ones relate to lawyers and how do I find the really good ones? Having no clue, I started by doing a Google search for "best law blogs" and a search for "best law blawgs" came up with a number of great blog review sites. Here are the ones that I found most useful:

Robert Ambrogi's LawSites: Votes are in: Your top law blogs
The 2006 Weblog Awards: Best Law Blog
Blawg Review: Blawg Review Awards 2006
Blawg Review: BlawgWorld 2006 Review

After looking through some of these reviews, I concluded that the "best" sites were the ones with the legal subject matter I was most interested in. I found the quality and consistency within a blog column varies a lot and that the subject matter can vary alot. The blogs that appeal to me the most are the ones that reflect the author's true personality. I also like blogs that are highly focused, but have a blogger who is broad minded and minimizes (if not totally avoids) any selling of his or her services.

I learned two more things: (1) there are a number of national luminaries that are universally recognized and applauded as legal bloggers because their names and posts appear the most frequently, and (2) the best way for me to narrow down the list was to find bloggers with similar interests that post a list of their favorite blogs and then cross-reference those favorites with the ones that are "universally recognized" under item (1) above.

Which law blogs do you like the best and why?

Will I really blog everyday?

Maybe. I'll write because I want to write, not because I have to write.

Several people have said that they really enjoyed reading my new blog, but they think that I am putting too much pressure on myself by having to write everyday. First of all, I did not say that I would write everyday. Nor did I say I wouldn't. I merely expressed a desire to write everyday.

On February 16th, I wrote:

"Back to my New Year's resolution.... The promise that I made is that every day I would write about one new thing that would help build a law practice. I plan to focus on five separate areas: legal services (product quality and packaging), business development (marketing and sales), office management (technology, systems, knowledge management), recruiting (virtual and real team building), and finance (billing rates, pricing models, cash flow)."

The New Years resolution that I made was a "promise" to myself to try writing every day. For the record, it was not a promise to write everyday forever. This is a new experience. It may last a few weeks or it could last for years. I promise to write when I have something interesting to say about the five areas of interest I outlined for The Virtual Lawyer. The good news is that I have been writing for 7 days in a row and I really enjoy it. It helps to clarify my thinking and has already helped to move my business forward.

P.S. No, this is not my post for today. I'll post something more interesting later...

How many lawyers does a firm need?

The largest U.S. law firm, Baker & McKenzie, now has over 3500 lawyers according to The NLJ 250 posted on Law.com. As a solo practitioner, I think about adding one or two lawyers, maybe growing to five or ten in few years (or maybe staying solo). I can't imagine growing into a firm with hundreds of lawyers, let alone thousands of lawyers. And, on a day-to-day basis, I don't think much about what the big firms are doing. Most of the time it seems that the big firms are part of another world. How does it affect me?

I believe the legal industry is going through a major period of transition, one that we have not seen in the history of the profession. I think the transition is being forced by the advent of new technologies, improved methods of communication, and globalization. The question is where is the legal industry going? What does it mean for solos and small firms?

Big firms are getting bigger. For each of the last two years, the largest 250 law firms in the U.S. grew by 4 percent or more. The smallest firm on The NLJ 250 had only 172 lawyers. I don't know the statistics, but when I graduated law school in 1986, I would guess that a 172-lawyer firm would have been in the top 25, or top 50 at least. The legal profession in the United States has been around for about 200 years. So, why is it that in the last 20 years, firms are now growing so big? Does it mean we all need to part of a mega firm to practice law?

When most clients go looking for a law firm, do they think "we really need a firm that has at least 1500 lawyers to be able to handle our legal needs?" Do they think 1500 lawyers work more efficiently under one roof? Law firms are getting bigger because they can, and because other firms are getting bigger.

Big firms are being structured more like traditional businesses with new management such as CEOs, COOs, CMOs and other C-level executives. More management means more overhead. Also, big firms are beginning to realize that knowledge management will drive law firms of the future and have started to invest more money in technology and training. These developments increase overhead, which means firms must continue to grow in order to maintain efficiency and profitability.

At the same time that big firms are growing, computers and the Internet are enabling solos and small firms to reduce costs and improve the quality of their practice and quality of their lifestyle. How can this be true that technology increases costs for big firms and decreases costs for solos and small firms? Because the latter don't invest in management, IT systems, training, and consulting. They rely on the consumer marketplace.

What this means is that the legal industry is undergoing a massive transition, which may take years to settle out. My prediction is that the number mid-sized firms will shrink. There will be big firms and small firms, but few in the middle.

What do you think will happen? How big should your firm be?

Thinking about sharing documents over the web?

In the spirit of collaboration, I have been looking at various technologies that would allow lawyers to share information over the web. How should lawyers share documents in cyberspace?

I am familiar with Wikipedia, but I don't know how to set up my own wikipedia page (and I'm not sure I want to collaborate with the whole world, just yet). Wikipedia has some information about contract law (e.g., Integration Clause), but I don't who is writing this stuff or for what jurisdiction.

Also, I have seen software demos and presentations conducted over the web using online services such as www.GoToMeeting.com and www.webex.com, but I don't use these services often enough to want to pay for them. I am more of the occasional user of document sharing tools. Once in a while I may want to share a document with another lawyer or review a contract with a client while talking over the phone.

One document sharing tool that I liked was "Conferral" because it was integrated with Microsoft Word and made it easy to share a document that was open on your desktop. Conferral has a number of features that allowed you to control what information was shared and when it was being shared. However, it made me nervous to be sharing my desktop over the Internet.

Today, I tried a new product called "Google Docs" that allows you to quickly share and edit documents over the web (for free!). You can limit the document sharing only to those people you select by sending email invitations or you can share the document with the whole world.

I just uploaded a document that I have been working on (it is still a work in progress and I disclaim that any of the information is accurate). The document is a Choice of Entity chart intended to help lawyers guide their clients through the various factors affecting the choice of entity for a new business. I posted the document to the web using the new Google Docs tool. You can find the Choice of Entity Chart at http://docs.google.com/View?docid=dhntjthf_4g5t663.

I would like to hear your comments on the Choice of Entity chart. Is it useful? How can it be improved? What do you think of the Google Docs sharing tool? What do you use for sharing documents over the web?

Power tools for lawyers?

Some guys want to own a Hummer. Other guys want twin 500HP boat engines. Others want to own superfast computers. The truth is men (and women) like power tools. The tools I dream about (yes, this may sound strange) are power tools for lawyers. I enjoy being able to handle complex business transactions and being able to crank out piles of documents quickly and efficiently. The problem is that most tools for lawyers are pretty poor.

Why do legal publishers still call me by phone, trying to get me to “review” their latest book for a free 30-day trial? Is it because they know once they send it to me, I will forget to return it within the 30-day deadline?

Frankly, I don’t want any more books on paper. What I want is an online resource that is cheap, easily downloaded, and up to date. I want content that changes so frequently that it is not worth my time to download copies. I want to be able to search legal sources quickly to find answers before I forget my question. I want to be able to easily locate sample documents drafted (and used) by experienced attorneys actually practicng in my jurisdiction.

I also want to know what other lawyers use as primary tools in their specific areas of practice. I want checklists and document assembly systems. I want to do less typing and editing and more creative thinking and problem-solving. Why is it that these tools and information don’t exist in one nice easy to find resource accessible by a web browser?

I think the problem is with the centralized publishing model. Legal publishers don’t actually use most of the materials they sell. If they did, they would realize their materials are pretty poor (however, there are a few exceptions like Massachusetts Corporate Forms by Bohnen and Coggins). Yet, the best lawyers usually don’t share their “tools” with other lawyers, except on a limited basis as a “courtesy” or in the course of delivering the final work product to opposing counsel.

Too many lawyers think that sharing information means they are giving away their expertise. Well, I think the opposite. We all can benefit by sharing knowledge. If one lawyer shares information, that will encourage other lawyers to do so as well. One notable example is John Hession of McDermott Will & Emery (formerly with Testa Hurwitz and Thibeault). He and his firms have consistently shared and updated their venture capital financing documents with the MCLE. I'm not expecting lawyers to provide free legal advice, just to share with other lawyers the tools that they use in their practice.

Here is my challenge… if there is any document or information that you would like me to share with other lawyers, send me an email. I will post it on a site made available only to lawyers. The challenge for you is to either (1) provide thoughtful and critical feedback that helps to improve my document or (2) you offer to send me a document of yours that I am interested in seeing.

If you are interested in this challenge, send email to v-lawyer@lexpertise.com.

How should lawyers charge for services?

There are three ways to charge for legal services: hourly, fixed fee or contingency. I typically charge for work on an hourly basis. Even when I offer clients a "fixed fee", I have to estimate the amount of time it would take and base the estimate on some equivalent amount of time. Other lawyers charge on a contingency, but that is not generally appropriate unless the matter has a significant payout and easily definable objectives.

So how should lawyers charge for their time? Lawyers are are split as to whether to charge for a fixed fee vs. hourly.

Tom Kane, a marketing consultant and former practicing attorney, suggests that small firms can gain an advantage over large firms by "looking seriously at alternatives to billing by the hour".

Chris Marston, founder of Exemplar Law Partners, LLC, a firm that claims to be the "first corporate law firm in the nation to exclusively adopt a fixed price model", believes that fixed pricing must be based on "value to the client".

Jeffrey Lalloway, a divorce lawyer in California, advises "not to hire a lawyer that is not willing to work on a fixed fee basis."

Joseph Grasmik, a business immigration lawyer in New York, publishes "typical fees" on his website with detailed FAQs, but then invites potential clients to request an estimate for a specific matter. Mr. Gasmik also publishes a "do-it-yourself" engagement letter that clients are supposed to fill out and sign based on quoted fees.

My approach is not to be strictly limited to either fixed fee or hourly rates. For some matters, like incorporation, a fixed fee is appropriate because the nature of the work is known and can be estimated based on prior experience. For other matters, the time or work is not known and may be disproportionate to what the matter is worth objectively (because the client wants to pursue it for non-monetary reasons). What is important is to set expectations reasonably and to put the client in control of deciding what services they wish to buy.

In yesterday's blog, I wrote that Knowledge Management will drive law firms of the future. If law firms develop high quality knowledge systems, how will that affect pricing? Will that make fixed fee billing more likely to be offered?

How do you think lawyers should charge for services?