Stuck on Repeats

[sebastian_dangerfield]

Originally Posted by Greedy,Greedy,Greedy

Litigation often isn't worth it and is usually a lousy way to solve disputes. But I see a bunch of areas of litigation where premium rates are happily paid - especially IP litigation and fiduciary duty litigation. I suspect Hank regularly closes the door, takes off all his clothes, and rolls around in all the cash his patent cases are generating.

I'm drawing the circle a bit bigger. And keep in mind, where there are higher rates, labor will follow. More supply/More competition to steal work by offering lower rates = Long term diminution of the niche service's value.

Patent litigation has built in barriers to entry other areas do not, so it will hold value in any environment. But generally, once a lawyer learns to treat all cases like the games they are, all areas of litigation are the same. As Icky noted, the monkeys are easily trained.

[Greedy,Greedy,Greedy]

Originally Posted by Fugee

This is a mental picture I did not need.

You want me to help you imagine Sebby, instead, sitting in the ante-chamber, listening to Hank in the other room, getting all excited at the very idea of romping in all that cash, but squeezing his legs together to hide the excitement while forever being denied entry to the fun room?

[Fugee]

Originally Posted by Greedy,Greedy,Greedy

You want me to help you imagine Sebby, instead, sitting in the ante-chamber, listening to Hank in the other room, getting all excited at the very idea of romping in all that cash, but squeezing his legs together to hide the excitement while forever being denied entry to the fun room?

[ThurgreedMarshall]

http://www.lawtalkers.com/forums/sho...postcount=1195

http://www.lawtalkers.com/forums/sho...postcount=1196

http://www.lawtalkers.com/forums/sho...postcount=1197

http://www.lawtalkers.com/forums/sho...postcount=1198

TM

[ThurgreedMarshall]

Originally Posted by sebastian_dangerfield

I'm drawing the circle a bit bigger. And keep in mind, where there are higher rates, labor will follow. More supply/More competition to steal work by offering lower rates = Long term diminution of the niche service's value.

Patent litigation has built in barriers to entry other areas do not, so it will hold value in any environment. But generally, once a lawyer learns to treat all cases like the games they are, all areas of litigation are the same. As Icky noted, the monkeys are easily trained.

I think you're looking at this fairly simplistically. For cookie-cutter deals and simple litigation, you're probably right, the market for sophisticated, expensive law firms is contracting.

But a lot of what large law firms do is outrageously complex compared to what the many small firms out there can handle. It's not a matter of not being smart enough, it's a matter of access to specialists, sophistication of the attorneys in dealing with that type of work, cross-border offices to assist in cross-border issues, etc.

On almost every deal I handle we rope in tax, IP, environmental, and/or labor experts. Small firms just aren't built that way. We also have expensive software, support staff, and document management systems that enable us to do work more efficiently (and therefore quicker) than smaller firms. I imagine it's the same in our litigation department.

TM

[bold_n_brazen]

Originally Posted by ThurgreedMarshall

I think you're looking at this fairly simplistically. For cookie-cutter deals and simple litigation, you're probably right, the market for sophisticated, expensive law firms is contracting.

But a lot of what large law firms do is outrageously complex compared to what the many small firms out there can handle. It's not a matter of not being smart enough, it's a matter of access to specialists, sophistication of the attorneys in dealing with that type of work, cross-border offices to assist in cross-border issues, etc.

On almost every deal I handle we rope in tax, IP, environmental, and/or labor experts. Small firms just aren't built that way. We also have expensive software, support staff, and document management systems that enable us to do work more efficiently (and therefore quicker) than smaller firms. I imagine it's the same in our litigation department.

TM

As someone who actually hires law firms, I can tell you that TM is mainly right about this.

I work primarily with one particularly large, well-known firm. They do the vast amount of our transactional work, and all of our SEC work. They also do some Exec. Comp. and have done some significant litigation for us.

I use a small-ish local firm for all our IP work. I use several small local firms for local litigation and employment litigation. I've used several Delaware law firms on issues of Delaware law. I use a great small firm for my governmental regulatory work.

[Hank Chinaski]

Originally Posted by ThurgreedMarshall

I think you're looking at this fairly simplistically. For cookie-cutter deals and simple litigation, you're probably right, the market for sophisticated, expensive law firms is contracting.

But a lot of what large law firms do is outrageously complex compared to what the many small firms out there can handle. It's not a matter of not being smart enough, it's a matter of access to specialists, sophistication of the attorneys in dealing with that type of work, cross-border offices to assist in cross-border issues, etc.

On almost every deal I handle we rope in tax, IP, environmental, and/or labor experts. Small firms just aren't built that way. We also have expensive software, support staff, and document management systems that enable us to do work more efficiently (and therefore quicker) than smaller firms. I imagine it's the same in our litigation department.

TM

I took Sebby's point to be that lower priced firms, but with all the tools, will take work from NYC firms. Not small firms being hired for complex transactions, but maybe clients trusting the transactional law firms in fly over land with matters.

A client that I did tons of patent prosecution work for had a $2 million patent lawsuit (read small). They were billed $3 million by out of town big law. The next low stakes case they had, I got. We're too small to staff a file the way the big firms do and probably couldn't run up bills like they do*. We got the client a $1.5 million check for about $500K in fees. We were stars and I assumed would only be asked to take on bigger matters. Then the patent counsel moved on, the knowledge that we were a better choice was lost, and they've been back with the first firm since.

In the end I think the CGs just want to insulate themselves from being blamed for not hiring the out of state big $$ firms- I know the business managers of their divisions are crying about the fees, and those managers might pull the trigger on hiring local, and the manager's decision might insulate the GC. Except around here those manager seems to be out of the position 6 months later. So manager x tells the in-house lawyer to hire me in 2012, but manager y takes over in 2013 and wonders why in-house lawyer hired some podunk firm when the bad result hits in 2014. It's not in-house guy's money so why should he run the risk?

I don't know how that plays into transactions, as they are over more quickly.

*we do patent application work for enormous companies, but litigation tends to be for small to mid-sized companies.

[Not Bob]

Originally Posted by Fugee

This is a mental picture I did not need.

Better?

[sebastian_dangerfield]

Originally Posted by Greedy,Greedy,Greedy

You want me to help you imagine Sebby, instead, sitting in the ante-chamber, listening to Hank in the other room, getting all excited at the very idea of romping in all that cash, but squeezing his legs together to hide the excitement while forever being denied entry to the fun room?

I'd have your company, though. Because, if I have this right, Hank is the only one who here who gets to do that.

Then again, I work in shorts, shave when I feel like it, and haven't had a boss in five years.

I'm more the louche flame out. You'd be...? A bitch for a Hank somewhere?

[sebastian_dangerfield]

Originally Posted by ThurgreedMarshall

I think you're looking at this fairly simplistically. For cookie-cutter deals and simple litigation, you're probably right, the market for sophisticated, expensive law firms is contracting.

But a lot of what large law firms do is outrageously complex compared to what the many small firms out there can handle. It's not a matter of not being smart enough, it's a matter of access to specialists, sophistication of the attorneys in dealing with that type of work, cross-border offices to assist in cross-border issues, etc.

On almost every deal I handle we rope in tax, IP, environmental, and/or labor experts. Small firms just aren't built that way. We also have expensive software, support staff, and document management systems that enable us to do work more efficiently (and therefore quicker) than smaller firms. I imagine it's the same in our litigation department.

TM

I wasn't addressing whether big or small platforms work better. Clearly, the one stop shopping thing is superior. I was noting that in whatever size firm we're discussing, one can expect to see aggregate realization remain flat.

Efficiency is one of the prime drivers of this flattening. Whatever size the firm, one of things that kept litigators' salaries so high for so long were the myriad inefficiencies in the system. Discovery done by associates, mindless procedural motion practice, endless depositions, etc.

Generally, three things are fucking up the litigation business:

1. Clients have become savvy to the padding-by-excessive work;
2. Most clients have only profited in recent years via cost-cutting, and so are applying that approach everywhere; and
3. Technology reduces process redundancies and length of time needed for litigation tasks (Read: Man hours).*

Also, deals are often revenue producers. Companies are doing them (usually) to enhance gains for themselves. Litigation is always a revenue suck for at least half of those involved. Nobody wants to pay for it, and everybody loathes the process. Between the efficiencies and general hatred for litigation, I see a bleak future for it across the board - big, small, medium firm - which I do not see for transactional lawyers.

This is not a bad thing, by the way. More deals, fewer suits equals a much better economy. But that's another issue.
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* You can staff the shit out of a case with paralegals, and charge decent fees for discovery services (cataloging, imaging, etc.) in cases, but it doesn't approach the dollars made having groups of grossly overpriced associates read warehouses full of documents all day.

[sebastian_dangerfield]

I took Sebby's point to be that lower priced firms, but with all the tools, will take work from NYC firms.

No. I think income per lawyer at all firms will stagnate as firms of all sizes keep running into temporarily hot niches, flooding each with excess labor, thus lowering the value of that practice area's work. If anything, big firms have an advantage in this climate. They can make up the loss in unit value with volume. It's just the litigators who get screwed, as the stand alone value of what they do drops.

[Hank Chinaski]

Originally Posted by sebastian_dangerfield

No. I think income per lawyer at all firms will stagnate as firms of all sizes keep running into temporarily hot niches, flooding each with excess labor, thus lowering the value of that practice area's work.

That is a 10-15 year cycle typically.

If anything, big firms have an advantage in this climate. They can make up the loss in unit value with volume.

Actually, the firms that were structured with lower overhead in mind are the ones with an advantage today. firms that have useless GPs sitting in corners and earning, well not earning, but getting big $$$$ have a problem.I went to a law firm CEO conference a few month ago. It was all open forum discussion. Deadwood (although not characterized as such) was the biggest problem. If you aren't structured and determined enough to force the fat fucks out you've got a serious issue. And that is big or small firms.

[Shape Shifter]

More local news (I know, I'm wearing this schtick out). Is there a facepalm emoticon?

Ballot debacle in the Upshur Co. Commissioner race

Posted: Jul 31, 2012 10:10 PM EDT
Updated: Jul 31, 2012 10:10 PM EDT
By Elizabeth Thomas - email


UPSHUR COUNTY, TX (KLTV) - The Upshur County Precinct 1 Commissioner race just may still be undetermined, after reports of an issue with disbursement of incorrect ballots.

Upshur County District Attorney Billy Bird says he found out at 6 p.m. on Tuesday that the Upshur County Precinct 1 Commissioner Race (Incumbent James Crittenden VS Paula Gentry) was not on the ballot in Box 1 at one polling place.

Byrd confirms with the Upshur County Clerk that the ballots in Box 1 were correct upon delivery to the Rock Building in Precinct 1.

Byrd has not spoken to any witnesses and has not seen any of the reportedly incorrect ballots.

As of now, officials are waiting to see what the turnout is going to be, and the loser would be in a position to issue a challenge. It's possible this race may have to be voted on again.

Byrd says the Republican Party chairman was supposed to have the executive committee look over the ballots, and Byrd says it is his understanding that did not happen. Byrd says he will look into that on Wednesday.

"I know that this is an important race to both of them, so I just want to make sure everything is handled properly," Byrd said.

Incumbent James Crittenden says, "I am extremely disappointed in the outcome of this runoff election, but I look forward to continuing the race. I would like to encourage all the voters to stand with us."

Copyright 2012 KLTV. All rights reserved.

http://www.kltv.com/story/19163171/b...missioner-race

[sebastian_dangerfield]

Originally Posted by Hank Chinaski

Actually, the firms that were structured with lower overhead in mind are the ones with an advantage today. firms that have useless GPs sitting in corners and earning, well not earning, but getting big $$$$ have a problem.I went to a law firm CEO conference a few month ago. It was all open forum discussion. Deadwood (although not characterized as such) was the biggest problem. If you aren't structured and determined enough to force the fat fucks out you've got a serious issue. And that is big or small firms.

True. Every business that pared overhead pre-2008, realizing "this economy is not sustainable" (meaning, every business run by someone with a heart rate and basal brain function) is doing far better than those that bought into the "it's going to be fine... this is just a blip that'll blow over" narrative.

But again, aren't bigger firms better positioned to kill off deadwood than small ones? Big ones can fire useless equity partners and absorb the cost of settling the ensuing arbitration/litigation (the final payout is at a discount, but still, it's expensive).* Putting aside morale costs, and office upheaval, I can't imagine this is so easy with a smaller firm's checkbook.

We're in a long term profit-via-cost-cutting cycle. Seems to me the guy who can absorb the deepest cuts while still providing quality service is best suited for survival. Rather than looking at it as "big v. medium v. small," I'd say the better analysis is, "Who can best profit as it all becomes commoditized?"

I'm sure somewhere in the late 60s/early 70s, there were a bunch of insurance defense firms having this same discussion. "What we do is too complex." "No it's not. Our platform can't be offered at cut rate prices." "Yes it can." "No, it can't." We know what happened there.

All can be automated, and will be. No service sector has any leverage anymore. Particularly a service platform that carries leases and payrolls like law firms and, because of silly professional rules, cannot allow outside equity investment.
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* This has been going on like crazy in Philly since as early as 2004, as wanna-be nationals seek to prop flagging PPP.

[Pretty Little Flower]

Originally Posted by sebastian_dangerfield

All can be automated, and will be.

No service sector has any leverage anymore.

Ignorance is strength.

Every conversation about college football's winningest coaches will also include Paterno.

Four legs good. Two legs bad.