The ABA Doesn’t Understand Free Market Economics

Facing a severe decline in demand for legal services among moderate-income Americans who don’t believe they can afford legal representation, two years ago the American Bar Association convened the Commission on the Future of Legal Services. This august braintrust recently published the results of its deliberations. Its conclusion: Americans need to be educated that they need more legal services.

ABA-Greedy-DelusionalAs Christy Hoop of Hinshaw & Culbertson LLP summarized in a recent JD Supra post:

The Commission suggests that all individuals should have legal checkups “on a periodic basis, especially when major life events occur” such as a marriage, divorce, the birth of a child or those individuals who may be in a situation which may require a medical health directive or a will.

The preamble to the proposed ABA Guidelines for Legal Checkups declares that “The purpose of legal checkups is to empower people by helping them identify their unmet legal needs and make informed decisions about how best to address them.” What the ABA refuses to recognize or admit is that the legal profession is subject to the the invisible hand of free market economics, and Americans already are making informed, rational decisions about their use of legal services. Namely, lawyers aren’t worth what they think they are.

Let us quickly review the basic laws of supply and demand. As described by Investopedia,

The law of demand states that, if all other factors remain equal, the higher the price of a good, the less people will demand that good. In other words, the higher the price, the lower the quantity demanded. The amount of a good that buyers purchase at a higher price is less because as the price of a good goes up, so does the opportunity cost of buying that good. As a result, people will naturally avoid buying a product that will force them to forgo the consumption of something else they value more. The chart below shows that the curve is a downward slope.

economics3.gif

A, B and C are points on the demand curve. Each point on the curve reflects a direct correlation between quantity demanded (Q) and price (P). So, at point A, the quantity demanded will be Q1 and the price will be P1, and so on. The demand relationship curve illustrates the negative relationship between price and quantity demanded. The higher the price of a good the lower the quantity demanded (A), and the lower the price, the more the good will be in demand (C). [Emphasis added]

The ABA Economy

The ABA is essentially a failed cartel or medieval-style guild. While the ABA and state bar associations once controlled prices by controlling the supply of legal services (i.e. licensed lawyers), they essentially undermined their own self-interests by allowing the proliferation of law schools, and by allowing the cost of legal education to skyrocket.

As a result, law schools have become massively expensive diploma mills, resulting in a glut of supply (lawyers) with a cost basis that requires high prices for legal services in order to service law school debt (at best) and the law firm partnership Ponzi scheme model (at worst), which in turn drives down overall demand. In high-end corporate circles, alternative billing arrangements that might lower legal costs (or at least improve the ROI of legal services) have been experimented with for years, but the model has yet to show traction. Meanwhile, the only recourse at the lower end of the economic ladder is the nearly dry well of government-financed legal aid.

Is the ABA Commission on the Future of Legal Services Delusional?

Compounding the legal profession’s supply-and-demand problems is a collective belief that their services are intrinsically worth more than those of other professions. In legal profession navel-gazing blogs — and there are A LOT of them — there is a constant litany of laments about how lawyers can’t live in the style they deserve because non-lawyers don’t understand how much law school debt they have to pay off.

If that’s truly how one feels, be prepared to answer why someone so highly trained still doesn’t understand a basic principle of family budgeting: Don’t incur debt that you know you might not be able to repay (or not be able to live well while repaying it).

The executive summary of the Commission’s findings makes numerous obvious and naive observations, like:

“Many lawyers, especially recent law graduates, are unemployed or underemployed despite the significant unmet need for legal services;”

“The traditional law practice business model constrains innovations that would provide greater access to, and enhance the delivery of, legal services;” and

“The legal profession’s resistance to change hinders additional innovations.”

Yet while full-throatedly recommending impotent measures like the establishment of an ABA Center for Innovation, not one of the Commission’s 12 recommendations even contemplates measures directed specifically at lowering the cost of legal services to average Americans.

TCPA Update: Great News for Plaintiff Attorneys (Not So Much for Telemarketers)

These days it REALLY sucks to be an autodialer telephone system vendor or a telemarketer that depends on one.

On July 10, the Federal Communications Commission released the long-awaited Declaratory Ruling and Order intended to clarify its controversial interpretation of the Telephone Consumer Protection Act’s autodialer definition. TCPA compliance is a significant issue for telemarketers because the TCPA allows individuals to file lawsuits and collect damages for receiving unsolicited telemarketing calls, faxes, pre-recorded calls or autodialed calls.

TCPA Compliance Nightmares

Sorry, Wrong Number

While the TCPA’s autodialer definitions were under the FCC’s review, some marketers thought they were in compliance if they manually dialed mobile numbers on autodialer systems. The Declarative Ruling and Order removes that fig leaf.

Internet marketing law expert David Klein of Klein Moynihan Turco has this assessment and caution about the FCC’s latest move:

“The ruling solidifies the FCC’s expansive stance that dialing equipment generally meets the TCPA’s autodialer definition, even if it is not presently used for that purpose. The expansive regime labels practically every telemarketing device on the market as an autodialer, subject to regulation under the TCPA.

“The Commission’s latest interpretation of the TCPA autodialer definition is broader than ever before. Accordingly, we advise that companies involved in telemarketing should take precautions whenever using automated technology to place calls or send texts to consumers, or face potential liability under the TCPA.”

Red Meat for Plaintiff Attorneys?

Without proof of consumers’ prior express written consent to be contacted, the TCPA provides for either actual damages or statutory damages ranging from $500.00 to $1,500.00 per unsolicited call/message. To put that in perspective, a Manhattan federal judge recently ordered Time Warner Cable Inc to pay a Texas woman $229,500 for placing 153 automated calls meant for someone else to her cellphone in less than a year, even after she told it to stop.

Now, with all telemarketing calls essentially in play, plaintiff attorneys might be further emboldened to pursue actions against deep-pocket companies. Lawsuits have been filed across many industries, including against social networking companies (Twitter Inc., GroupMe), sports franchises (Los Angeles Clippers, Buffalo Bills), pharmacies (CVS Pharmacy Inc., Rite Aid Corp.), travel and entertainment companies (Cirque du Soleil Co.), retailers (Best Buy Co., J.C. Penney Co.) and online service providers (29 Prime Inc.).

Given the proliferation of TCPA class actions and uncapped statutory damages, it’s not surprising that TCPA settlement amounts are hitting record highs. For example, in February a federal court in Chicago granted final approval for a class action settlement with Capital One Financial Corp. and affiliates totaling approximately $75.5 million.

What Corporate Counsels Can Do: TCPA Compliance Oversight

In TCPA cases, the burden of proof is on the marketer to show it obtained the necessary prior express written consent before making marketing call(s). It’s up to corporate counsels to ensure that their marketing colleagues 1) design web registration forms to ensure that they clearly and conspicuously include proper disclosure of what respondents are agreeing to and 2) have a systematic way to capture and retain that consent for telemarketing purposes.

But your oversight role doesn’t stop there because consent under TCPA is fluid and ephemeral.

  • A called party may revoke consent at any time and through any reasonable means;
  • Called parties can provide and revoke consent multiple times serially, and it’s the marketer’s responsibility to keep track whether the most recent consent is valid;
  • Marketers cannot restrict how potential called parties opt-out; and
  • If the phone number has been reassigned, consent must be obtained from the current subscriber.

How Marketing Automation Technology Can Help in TCPA Compliance

Online marketing software solutions like LeadiD capture “lead generation events,” creating virtual certificates of authenticity for consumer telemarketing consent.

To be on the safe side, lead certification records should be stored for at least four years — the TCPA’s statute of limitations for filing suit.

Proof of internet-provided written consent includes, but is not limited to:

  • Website pages that contain consumer consent language and fields;
  • An associated screenshot of the consent webpage as seen by the consumer where the phone number was input;
  • A complete data record submitted by the consumer (with time and date stamp), together with the applicable consumer IP address.

Services like LeadiD also offer visual capture/playback of the consumer’s interaction with the registration form in question.

More TCPA Tips to Come

As a marketer myself, I’m personally invested in TCPA compliance, so watch this blog for future posts on news, best practices and resources.

Is Alternative Small Business Lending Ripe For Regulation (and Lawsuits)?

A blogger with alternative small business lending company Kabbage recently pitched me to write a post featuring her company. I’d heard of Kabbage before and had it in my “future topics” list, so I figured this was the nudge I needed to start poking around.

Alternative Small Business LendingAs it turns out, Kabbage doesn’t need my help to build top of mind awareness or attract traffic to its website. It’s already gotten a big write-up in Forbes, which reported that Kabbage is an established leader in the emerging space and well on its way to a record year. Bank lending to small businesses froze during the Great Recession and hasn’t recovered, especially for amounts in the $25,000 to $55,000 range — the sweet spot for this new breed of alternative lenders. Also, alternative small business lenders decide on applications within minutes, not weeks (like traditional banks). Not surprisingly, the field is quickly crowding with competitors like OnDeck, Prosper, CAN Capital and spinoffs from companies like Amazon, PayPal and Square.

As Competition Grows, Will Scrutiny Also ?

A few things in the Forbes article struck me as potential problems/opportunities for law firms — depending on whether you’re a plaintiff’s or civil defense attorney. Although alternative small business loans are easier to obtain than small business loans from banks, they come at a steep price. On an annualized basis, the interest rate on alternative small business loans ranges from 40% to 60%.

“Some of these guys make used-car salesmen look good,” says [Jay Goltz, an entrepreneur and small-business advocate in Chicago], who calculated that one lender was charging as much as 150%. “I don’t know how any business could grow fast enough to pay off that kind of loan.”

As the Forbes article points out, “with all of that credit available, many businesses have gotten in over their heads because they didn’t realize the full price they were agreeing to pay. The fact that the loans are for short terms can disguise how expensive they are.

As competition grows in the alternative small business lending industry, it will be interesting to see what tactics competitors use to build and hold market share — like high-pressure sales, looser lending standards, derivative markets — and whether state and federal regulators decide to intervene to prevent another credit bubble from forming.

Law Firm Website Redesign: Move Your Standalone Blog to Your Website

Judging from lunch and happy hour conversations at the LMA 2012 annual conference, we’re in for a wave of law firm website refreshes and redesigns. There was a lot of discussion about incorporating features to increase website traffic and visitor engagement, but no one was talking about the single most effective way to do that: moving their standalone blog to their website.

Maintaining a blog separately from your website just doesn’t make business or practical sense.

  • Websites that incorporate a blog component typically perform better and require less time and expense than maintaining two or more content management systems.
  • Your blog allows you to easily publish new content your site on a regular basis, it is built to be search engine friendly, and it is simply easier (and cheaper) to manage one site instead of two!buy
  • It is much easier and less confusing for your prospects and leads to find and engage with you when you are directing them to just one site.
  • You typically don’t change most content on your main website pages, like your attorney bio and practice description pages. By keeping your blog as part of your main website, the static pages of your site benefit from the optimization and fresh content published on your blog.

Don’t Believe Your Website Developer. It Absolutely Can Be Done.

On the Inkling Media blog, Ken Mueller noted:

” Businesses get a website, and then they get a blog….Usually this is done because they don’t know how to add a blog to their site, or their web CMS isn’t blog friendly. If that’s the case, you might want to think about a complete redesign of your site to something that includes a blog, and again, I’ll put in a big plug for self-hosted WordPress sites.

“So why is it a problem if your blog doesn’t reside on your domain? Because you’re sending all the traffic to another domain: your blog. A blog will get heavier traffic than your site, and it’s more likely to have regularly changing content and important keywords, as well as attract inbound links. If that happens on your blog, your website is getting none of the credit.

“And don’t think that URL masking, redirecting, or even pulling the blog in via frames will help. The SEO credit will still go to the blog domain, not your website domain. The goal is to drive traffic to your site and get the SEO credit for it. This is a bit harder to remedy than the first three, but a quick chat with your web designer will let you know what your blogging options are for your site. And don’t take “No” for an answer. I’ve spoken to several businesses whose web team told them it couldn’t be done. If that’s the case, and SEO is important to you, it might be time for a new site (and a new web designer).”

Get Off on the Right Foot

Don’t forget, you don’t even need a “website.” A blog IS a website — a dynamic website. You can have pages on a blog and, with some of the great WordPress themes on the StudioPress Genesis Framework, you can create an attractive, high-impact website with full blog integration.

 

 

3 Law Firm Marketing Lessons from a Guy Who Makes Fiberglass Shower Pan Liners

I’m having a walk-in shower installed in my home, and getting a workshop in branding and word-of-mouth marketing in the process.

When I began the project, I thought all I needed was a plumber and a tile guy. The plumber was a no-brainer — I’ve relied on Wilson Plumbing for years. But I quickly learned that even a small construction project like mine is comprised of a general contractor cobbling together a cadre of independent niche craftspeople — the demo crew, framers, drywallers, concrete pourers, fiberglass shower pan builders and tilers.

The morning after the fiberglass shower pan was installed (and the overpowering acetone fumes had cleared), I went into the bathroom to inspect the progress and noticed a  simple branding gesture that conveyed a bold message. Embedded on the new shower curb under the fiberglass was a plain card that bore just the name and phone number of the contractor in large, readable type.  What it actually said, though, was, “I made this and I stand behind it. If you like it, call me.”

Clearly, that message wasn’t intended for me — it was tiled over soon thereafter. It was directed to other, unknown contractors that would encounter his handiwork and might want to work with him on a future project.

And it worked!

Later that same day the plumber came by, glanced at the shower floor and remarked, “That’s a great pan liner. Who did the work for you?”  I didn’t know; I just pointed to the card. The plumber took out his mobile phone and snapped a picture of it.

Three Key Marketing Lessons

  1. “Marketing” can get in the way. Whenever possible, let your work product speak for itself. Share and promote well-crafted/well-reasoned pleadings and motions, not just outcomes.
  2. Engage with potential clients/referral sources at the times and places their needs are most immediate.
  3. Keep your message simple, memorable and actionable.
What law firm marketing ideas or inspirations have you gotten from unexpected sources?

 

 

 

 

Legal Marketing: What You’re Missing at SXSW 2012

Every spring the social media and entertainment industries converge on Austin, Texas for SXSW (shorthand for South by Southwest), one of the most frantically busy and buzz-worthy conferences of the year.

For all the claims about lawyers as consummate networkers, I marvel that SXSW is not awash in IP, entertainment and small business/startup lawyers. The superabundance of crowded parties, meet-ups, hospitality pavilions and special events are a networker’s dream — start-up businesses, start-up films and start-up bands, all in need of lawyers with specific expertise.

Rocket Lawyer jumped into the networking fray this year with a Sociable Lawyer Premiere Event last Friday to promote its On Call lead referral program. Despite it being an uncharacteristically cold and rainy afternoon, a crowd of young lawyers converged on a Sixth Street bar to connect. I spent a while talking to some first-year associates about their experience with the controversial forms-driven service, and it was clear that Rocket Lawyer was on to something — building and strengthening connections with the current generation of solo and small-firm attorneys who “get it.”

A hidden bonus for lawyers at  SXSW is the free CLE. Yes, you can get free CLE as part of your SXSW admission.  I don’t know when they started, but for the past several years Lommen Abdo Law Firm has run a really interesting CLE track called “Legal Issues in the Music, Film and Emerging Technology Industries”  Talk about a marketing ROI goldmine….

This year the program boasts more than 40 industry leaders on different 13 panels. All SXSW registrants are welcome, but attorneys can register for up to 13 CLE credits and are given preferential access if the session is full.

Tomorrow’s sessions include:

Gimme Shelter from the Storm Clouds

As more products and services move to the proverbial cloud, from shared collaboration, commercial product offerings, and user-uploaded content, new business models are created while extant business models come under attack. This panel will explore the disruption caused by some new cloud-based services and how this disruption is affecting existing industries. For example, who is responsible for liabilities arising from the use or exploitation of content stored in the cloud; should Congress change the law to impose new liability/responsibilities on operators of cloud-based services; what rights, if any, do consumers have to perpetual access to their content in the cloud; can a user transfer their content in the cloud to another device or person? These and other questions will be addressed by the distinguished panel.

The Automobile as Network Node

Automobiles are increasingly connected to computer networks and are used to collect, use and share vehicle-related information. They also provide a delivery mechanism for driving, entertainment and other content and information. This panel will discuss legal issues arising out of and related to the collection, use and disclosure of vehicle-related information and related emerging legal issues of data use in or related to vehicles.

CLE panels later this week during the music festival portion include:

Royalties in the Digital Space: What, Where and How Much Are They?

Identifying, following and actually collecting essential money from a myriad of digital sources is a growing challenge. With the help of sophisticated music accountants, this panel will show what is at stake, and where and how to secure this income.

Licensing Madness: Exploitations a Go-Go

In a world where music is being licensed to promote, enhance, advertise and image almost everything, the deals and protocols are as varied as the uses themselves. The panel will identify uses and review common terms and deal expectations.

Run for Cover: The Future of Cloud Commerce

As traditional music consumer consumption habits evaporate into the cloud, a new legal and language lexicon casts a mighty shadow over the music business. This panel will analyze whether subscriptions and other alternatives present promise or problems in the new music economy.

Any interest in working with me to pitch social media for law firms panel ideas for next year’s SXSW?

Social Media for Law Firms: Free HubSpot Report Offers Trove of Valuable Marketing Data

The best things in social media research are (frequently) free.

That’s certainly the case with HubSpot’s new report ” The 2012 State of Inbound Marketing.” Highlights include:

  • Survey results of 970+ professionals reporting on their company’s marketing strategy and results
  • How to drive more leads at a lower cost for your business
  • Why social media and blogs are the most rapidly expanding marketing channels
  • What to expect from the future of inbound marketing
As an added bonus, on March 1 HubSpot CMO Mike Volpe will be headlining a live webinar to go over the report’s key findings — also FREE.

Or you can shell out $500 for the new report from ALM Legal Intelligence that quizzed 180 law firms, providing anecdotal support for what we already know about social media marketing at law firms.

Straight Talk from General Counsels on How to Win Their Business

Far too much of corporate law practice marketing is predicated on what the firm wants potential clients to know, rather than what general counsels are actually looking for and how they conduct their searches. I came across a gem of a video on the Corporate Counsel section of Law.com that provides a glimpse of what general counsels actually care about when identifying and vetting outside firms.

  • Strong word-of-mouth is a great equalizer; gets you on the short list.

“Be good at what you do. We tend to interview the people we’ve heard about a lot, and we’ve heard about them a lot because they’ve had success in the past. And it doesn’t mean that we’re the kind of company that defers to the absolutely “blue chip” [or] “name brand” in a certain area because that’s an attorney the board will be comfortable with…If you are good at what you’re doing, whether you’re small, new emerging, well-known, we tend to be able to find you.”

Eric Whitaker, General Counsel, Tesla Motors

 

  • It doesn’t matter how good you are if you’re also an ass.

“Can I get along with this person, will they get along with my [internal] clients? Getting along with me is important, but it’s much more important to get along with the clients, because the clients are going to see you in the long term, every day basis. If the people who have to work with you on a daily basis in that transaction can’t stand you, that’s not going to reflect well on me nor is it going to get you repeat business.”

Robert Shives, Senior Director & Associate General Counsel, Fujitsu

 

  • Forget quirky videos and personal narratives; make website attorney bios more search-friendly.

“I absolutely check out bios, because we are frequently vetting new counsel. I look at representative clients, I look at representative matters. One of the things that makes me crazy is when the sites aren’t easy to maneuver. So how you’ve coded your website to be able to sort. Try and do it yourself, as if you’re an outside counsel trying to get to a person with this expertise in this location.”

Renee Lawson, Associate General Counsel, Zynga

 

  • Think rifle, not shotgun.

“One of the things that’s sort of interesting is that a lot of firms describe [themselves] as the everything to everyone. I’m usually looking for something very specific, so if you are an IP/anti-trust/transactional/product liability/labor and employment/estates and trust lawyer – which I have seen – you’re probably not the attorney I’m going to hire. So think about how you’re portraying yourself to the outside world.”

Renee Lawson, Associate General Counsel, Zynga

 

“It’s a credibility issue as well. When one sees that long list of “you’re an expert in every field,” you just pass. You take a pass on that person.”

Megan Pierson, Senior University Counsel, Stanford University

 

  • You’re competing against in-sourcing.

“I hire a lawyer and expect that they’re going to give me 2,000 hours a year for a $200,000 salary — I’m paying them $100 an hour. In reality, if you’re working with me at a high growth company you’re working 3,000 hours a year, so it’s even less [per hour]. My blended rate from law firms for the most part — big law firms — is still $400-$500 an hour.

“It’s simply a situation where, for the most part, law firms have priced themselves out of a whole bunch of work I used to have them do. It’s that simple. When I started in ’99 I would send contracts to law firms, I’d send license agreements to law firms, I’d send some employment issues to law firms. I just don’t do it anymore.”

“If work is going to repeat at all, I’ll bring the expertise  in-house. My in-house teams have simply gotten much bigger, and my outside counsel use has gone down, and it’s a direct result of the economics of it.”

Eric Whitaker, General Counsel, Tesla Motors

  • Billing reviews can be moments of truth.

“I don’t bring everything up with my outside counsel, but I do bring certain things up because we are early in a relationship and I want to set expectations. If I ask you to look at something on a bill, I expect you to look at it, and I expect you to get back to me promptly. And frankly if it even has the slightest appearance of being inflated, wrong, I expect you to say, “I’ve taken care of it,” and I expect you to do it right away.

“If I have to battle for a write-off with you, after I’ve given you the courtesy to bring it to your attention and reviewed your bills that you should have reviewed, you’re not on my list anymore.”

Renee Lawson, Associate General Counsel, Zynga

 

Social Media for Law Firms: Ignite Internal Collaboration with Yammer

On last Friday’s #LegalChat on Twitter, the topic of using social media for internal collaboration came up. Several of us mentioned Yammer as a platform worth considering for large and multi-location firms.

Although the companies are not affiliated, a simple way to describe Yammer is a private version of Twitter.

“Enterprise social networking empowers employees to be more productive and successful by enabling them to collaborate easily, make smarter, faster decisions, and self-organize into teams to take on any business challenge. This new way of working drives business alignment and agility, reduces cycle times, increases employee engagement and improves relationships with customers and partners.”

If you’re open to a SaaS solution for enhancing organizational effectiveness and improving client service, Yammer offers some powerful capabilities:

  1. Connect subject matter experts and facilitate real-time online conversations across the firm.
  2. Create a dedicated team workspace for a matter, a practice area or a cross-functional group.
  3. Use it with, or as an alternative to, a content management system to share, store, and manage documents, presentations, images and videos.
  4. Create a secure external network to communicate/collaborate with clients and vendors — fewer phone calls.
  5. Stay connected through mobile devices — just like Twitter.
I expect data security paranoids will dump on this idea, but as social media-based solutions for law practice management go, Yammer is pretty slick and worth considering.
I’d love to hear from any law firms currently using or considering Yammer.


Law Practice Management: We Have Met the Enemy and He Is Us

Q: How is the “information overload” problem like America’s obesity epidemic?

A: We know what needs to be done to address it, but we’re daunted by the seeming enormity of the task, and too few of us make the effort.

While not as disturbingly graphic as a Dr. Oz episode on belly fat, the following infographic from Mindjet illustrates the negative impacts and costs of information overload, and 11 simple coping strategies we can all implement to help us deal with the volume and complexity of information in healthy and productive ways.