Thursday, July 31, 2014

Law Firm Space Planning as a Knowledge Management Strategy

The knowledge-enabled productivity and financial rewards of radically redesigning law office space promise to be significant for law firms that have the courage to change.
 I recently published  an article   Law Firm Space Planning as a Knowledge Management Strategy in the July issue of Thomson Reuters Practice Innovations.

c. Thomson Reuters
Just as firms have been grappling with the billable hour for the past decade, the coming decade may be marked by the struggle to redefine the legal workplace. Office rent has been the second largest expense for law firms. Firms outside the US have already made significant strides in developing innovative space strategies. While cost reduction may be the primary incentive to reinvent the law office, firms should not overlook this as an opportunity to create "knowledge enabling" work environments...Read the complete article HERE.

This article was inspired by a presentation by Ivan Ross of Geyer Architects at the 2013 Janders Dean Knowledge Management Conference in Sydney, Australia. Additional thanks to Steve Martin of Gensler Architects for sharing his time and insights on space planning and design in US law firms and to Russ Weber my first architectural mentor.

Tuesday, July 29, 2014

ALM Legal Intelligence 2014 Law Librarian Survey Trends:Embedding, CI, KM, Sole Providers

American Lawyer Media Legal Intelligence released the 2014 Law Librarian Survey data earlier this month.

Library Chiefs Continue to Rule Contract Negotiations

In reviewing the data I continue to be struck by the terrific challenge library chiefs face in the current environment. Law firm profits are reviving, lawyers continue to demand the best and most strategic information resources for their practices and yet library chiefs have succeeded in
containing costs. The survey give clues how they achieve this. Librarians are sharp negotiators who assess not only price but the comparative value and usability of the content. They also employ sophisticated tools for analyzing the ROI for the resources they invest in. These talents are paying off big time for the firms which employ these experts. It would be interesting for ALM to track the comparative outcomes when firms retain consultant-contract negotiators vs. the library chief with or without the assistance of the internal procurement officer.

The Big Movers
 Embedding, Competitive Intelligence, Social Media Monitoring, Centralization, Billable hours, Sole source for online research.
A Sampling of Key Trends From the 2014 Law Library Survey

  • 58% of Library Chiefs are responsible for overseeing Competitive Intelligence

  • 73% report that the volume of Competitive Intelligence research has increased

  • 40 % of Library Chiefs are responsible for Knowledge management

  • More firms were purchasing eBooks. 

  • 86% report that they achieved better deals from online providers

  • 81% of are embedding librarian in practice groups up from 14% in 2012.

  • 49% publish business intelligence newsletters. 

  • Manzama a social media monitoring tool retained the top stop of news aggregation tools and is used in 49% of the responding firms.

  • 72%  report that recovery for online research is declining.

  • Lexis is winning the sole provider, but spending on WL is almost double the spending on Lexis. It is likely that the decline in cost recovery is accelerating the move to sole provider. Firms have to reduce cost in order to offset lost revenue. Spending on BLaw remains flat.

Questions that Disappeared Last year there were several questions on complexity of research and research shifting from lawyers to information professionals. I do not see those questions in the 2014 survey. This is an important issue and should have been retained.
 Outsourcing and Centralization

For several years Library Chiefs has been spearheading initiatives to streamline library operations through centralization and outsourcing administrative operations.  I am uncomfortable with the results reported regarding centralization and outsourcing. For the second year in a row the ALM data actually suggests both centralization and outsourcing are declining. Centralization was down in in all categories except Contract negotiations. This doesn't seem likely.

Low Cost Centers

There have been some high profile big firm relocations of back office staff from NY, DC or LA to Florida, Ohio, Kentucky or West Virginia. Library chiefs should realize that  there is an alternative path to  achieve  similar savings. Some firms already have offices in low cost areas and cost saving benefits can be achieved by simply centralizing administrative processes in those cities.
The Long Slow Death of Cost Recovery

In just 5 years there has been a dramatic decline in the number of firms which recover more than 60% of their online costs. In 2009 51% of firms reported recovering more than 60% of their online costs. In 2014 it is down to 17 % of responding firms. This is no doubt due in part to the growth of AFAs and client demands for cost reduction.

Since this survey covers the Amlaw 200, I recommend that ALM add questions on resource expenditure per attorney and staff to attorney ratios. These would provide valuable metrics for benchmarking. I would like to know the   dollar amount of print  resource spending. Yes it will be a kind of deathwatch. Given the increase in sole online provider contracts, I would like to know if the abandonment of access to Lexis or Westlaw forces firms to rebuild print collections of core treatises which are no longer available online or in eLibraries due to the cancellation of the online contract.

Tuesday, July 22, 2014

PLL Summit Keynote: Susan Hackett Delivers A New Vision - Clients Who Want Value Should Demand That Librarians Get "A Seat at the Table"

Susan Hackett, The CEO of Legal Executive Leadership kicked off the  2014 Private Law Libraries Summit with a bang. This year’s theme was  “The Voice of the Client” and  Hackett delivered a powerful message which focused on “Re-engineering the Role and Value of  Private Law Librarian:  Practical Strategies for Leadership in Serving Corporate Clients.”

Susan Hackett Points the Way
Photo (c) Bess Reynolds

We've Come A Long  Way. I couldn't help but contemplate the  trajectory which the Summit has taken since the first Summit in 2010. Although the theme of the  first Summit was "Change as Opportunity,"  it was fear and bewilderment that fueled the discussions. By 2014 the Summit had moved information professionals from survival at the margins to front and center in the delivery of value to clients. Not only did we have Hackett the former Sr. VP and GC  of the Association of Corporate Counsel delivering the keynote, but she was followed by a panel of In House Counsel who reinforced and validated Hackett's insights into the value librarians can bring to multi-disciplinary  client support teams. It is time for information professionals to move from the shadows  of administrative support to center stage  with a seat at the client table and with a voice in the value and process improvement discussions.

Clarifying the Context. Disruption in the legal profession is not solely the result of the recession. Law firms will continue to struggle if they don’t realign their business strategy with delivering value to clients. Law firm’s continue to focus on cost, profit and pricing  which are the symptoms of dysfunction and not the root cause.
The Real Problem Is Client Disconnect: Lawyers still want to sell their expertise by the hour. Clients want to buy business solutions and efficiency.
The Opportunity: Information professionals are uniquely suited to help lawyers leverage the firm's knowledge resources and develop new products, processes and multi-disciplinary strategies which will respond to the client demand for efficient business solutions.
The Innovators Hackett highlighted the innovative initiatives at  two law firms Seyfarth (Lean Six Sigma) and Eversheds (Agile) and two Legal Departments Intel (Dynamic KM) and Cisco (Global Center of Excellence) as examples of workflow reengineering.
Clients Love Data Start demonstrating value by doing time trials. How long does it take for an associate to perform a function that we as information professionals can demonstrably deliver more quickly. Measure the time saved and translate into a value to clients.

Hackett's Examples of Staffing Innovation

      Focus on each person's highest use, not pushing work down

      Demand Management Practices – firms and clients

      “Captive” work centers to drive down project costs

      Design a new kind of “contract lawyer” – you/your team.

      Direct client and firm exposure: training, client deep dives, issue monitoring, etc.

      Assist with feeding or writing blogs, Tweets, Social Media – push knowledge to firms lawyers and clients

      Sourcing increasingly sophisticated work to those who do it faster and cheaper than lawyers

Hackett's Examples of Knowledge Innovation

       Aggressively collect, catalog, and manage data, including big data. Offer it up to clients.
       Create a collaborative knowledge library of firm practices or one that shares clients’ practices.  Offer it up to clients.
      “Proof of Concept” Discussions – questions posted online in firm communities are answered communally and archived.    

      Assign associates to capture partner knowledge experience as part of their training – catalog it for future training.

      Make knowledge capture a legacy project for elder partners

      Create playbooks, process maps, trainings, etc. 

Disruption Equals Opportunity. According to Hackett the primary competition for law firms is not other law firms, it is the legal department itself. As legal departments become more efficient, information innovators can help law firms develop value strategies and services which can help firms compete effectively with their clients.

The Bottom Line: Stop selling ourselves to our law firms, start selling our value to the clients.

Thursday, July 10, 2014

Practice Innovations: Law Firm KM, Space Planning, Google Generation Lawyers, Big Data, Risk Management,Crowd Sourcing & Succession Planning

The July Issue of Thomson Reuters Practice Innovations has just been released. Great mix of articles on cutting edge law firm management issues.

Monday, July 7, 2014

White v West Publishing and Reed Elsevier-- Judge Rakoff Fair Use Rationale Explained:Briefs are like Facts, Databases Transform, There is no market for Legal Briefs

It is more than a year  since Judge Rakoff dismissed Edward White's case against Westlaw and Lexis for copyright infringement. A memo explaining the rationale was promised and it has finally been delivered. On July 3, 2014,  Judge Rakoff released a Memorandum and Order which provides a fair use analysis of the decision and reaffirms the 2013 dismissal.

White’s copyright claim can be traced back to his dismissal as class counsel in the case of Beers v XTO Energy, Inc. No. Civ 7-798-L in the Western District of Oklahoma. White was afraid that the "newly proposed class counsel or other lawyers would use his work product” He registered copyrights on the Summary Judgment Motion and the Motion in Limine briefs which had been filed in the Beers case. However prior to registering the copyright he had filed the motions with the court using Pacer’s electronic filing system. Westlaw and Lexis both subsequently  retrieved these documents from the Pacer system and added the documents to their legal research systems. Once a document was filed on Pacer it became available to the public online and in the court clerk’s office.

Rakoff's Memorandum cited the "Fair Use" defense in Section 107 of the Copyright Act of 1974 providing the rationale for the dismissal. The memo also stated that under the facts of the White case, 3 of the 4 factors favor “fair use” and one factor was neutral.
The Fair Use Balancing Test Applied

 1. The purpose and character of the use. Citing Campbell v Acuff-Rose Music, Inc. 501 US 569, 578 (1984) the court found the Lexis and Westlaw’s use of White's briefs was transformative. White created the briefs to achieve a specific outcome for a client.  Westlaw and Lexis used the briefs in creating an interactive legal research database. The memorandum states that the editorial processes undertaken by Lexis and Westlaw in “reviewing, selecting, converting, coding, linking and identifying the documents add something new and change the character and purpose of the work.

2. The Nature of the copyrighted work. Fair use is more likely to be found in factual works than fictional works. The memorandum states that "Briefs are functional presentations of fact and law.” Since the briefs were filed with the court it is harder to claim that they are "unpublished."  

3. The amount and substantiality of the portion used in relation to the copyrighted work as a whole. Lexis and Westlaw copied the entire documents.  There is precedent where courts have concluded that  copying the whole work "does not necessarily weigh against fair use because copying the entirety of a work is sometimes necessary to make a fair use of the image." BillGraham Archives v. Darling Kindersley Ltd., 448 F.3d 605, 613 (2d Cir. 2006). Although defendants here copied the entirety of White's briefs, such copying was necessary to make the briefs full text searchable. The Court found that Lexis and Westlaw only copied what was reasonably necessary for their transformative use, and concluded that that the third factor is therefore neutral. 

4. The effect of the use on the potential market for the work.

Regarding the fourth factor, a finding of fair use is disfavored "only when the market is impaired because the material serves the consumer as a substitute, or . . supersedes the use of the original." Bill Graham Archives, 448 F.3d at 614 (quoting Pierre N. Leval, Toward a Fair Use Standard, 103 HARV. L.REV. 1105, 1125 (1990)). In determining whether such a market exists, the Second Circuit "looks at the impact on potential licensing revenues for 'traditional, reasonable, or likely to be developed markets.'"

In this instance, West's and Lexis's usage of the briefs is in no way economically a substitute for the use of the briefs in their original market: the provision of legal advice for an attorney's clients. White himself admits that he lost no clients as a result of West's and Lexis's usage.

 Isn't It Really Just A Question of Precedent?
I agree with the outcome  of the White case but I find the Court's analysis somewhat strained. I think the more obvious reason to dismiss the copyright claim would be based on a public policy rationale. In the common law system a completely original brief citing no precedent would be pretty useless and unpersuasive. All legal briefs are inherently "derivative" and It serves the " interests of justice" for the briefs and legal arguments which are made to courts to be available for public review.
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