Merger Mania: Microsoft Buys LinkedIn In Record Deal (& MS Word Tips For Lawyers)

The world looked one direction, and Microsoft slipped a multi-billion dollar cash purchase past us.

While political news dominated the air and digital waves, the acquisition of LinkedIn by Microsoft almost went without notice. But, this week, it’s finally possible to let Microsoft’s largest acquisition in history sink in. At $26.2 billion, the acquisition of LinkedIn is more than three times the size of Microsoft’s acquisition of Skype in 2011 for (what’s now, a mere) $8.5 billion (via CNN Money).

It may not come as a total surprise, however, as Microsoft has been hedging its bets in the social networking world for a few years now.

Microsoft bought Yammer, a “freemium” private social network for corporate use similar to Facebook, for $1.2 billion back in 2012. Yammer came with a user base of more than 200,000 companies, which—one can guess—would help Microsoft build a larger B2B clientele for its Office products (via Forbes).

LinkedIn, with more than 433 million members, seems to have added to Microsoft’s incentive to invest in the corporate world of networking. LinkedIn, for its part, has been equally eager to grow.

In February 2016, LinkedIn shares closed down 43.6 percent, which represented $11 billion in market value. Furthermore, LinkedIn reported that online ad revenue growth slowed to 20 percent in the latest quarter from 56 percent a year earlier, as reported by Reuters.

All in all, LinkedIn may have been looking for the kind of leverage Microsoft offers to pull them out of a financial funk.

Chief executive at Microsoft, Satya Nadella, shed some light on the purchase, saying in an email to Microsoft employees, “This combination [of Microsoft and LinkedIn] will make it possible for new experiences,” such as “Office suggesting an expert to connect with via LinkedIn to help with a task you’re trying to complete.”

In addition, he said that these experiences will “get more intelligent and delightful.”

Some, however, are convinced that this combination will be, in fact, neither intelligent nor delightful.

Randall Stross of The New York Times wrote an opinion article, “Why LinkedIn Will Make You Hate Microsoft Word,” in which he writes:

“Did Mr. Nadella, who has been at Microsoft since 1992, learn nothing from the Clippy disaster? Clippy, the animated anthropomorphic paper clip introduced in 1996, popped up unbidden in Microsoft Office programs to offer advice. ‘Are you writing a letter?’ it would ask annoyingly. Clippy became famous for the ire it provoked and, in 2010, Time magazine included Clippy in a roundup of the 50 worst inventions of all time, along with asbestos, leaded gasoline and pay toilets.”

Mergers are certainly on the mind. It’s hard to know when your firm is falling behind and when it’s correctly eschewing technological change.

Change can be powerful for growth. But even great firms fail. Leadership—and majority market share—in the personal computer industry changed hands often from Altair, to Tandy, to Apple, to IBM, to Compaq, to Dell, to HP (Tellis and Golder 1996; 2001). And, Microsoft executives are acutely aware of the acquisitions made by their social network competitors. Even Mr. Stross for The New York Times laments:

“But I suspect that both Mr. Nadella [of Microsoft] and Mr. Weiner [of LinkedIn] are afflicted with extremely bad cases of Facebook envy. Every tech company, including Microsoft, contemplated buying, or actually tried to buy, Facebook in its early days, and all are haunted by the thought of the deal that got away. Today, Facebook’s market capitalization is about $320 billion, not that far behind Microsoft’s $394 billion.” 

Merger mania is upon us. Yet, key questions remain unanswered: what is more important to success? Does success depend on high-quality products or, today, does it depend entirely on a social network peers?

-WB

Excel, Word, Outlook, PowerPoint… your Office partners are such familiar friends, but when they prevent you from doing what you need to do, they can turn into enemies.

In fact, even if you use Microsoft programs on a daily basis, there’s always something you want to do—and you’re certain it can be done!—but you don’t know how do it.

Have you ever thought:

• “There’s got to be an easier way?”
• Are you overwhelmed by the computer work you need to get done every day?
• Do you feel like it takes too long to get things done in your Office programs but you don’t have the time to learn the shortcuts and new features?

If you answered “yes” to any of these questions then take C4CM’s audio course, “Top 10 Microsoft Office Tips, Tools, Tricks and Shortcuts: From Basic Business User to Power User,” on Tuesday, July 12, 2016 from 2:00 PM To 3:15 PM Eastern.

In just 75 minutes you will learn how to work less AND better by using more of the technology you have at your fingertips.

How Lawyers Can Use Excel: The PowerPivot Add-On & More!

Excel is a tool for Wall Street, right?

Wrong.

Excel is a multi-dimensional tool that is useful in a variety of industries, from accounting to finance to law. Yes, that’s right, there are a plethora of reasons lawyers should use Excel in their practice.

Below are a few suggestions of everyday legal activity that could be made easier and accomplished more efficiently with Excel.

Case Analysis

One of the more important tools in Excel is the PivotTable. Now, there’s a brand new feature—the PowerPivot—that brings PivotTables to a whole new level. First, let’s discuss the features of the regular PivotTable.

PivotTables help organize and analyze data. For example, let’s say you want to organize hot docs by key words in discovery. Or maybe you want to identify key concepts or key witnesses and sort them by priority or some other measure. Perhaps you have a long chain of correspondence for the case and you want to code it by sender, receiver, message subject, etc. PivotTables allow you to take each of these categories and sum, filter, or count their contents. You can take any complex dataset and reorganize it with your own ddesignated columns or rows.

How does this compare to PowerPivot? PowerPivot adds the following capabilities (read more at the Journal of Accountancy here):

• Multiple data sources (pull data from two or more sources into a single report)
• Many types of sources (pull data from just about anywhere into a PivotTable)
• Sets (advanced filtering)
• Large data sources (analyze data that exceeds Excel’s row limit)
• Expressions (advanced functions and time intelligence)

Basically PowerPivot is the new and vastly improved PivotTable. The extra filtering capabilities are exceptionally useful.

Does all this information sound like a foreign language? Take The Center For Competitive Management’s webinar, “Using PowerPivot to Pump-Up the Power of Microsoft Excel,” on Wednesday, March 30, 2016 from 2:00 PM to 3:15 PM Eastern time. 

Case Status Updates

Law firms circulate internally, and to the client, a case status update.

Excel makes this easy by providing a manipulatable database sorted or filtered by client name, county, type of case, date filed, place filed, date settled, opposing attorney, case settlement amount, and attorney fees to date.

At the end of the year, the compilation of all case status spreadsheets will give managing partners the perfect overview of upcoming casework and trials, in addition to closed and settled matters (not to mention, incoming income!).

Casework assignments 

In a similar vein, Excel can expedite the process of assigning cases to attorneys. Excel can be used as a method to effectively organize case assignments and avoid duplication of work effort.

That way, when a senior attorney wants to know who is creating the timeline (in Excel, of course) for his case matter, the information, including the name of the assigned associate and the status of his or her work, is quickly and clearly accessible.

 

Timelines 

For internal reference and trial presentations, timelines are an essential weapon in a litigants quiver. Lawyers involved in complex litigation must have a clear understanding of the chronology of the case.

However, these timelines are also vital to a firm when the case goes to trial—jury members must understand case chronology, as well.

This means a timeline must be both functional and visually stimulating. Enter, Excel.

Excel has the ability to sort timelines by event and date in a meaningful and demonstrative way. Microsoft in Education even provides a tutorial to explain exactly how to achieve this in its article, “Create A Timeline In Microsoft Excel.”

Timesheets

Today, an increasing number of lawyers are using Mac computers and Apple software at the office. Just read the titles of new legal blogs on the web, including Mac Lawyer, Law Office Software For The Macintosh, and Criminal Defense With An Apple.

Even those lawyers, however, are keen on Microsoft products. Take, for example, Esquire Mac’s discussion of billable hour software versus Excel:

“Over the years, I’ve developed a fairly simple but flexible spreadsheet for tracking my billable time. For our firm, this represents the ideal solution at present. I have taken a liking to a few different Mac billing apps out there (like Billings, Involer, Invoice, GrandTotal, and iRatchet) but each of them falls short in one way or another for our purposes.”

No need to purchase expensive billing software when Microsoft Office is already uploaded to your office computers.

In addition, though some firms may have staff or consultants dedicated to case management analysis, for smaller firms, organizing timesheets in Excel can help trend your most significant cases over time.

For example, a legal administrator can organize attorney time by case matter, month, billable hours, or the billing attorney to discover which cases are the most active and which may need more attention, which attorney billed the most this month and which the least.

Access to this type of information will make a firm more attentive to any clients who might be falling through the cracks, and also increase its overall profitability, after it knows where to devote more billable hours.

In the end, Excel has applications in many industries. If Excel is not frequently used in law, it’s because lawyers tend to fear it.

But, help forums and tutorials for Excel are copious online. These days, attorneys have no valid claims to MS-Office ignorance.

So, start small and get familiar with Excel’s massive potential for your firm. After all, the best part about Excel is that you already own it.

-WB

Eliminate Outdated Legal Technology–As Easy As The ABCs

Technology is not only a pragmatic requirement of the practice of law; it is now an ethical one, too.

If your IT Department isn’t already the most integral and important part of your firm, it’s likely you’re already falling behind. Furthermore, if you use any of the following items on a day-to-day basis, your operations are as outdated, as well.

Eliminate some of these machines (and office mores) to get back on track.

“A” for Associates.

Associates are on the decline, and law firm employees on the rise.

Associate compensation models are changing as the legal marketplace becomes overpopulated with a generation of lawyers with very different workplace attitudes and expectations.

Firms are recognizing the growing obsolescence of the traditional lockstep model and are taking steps to rework it or replace it. Firms now have an opportunity to be much more creative in how their attorneys are paid and to use compensation as a way to drive long-term value. To create long-term value and retain good attorneys, a firm first needs to design a strong, coherent, and attractive strategy.

Rather than firing secretaries or de-equitizing partners, Greenberg Traurig law firm has created a new strategy for hiring associates in the form of a “residency program.” Firm managers view this program as a way to attract talented associates without having to endure the costly and risky hiring process. Also, it allows junior lawyers to sign on who may not have made the cut in the first place, reports Law21.

In addition, junior lawyers work case matters without billing their work at the high rates clients have come to expect. Sitting on conference calls and gaining on-the-job training, these “resident” attorneys gain the job experience needed to succeed in the future and sustain life in an over-saturated market today.

Greenberg is simultaneously creating a new non-shareholder-track position called the practice group attorney, similar to the positions at law firms Kilpatrick Townsend & Stockton; and Orrick, Herrington & Sutcliffe.

The age of the Associate is over.

“B” for Binders

Why are you till making copies, printing out transcripts, and creating binders? Sure, every once in awhile, there’s a need for a hard-copy backup binder. But, it’s time to go digital.

Papers can be scanned, digitally stored, text-recognized, and then made searchable to improve the efficiency and cost-effectiveness of your law firm.

Binders are out, and electronic case material software—MyCase, Amicus Attorney, AdvantageLaw, LegalFiles, and OneNote—is in.

“C” for Conference calls

How many people really benefit from conference calls? Already, it’s impossible for more than one person to speak, and—often—people accidentally speak over one another.

Is a conference call more efficient than a memo? Do five people really need to bill the client for the same call?

Conference calls can easily be replaced with a quick person-to-person conversation, memorandums circulated over email, lists distributing work product, or—for the advanced law firm—discussions over a wiki (Learn how to create one here).

Ditch the conference call and develop your social capital at in-person conferences instead.

“D” for Dictaphones

Della may have used a Dictaphone for Perry Mason, but outside the world of black and white television is the real world of iPhones and Macbooks.

Your smartphone, tablet, and computer is capable of recording and even transcribing audio. So why are you still using cassette tape recorders? The Dictaphone should die in a fiery death, the app Dragon Dictation, however, is worth its weight in Silicon.

“E” for E-mail

Experts agree, e-mail is outdated. A meeting-less morning, a conference-call free afternoon, or e-mail-less day goes a long way in productivity for the firm and project deliverables for your clients.

Reading and answering e-mail takes up approximately 28 percent of the average workweek for employees, reports a 2012 study by McKinsey & Company. Communicating and collaborating internally takes up 14 percent of the workweek, and searching and gathering information just 19 percent.

Have you ever e-mailed a colleague who shares a wall with you? If so, it’s time to reconsider your e-mail etiquette and e-mail frequency.

Electronic communication certainly has its advantages. But, its overuse has made e-mail under-perform in comparison to old-fashioned office visits.

“F” for Faxes

Ok, keep your fax machine. But only if it’s paid for or used as a paperweight, museum item, or reminder to what legal assistants had to go through to file motions in the past. Otherwise, stick to e-filings or eFaxing.

You know what’s not outdated? MS Office. Take one of The Center For Competitive Management (C4CM)’s audio conferences on technology integration for law firms:

“Excel Dashboards: Tips, Tricks & Techniques to Communicate & Summarize Complex Excel Data,” Tuesday, January 19, 2016

Do you know how to create beautiful graphs that really convey the message of where the company is and where it needs to go? This webinar will show you how to create useful Dashboards that turn business data into actionable information.

Excel Dashboards are a powerful tool to communicate and summarize complex Excel data. They are designed to draw your audience’s attention so the most important information jumps right out at them and they don’t have to scan the entire page for hours just to get a simple answer.

“PowerPoint 2010: Top 10 Steps to Creating & Delivering Killer Presentations,” Wednesday, February 3, 2016

Are you looking for the quickest and most effective ways to create PowerPoint presentations that attract visual interest and communicate your important business information?

Creating professional, unique PowerPoint presentations is much easier than you think. In fact, in just 90 minutes, you will learn how to create beautifully-designed, visually appealing PowerPoint presentations in just 10 simple steps.

During this interactive webinar, you will learn how to take advantage of the many under-utilized formatting options in PowerPoint 2010 to create and customize visually stunning and effective presentations.

And many, many more!

-WB

Steady Growth or Innovation? What Your Law Firm Can Learn From Microsoft’s Crossroads

Last week, Microsoft Chief Executive Steve Ballmer announced his retirement. And, some sources are saying this is a good opportunity to reboot the company’s disenchanted corporate culture.

Is Microsoft in such dire straits?

Consider 2010, the advent of Apple’s iPad announcement. Microsoft had already created a buzz in the tech community for its mockups of a tablet computer. Dreamed up by the inventor of the Xbox videogame, the tablet folded like a book and its users could sketch directly on the screen.

But, Microsoft waited. And, while the Apple iPad transformed into a worldwide phenomenon, for its turn, Microsoft scrapped the entire tablet computer idea.

According to Steve Ballmer, Microsoft needed to refocus its efforts on the Windows operating system for which the company first earned its reputation.

“So ingrained is Microsoft’s culture of protecting entrenched interests that swinging for the fences is sometimes punished, and so people stopped trying, say current and former employees and outsiders,” reports the Wall Street Journal.

“They say that an outsider CEO may be the best choice to welcome back technologists who think outside the box.”

In any venture, it’s important to decide on a vision. There are two extreme choices in business: (1) invest in innovation or (2) invest in the sure-thing.

For centuries, entrepreneurs have known there exists a trade-off between risk and reward. Too much risk in finding the next, new, cutting-edge technology and your company may be left in the red. However, too conservative and your company may be left in the dust.

It seems as though Microsoft isn’t sure where it should land on this thin, insensitive line of risk and reward. To those law firm managers surviving the recession, do you?

Of course, a tradeoff does not imply one without the other. For law firms, there is middle ground between innovative legal resources and services and traditional practices.

“Whether to manage a company for growth or for efficiency is a classic business conundrum, and the choice isn’t simple,” Shira Ovide reminds us in the Wall Street Journal.

Before you throw out nautical décor and ask I.M. Pei to design your new law offices, consider the following:

1. Is there a large innovation gap between your firm and others in your same practice area?
2. When was the last time you updated your legal technology?
3. What is the average age of your associates?
4. What is the spread of ages for employees at your law firm?
5. What is the type of profile for associates you hope to attract in the future?
6. What is your mission statement?
7. How large do you want your firm to grow in the next 5 years? 10 years?

Often innovative companies attract bright young talent. However, if your youngest associate is in his late thirties, how well will a 20-something tweeting law grad assimilate in your firm?

On the other hand, if your firm is top-heavy, it’s likely your firm is lagging behind in the best latest technology and methods for managing your firm.

If you haven’t yet, it’s important to create a 5 to 10 year plan for:

• Risk Management
• Global operations
• Incorporating technology
• Growth targets
• Leadership training
• Social media/mobile devices

In the case of Microsoft, Mr. Ballmer may scoff making radical ideas come true, but he knows how to make the company green—with money, that is. Since becoming CEO in 2000, Microsoft has become one of the world’s most profitable companies by quadrupling its annual revenue, making about 75 cents in gross profit for every dollar in sales.

Google takes in half that amount.

So, yes, maybe Microsoft’s digital music player was too little, too late (do you even remember the Zune?). And, perhaps Apple’s brand is little a bit more “cool”. But, if slow and stead wins the race, Microsoft is right on track.

Does your law firm strategy match your corporate culture? Learn how to grow your business with C4CM’s audio course: Increasing Revenue Per Lawyer: Creating a Healthy Culture of Business Development.

This information-packed webinar will present best practices used by today’s most profitable firms for creating a vibrant culture of business development, including (but not limited to):

Steps to build client loyalty, manage expectations and generate client referrals

• Identifying and maximize cross-selling opportunities
• How to match your marketing strategy to seniority level
• Making business development a sustainable, ongoing part of your culture

-WB

How Lawyers Can Use Excel

Excel is just a complex calculator that comes free with Microsoft Word, right?

Wrong.

Excel is a multi-dimensional tool that is useful in a variety of industries, from accounting to finance to law. Yes, that’s right, there are a plethora of reasons lawyers should use Excel in their practice.

Below are a few suggestions of everyday legal activity that could be made easier and accomplished more efficiently with Excel.

Timelines

For internal reference and trial presentations, timelines are an essential weapon in a litigants quiver. Lawyers involved in complex litigation must have a clear understanding of the chronology of the case.

However, these timelines are also vital to a firm when the case goes to trial—jury members must understand case chronology, as well.

This means a timeline must be both functional and visually stimulating. Enter, Excel.

Excel has the ability to sort timelines by event and date in a meaningful and demonstrative way. Microsoft in Education even provides a tutorial to explain exactly how to achieve this in its article, “Create A Timeline In Microsoft Excel.”

Timesheets

Today, an increasing number of lawyers are using Mac computers and Apple software at the office. Just read the titles of new legal blogs on the web, such as The Mac Lawyer, Law Office Software For The Macintosh, and Criminal Defense With An Apple.

Even those lawyers, however, are keen on Microsoft products. Take, for example, Esquire Mac’s discussion of billable hour software versus Excel:

“Over the years, I’ve developed a fairly simple but flexible spreadsheet for tracking my billable time. For our firm, this represents the ideal solution at present. I have taken a liking to a few different Mac billing apps out there (like Billings, Involer, Invoice, GrandTotal, and iRatchet) but each of them falls short in one way or another for our purposes.”

No need to purchase expensive billing software when Microsoft Office is already uploaded to your office computers.

In addition, though some firms may have staff or consultants dedicated to case management analysis, for smaller firms, organizing timesheets in Excel can help trend your most significant cases over time.

For example, a legal administrator can organize attorney time by case matter, month, billable hours, or the billing attorney to discover which cases are the most active and which may need more attention, which attorney billed the most this month and which the least.

Access to this type of information will make a firm more attentive to any clients who might be falling through the cracks, and also increase its overall profitability, after it knows where to devote more billable hours.

Status of cases

Law firms circulate internally, and to the client, a case status update.

Excel makes this easy by providing a manipulatable database sorted by client name, county, type of case, date filed, place filed, date settled, opposing attorney, case settlement amount, and attorney fees to date.

At the end of the year, the compilation of all case status spreadsheets will give managing partners the perfect overview of upcoming casework and trials, in addition to closed and settled matters (not to mention, incoming income!).

Casework assignments

In a similar vein, Excel can expedite the process of assigning cases to attorneys. Excel can be used as a method to effectively organize case assignments and avoid duplication of work effort.

That way, when a senior attorney wants to know who is creating the timeline (in Excel, of course) for his case matter, the information, including the name of the assigned associate and the status of his or her work, is quickly and clearly accessible.

In the end, Excel has applications in many industries. If Excel is not frequently used in law, it’s because lawyers tend to fear it.

But, help forums and tutorials for Excel are copious online. These days, attorneys have no valid claims to MS-Office ignorance.

So, start small and get familiar with Excel’s massive potential for your firm. After all, the best part about Excel is that you already own it.

-WB

Learn more about how your law firm can use Excel with The Center For Competitive Management (C4CM)’s guides and webinars:

• Excel Pivot Tables: Shortcuts, Tricks, and Time-Saving Tips to Crunch Data More Efficiently
• Excel Does That? Shortcuts, Tips, and Time-Saving Tricks
• Excel for Financial Reporting: Shortcuts, Tricks, and Time-Saving Tips
• Mastering Excel’s Secret Super Tool: ‘What If’ Data Analysis (2007/2010)
• Mastering Excel as a Database (2007/2010)

New Generation Typing Test For Lawyers: Technology Training at #150WordsPerMinute

It would be interesting to survey exactly how many law firm partners were comfortable working in Microsoft Excel and Office. In fact, it would probably suffice and be sufficiently telling to test them on basic Microsoft Word aptitude alone. Although there is no data to support this supposition, it would be my guess that, in the case of computer programs and law-partner proficiency, very few would pass the bar.

What should be the standard for computer knowledge in the workplace? Does extensive experience in the industry of law make up for a deficiency in information technology skills?

Before the digital age, businesses used the typewriter and hired typists to conduct its clerical work. The majority of clerical jobs were filled by women, which became the rising working class in the late 1800s.

“In response to business demand for trained typists, business colleges, which previously taught penmanship and mathematics, began to offer typing courses,” writes Donald Hoke in his paper, “The Woman and the Typewriter: A Case Study in Technological innovation and Social Change.”

The appearance of the typewriter seemed to serve as a social catalyst, allowing women to penetrate the workforce during a time and in an area where they were marginalized.  

“The entrance of women into certain sectors of the work force and the profound social and economic changes that took place in the late 19th century would probably have occurred eventually even without the typewriter. Nevertheless, they did occur when they did in large part because of the typewriter, and our society has assumed a particular shape as a result,” concludes Hoke.

In a similar way, technology has changed the way law is practiced today.

These days, discovery is filled with e-mail correspondence, social media messages, and time-stamped status updates. Even Facebook is discoverable.

Intelligent e-discovery software is deliberately designed to filter by search terms and key words (even Twitter hash tags) for legal-specific purposes.

In addition, the nature of disputes has changed.

Just this week the news was discussing how workplace policy banning employees from using a cell phone to photograph other employees infringed on “protected concerted activity.” Cell phone and camera phone policies are abound—not just in the office, but also in schools, in most federal buildings, and at law firms.

Furthermore, disputes are no longer he-said, she-said. Litigation involves e-mail chains, spam, pokes, and new-gen jargon. It’s now, he tweets, she tweets. To best understand the client, lawyers must adapt, which involves e-mail communication and Skype phone calls.

Not to mention, the process of filing disputes is now electronic.

Traditional means of practicing law still exist, just with a shiny new prefix. Well, e-nough!

Just like the market shift in the late 19th century with women in the workplace, technology is a beneficial force in law practice—as long as attorneys and firms embrace the innovation.

Unfortunately, many lawyers are still stuck in the past. Their resistance to technology does not make them old-fashioned, it makes them inefficient.

Professionals can no longer pass off blogging, social media, cloud sharing, e-filing, or e-anything as a temporary fad. Nowadays it’s the top-tier lawyers who are lagging behind while the first-year associates band together, open shop, and nab clients with their high-tech expertise in a mobile-app era.

Old-school Law firms who want to compete should start with three, simple steps.

1. Establish comprehensive, mandatory training for associates and staff regarding in-house legal software and tools.
2. Don’t make excuses for law firm partners and senior associates: everybody attends technology training.
3. New hires take a basic computer test during the interview process with a set, minimum performance requirement: again, no exceptions.

The field of law has certainly evolved. And it’s not enough that your law-practice policies reflect changes in the market, your attorneys’ attitudes and acceptance of this change must e-volve, too.

-WB

In-House Counsel And Innovation: The Benefits To Outsourcing Routine Work At “Reverse Auctions”

It’s a breath of fresh air when companies don’t require some sort of catalyst or cosmic shove to spark innovative thinking in the workplace.

One such company, FMC Technologies Inc., has been on the cutting edge of legal services for more than a decade, and only now are other economically-propelled and financially-strapped companies following suit.

An oil-and-gas-equipment supplier for the energy industry, FMC Technologies uses a type of online “reverse auction” to seek legal counsel on various maters. Reverse auctions allow law firms to bid a certain amount for advertised legal services, and then keep bidding in competition with one other to offer the lowest price possible.

“Every lawyer will tell you that every piece of work they do is incredibly important and risky and has to be custom-made, and that’s just nonsense,” said FMC Technologies general counsel Jeff Carr to the Wall Street Journal. “No matter how legally brilliant you are, there is always an alternative.”

And alternative billing arrangements are exactly what clients are seeking these days.

Legal costs for Fortune 500 companies accumulate anywhere from $20 million to $200 million per year, according to experts like Courtney Sapire, chief marketing officer for RFx Legal. RFx Legal is a consulting group that specializes in helping companies cut annual legal spending. According to Sapire, reverse auctions can help reduce legal costs by as much as 15 to 40 percent.

Reverse auctions or competitive bidding is especially conducive to hjgh-volume work, such as tax filings and intellectual-property transactions, whose processes are particularly routine.

“Is it making all of us uncomfortable? Yes. Especially when you start to move away from the more routine sort of work,” counters Toby Brown, the director of pricing at Vinson & Elkins LLP.

Attorneys and legal staff may be concerned, but clients appear eager to embrace this new pricing scheme. Many large companies, including GlaxoSmithKline PLC, eBay Inc., Toyota Motor Corp. and Sun Microsystems, have already used reverse auctions to acquire legal representation.

It’s the exact kind of work that other large companies, including Microsoft and Hewlett-Packard, have chosen to outsource overseas.

Like of competitive bidding, outsourcing allows “routine and repetitive” legal tasks that expensive in-house lawyers are not excited about to be completed more efficiently and affordably.

For example, Microsoft, which houses a $130 million legal budget, assigned its most routine legal work to 80 legal vendors in India. As a result, its in-house counsel was more available for complex research regarding patent conflicts.

In addition, Microsoft’s preferred provider program, involving roughly 50 American attorneys, helped decrease legal costs associated with obtaining patents, which amounted to, on average, $20,000 per patent. Solo practitioners had the freedom to negotiate alternative and fixed fees to significantly reduce Microsoft’s patent costs.

The same small firms and solo practitioners sought by Microsoft are the type of lawyer available for price negotiation in reverse auctions.

Shpoonkle, a legal-aid website launched in March, uses competitive bidding to match customers with individual attorneys or small law firms. The average hourly fee charged to Shpoonkle’s clients is approximately one third of the national average, or $280 per hour, says the website’s founder Robert Niznik.

More and more websites are popping up everyday ready to provide competitive prices for legal services that are typically delegated in-house.

So, are reverse auctions and outsourcing firms a replacement for or supplement to in-house corporate counsel?

“Our own people now are able to spend time on higher value work,” concludes Horacio Gutierrez of Redmond, Wash.-based Microsoft, about the challenges faced by in-house counsel and the outsourcing trend.

“These success stories show you can be innovative.”

-WB

Microsoft Proves in Law And Business, The Best Defense is (Still) A Good Offense

Best settle your patent cases now; the rules are about to change. In its final appeal of a massive $290 million jury verdict, Microsoft argued in front of the Supreme Court that the standards for patent infringement should be loosened to allow more frequent legal challenges and, ostensibly, to promote competition. Strangely, if the law changes and eases the requirements for patent infringement, Microsoft will be one of the first to lose.

The IFI Claims Patent Service reports that Microsoft was approved 3,094 patents in 2010—placing them third behind leaders IBM with 5,896 and Samsung with 4,551. This compared to just 563 patents for Apple, ranked 46 on the same list last year. Of all the recent gadgets, however, it is Apple’s products that stand out. The iPod, the iPad, and certainly the iPhone opened not only new markets in the computer, mp3, and smartphone industries, but created utter obsessions within the techno-elite and new generations alike. 

So after spending $9 billion per year on research and development, why is Microsoft struggling to innovate? Reuters’ investigative team attempted to answer this question. Its Special Report found:   

“Microsoft’s been playing defense for the last 10 years,” said [a] former executive. “They are trying to protect existing revenue streams rather than taking risks. New revenue streams put the old ones at risk, and those old ones support thousands of people in the company. It’s a difficult situation to be in.”   

And again, in 2011, Microsoft is suffering a similar fate of always being the bridesmaid, and never the bride. With $200 million in damages at stake in a Supreme Court Case—Microsoft Corp v. i4i Limited Partnership (No. 10-290)—Microsoft, once again, is on the defensive. But even if Microsoft wins, and the Supreme Court does alter prior precedent for patent protection, the company loses. Microsoft’s 2009 10-Q reveals it has over fifty other patent infringement cases pending, including ten with trial dates in the 2010 fiscal year. Expect these already high numbers to skyrocket once the law changes the standards for patent infringement—Microsoft becomes an easy target for finding loopholes in new legal language. Also, the already measly reward for its large R&D investment plummets, as other companies will start to swipe Microsoft’s creations without fear of prosecution.

In the technology world, maintaining a strict defensive is often called the “innovator’s dilemma.” This occurs when a company concentrates on protecting existing markets as opposed to establishing new ones, and when they blindly follow the adage that good managers keep close to their customers. Instead, success is often driven by the uniqueness of internal management—about getting the right people in your firm, and then properly motivating them (See Duly Noted: Post-Its Show Law Firms How To Stick With It and The Surprising Science of Motivation).  

So, before your firm sets out a legal defense, be sure of its consequences and effects on your other cases and clients. Be careful about clients’ influence over the direction of your legal arguments, but be certain that winning a case does not come at the cost of their future business outlook.  

Within the firm, balance your portfolio of plaintiff and defense suits to ensure litigation trends favoring one over the other doesn’t unravel your bottom line. And, most importantly, when it comes to internal firm management, be sure your partners and senior associates are adequately rewarding risk and innovation on the part of younger attorneys.  

Microsoft’s fate is not in the hands of the Supreme Court, rather its own management decision-makers. Stories surrounding Microsoft tend to focus on turf wars and power struggles. Although not ranked as high in terms of patents, Apple’s corporate culture is about innovation and collaboration, which define success more than numbers.                                                                          

-WB  

Read about Microsoft’s Supreme Court defense here.

Microsoft v. Google And The Economics Of Antitrust

Today, Microsoft filed a formal complaint with the European Commission alleging Google violated European competition law. This move comes an unlucky thirteen years after the date Microsoft itself faced a series of consolidated civil actions filed by the U.S. Department of Justice (DOJ), pursuant to the Sherman Antitrust Act.  Microsoft essentially lost its case against the DOJ and feels Google is owed the same discourtesy. Discourtesy rather than justice is, at least, what prominent economist Milton Friedman would contest about Microsoft’s fate. In the March/April 1999 Cato Policy Report, Friedman wrote the following piece asserting that antitrust laws do more harm than good.

“When I started in this business, as a believer in competition, I was a great supporter of antitrust laws; I thought enforcing them was one of the few desirable things that the government could do to promote more competition. But as I watched what actually happened, I saw that, instead of promoting competition, antitrust laws tended to do exactly the opposite, because they tended, like so many government activities, to be taken over by the people they were supposed to regulate and control.”

Friedman maintains that the computer industry in Silicon Valley is so fluid and changing, law suits and the process of legal precedent is actually slower in policing antitrust than the would-be vigilante competition of the players themselves, if left to their own devices. Because information technology and dot-come markets are defined as being pioneering and innovative, it stands to reason that that monopolies would be broken up naturally by developments in new, smaller hardware, cutting-edge software, and the type of instant creativity that generally characterizes Silicon Valley. Day-end’s invention makes the previous month’s work obsolete.

In America, big business is constantly vying for free-market behavior and zero government intrusion, that is, until its own interests and bottom-line are compromised. In the case of Microsoft, the company has shrewdly though detrimentally discovered how to play the antitrust game. So, thirteen years later, it’s Microsoft’s time to profit from government auspices, outlining six major reasons for their complaint:

1. After acquiring YouTube in 2006, Google implemented measures that impede other, competing search engines from accessing YouTube videos for their search results.
2. In 2010, Google implemented similar measures to prohibit Microsoft Windows smart phones from successfully using and operating YouTube metadata.
3. Google’s attempts to secure exclusive access to “orphan books”—books where no copyright information is available—was denied in a New York federal court last week. European courts, according to Microsoft, should reinforce this ruling that “Google’s ability to deny competitors the ability to search orphan books would further entrench Google’s market power in the online search market.”
4. Google contractually restricts advertisers from resubmitting their data to other, competing search advertising platforms in an interoperable way. This means competing search advertising platforms have less relevant ad data, and thus less revenue.
5. Distributing search boxes distributed throughout the pages of web sites has become a common method by which search engines attract new users. Google contractually restricts—via exclusivity clauses—web sites in Europe from disseminating competing search boxes on its pages.   
6. Finally, Microsoft is prepared to provide expert testimony to attest to the fact that promoting and demoting advertisements has “competitive significance,” and that Google algorithms make it more costly for all other search engines to place prominent advertisements.

Microsoft Senior Vice President & General Counsel, Brad Smith, who, in the name of transparency, wrote the blog post discussing the complaint, also concluded, “Google has done much to advance its laudable mission to ‘organize the world’s information,’ but we’re concerned by a broadening pattern of conduct aimed at stopping anyone else from creating a competitive alternative.”

It’s ironic that Internet access to our “world’s information” represents the true, unfettered version of free market behavior that Friedman favored for the computer industry as a whole. Popularity of a web site, or demand, means that site is placed higher on a list of similar results compiled by a search engine. As demand wanes, so does the site’s prominence in a key-word search. This is what the IT industry has now dubbed as “net neutrality.” In a perhaps not unexpected twist, this is another aspect of the World Wide Web that the U.S. government is attempting to regulate. Soon Microsoft and Google may find themselves on the same side of the courtroom, defending the net from a government-enforced, two-tiered system that would benefit Internet Service Providers as opposed to the operators.            

Between complete federal control and net neutrality, where should the digital line be drawn? In 2011, more than antitrust law is at stake with this question. It seems clear that Microsoft v. Google is just the beginning for large-scale, IT-related lawsuits.

-WB

Three Questions To Ask A Firm Before You Hire Them

In this economy, clients have the advantage of choosing from a wide-range of qualified law firms. Law firms, for their turn, must stay competitive in this tight market to seek out new clients and to keep old ones satisfied. As the industry progresses, it’s difficult to predict whether or not a prospective client will feel more comfortable with a gray-haired litigator, yellow legal pad in hand, or the young power-suit with an iPad 2.

Regardless of your preference on the above, certain technology in the legal field is necessary for law firms of every generation. To ensure a law firm is up-to-date on their legal precedent, you should ensure they’re current on their legal tools. The following lists three basic questions to ask the firm of your choice so that you know whether or not it’s best equipped to represent your interests.

Email.  

If the equity partners at the firm have never sent you a personal email, then it’s time to worry about what other technology they don’t understand. As claims become more and more techno-related—intellectual property disputes, dot-com bankruptcies, and start-up social media suits—so law firms should understand the interworkings of what it’s defending. After being wined and dined, think about whether excuses of “non discoverable communication” or “confidentiality” are just cover-ups for lack of computer proficiency.

 

Ask: Will you please email me the name of that restaurant you took me to? My wife really enjoys a good filet mignon.

Excel.

You wouldn’t hire an accountant who didn’t understand basic MS Excel macros or formulas. Also an expert in its field, a law firm should be able to back up its experience in corporate litigation with, in the least, last year’s version of Excel. If a firm is serious about its own financial tools, it will use the same diligence to protect yours.

Ask: Will you please send my invoices in .xlsx forma? I’d like to forward them to my CFO for budgeting purposes.

Secure FTP.  

FTP sites are certainly not the sole or most secure medium for transferring large document files. But, Trial Transfer Protocols (FTPs) have existed internationally since the 1970s, so it should reflect the firm’s electronic capabilities and basic understanding of the web (there’s a reason it’s called “world wide”).  In addition, an equity partner’s relationship with their Tech lead is telling to their level of respect for the field in general.  

Ask: Do you have an FTP site, and how do you ensure it’s secure? Please let me know when we can have a conference call with your IT manager to discuss this matter.

-WB