1. This is something Google has been working on for some time. Googler (and attorney) Rick Klau gives some of the background here. This wasn’t coded in a rush and released into the wild for comment. Google offerings typically improve consistently over time. “Iterate” is the mantra, I think.

2. Free doesn’t mean “lacks value.” As Ernie Svenson notes, Google Scholar is already quite good, and we have really already paid for the information; Google just presents it in a highly useful and usable format.

3. There will probably be integration with other Google offerings. It doesn’t take too much imagination to think about a mobile version of Google Scholar with an app on Android, Google’s nascent mobile phone OS. Here’s a link to a case on Google Scholar; I sent it to my BlackBerry, and it’s very readable on the small screen. Heck, the base version at scholar.google.com already works well on my smartphone.

These questions (and more) will likely be covered by Denise Howell in the next This Week in Law (Friday at 11: 00am PST; featuring Google’s Rick Klau).

(Update: Here’s a good review of Google Scholar, via Ernie.)

What will Google Scholar mean to the major incumbents, such as LexisNexis and Westlaw? Probably not much in the short run, in the sense that they have been moving upmarket for years (premium content for premium cost; see some of their reaction here). Smaller firms, solos, and thrifty law departments will undoubtedly give it a hard look and watch for updates.

As for other legal research companies? The jury’s out on that. This option, which hits my Gmail account far too often, might need to reconsider the subject line of yesterday’s message:

Starting today, we’re enabling people everywhere to find and read full text legal opinions from U.S. federal and state district, appellate and supreme courts using Google Scholar. You can find these opinions by searching for cases (like Planned Parenthood v. Casey), or by topics (like desegregation) or other queries that you are interested in. For example, go to Google Scholar, click on the “Legal opinions and journals” radio button, and try the query separate but equal. Your search results will include links to cases familiar to many of us in the U.S. such as Plessy v. Ferguson and Brown v. Board of Education, which explore the acceptablity of “separate but equal” facilities for citizens at two different points in the history of the U.S. But your results will also include opinions from cases that you might be less familiar with, but which have played an important role.

This new resource is couched in terms of allowing average citizens to access legal information. Some of those citizens may also work in law firms and legal departments.

I thought this would happen about four years ago. Please consider the “Law 2.0″ references therein youthful exuberance.

”Costs and growth are different sides of the same coin,” he said. ”We will spend money to save money and save money to spend money. We will never be done looking at our cost structure.”

For strategically disciplined companies, cost control didn’t start this year and won’t end next year.

Contrast this viewpoint with a recent look at the state of law firm financial discipline from law.com. According to one industry advisor:

“Law firms were very effective at reducing expenses,” … “Now they are saying, ‘We’ve cut to the bone. We can’t cut expenses any more. Now we need to look at areas we can grow our revenues.’”
“…2010 could be a fairly good year. “Firms are much more efficient. They’re lean and mean and ready to profit.”

From a headcount perspective, some firms may have started to look at the problem. From rates and matter staffing, general overheads, and especially the use of technology, many firms haven’t even started. Their clients are years ahead of them and aren’t slowing down.

So I come out on the Mark Hurd side of the cost control coin: you are never done. Here’s one look at the client waters some large law firms may be sailing into:

This week, The Lawyer reported that the merger has been approved by management. It’s certainly not on a rocket docket: partnership approvals would come in December and the merger would be completed in May, 2010.

If Hogan-Lovells happens, it’s a sign that two strong firms want to move forward aggressively when other firms are retrenching. In the meantime, I can think of a least 3 reasons why I don’t think this is a signal of a bottoming of the legal market or the start of law firm merger-mania:

1. Clients are still trying to cut back, on the number of firms used, and the costs paid to each. There is a lag between law firm work in progress and client demand. Most firms will continue to experience downward pressure.

2. The cross-border work is appealing and often high-margin. But there’s a finite amount and much of it is linked to the global economy. There’s already probably excess capacity for this work for the next 12-18 months, unless two firms match up really well in terms of clients, offices, and areas of strong expertise.

3. Some firms looking for merger partners are doing it out of weakness: to shore up practice areas, fill in for key partner departures, or reverse falling realization rates. Why would a stronger firm want to take on a weak sister when you could cherry pick their best people?

So good luck to Hogan and Lovells. Six months is a long time; the rest of the industry will likely be watching.

You can click on the picture to watch (move the player slider to the 30 second mark if you’re in a hurry):

So there you have it. Two ways to compete for customers with products or services:

1. As the low cost provider.

2. As a segmenter or differentiator.

Moving into the legal space, it’s clear that most large law firms, even with forced discounting, still do not want to be a low cost provider. So they try to differentiate. But clients don’t want pay premium prices for all matters (or for all attorneys on various matters). It’s hard to segment when you are trying to cross-sell or be the firm that a client converges on.

So what to do? The answer takes longer than 30 seconds.