Mergers and Dispositions
August 1, 2007 | Filed Under Law Firm Trends, Technology, In the News
It’s been awhile since we’ve looked at law firm mergers.
One reason to revisit this topic is the publication of BlawgWorld 2007. Yours truly has an entry on the “Urge to Merge” by certain law firms; the entire issue can be downloaded here (Three clicks to find my contribution, starting with the “Blawgs” tab on top). It’s a rather large file, but quite innovative in design and packed with a lot of interesting articles, tech answers and solution providers. (See if you can find this weblog on the cover; and even this writer on page two, the “Preface,” after refreshments were served at the pre-launch party eons ago…)
Bringing this subject up to date, the most recent example may be the report that K&L Gates and Hughes & Luce are planning to hook up:
In a company press release, Edward Coultas, Hughes & Luce’s managing partner, said, “We are eager to explore this strategic opportunity for our clients and our respective firms. A true global platform created by the proposed merger would heighten the combined firm’s ability to serve clients in Texas, throughout the United States and around the world.”
There it is again, that word platform. Sound familiar?
The New York Times also had a recent report (Select content) about goings on with US law firms in Europe, focusing on Americans in Paris:
Perhaps the most aggressive hunter has been Latham & Watkins, of San Francisco, which devised an international expansion strategy with McKinsey in the late 1990s, then began talks in 2002 with Ashurst of Britain about a merger, which failed. Hardly had the dust settled on those talks when Latham hired away Ashurst’s entire private equity team in Paris, then it proceeded the following year to raid Ashurst’s Munich office. Last year, Latham snatched up Gaby Eickstädt of Ashurst, one of Germany’s leading antitrust experts. Earlier, the firm pulled off perhaps its biggest coup, hiring 95 lawyers from the Paris office of Stibbe, a law firm based in Amsterdam.
The cherry-pick sometimes appears to be a quicker and more direct way to grow than merging outright.
Recently, mid-sized firms in Chicago and Washington are deciding whether to go-a-courting or go-it-alone.
In an era of the primacy of profits-per-partner and the euphemistically termed “de-equitizing,” law firm mergers seem a bit old-fashioned. We’ll await an intrepid law or business professor to report on what percentage of such mergers add value. That’s a reality check that may be instructive to all involved.
Facebook: Blocking and Tackling
July 29, 2007 | Filed Under Technology
UK’s Telegraph reports that 70% of London firms surveyed are restricting employee access to social networking websites like Facebook.
Megafirm Allen & Overy had earlier followed this trend but then lifted the ban after employee complaints. According to this report, A&O initially blocked access when its “IT chiefs took the decision to block access to the website due to concerns that staff downloading videos from the site would compromise the performance of A&O’s IT systems.”
(Sounds a bit like a classic generic IT rationale. As if Facebook’s the only place a solicitor can download a video…)
A better concern would be whether lawyers are really expanding their professional networks on sites like Facebook–and are they billing their time doing it? Some are already complaining of “social network exhaustion.”
Some technology drives business results; other risks driving us to distraction. Or is it flying?
Headhunting Without Recruiters
July 23, 2007 | Filed Under Technology, Organization
As disclosed here; Socialtext CEO Ross Mayfield is looking to take a step up and recruit a new CEO to replace himself.
Since Socialtext is a company that seeks to bring wikis to the enterprise, Mr. Mayfield is using the web to hunt the best head:
The ability to do this search openly is part of the great culture we have built at Socialtext. I’m going to transition to Chairman & President and focus on growing the top line with my external facing duties and drive corporate and product strategy. CEO 2.0 will bring a strong operations background and have a mandate to grow the bottom line. This is a dream job.
I’m just starting the search and you can help. We should be able to find the right person within our own strong network, so if you can make a strong recommendation please contact me through LinkedIn.
With the many networks available now, the long-standing assertion of executive recruiters about their “proprietary databases” filled with “exceedingly qualified candidates” rings a bit hollow.
If they can really find and pry “A” players out of good gigs that such people are always in, then headhunters may earn their 33-and-a-third. Those are few and far between; I had a staffer from one of the leading legal recruiters leave me a message last week to “call her if we need any lawyers.”
Talk about value added…
Interested parties can contact Mr. Mayfield through LinkedIn; although Denise Howell points out that some members of that network are migrating to Facebook.
Patently Oblivious
July 16, 2007 | Filed Under Technology
The first thing any serious business does it file a patent on its inventions, right?
Maybe not so fast.
The New York Times has an interesting take on the real value of patents.
A profile of research directed by James Bessen (on the faculty of Boston University law school) shows something that many GCs have seen over the years:
The two researchers have analyzed data from 1976 to 1999, the most recent year with complete data. They found that starting in the late 1990s, publicly traded companies saw patent litigation costs outstrip patent profits. Specifically, they estimate that about $8.4 billion in global profits came directly from patents held by publicly traded United States companies in 1997, rising to about $9.3 billion in 1999, with two-thirds of the profits going to chemical and pharmaceutical companies. Domestic litigation costs alone, meanwhile, soared to $16 billion in 1999 from $8 billion in 1997.
This certainly explains why many law firms have moved to expand their IP practices: you bill to file, prosecute, get the patent, watch for infringers, send out cease & desists, and file again (only this time it’s a lawsuit). Then you wade into discovery unlike anything you’ve ever seen, and likely settle at some point.
Meanwhile, has the client done anything to actually monetize the patent?
For some inventions, licensing may be a better option.
It may be time to add a ROIP metric to the pre-filing patent review process: articulating a realistic calculation of the likely return on intellectual property.
Until then we know who always wins.
Avvo Thyself
June 5, 2007 | Filed Under Law 2.0, Technology, New Services
After a 16 months in stealth mode, venture-backed (to the tune of $14 million!) Avvo pulls off the veil. For a long time the home page didn’t say much, beyond this teaser:
However, we can say that we are dedicated to helping consumers better navigate the highly confusing legal industry, and we are building something that no one else has built before.
Drum roll…
It’s a lawyer ratings site. On steroids.
CNET has the details, with a lot of prominent lawyers given some not-so-great ratings. The local Seattle paper has more, including an explanation from CEO Mark Britton. He notes that Avvo goes beyond Martindale-Hubbell, FindLaw and AttorneyPages:
… Britton says there is “no established brand” that attacks the problem on behalf of the consumer. And the 40-year-old former attorney at Preston, Gates & Ellis notes that Avvo is different because it uses a mathematical model — pulling information from attorneys’ Web sites, state bar associations and other public databases — to determine which attorney is the best in his or her practice area.
I want to think about this, and noodle around the site a bit. It’s a beta (Whatever that means anymore).
There will certainly be additional content as Avvo builds out the site. Probably a link to local search, and allowing lawyers to add content. The Avvo blog hints at this. Part of the pitch to the VCs had to be “Zillow for lawyers.”
At first blush, you wonder if legal ratings might be better targeted at the corporate market rather than consumers. Some are working on this now. (And I’ll give a hint that it relies more on real people than math).
Joe Sixpack typically interacts with lawyers in divorce, personal injury, and the occasional will or trust. Do these areas need complex algorithms? Sometimes this works in my area.
People do need help navigating the maze that is the law and in finding lawyers when they need them. They also need help paying for them, which has led to the expansion of pre-paid legal plans.
We learned in the last few years to Google ourselves to see what’s out there on the Interweb. When I Avvo’d myself this morning I was told that it hasn’t yet crawled its way to the Midwest.
Thank goodness.
Good luck to Avvo. I’d like to see more VC money in the legal space.
Update: (Also good thoughts on Avvo from Kevin O’Keefe and Carolyn Elefant).
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