Now turn to 2012. At this time, the Sox are in last place in the AL East, with a record of 12-19. The long streak of Red Sox game sellouts is in jeopardy. According to WBUR, you can now sit in the 8th row of the Fenway grandstand for about $4. Why? Well, late last season, when Boston got mad at a bunch of Sox players for eating chicken and beer in the clubhouse during games, the Sox promised to clean house. But in April, with a new manager in tow, the situation only seemed to get worse. And when Josh Beckett hurt his back playing golf on a team day off, which caused him to give up 7 runs in 3 innings last night, his response was “I spend my off days the way I want to spend them…my off day is my off day.”

Photo credit: Boston.com

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So what does this have to do with the legal industry? Plenty. When you hear people talk about the Red Sox now, you hear statements like,  “they don’t deserve to win” or “they don’t seem to care.” Loosely translated, the Red Sox are not listening to their fans. They’re not acting like they care that people invest their time and money to watch them and cheer them on. They’re not fostering a good relationship with the people who keep them employed.

Lawyers have been struggling with this same issue for years. Survey after survey has identified gaps between general counsels’ needs and what lawyers deliver. The two sides always seem to talk past each other, and lawyers can improve this situation by doing a few simple things. Here they are:

1. Start a conversation – It sounds so simple, and it is. Talk to your clients about what they value, what value you propose to bring to the table, and come to an understanding on how you’ll meet in the middle.

2. Start figuring out how you make money – Look critically at where your costs are and how you can package services in a way that brings you profit and your clients value.

3. Use the tools that are available to you – Billing software, e-discovery, and document automation all help cut the cost of non-legal work that clients have been forced to pay lawyers to do. Cutting these costs will help clients feel better about their bills and help lawyers spend more time doing work they enjoy.

See? Now if the Red Sox would just act like a forward-thinking law firm, the city of Boston would be a much happier place!

Granted, if Dewey is to go under, it will be the largest collapse of a law firm since the economic downturn began. But the issues plaguing Dewey seem to be encouraging a deeper conversation about what the value of a lawyer is and how lawyers, through law school and their practice, can prepare themselves for what is certainly a changing landscape in their profession.

Hence we were happy to see an in-depth discussion of these issues today on Boston’s NPR station, WBUR. Tom Ashrbook, host of On Point, brought in Jennifer Smith, legal affairs writer for the WSJ, corporate lawyer and author on the legal profession Michael Trotter, and professor of law at Indiana University, Bill Henderson. The three of them had a lively conversation about where the legal profession is going, and why, and fielded callers from around the country offering their two cents.

Here are some of the issues they covered:

1. Law firm billing rates have risen to historic highs. Many of the nations top firms feature partners whose rates hover near $1000 per hour. This means the associates under them charge $500 or more. There aren’t a lot of businesses out there who can afford those rates. And general counsels are fighting back.

2. Law schools may not be holding up their end of the deal. As we’ve covered here, a heated discussion has started about what skills students are building when they spend three years in law school. And when those students arrive at firms without some of the skills needed for practice, who is really paying for them to be trained?

3. The rise of technology for doing legal work is important, and lawyers should pay attention. Of course we’re biased on this one, but just as lawyers made room in their practices for email and e-discovery, technologies like document automation will play an increasing role in how lawyers get work from clients and then get that work done.

Needless to say, we’re excited to see how this all shakes out. Especially that last point…

But what if a law firm could hold on to the knowledge and insights those lawyers had accumulated over the years even if a few of them went to another firm? That’s the goal of knowledge management directors everywhere. And when we’ve worked with these forward thinking folks, we agree that document automation is a great way to institutionalize the insight that goes along with legal documents.

One of the benefits of creating templates for documents is that the knowledge associated with each choice becomes baked-in. You can build an automated template that tells the user, “use this choice if A, but don’t use this one in state B.” It’s like having a seasoned partner offering guidance to the drafter every time that document is generated. And that’s helpful, especially when the author of that form is now at another firm down the street.

Just something to think about for all you Deweys and LeBoeufs out there…

1. What’s different about Venture Law Advisors and how does it fit into today’s legal marketplace?

My partner, Charles Knight, has been a startup founder and is an active angel investor, and he always noticed that the phrases “quality business and legal advice” and “reasonable rates” were never used in the same sentence. So he founded Venture Law Advisors in 2009 on the belief that by keeping overhead low, VLA’s business-oriented attorneys could provide a high level of legal and business support to emerging companies under fee arrangements that make sense.

In the last three years, we’ve learned that being different is more than keeping overhead low and offering alternative fee arrangements. Instead, we now recognize that producing commonly-used documents needs to be as efficient as everything else our clients do. Legal services can’t be the broken link. Using highly sophisticated document assembly technology, we now spend less time drafting documents and more time providing our clients the higher value legal and strategic guidance they need.

2. What made you want to launch VentureXpress?

While most of our clients occasionally have unique needs that require customized legal solutions, we found that most emerging companies had the same or similar needs at some point in their life cycle. So rather than re-inventing the wheel each time a client needed incorporation documents, an equity incentive plan, or an employment agreement, we decided to create semi-customizable, yet canned packages of legal products we could provide on a flat-fee basis. We offer those products under our VentureXpress platform.

Our VentureXpress products are not one-size-fits-all products. We selected Brightleaf as our document assembly solution because it allows us a great amount of customization to satisfy most business needs.  And when a client requires a customized legal solution, we can often start working from a VentureXpress product, thereby reducing the amount of time we need to invest in that custom solution.

The VentureXpress products are designed with enough sophistication that our incorporation packages, as an example, are suitable for a startup company that plans to seek venture or other institutional capital. So we think they are better than what you would receive from an online, self-help service, and you get to speak with a VLA attorney.

3. You mentioned Brightleaf. How does Brightleaf allow you to provide your VentureXpress products?

Brightleaf allows us to convert our commonly-used legal forms into web-based templates that adjust and provide different customization options as we build a document for our client. And our lawyers create those templates, not programmers with no legal training. We also use a Brightleaf service called “Leaflets” to engage with our clients and provide them with a web-based questionnaire where they can submit deal terms and party information that either helps us complete their documents or allows them to create documents on their own. This reduces intake time, and most clients who use this service tend to better understand their legal documents.

4. I see that right now people can come onto the VentureXpress site and create an NDA. Where are you hoping to go from here?

We just released our first VentureXpress public legal form that uses Brightleaf’s Leaflets service. This is a self-help website that allows anyone to create their own legal forms for free. Anyone who creates a document using the public legal forms site needs to consult with an attorney before using those documents, but the service is designed to help users create those documents more efficiently. We are using the mutual non-disclosure agreement to generate user-feedback, but we intend to release more commonly-used forms relatively soon. We also have a few other tricks in our bag, but I can’t share those yet.

5. Aren’t lawyers supposed to be slow to embrace new technologies?

Yes, but you guys make us look good.

Aww, thanks Bryan! And thanks for sharing your story!

Exceptionally good lawyer at an exceptionally good firm.  Kudos all around.

About M&A Advisor:  M&A Advisor facilitates best practices in mid-market Merger and Acquisition endeavors throughout the U.S. and abroad.  Through their network of industry experts, they work to identify  and highlight the people and entities that move M&A practice forward.  Their prestigious 40 Under 40 awards are given annually to top innovative professionals in legal and financial professions.

That’s the good news. Here’s the bad:

The numbers above estimate we’ll be adding an average of 7,360 lawyers per year across the profession.  But across our 251 law schools (200 ABA-accredited law schools, 27 unaccredited law schools, 19 state-only accredited law schools, and 5 currently in some accreditation-seeking stage), we’re minting about 45,000 new lawyers each year. 

If you assume a retirement rate of 3% per year (some studies place it closer to 2.8%, but let’s be generous here), you get the following math:

 (45,000 new lawyers) – (7,360 newly created jobs) – (~22,950 retirement vacancies) =  14,600.

That’s 14,600 new lawyers each year…just under a third of the annual crop…for whom there will be no lawyer jobs.   Period.  And that’s based on the most optimistic employment projection we’ve seen in a long time…and doesn’t include the backlog of graduates sidelined by the recession/contraction of the past few years.

Based on last month’s ABA report that the debt load at private law schools had skyrocketed an astonishing 17.6% IN ONE YEAR to $125,000 per student.  (At public schools, it’s up 10% over the same period to $75,000.)  Multiply that by the 146,000 student oversupply schools will crank out this decade and you’ve got something like $20 billion in waste.

Ugh.

 There’s a legendary (apocryphal?) law school saying, usually associated with Harvard, variously attributed to different professors from different eras, recounted in movies and novels. It admonishes 1-Ls to “look to the person on your left; look to the person on your right…one of you will not be here next semester.”

And now, the other one won’t have a job after graduation.

We also think this could have some interesting implications for lawyers who represent these companies. Their seed financing deals could get more complicated and hard to manage. But here’s the best part – Brightleaf can help.

Under the JOBS Act, startups can raise up to 1 million dollars via crowdfunding. That means the company can go out to an SEC-approved website where smaller investors can pledge small amounts of money to the company – say $5,000 or $10,000. This could result in companies raising money from a much larger group of people than they ordinarily would. For a typical seed round, companies may raise money from a group of 10-25 individuals, or even from a single fund where the investors have already pooled their money. But with the JOBS Act, startups could end up with dozens of investors.

What does this mean for lawyers? A lot of papers for people to sign and names to keep track of. But if the lawyer could enter these names into a software that would prepare the appropriate investment document for each of these people, that might save some time, right? Indeed. And this is why Brightleaf has what we call One-To-Many technology. To help you draft those documents that need to go to many people in slightly different forms, like employment agreements, option grants, and yes, angel investor subscription agreements.

We won’t say we knew the JOBS Act was going to happen, but we’re prepared to help lawyers deal with it anyway. Give us a call to find out how.

The ABA Journal reported over the last week on the goings on at TechShow.  Among said goings-on was a rather direct-sounding presentation called, “The Future of Law Practice (And, More Importantly, What You Should Be Doing to Plan For It.)” by Jim Calloway, Director of the Oklahoma Bar Association’s Management Assistance Program.  According to the ABA Journal, Calloway’s thesis is a simple one:

• Macro trends will exacerbate competition in all levels of the legal industry.
• Techology will accelerate that competition from new sources (e.g., LegalZoom).
• The firms that do best in this environment will be the ones that adopt and adapt to technologies.

“Lawyers process information, and information technology is a huge part of our future,” Calloway said. “Those who ‘don’t get it’ may soon no longer be doing it.”

Calloway goes as far as calling out particular “must have” technologies for firms looking to compete:

• Client-collaboration portals
• Conflict-check and client-intake automation
• “Better” document assembly  (“You’ve got to do document assembly”…“The technology is out there and other people will implement it.”)
• Systems that support alternative fee arrangements

Most lawyers admit that these changes are coming sooner or later to their practices and jurisdictions.  Looks like Oklahoma’s “sooner.”

[Okay...that wasn't funny either.]

Trust-E? Maybe they should call themselves Crank-E.

Okay. This actually just happened.

I was just checking a pilot outreach program on a popular, reputable  CRM tool. And when I hit the intake form, my eyes were immediately drawn to the squiggly letters in the (also popular, also reputable) Trust-E user verification box above.

Whoa…whoa…whoa…You kiss your mother with that mouth, Internet?  (C’mon, seriously…you can even almost see between the f and d the apostrophe that makes the intent clear here).

I’ll get over the insult. I guess even a worldwide network of interconnected computers can have a cranky day.

But if this is the first sign that SkyNet is becoming self-aware (just about a year late), I’m outta here.

For the lawyers who work with entrepreneurs, drafting the documents that get startup companies off the ground is a bit of an oxymoron. The documents themselves tend to be simple and straightforward. But there are many of them – often a dozen or more – and the pieces of these documents interrelate in a way that invites mistakes. Couple that with the fact that entrepreneurs need to focus the resources they have (i.e. the founders’ time and money) on building a business, not spending thousands of dollars on legal fees.

As we’ve talked about on this blog, lawyers often don’t make a lot of money getting startup companies formed, so it’s important that these lawyers find ways to make this work easier and more profitable. Here’s where Brightleaf solves both the entrepreneur’s and the lawyer’s problems. Drafting becomes faster (because there are fewer hours billed) and smarter (because the templates for drafting documents prevent errors). This means more value to the entrepreneur, and better work coming from the lawyer. So the entrepreneur can focus on building his or her business, and the lawyer can focus on building a great relationship with the entrepreneur. See? Everybody wins!