Many small law firms have the capacity to perform outsourced legal work for corporate legal departments, but lack the connections.
A virtual Internet meeting place called Legal OnRamp is providing a mechanism for small-firm lawyers to meet in-house counsel who are looking for ways to cut their costs for farmed-out work.
Created by Cisco Systems, Inc., Legal OnRamp is dedicated to the principle that law firms and legal departments can produce less costly results by working together in a cooperative, information-sharing fashion.
Cisco’s general counsel, Mark Chandler, made the argument for Legal OnRamp earlier this year during a widely distributed speech at Northwestern School of Law.
“The most fundamental misalignment of interests is between clients who are driven to manage expenses and law firms which are compensated by the hour,” Chandler said.. He described law firm economics as “the last vestige of the medieval guild system to survive into the 21st century.”
Chandler’s central point is that changing technology will doom the traditional methods of operation employed by law firms. The traditional methods, he said, were based on law firms’ privileged access to information that clients needed. But he said that in the modern electronic age, access to information much easier for everyone.
“The greatest vulnerability of the legal industry today is a failure to make information more accessible to clients, to drive models based on value and efficiency,” he said. “The present system is leading to unhappy lawyers and unhappy clients. The center will not hold.”
Chandler noted in his speech that Cisco and eight other large companies had just launched a project in concert with several large law firms called Legal OnRamp for the purpose of bringing corporate counsel and law firms together to share information in a new way.
Paul Lippe, the chief executive officer of Legal OnRamp and a former corporate general counsel, told Lawyers USA that the project evolved from Silicon Valley engineering culture.
“There’s a high degree of frustration among engineers and business executives generally with the way lawyers work,” he said. “There was a group of us who were trying to develop a new model for working with lawyers in which technology was a component.”
Lippe had known Chandler for years and they met with lawyers from other companies to discuss the future of Legal OnRamp.
“The idea was: We use technology to be more efficient, and there’s nothing magical about law that says you can’t do the same things there.”
Legal OnRamp is a web-based network that Lippe describes as “a shared space for law departments and law firms to collaborate.” For example, the site has an “ask the expert” function, in which users can find specific answers to legal questions by browsing or keyword searches. The “experts” are Legal OnRamp members, and each information page provides users a with link to contact or read more about the lawyer who provided it. Borrowing from the Internet website My Space’s networking function, bio pages include a “connection list” of lawyers’ colleagues within and outside their firm.
Legal OnRamp also provides space for law firms to provide legal updates, a marketplace for legal departments to post work opportunities, bulletin boards, access to legal databases and a document depository.
It is invitation-only, but Lippe said that most lawyers who express interest are accepted. As a member of Legal OnRamp, a lawyer is expected to share information that can be useful to others, such as state-specific statutory information. For instance, Timothy J. Long, a partner in the Los Angeles and Sacramento offices of Orrick, Herrington & Sutcliffe, has offered a page answering whether a direct deposit can be used for a terminated employee’s final paycheck in California. (Citing California Labor Code Sect. 213, Long’s answer was yes.)
But it’s also a great way for individual lawyers to network – which, according to Lippe, makes the program especially attractive to solos and small-firm lawyers. The lawyer directory on Legal OnRamp focuses on individuals – not firms.
An in-house lawyer might make contact with an outside lawyer by posting a question or doing a word search that might lead her to a lawyer’s shared information.
Those contacts can lead to work. But there’s an inherent aspect of Legal OnRamp that discourages the traditional hourly billing method.
“The traditional response a lawyer might give is ‘I’m really smart and I practice in a big firm with a good reputation,'” said Lippe. “But on Legal OnRamp you’d say, ‘Here’s how we did this before; here’s how we approach this systematically; here’s how we reduce cost; here’s how we measure quality.’
Lippe believes that this type of information sharing can put smaller firms on an equal footing with the mega-firms.
“There’s a fallacy that large companies will only deal with large law firms,” he said. “In fact, just the opposite is true. The larger the company, the larger the legal department, and the more they’re actually interested in working with lots of small firms.
“As the marketplace for law becomes more transparent and as sophisticated clients look for ways to manage work and measure quality and reduce cost – that will open up lots of opportunities for smaller firms.”
Some small-firm lawyers are already taking advantage.
Geoffrey W. Parnass, a partner at nine-lawyer Shustak & Partners in New York City and a former corporate counsel whose practice focuses on acquisitions and private equity work, was drawn to Legal OnRamp because “it levels the field between small firms and large firms.”
Leonard D. Young, a partner in the 50-lawyer Cleveland firm Walter & Haverfield, and also a former in-house lawyer, recently joined for similar reasons.
“I’ve spent most of my life hiring lawyers and trying to manage a legal budget,” he said. “So I’m extremely sensitive to that. I think that corporate law departments are going to be taking their lead from the Ciscos of the world and they’ll be looking for ways to share technologies and their information. And I have a feeling that Legal OnRamp is going to be one of the mechanisms that corporations are going to turn to.”
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