Wednesday, March 28, 2007

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?

Tuesday, March 27, 2007

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?

Saturday, March 24, 2007

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?

Thursday, March 15, 2007

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?

Tuesday, March 6, 2007

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?

Saturday, March 3, 2007

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?