Integrity Legal

Posts Tagged ‘ECommerce Long Tail’

18th September 2010

This author is a frequent reader of the Economist magazine. The legal service industry was the main topic of an article printed in a recent issue. This article succinctly and truthfully got to the heart of a significant issue in the international legal community, that of Legal Process Outsourcing. The whole dynamic in the legal service community is changing as a result of the internet, world wide web, and the ramifications thereof. These ramifications are being felt in other industries as well, but they seem to be having the most interesting impact upon the legal service industry because the industry, or more precisely; profession if used in a more individualized sense, has not had to retool its customary payment structure or hierarchy for a relatively long period of time. To better understand the significance of this development one needs to read some passages from the online article itself:

Lawyers hate keeping track of their billable hours. Clients hate them even more; each month they receive bills showing that their legal representatives have worked improbably long hours at incredibly high rates. Billing by the hour often fails to align lawyers’ interests with their clients’. The chap in the wig or the white shoes has an incentive to spin things out for as long as possible. His client would rather win quickly and go home. Since there is clearly a demand for an alternative to the billable hour, you would expect someone to supply it. And indeed, this is starting to happen.

Many legal tasks, although not quite easy, are variations on a theme. The production of a certain document (such as a trademark registration) does not differ vastly from one instance to another… Automating the automatable stuff allows lawyers to spend more time talking to the client.

One of the most important aspects of an attorney’s (or lawyer’s) job is direct contact with clients, Courts, or government agencies. The more time that an attorney can devote to direct interactions which result in direct, immediate or long term, benefits to clients, the better. The more services that a lawyer can provide, the better. The more satisfied clients, the better. In short, if a strategy, service, system, or technology works, and it is legal and ethical; then an attorney or lawyer should take all reasonable measures to provide the best service required based upon the totality of the circumstances in a given case. As the technological advances in developed countries and developing countries continue creating new avenues for efficiency in the legal profession, the overall situation is having a collateral impact upon the very practice of law in many parts of the world:

More and more firms’ in-house lawyers, who typically hire and manage outside lawyers, have turned to alternatives to the billable hour since the beginning of the global recession in 2008. According to a survey by the Association of Corporate Counsel (ACC), which represents companies’ in-house lawyers, 44% of members asked their lawyers for alternative billing to cut costs in 2009, more than any other cost-reducing measure. Susan Hackett, the ACC’s general counsel, says that just a few years ago what she calls “value-based” billing was only 3% of her members’ legal spending. Now, she says, surveys show the average client laying out between 15% and 30% of their legal spending this way.

The idea of so-called “value based” billing is an interesting one as this trend becomes increasingly prevalent. Many companies, individuals, and corporations have begun making increasingly informed decisions regarding the retention of legal counsel as many areas of the legal profession are becoming increasingly specialized in tandem with the demands of prospective clients. This sometimes requires attorneys and/or lawyers to practice law in a very narrow context. This can be problematic if over-specialization occurs and the lawyer finds their expertise is decreasingly in demand. Fortunately, a naturally occurring economic phenomenon in combination with recent advances in technology will hopefully see to it that lawyers and attorneys maintain diverse and highly unique areas of expertise across a field of areas while being able to provide advice and counsel for an increasingly large and novel set of practice areas. The aforementioned naturally occurring economic phenomenon is: The Long Tail. For those unfamiliar with this as an economic concept, it may be best to provide a quote from Wikipedia on the subject:

The Long Tail or long tail refers to the statistical property that a larger share of population rests within the tail of a probability distribution than observed under a ‘normal’ or Gaussian distribution. The term has gained popularity in recent times as a retailing concept describing the niche strategy of selling a large number of unique items in relatively small quantities…

The Long Tail’s statistical property noted above can also apply in a service context and this author would dare say that the ramifications in terms of demand for increasingly novel services in increasingly novel fields is astounding as more consumers (or prospective clients) demand services which did not even exist in the very recent past. This property can be extremely beneficial to those in the legal profession as demand for legal services will be further reinforced by the differing aspects of the laws and statutes in various jurisdictions. These statutory and structural legal differences can be explored for further efficiency in an international trade and business context. As the long tail continues to further stratify consumer demand, client needs will continue to evolve, thereby leading to new avenues for further expansion for legal service providers. By sorting out the issue of legal fee payment in an efficient manner law firms in the future can reap the rewards of new opportunities in the interstate, supranational, regional, and international business communities. Then, lawyers and/or attorneys can focus on providing cutting edge legal service while the client can enjoy more reasonable fee structures which accurately reflect the costs of an attorney’s, time, advice, and expertise. A final note from the Economist article may put it most succinctly:

Both sides can then focus on the case at hand, rather than the bill.

This is important to note as most attorneys or other legal professionals prefer practicing law or providing services to discussing fees. Although all can understand that fees are required before services can be rendered, many legal professionals feel that fee negotiation with clients is not an effective use of time compared to time spent actually providing services to clients. Therefore, the increasingly innovative legal services that are being required as the long tail reshapes the business world will provide innumerable benefits to legal service firms world wide while providing clients’ with peace of mind in knowing that bills will not become unreasonable nor will the level of service suffer due to lack of specific expertise in a given area.

For related information please see: ecommerce law.

more Comments: 04

The hiring of a lawyer is an important decision that should not be based solely on advertisement. Before you decide, ask us to send you free written information about our qualifications and experience. The information presented on this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.