Now quality, in the modern sense, is not simply the absence of defects. Instead, it reflects the user’s total experience with the product or service, including the costs, the ongoing service, and more. Renting a car from Hertz is a high-quality experience because they usually get your name on the board and you can get your vehicle quickly–it’s the same Ford that’s offered by other car rental companies. The services of your cable company usually are not a quality experience, considering you’re put on hold for twenty minutes in order to schedule an appointment that keeps you waiting for the cable guy for four hours.

So, is it possible to create the iPhone of law? You may respond, “our firm already is the iPhone of law.” Maybe a few of you are. But we recently surveyed in-house counsel. Twice as many said their company delivered higher quality to their customers than their law firms delivered to them. Again, maybe there are a few of you out there, a small segment.

Law traditionally has defined quality as most professional services define it–as a description of the provider. Ask most lawyers what quality is, and the answer will be a combination of a Potter Stewart-esque “we know it when we see it,” plus a detailing of their credentials, level of effort, absence of defects, and their anticipation of low probability events. Lawyers will sometimes talk about quality in terms of outcomes, but usually only when the outcome is good. When the case is lost, the deal goes south, or the derivatives go bust, lawyers distance themselves from responsibility even though that broader success is almost certainly what the client has in mind by quality.

Law has undergone a sea change, different from any other market for professional services. With the rise of the legal department, we no longer have the classic information asymmetry between the provider and buyer of professional services. As such, we are on a quick march to a more modern, complete notion of quality in law.

Rather than jump ahead to propose that definition, let me suggest that the way to get there is to follow the iPhone approach. Let’s start by looking at the three key steps Apple followed in creating the iPhone

1. Apple focused intensely on the user experience. It evaluated different phones and PDAs to learn what people liked and disliked. It studied whether people were using their phones for web browsing, email or voice services, or other applications. It looked at demographics and who was most mobile, who would use first. They didn’t just take people’s input as static, but tried to skate to where the puck was going to be based on anticipatable changes and what looked like unmet needs. While input came from many places, the decisions on what to prioritize came from one person with a unifying vision–Steve Jobs. In law, this might mean really focusing on a matter or a process. Is it about avoiding a problem or creating opportunity? How will people actually respond to the incentives provided? Does cost or delay create its own set of problems? And it will certainly mean moving away from the false notion of consensus as the mechanism of achieving excellence.

2. Apple really pushed the technologies. The screen resolution, network performance, typing interpretation, screen resizing and flipping, are all pretty remarkable. But the technologies are not there for their own sake, but in support of some aspect of the user experience. The technologies in law are not so sophisticated, but surely we can start to better understand how to use document automation, or collaboration, or more sophisticated search. We can use the technologies of connectivity to be closer to clients and better understand their issues. In the last generation we figured out spell checking, e-mail, and browsing, so none of this is that hard.

3. Apple worked with partners, they leveraged their ecosystem to provide complementary capabilities. No one has ever accused Apple of suffering from excess humility disorder, so the way they work with partners can be aggressive and in some cases exclusionary. But nice or aggressive, they are always mindful of their partners’ capabilities, and thoughtful of how those capabilities can enhance the customer experience. It’s never only about Apple. In law, this would mean lawyers thinking more broadly about all the aspects of the client’s world, and how their objective can be achieved, focusing on the outcome, and how to define the lawyer’s task in furtherance of it. A document, even a perfect document, is only a very small part of that solution.

Why is all this timely? Because regardless of what anyone would like, most companies are going to cut legal spending by at least 20 percent in 2009. If that cut happens in the absence of a thoughtful definition of quality, it will cause genuine harm. If that cut catalyzes a more sophisticated view of quality, it will probably do us all a world of good.

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Solving problems outside your comfort zone | 43 Folders
Solving problems outside your comfort zone

Merlin Mann | Oct 10 2007

I sometimes think that one factor in success as a business or as a human being has a lot to do with what kind of problems you’re comfortable solving — and how you get better at addressing the stuff that falls outside that comfort zone.

History is littered with revolutionaries who couldn’t run the country they’d overthrown, Generals who’ve insisted on re-fighting the last war, talented programmers who were promoted to becoming ineffective and very unhappy managers, and, of course, there’s the countless companies that just couldn’t make the leap when technology or cultural change rendered their comfy old business model moot.

Seems like there’s a thread here that’s worth thinking about.

How do you get better at knowing when you’re trying to solve the wrong problem?

It’s something I’ve been thinking about a lot lately as I take what had been mostly a hobby and try to “Go Pro” with it. For me, that’s meant a lot of stumbles around moving from being a one-man show into what may eventually become a small company who knows?. I’m finding it really challenging to stop solving the problems I’m comfortable solving, and to ask for and accept help with the stuff I suck at or that doesn’t represent the best use of my time.

I think this applies to almost everybody, from the time they’re born, right? You figure out a few things, you do some informal experiments with reality, and then you try to suss out the patterns that won’t get you hit by a car or carted off to jail. But the old patterns almost always stop doing the trick at some point or in some unexpected context. For example, that bawling and tantrum-throwing that got you a hug in kindergarten may not endear you to your company’s board.

The best advice I’ve gleaned so far is to try and stay cognizant of diminishing returns. Just because I know how to do basic sysadmin work doesn’t mean I’m the best person to work on it. And conversely, just because I loathe the idea of becoming a “manager” doesn’t mean I can afford to put off learning the skills forever.

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Transnational Law Blog: Now is the Time for Law Students to become Pioneers in the Legal Blogosphere
We echo Mr. Bests sentiment that “blogging for credit” should be an essential component of a legal education. My previous post “The Law Students Role in Cyber-Scholarship” explicates reasons why law students should blog and are blogging. According to Mr. Best: [N]ow is the time for law students to become pioneers in the legal blogosphere. Law students who create sophisticated and authoritative blogs will be laying the foundation for legal scholarship in the 21st century. Eventually future law students may consider starting a blog to be as valid as joining a law journal.

Best pointed out that law review articles about the recent Supreme Court ruling in Hudson v. Michigan will not be available for at least a year. However, during the interim, practicing attorneys are attempting to understand, interpret, and apply the ruling; consequently, they are turning to online media for insight, debate, and expert explication. An attorney who relies on the traditional forms of legal publication will have to wait for a year to learn what the experts think. And when the law review articles finally begin to come out months from now, how many of them will have practical value? Some no doubt will be helpful to legal practitioners, but many of the articles will be esoteric and arcane, and some will already be outdated.Best posited that a law student could devote an entire blog to documenting the legal repercussions of the decision. “This blog would become the online authority about the case and its ramifications.” The author of the HvM Blog would analyze court decisions that relied on Hudson; publish articles and link to blog posts by professors and practitioners; link to online conversations about the decision; and follow resultant legislation. “If done well, an HvM Blog would provide immediate benefits to the entire legal profession. Prosecutors and defense attorneys across the country would rely on it as a resource, and judges might even cite the blog in a court opinion.”

Since Best is one of the first and the few law students to receive academic credit for blogging, we look to him for direction in this area. He said, “If law students are inspired by these ideas and create their own legal blogs, they should attempt to get Independent Study credit. This would require finding a faculty sponsor and getting approval from the administration.”
   

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Transnational Law Blog: The Law Student’s Role in Cyber-Scholarship
A significant number of these gatekeepers in the legal community that have been “routed around” are law students working tirelessly on a law journal. However, as Balkin points out, the blogosphere and Social Science Research Network (SSRN) will not displace the old gatekeepers but it will generate new ones “that partially supplement and partially compete with them.” The gatekeeper in the form of a law student will not be left behind in a cluttered, windowless room reading articles by law professors and cite checking. Quite the contrary, law students are an active part of the blogosphere and reap just as much benefit from the forum as anyone else and their commentary creates a larger butterfly effect than it ever did before.

The blogosphere presents law students with an opportunity to directly engage legal scholars about issues confronting them in their studies and everyday lives. It allows students to interact with not only the professors at their school but also professors at other law schools. That is, the blogosphere allows students to interact with a larger array of experts, including professors that most of them would have never had the chance to engage simply because they were precluded by their LSAT score, GPA, or they did not make it onto a journal. Most importantly, the oppotunity presented by the blogosphere to interact with and learn from professors creates a dynamic environment that will undoubtedly compliment and possibly subvert the Socratic method.

Balkin said in his essay that links, page views, and downloads of SSRN articles will “gradually be layered on top of existing methods of assessing quality and generating scholarly reputations; and they will, over time, merge with and influence them. Someday hiring committees may pay less attention to journal placements and more attention to page views.” If this is true, who will be a large portion of the multitude viewing pages and downloading SSRN articles? Does it even need to be said? What better way will there be to assess a professor’s accessibility and effectiveness as a teacher than by measuring his or her page views and the opinions expressed on the blogosphere of his or her work by law students?

In response to Balkin’s essay, David Luban at Balkinization said that if Balkin is correct about the routing effect of cyberspace, then the role of the law journal gatekeeper will shrink dramatically and “the result may be a downward spiral in quality, importance, and attractiveness of the law reviews, both to authors and to editors.” Luban further states that the decline of ambitious law students attracted to the prospect of working on a journal and the reluctance of respected scholars to submit articles that are “disconnected from the flow of real-time political and legal events” caused by the pull of cyberspace is good news to some people in the legal academy.These are the people who have always bridled at the idea that law students rather than peer reviewers should decide what counts as meritorious scholarship. I have never taken this problem seriously. Comparing the quality of articles in the top student-edited law reviews with the quality of articles in the top peer-reviewed philosophy journals (my own scholarly point of reference), I have never been able to detect superiority in the peer-reviewed philosophy journals. By and large, I think that law review editors – at least at the top law reviews, where the editors have an embarrassment of riches to choose from – have been pretty good gatekeepers.Ethan Leib at Prawfsblawg wrote a riposte about the above quoted passage calling it an “astonishing claim”. Leib expressed that peer review produces scholarship that is more “important and ground-breaking” than anything found in the best law reviews. “Few tend to think it is a good thing that second-year students are the gate-keepers to our most important research vehicles — and I doubt very many think it makes no difference to what gets published in the ‘top’ journals.”

However, I think there is a subtle point here that is being missed by Leib and Luban, which is that law school is intent upon training lawyers. The quid pro quo of being published in a law review is that law students get to work with the latest manifestation of a great legal scholar and the scholar gets published in a reputable law review. The process known as “journal” is a means for the next generation of legal scholars to hopefully acquire some of the skills they will use in their own scholarship. Yet, as Balkin has pointed out, cyberspace threatens to change all of it.

The blogosphere is an environment where anyone with the initiative can learn from today’s most respected whatever and have an opportunity to share their own whatever with whomever cares to stop by. Perhaps Thoreau summarized it best in Walden when he said, “I had three chairs in my house; one for solitude, two for friendship, three for society. When visitors came in larger and unexpected numbers there was but the third chair for them all, but they generally economized the room by standing up. It is surprising how many great men and women a small house will contain.”

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Blawgs for Lawyers, Attorneys and Law Firms Internet Marketing

Lawyers practicing for 4 to 5 years often feel trapped in their large law firm. A new condo or house, new car, and a lifestyle conducive with being a successful young lawyer requires a regular check and steady work a large law firm feeds you. The fear in leaving is that you’ll have no clients. God knows, nothing in law school prepares you to market as a business entrepreneur.

Blogs have changed all that. A lawyer can leave a large law firm, start a niche law blog on their area of expertise, and have more than enough good paying clients inside of 18 to 24 months. Sure, there’s going to be some belt tightening during this time and likely a line of credit from a bank (they’re happy to loan money to professionals with a work record). But you’ll be out doing what you love with your own clientele.

And I’m not talking of blogging every day or hours at a time. Anyone that tells you that’s required is nuts. I’m talking a blog post or two a week about something you read elsewhere, often linking to existing blogs on the topic so as to draw attention.

You’ll first start picking up clients from the search engines, then people reading on the subject seeing you cited elsewhere, then people seeing you at conferences you were invited to speak as a result of your blog, and then from folks seeing you in the trade and mass media whose reporters contacted you because of your blog.

You’ll also be using your blog as a business development tool in talking with prospective clients and referral sources. You’ll tell these these folks to look at your blog to size up your skill, passion, and expertise in your of expertise. You’ll get their email so they can be subscribed.

No theory here. I talk to lawyers each week who are leaving their firms and starting their own firm. Based on the blogging success of other lawyers, they are going to start their own blogs to bring in the new work they’ll require. And it varies from consumer and small business work to work for sophisticated multi-national clients. ….

You guys on the fence as to whether to make the jump from the large firm, ask around. You’ll find that though it requires some work and gumption, it’s never been easier to market yourself and establish your own client base.

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» How to Check E-mail Twice a Day… or Once Every 10 Days
I have found that people will generally expect you to respond as quickly as technology allows you to receive their e-mail, hence the permanent ADD of most Blackberry owners.
I have one friend, a uber-successful mechanical engineer, who received a Blackberry e-mail from his boss just as he my friend got on the NYC subway with me at 9pm on a Friday. There was no reception, so he responded as soon as we got off 4 minutes later. His boss had already left him a voicemail indicating that they would need to “have a serious talk” the following Monday about his lack of response, and that the head boss was livid and threatening to fire him.
It’s a sad state of affairs and an all too common problem. This culture of immediacy needs a severe backlash.

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Sky Reporter Home: Stories, mini-documentaries, slide shows and short films from Arthur Kent
Karzai promised the forum he would fight corruption. Meantime his Attorney General, Abdul Jabar Sabet, has yet to answer for the violent police raid he ordered two weeks ago against Tolo TV, the country’s leading source of independent news. Seven reporters were detained and beaten. Karzai has not commented on the raid. His information minister, Karim Khoram, is formulating ways to use a new censorship law to further reduce coverage critical of the regime.

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If I go to Google to perform a search and Google sends me the results; Google had to pay for the bandwidth they used to send me the search results, and I have to pay for my bandwidth in order to receive those same search results. My observation is simply that the same information got charge twice; once at the sending end, and once at the receiving end. Bandwidth had to be used to send it, which Google paid for; and bandwidth had to be used to receive it, which I paid for. That is currently the normal way information is charged on the internet, every bit or byte,which ever unit you prefer, is charged twice.

Now those against Net Neutrality are proposing that a third charge be add to every bit or byte in transit between the sender and the receiver, and who will pay it is unclear. But, what will we gain if someone does pay it? It has been argued that the money is need in order to build out the internet further, and with greater capacity. But, what assurances does anyone have that the money will be put to that purpose. My DSL provider currently does not provide me with the all bandwidth I am paying for, in fact Americans have horrible speeds compared to citizens of other country. So, how can I trust someone to give me what I am bargaining for, when I don’t think I’m getting now?

Current as I am writing this article there is a case in Federal court Verizon v. Vonage, supposedly centering around patent infringement. But, I think it has to more with the threat Vonage possess to Verizon monopoly on telephone calls. If Net Neutrality were to disappear then Verizon could just charge Vonage or Vonage customers for using Vonage’s service on Verizon’s DSL lines. While simultaneously offering a Verizon branded VOIP service which would not be subject to the same charge.

The rebuttal would be that Vonage’s volume of data is so much greater that they should be made to pay because they are getting the benefit of the lines. But, there is a fallacy with that argument and that is that the benefit is only one way, the owner of the dsl line who has put it to this use, VOIP, is also receiving a benefit. I believe that the purchaser of bandwidth has the right to use it however they chose. This third charge if allowed would in effect dictated consumer consumption away from most successful, most useful, and toward the less successful, less useful. It would punish merit, and reward the inept, over all causing the market to become less efficient.

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Law.com – N.Y. Lawyer Misconduct Fund Braces for Surge

N.Y. Lawyer Misconduct Fund Braces for Surge

‘Catastrophic losses’ in single case cause concernJoel StashenkoNew York Law Journal
April 16, 2007

Dishonest attorneys prompted the awarding of $7.1 million in 2006 from the New York Lawyers’ Fund for Client Protection, which warned Thursday that the fund is likely to start seeing claims from the largest case of lawyer theft in its 25-year history.

Last year, the fund paid out $1 million less than the $8.1 million awarded in 2005. The average awarded annually over the last five years has been just over $6.3 million. (The report is available at www.nylawfund.org.)

See the 2006 Annual Report and highlights from the report.

Officials say the fund’s finances are “very strong,” but claims for reimbursement from clients defrauded by Andrew F. Capoccia and two attorneys working for him in his debt-reduction practice could total $5 million to $6 million alone, although the claims might be spread over more than one year, said Timothy J. O’Sullivan, executive director and counsel to the fund. Several hundred, and possibly thousands of clients, may seek help once federal authorities distribute restitution payments, he said in an interview Thursday.
……………
THEFTS FROM ESCROW

While trying to anticipate a new challenge, the fund said an old problem — the theft of money kept in escrow by lawyers for downstate residential property purchases — continues to plague the system, though to a somewhat lesser degree in 2006 than in 2005.

Sixty-two of the 147 awards last year went to cover $2.9 million in real estate escrow losses. That was down from the 116 awards totaling $5.2 million the fund paid for escrow losses in 2005.

The escrow loses are almost exclusively a New York City and Long Island problem. Sellers’ attorneys there typically hold down payments for residential properties, often as much as 10 percent of the purchase price. Upstate, down payments tend to be much smaller and brokers usually hold the money.

A New York State Bar Association committee chaired by Ira S. Goldenberg of White Plains has been working for more than one year on a study of the real estate escrow process and ways to better protect clients’ money.

Alter said the theft of real estate escrow, which has accounted for 36 percent, or $44.8 million, of all payments from the fund since 1982, is “certainly not a decreasing trend.”

“It is not easily addressed,” she said Thursday. “Lawyers and clients, they get used to doing it one way and it’s often very hard to convince people to put in some safeguards and to change the practice. Most lawyers are good and honest and the honest ones don’t want to change and their clients don’t want them to change because it becomes more complicated.”

The Nassau and Suffolk county bar associations have also been studying real estate escrow practices.

In its annual report, the fund called for the adoption of a court rule requiring the transfer or protection of escrow funds held for clients in instances where attorneys have been suspected of or disbarred for misconduct.

Alter and O’Sullivan emphasized that only a miniscule number of lawyers are involved in dishonest acts that lead to awards. In 2006, 35 lawyers were responsible for the $7.1 million in reimbursements. There are about 229,000 lawyers in New York state.

Alter added, however, that every “blood-curdling” instance of lawyer dishonesty discredits the profession.

“It is something so far from what we are expected to do or how we are expected to behave,” she said.

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You know this is getting serious when the ABA has taken notice of second life in it’s writings. Below is an excerpt from an article I found on the ABA Journals website. I may just have to publish my own Second Life paper that I’m working on.

Travel into Second Life––the virtual world where lawyers are having fun, exploring legal theory and even generating new business

By Stephanie Francis Ward

Beathan Vale was concerned about his local court system, which had only one judge.

As a member of the Confederation of Democratic Simulators, he took an active role in the development of his local government in the community of Neufreistadt. Ideally, Vale believed the community’s judicial branch should be modeled to resemble the U.S. Supreme Court. But its lone judge, an English barrister and fellow confederation member named Ashcroft Burnham, favored an English common-law approach. Burnham also got to personally select the court’s new appointees, and the lack of oversight didn’t sit well with Vale.

Ultimately Vale prevailed. Neufreistadt rejected Burnham’s court scheme—and the idea that partici­pation be limited to lawyers.

Both men meet on a regular basis to discuss—and often debate—the direction of Neufreistadt’s legal system. Yet they have never actually seen each other in person.

That’s because Neufreistadt isn’t an actual town, and Vale and Burnham aren’t real people. While they do exist, they do so within the realm of virtual reality, in an expansive cyberworld called Second Life.

Launched in 1999, Second Life is an animated, three-dimensional virtual world run by a privately owned com­pany called Linden Lab, based in San Francisco. Its investors include Amazon.com founder Jeff Bezos. Anyone at least 18 with a computer and a high-speed Internet connection can join, and millions have—about 3.3 million at press time, with more joining every day.

Among this growing group of participants are people who live as lawyers in both real life and in Second Life. They are drawn into Second Life for reasons including rainmaking and nation-building. Others say they are attracted by the myriad legal issues arising from—and existing within—this expanding alternative universe.

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If accurate, this would mean that some 200,000-230,000 active Second Life users are on average currently spending more on their in-world experience than any existing online world by far. (For comparison, a World of Warcraft subscription is but $15 a month, and that’s money paid to the Blizzard/Vivendi, not user-to-user.)
To summarize Tristan Louis’ conclusions, Second Life is relatively sparse according to its amount of active users, but absolutely economically lively based on the average amount of cash trading an active user’s hands.  Furthermore, even though Second Life doesn’t have an enormeous amount of active users, Louis predicts that that’s all going to change:

[I]t looks that, under the most conservative growth rate, we will see 3.5 million users registered and over 600,000 using the service by the end of April 2007. Under a liberal interpretation of the data, those numbers would shift to 9.6 million and just under 7 million. However, in the most likely case, it is probable that there will be 7.2 million users registered with 1.6 million logging in over the previous sixty days. Not too shabby.
“Not too shabby,” Tristan Louis concludes, but he also advises his readers “to go with the most conservative estimate because [his] data set is still relatively small. Even then, this type of growth mirrors some of the growth patterns we’ve seen in the early days of the commercial web and seem to support the contention that LindenLab is going to be a very strong player in the future.”
In response to Tristan Louis’ analysis of Second Life’s economic situation, Tateru Nino analyzed his analysis, ultimately judging that although many of the user-to-user transactions aren’t meaningful, there is still significant economic activity:
The way money moves in Second Life with tip jars and alternate accounts and refunds means that probably about half of the value given is double-counted. That would leave us with roughly 75% that we could count on, but let’s go the highly conservative route and say a mere 40% of that figure represents actual meaningful transactions, where there’s a net change in the distribution of funds that is in line with the stated figure. Averaging out Tristan’s weekly samples for December 2006, and then applying our own conservative 40% figure to it, we get a daily movement of L$ equal to $269,848 USD.

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And it’s all on camera, too. But lest you think Kline should be sent back to law school — where they teach that class about how it’s a bad idea to sue your own company for nonexistent intellectual property violations — remember not to believe everything you see on television, YouTube or even a Coke Web site.

The Law Blog was skeptical — we don’t run across a lot of practical jokes involving lawyers — until we read this piece in the Fulton County Daily Report. According to the story, the four lawyers used in the campaign are indeed all real: Michael J. Kline, a senior litigation counsel for intellectual property at Coke; fellow in-house lawyers Elizabeth Finn Johnson and James M. Koelemay Jr.; and Dalton, Ga., attorney Robert A. Cowan. YouTube clips of several commercials can be found along with the Daily Report story.
After Coke decided to run with the litigation theme, James Dudokovich, marketing counsel for Coke and one of those in on the joke, set about to convince six of Coke’s in-house attorneys and two outside lawyers to offer legal advice to a pair of brand managers who wanted to sue their own company.
The video clip involving Kline starts when one of the actors says, “So, do you think we as the Coke brand would have a case against the Coke Zero brand because they’ve infringed upon our taste?” There’s a long pause, while Kline suppresses a smile. “It’s a novel theory.”
Johnson’s reaction is no less funny. “You don’t have valid claim” she shouts.
“To be quite honest with you, these guys came across as very legitimate,” Kline says, recalling that the actors wore company ID badges. Though he later got suspicious, he says, “They were pretty good at selling a ludicrous proposition.”

The legal theme doesn’t stop with the video clips. The Coke Zero Web site offers surfers the opportunity to “Sue a Friend” for various forms of taste infringement, including ringtone theft and using the same pickup lines; it also offers a “Ruin This Man’s Day” button, by which viewers can electronically harass an image of an already harassed-looking lawyer as he drafts litigation that would force Coke Zero to “stop using real Coca-Cola taste.”

The goal of all this legal shtick: to revamp Coke Zero’s image. The drink has a new black label and is being marketed toward men in the 18- to 34-year-old age bracket — men who might not drink Diet Coke because a “diet” drink is perceived as feminine, but who could be attracted by the humorous marketing of the calorie-free Coke Zero.

Susan McDermott, a spokeswoman for Coca-Cola North America, says that when the drink first launched, ads focused on selling a brand image and the drink’s “personality,” then began looking for a way to show that Coke Zero offered the taste of real Coke — without the calories. “As they looked at different ways to expand the campaign, they thought, maybe we should sue ourselves,” she says.

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Inspite of this articles dyer overtones I feel compelled to point out this simple fact, revenues are still growing. They haven’t gone negative,yet. Nor are they likely to, since the economy is still growing, which tends to correlate with increases in work for firms.

But projections for 2007, from Citigroup and Hildebrandt International, peg revenue growth slightly off pace and profitability down to 7 to 9 percent.
“I really believe the business model is tired and old and not working for a lot of firms,” DiPietro said.
Citigroup and Hildebrandt International say 6 to 8 percent rate increases across the board contributed much to recent profitability, and DiPietro said increasing pressure from clients and competition could make it difficult to keep raising rates.
Evoking Nietzsche’s oft-quoted proclamation about God in the modern age, DePietro declared, “The billable hour is dead.” He pointed to fixed-fee arrangements, like the one that technology giant Cisco Systems Inc. has with some of its law firms, as a possible wave of the future.
Although firm leaders in attendance conceded that they are seeing more sophisticated buyers, RFPs and “beauty contests,” they said that overall demand is high, especially for high-end work.
“It’s hard to say the model is broken when demand is so high,” Dell said later at his panel on the “multifaceted legal market.”
On the same panel, Dechert Chairman Barton Winokur said his firm looks for ways to try to meet clients’ desire for lower rates not by eschewing the billable hour, but by being more efficient with time. Clients, he said, are willing to swallow rate hikes if they see firms making an effort to use their time better.
Firm leaders said there are many other ways to keep profitability from sinking. Just last week, Chicago’s Mayer, Brown, Rowe & Maw announced that it was de-equitizing 45 partners, a move that will help push PPP up at the firm. “I think there’s a need to constantly work on the structure to make it as profitable as it should be,” James Holzhauer, Mayer Brown’s incoming chairman, explained during a break Thursday.
Other large firms have restructured partnership in recent years to improve the bottom line, but consultant Hildebrandt — an admitted advocate of the two-tiered partnership — said the ultimate cost of reining in equity can be high.
“I think de-equitization is going to do more damage to morale than anything in the next five years,” Hildebrandt said. “Statistically, that group performs less than they did before.”
Among the mounting costs at firms are associate salaries, which recently jumped significantly. At most leading firms, first-year salaries hit $145,000 around the country and $160,000 in New York. Baxter said these types of expenses could really cost firms if they want to compete for high-end work but can’t get it in the ever more segmented marketplace.
“The firms that don’t have clarity are going to have expenses to the high end and revenues to the middle,” he told the audience.

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I’m currently working on an academic paper which discusses the what is a virtual economy, whether those activities should be taxed, a how should they should be taxed. My current thoughts are leaning toward characterizing the realization events which give rise to tax liability as occurring when the income is withdrawn from Second Life, by converting the income form Linden dollars to real US dollars. I feel any other way would be unfair, because Second Life is owned and controlled by Linden Labs. Linden Labs could go bankrupt and take the income of their residents with them, and it would be unfair to tax individuals on money which they didn’t have full possession. Also, once the income leaves the virtual economy it gives the government something to attach, if need be, to satisfy any tax liability.

After all, the rights the users of Second Life and other MMOGs enjoy are a function of their Terms of Service agreements they enter into with the online game providers. As such, those rights are subject to that agreement, which include clause that allow Linden Labs to delete a users account for any reason, and in the event of dispute arising under the agreement, an arbitration clause.

So, in short, let the money leave the game before we worry about taxing it.

NEW YORK–If you are a hardcore player of virtual worlds like World of Warcraft, Second Life, or EverQuest II, IRS form 1099 may soon take on a new meaning for you.

That’s because game publishers may well in the not-too-distant future have to send the forms–which individuals receive when earning nonemployee income from companies or institutions–to virtual-world players engaging in transactions for valuable items like Ultima Online castles, EverQuest weapons, or Second Life currency, even when those players don’t convert the assets into cash.

Most governments are only beginning to become aware of the substantial economic activity in online games, but the games’ rapid growth and the substantial value of the many virtual assets changing hands in them is almost certain to bring them into the popular consciousness.

“Given growth rates of 10 to 15 percent a month, the question is when, not if, Congress and IRS start paying attention to these issues,” said Dan Miller, a senior economist with the Congress’ Joint Economic Committee, who is also a fan of virtual worlds. “So it is incumbent on us to set the terms and the debate so we have a shaped tax policy toward virtual worlds and virtual economies in a favorable way.”

Miller’s comments came during a Saturday panel called “Tax and Finance” at the State of Play/Terra Nova symposium, the fourth annual gathering at New York Law School of academics, lawyers, and other scholars to talk about the legal, social, and economic issues surrounding virtual worlds.

The panel was formed in the context of recent questions–first raised by author Julian Dibbel in his book Play Money and in an article he wrote earlier in Legal Affairs magazine–about whether the transfer of virtual assets, or players’ acquisition of virtual loot by, for example, killing monsters, creates taxable events.

“If you haven’t misspent hours battling an Arctic Ogre Lord near an Ice Dungeon or been equally profligate spending time reading the published works of the Internal Revenue Service,” Dibbell’s article began, “you probably haven’t wondered whether the United States government will someday tax your virtual winnings from games played over the Internet. The real question is: Why hasn’t it happened already?”

And while Miller’s committee began examining these issues in October, his comments Saturday suggested there could be wider future congressional oversight and a revised IRS tax policy. That’s in spite of the fact that Miller said his committee, and Congress in general, is not out to gouge virtual-world players.

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3. Second Life: It’s not a game

Honestly, second life’s scheme of giving their users property rights is a creative novelty in the world of online games. It allows them to outsource some of the development of the game environment to their users, who because of the rights they have to what they create have an incentive to contribute, to think what would users want, what would be useful. It also allows Linden Labs, the creators and owners of Second Life, to create a more democratic experience for their users, which adds to the games appeal.

However, it’s important that people realize that the property rights they enjoy in Second Life are a product of the terms of service agreement they have entered into with Linden Labs. That agreement specifies that Linden Labs may at their sole discretion alter it, potential negating any property rights users have. Furthermore, any conflict arising under the agreement are subject to it’s arbitration clause.

This is not to mention what would happen if Linden Labs went bankrupt.

All I’m saying is not to loose the forest because of the trees, don’t make this house of cards into something that it is not. It definitely is something to watch, maybe invest sometime and energy into, just not all of one’s time and energy!

Last November in Beijing, IBM gathered 2,000 employees, with 5,000 more watching on the web, to unveil a series of global initiatives on digital storage, branchless banking, and the like. During the presentation, CEO Sam Palmisano walked up to an onstage PC, logged onto the online three-dimensional virtual world called Second Life, and took command of the cartoon-like “avatar” that represents him there. He then visited a version of Beijing’s Forbidden City built on virtual real estate, dropping by an IBM (Charts) meeting where avatars controlled by employees in Australia, Florida, India, Ireland, and elsewhere were discussing supercomputing. Among the initiatives announced by Palmisano that day: a $10 million project to help build out the “3-D Internet” exemplified by Second Life. Linden CEO Philip Rosedale stepping into the metaverse. Rosedales avatar is edgier than the actual Linden Lab CEO. Sam Palmisano’s avatar inside one of IBM’s Second Life properties

By early January more than 3,000 IBM employees had acquired their own avatars, and about 300 were routinely conducting company business inside Second Life. “The 3-D Internet may at first appear to be eye candy,” Palmisano writes in an e-mail interview, “but don’t get hung up on how frivolous some of its initial uses may seem.” He calls 3-D realms such as Second Life the “next phase of the Internet’s evolution” and says they may have “the same level of impact” as the first Web explosion.

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I came across this article and found the recommendations to be really useful. I already use Skype. But, by far the most useful and easiest to use would be zillow.com the easiest way to get an estimate of property values and comparison of property values of comparable properties in the neighborhood.

Ten Must-Have Web Sites for Solo Practitioners

By Rick GeorgesSpecial to Law.comMarch 12, 2007

Picking the best of anything is difficult. However, I decided to take a stab this month at the Web sites I use most frequently during a typical day of practicing law. Im not including the obvious ones: legal research and general search sites. Im aiming to point to sites that create a new source of information on the Web, and that leverage the interactive Web 2.0 space.

Here goes:

GoToMyPC is a remote-access Web application that permits me to access my office host machine anytime I like. It allows me to run updates, check my calendar and contact changes created by my secretary, and, in general, prevents running to the office to maintain the server, or to practice law. Its the solo lawyers best friend, runs flawlessly and costs only about $20 a month per machine.

There are conflicting views about the new property valuation site, Zillow.Com, which is a

mashup of Google Maps and property valuations and other information culled from public records. My take on this is that the range of values is a good starting point for looking at a residential property, and is better than no information at all. This is a great reason why Web 2.0 is going to change the landscape of real property law. I use it all the time in my residential transactions practice.

What if sending transcribed memos or notes was as easy as picking up the cell phone or telephone? Enter a new free beta called Jott. Remember that name, because I predict that lawyers will be using this service all the time. Just call Jotts toll-free number, speak your message and Jott will transcribe it and e-mail it to you. Sweet, simple and utterly addictive. Jottcasting, jottmumbling — whatever you call it — is cool, cool, cool.

What? Too lazy to pick up the phone? Joopz allows text messages to be sent directly from the Joopz Web site. Joopz is a Web-based text messaging service that enables “Web texting” — two-way communications from the Web to any mobile phone in the U.S. and Canada … and back

By way of full disclosure, I am a Law.com affiliated blogger. Simply put, I dont get paid to blog, but I get the exposure provided by the best law-related Web site in the world. Im not pandering to my publisher when I say that the Legal Technology page is one of the resources I check every day for tips, software, advice and education about my law practice. There are tons of free and trial software packages available for download, and the editors highlight the best law technology blogs on a regular basis.

Im amazed Im getting such use out of the ScanR application. In the past, there never seemed to be a scanner around when I needed one. I have flatbed scanners at home and at the office. But they dont fit in a briefcase, do they? Enter a great new Palm application, ScanR, that uses the Palm camera as a portable scanner. Just shoot a picture of a page and e-mail it to the ScanR people. They convert it into an image and make it available at the Web site. Very nice.

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This is the Manifesto of the Virtual terrorist organization known as the Second Life Liberation Army.

TOWARDS A STRATEGY FOR THE DEMOCRATIC REVOLUTION
Prepared for the Second Life Liberation Army
Keksakallu Klata, Political Officer
and discussed and amended by a full members’ meeting
20 February 2007

Objective basis of the democratic revolution

If there were no objective material basis for a democratic revolution in SL, then the SLLA would be at best an exciting combat game, at worst a group of griefers.

But there is an objective basis for a democratic revolution in SL – a real contradiction lodged within the sim which we must exploit.

This contradiction is broadly analogous to that which confronted revolutionaries in the English Revolution of the 17th century and the American and French Revolutions of the 18th century.

On the one hand citizens have an objective interest in the establishment of inviolable property rights and the fullest development of the internal market – and on the other hand the citizens and property owners do not govern SL. There is a direct contradiction between the interests of the citizens and the dictatorship of Linden Labs.

The attached article from Information Week magazine (http://www.informationweek.com/news/showArticle.jhtml?articleID=196604327)
shows how this contradiction expresses itself. Philip Rosedale is quoted as saying: “The land itself and the space and everything is owned, controlled, and built by the people”. And yet, as the article shows, without a citizens’ government there is no way that even basic property rights of citizens can be secured.

This absence of a citizens’ government leaves citizens vulnerable in relation to other macroeconomic and policy questions essential to the future development of SL, such as land issue, currency supply, immigration (volume of entry of new citizens), participation of RL corporates in SL, land fees and strategic priorities in stabilising the grid.

The technical basis for mass communication between avatars, the existence of numerous large property owners and of a mass of small landowners and non-paying players, the vast expansion of SL and the enormous publicity it has recently received all sharpen its contradictions. A democratic revolution is no pipe-dream; it can be made to happen.

The forces of the democratic revolution will therefore aim to carry their message to all citizens of SL and rally all to the call for avatar representation based on one citizen, one vote (no votes for alts) and for an SL government.

What form will democratic representation (‘Self-Rule’) take? We cannot yet answer this in absolute terms. Some may believe that it could take the form of an elected parliament; others that a new hi-tech form of democracy may be possible that we have not yet imagined. Either way, representation should be on the basis of universal suffrage with no RL user able to vote more than once. In SL-language this is simple to express, and suggests a slogan: One Citizen One Vote (except Alts).

Even when we succeed in winning some form of avatar representation, this would not be final victory. It is most likely that LL would seek to limit it to a weak consumer consultation exercise. But it would have the potential to develop a dual power situation; a revolutionary crisis. The success of this depends entirely on how the revolutionary democrats themselves act in such a situation. The aim of the SLLA would be to form and lead the Jacobin wing of such an assembly, striving for an SL government elected by its citizens.

Strategy
The conclusions to draw from this are simple. Two things are necessary and we need both if we are to win. They are:
(1) a broad democratic initiative that hundreds, thousands and ultimately tens of thousands can sign up to, to create the conditions in which a representative institution could be created. This could be a new group or a petition.
(2) the SLLA itself, acting as the advanced guard of the revolution, pushing towards the declaration of an avatar government.

We turn our attention to all active players. However the very richest and most successful in-game entrepreneurs will be least likely to want trouble with Linden Labs and most concerned to link with RL businesses. For this reason the SLLA, while utilising rich citizens as important allies, must try to win support for revolutionary democracy among the masses of smaller property owners, landless citizens and non-paying players.

We should maintain the SLLA’s military campaign, never seeking to harm players’ general enjoyment of SL or damage the grid, but always seeking through spectacular simulated guerrilla attacks (perhaps using humour as well as simulated violence) to raise awareness of our goals:
1. avatar representation and
2. a citizens’ government.

Each action should therefore be directly linked to a PR offensive in in-world and RL publications. Wherever possible we should use this to promote a broad political initiative (see below).

Other actions need to take place too: political rallies; pickets; attacks on fascist Sims, films, concerts, parties, protesting vocally but peacefully at official Linden events inworld etc.

After reading the document I have only a few things to say:
1) It’s a game, Second Life is the property of Linden Labs, it’s creator.
2) Linden Labs only granted their residents some form of property rights in order to give residents the incentive to contribute to the Second Life community; Linden Labs is trying to harness the abilities of it’s users so that it doesn’t have to higher developers to code the whole Second Life world.
3) If residents don’t like it, then someone should create a clone of Second Life and grant their users even more rights and a democratic government, this would have the effect of causing residents to emigrate to a “new world”, eventually if enough people leave then Linden Labs will cave in and give residents a democratic government.

In short, violence against people or property is never justifiable. There I said it; I have become the Gandhi of Second Life, great!

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2. US Government probes economic activity in Second Life | OUT-LAW.COM
3. Why Second Life Numbers DO Matter

Part of the reason why the US has been able to conduct the war on terror without the inflation that plagued the US as a result of the Vietnam War in the 70s is because foreigners have been lending us the funds we need for our current war. A selling off of dollars could be indicative of a lack of confidence in the US government’s policies in prosecuting the war on terror, which could have dyer economic consequences at home and abroad. Or it could be that, in spite of all the tax cuts, the US is not able to offer the best risk adjust rate of return in the world.

LONDON: Central banks around the world are diversifying their reserves and cutting their holdings of U.S. dollars, according to a survey sponsored by Royal Bank of Scotland Group.
Italy, Russia, Sweden and Switzerland have made “major adjustments” in foreign-exchange holdings favoring the euro and the pound, according to the poll conducted by Central Banking Publications between September and December 2006.
China also plans to manage its reserves more actively, the report said.
“Central banks are open to saying theyve been diversifying to improve returns and reduce exposure to any single currency,” said Sean Callow, senior currency strategist at Westpac Banking in Singapore. “Theres no doubt that when they say diversification they mean selling dollars.”
The survey of official reserve managers controlling $1.5 trillion, or around 30 percent of the global pie, found that 40 of the 47 respondents said central banks are not reaching the limits of feasible and practical diversification. It also found that many central banks are eager to invest more of their growing reserves into higher-yielding and “non- traditional” assets such as stocks and commodities.

Diversification of official reserves could make it more difficult for the United States to fund its current account deficit, the broadest measure of trade in goods and services, and cause yields on U.S. Treasury bonds to rise. The dollar accounted for 65.6 percent of the worlds currency reserves in the third quarter, according to the International Monetary Fund.
The U.S. current account deficit widened to a record $255.6 billion in the third quarter of last year, according to the Commerce Department.
When a country runs a deficit in the current account, it relies on overseas investment to offset a shortfall in savings. Net purchases of U.S. stocks, notes and bonds by investors from abroad fell to $15.6 billion in December, the lowest in almost five years, according to the Treasury Department.
Nineteen of the 47 central banks surveyed had cut their share of dollars, with 10 saying they had increased holdings of the U.S. currency. Twenty-one respondents said they had increased their reserves of euros, compared with seven who said they had reduced their holdings of the single currency.
The 47 banks hold a total of $1.5 trillion in reserve assets.
Nine central banks also increased their share of the British pound, citing the yield on sterling-denominated assets as the most popular reason. Central banks bought $36.2 billion of reserves in pounds in the four quarters ended September 2006, according to the IMF.
The Bank of England raised interest rates last month to a five-year high of 5.25 percent, with the higher yield attracting investors. That compares with a benchmark rate of 3.5 percent in Europe and 0.5 percent in Japan.

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I’m currently working on an academic paper which discusses the what is a virtual economy, whether those activities should be taxed, a how should they should be taxed. My current thoughts are leaning toward characterizing the realization events which give rise to tax liability as occurring when the income is withdrawn from Second Life by converting the income form Linden dollars to real US dollars. I feel any other way would be unfair, because Second Life is owned and controlled by Linden Labs. Linden Labs could go bankrupt and take the income of their residents with them, and it would be unfair to tax individuals on money which they didn’t have full possession. Also, once the income leaves the virtual economy it gives the government something to attach, if need be.

SECOND LIFE, Oct 15 Reuters – Booming virtual economies in online worlds such as Second Life and World of Warcraft have drawn the attention of a U.S. congressional committee, which is investigating how virtual assets and incomes should be taxed.
“Right now we’re at the preliminary stages of looking at the issue and what kind of public policy questions virtual economies raise — taxes, barter exchanges, property and wealth,” said Dan Miller, senior economist for the Joint Economic Committee. “You could argue that to a certain degree the law has fallen behind because you can have a virtual asset and virtual capital gains, but there’s no mechanism by which you’re taxed on this stuff,” he said.
The increasing size and public profile of virtual economies, the largest of which have millions of users and gross domestic products that rival those of small countries, have made them increasingly difficult for lawmakers and regulators to ignore.
For example, in Second Life up to US$500,000 in user-to-user transactions take place every day, and the economy is growing by 10 to 15 percent a month.
“Ownership, property rights, all that stuff needs to be decided. There’s just too much money floating around,” game designer Sam Lewis, who trained as an economist and has worked on games such as Star Wars Galaxies, said in a telephone interview. “The tax laws don’t know how to behave because these are virtual items: ones and zeros on a database we’re allowing you to play in,” he said.
Even if it is inevitable, Lewis is not exactly looking forward to having real-life tax authorities enter the virtual world.
“I’m a designer that thinks any sort of boundaries or rules actually give you an interesting challenge to overcome, but off the top of my head I don’t particularly want the IRS coming in,” he said.
The rapid emergence of virtual economies has outstripped current tax law in many areas, but there are some clear-cut guidelines that already apply. For example, people who cash out of virtual economies by converting their assets into real-world currencies are required to report their incomes to the IRS and other national tax authorities, depending on where they live in the real world.
Less clearly defined is how to deal with virtual income and capital gains that never leave the virtual economy. In the real world if you earn income or own an asset that increases in value, you are usually required to pay taxes. In a virtual economy the situation is unclear.
“Let’s say the IRS decides they want a valuation of your assets. We don’t have a stock market where we can as of the 31st of December, these assets went up, these went down,” Lewis said.
Miller of the Joint Economic Committee, who became interested in the issue when he began exploring some of the virtual worlds in his free time, said he has an open mind about how real world tax authorities should interact with virtual economies.
“We are starting with a blank slate and going through the various dimensions of virtual economies, and seeing where they might intersect with public policy,” he said. Miller hopes to have a rough draft of his report done by the end of the year, although he admitted that some of his colleagues may need some convincing.
“I found that talking about this issue with some of the other economists on the committee, they are not really familiar with what a virtual economy is. The idea of Second Life or World of Warcraft or some of these other synthetic universes, they have trouble wrapping their head around it. So there’s an educational hurdle to overcome here,” he said.
However, there are probably some on Capitol Hill who won’t require much explanation.
“I can almost guarantee that there are some members of Congress spending time in Second Life or World of Warcraft,” Miller said.

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