Category: Economy

Tech salaries gain largest jump ever

January 27, 2016 Astrid Countee Leave a comment Business, Economy, Tech

It pays well to be a techie in the US. From 2014 to 2015 tech salaries experienced their largest annual jump ever, to nearly 8 percent. The average salary of $96,370 reflects the demand for highly skilled technical workers. “Opportunities await…for highly skilled tech professionals…”, stated Bob Melk, President of Dice.com, the site that conducted this annual survey. Dice surveyed 16,301 employed technology professionals between October and November 2015.

A person employed in the technology industry saw their salary rise 7.7 percent from 2014 to 2015.  Not only is this the biggest increase in salary every, according to the annual survey done by Dice.com, employees could also expect to bring home bigger bonuses as well.

Those most likely to receive bonuses were senior tech employees. The percentage of survey respondents that reported a bonus stayed steady at 37 percent. But, the amount of these bonuses last year enjoyed a 24 percent increase from where they were in 2009. The wage increase indicates a healthy job market, and an emphasis on valuing talented employees.

“The competition for tech talent today is undeniable,” Melk said in a statement. “Demand for skilled talent and low unemployment rates for tech professionals aren’t making the hiring landscape any easier. Employers realize offering competitive pay is a necessity.”

Many cities on the list boasted average salaries that passed the $100,000 annual mark. Although there were the usual suspects, such as San Francisco and New York, there were also unexpected cities like Minneapolis on list. While Minneapolis is not usually considered a tech hub, there has been a growing community of seasoned engineers gathering there. Other unexpected cities added to the $100,000 club include Washington, DC and Portland.

Tech jobs appear in every sector of our economy, and therefore high paying jobs are no longer relegated to traditional technology hubs like Silicon Valley. From those surveyed, the industries where experienced workers were most likely to receive bonuses included banking/financial, telecom, hardware, entertainment/media and utilities industries.

 

Article via Cnet: 26, January 2016

Photo: Money by Pictures of Money [Creative Commons Attribution-NonCommercial-NoDerivs]

Top 1 percent own more than the other 99 percent

January 22, 2016 Abby Shulman Leave a comment Economy, Human Rights, Tech

Oxfam International, a coalition of 17 organizations dedicated to reducing world poverty, just released its newest report on global income inequality. Fittingly titled “An Economy for the 1%,” the report states that the globe’s top 1 percent of earners now own more than the other 99 percent altogether. Moreover, the 62 richest people in the world own as much as 50 percent of the planet’s population.

Since the year 2000, income inequality has skyrocketed. The bottom 50 percent of the population have experienced a decrease in wealth of 41 percent—over a trillion dollars—and the top 1 percent has accumulated half of the total increase in global wealth since 2000. This occurs even as new technologies are brought to developing countries in order to improve their economies and help individuals.

The largest share of blame, according to the report, should be dealt to wealthy individuals who circumvent taxes through the use of consultants and offshore accounts. However, the increase in income inequality is also partially due to improvements in technology that increase capital gains.

“One of the key trends underlying this huge concentration of wealth and incomes is the increasing return to capital versus labor. In almost all rich countries and in most developing countries, the share of national income going to workers has been falling,” said the report. “This means workers are capturing less and less of the gains from growth.”

This issue is augmented by modern intellectual property laws, which drive out competitors and increase prices. The pharmaceutical industry, for example, spent over $228 million in 2014 on lobbying campaigns.

World Economic Forum Founder Klaus Schwab talked about the “fourth industrial revolution” that has resulted from the developments of new technologies. “Those who are entrepreneurs, who have talents, will push innovation—will gain from the revolution—and those who are on the other side, particularly in service positions, will lose,” he said.

From another perspective, this means that entrepreneurs in developing countries have a newfound shot at success. Half as many people lived below the extreme poverty line in 2010 than in 1990. According to the Oxfam report, however, the number of people living in extreme poverty “still remains unacceptably high.”

Article via The Washington Post, 21 January 2016

Photo: Boss by Santiago S.V. [Creative Commons Attribution-NonCommercial-NoDerivs]

Harlem to receive first venture capital fund

December 6, 2015 Abby Shulman Leave a comment Business, Economy

After introducing the accelerator program Cofound Harlem three months ago, 22-year-old John Henry has just announced his plans to launch Harlem’s first venture capital fund. Cofound Ventures, as the VC fund is called, has a goal to raise $8 million in order to run the accelerator program and fund Harlem startups.

Currently, all of New York City’s venture capital firms are located below Central Park, with most operating in midtown Manhattan. Cofound Ventures plans to establish itself in East Harlem on 5th Ave and East 118th St.

“Harlem has never had a fund,” said Henry. “It’s a very special town. There’s a lot of recent development with Columbia expanding, and it’s the perfect time to put up the first fund.”

Cofound Ventures will provide up to $100,000 in additional funding to each company that uses Cofound Harlem’s accelerator. The accelerator program already provides startups initial stipends of $50,000, free office space and mentorship. Instead of taking equity from the startups operating under it, Cofound Harlem requires that each startup operate for its four years in Harlem.

Harlem’s unemployment rate is twice the national average. Through the funding and mentorship of startups, Henry estimates to create 800 high-paying jobs in the next four years. Startups will be also be required to host workshops to the community, free of charge, during their nine month use of Cofound Harlem’s office space.

In Cofound Harlem’s first round of startups, 75 percent of the founders are minorities.

“In terms of what we’re looking for going forward, there is no, say, direct criteria that you have to be underrepresented to be admitted, although we definitely have it in mind,” Henry said. “My goal is to keep this 75 percent for the duration of the cohort. If you consider for a moment that everyone who went through the program was white, I don’t think it would have a meaningful impact.”

Article via TechCrunch, 4 December 2015

Photo: Harlem via Ian Freimuth [Creative Commons Attribution-NonCommercial-NoDerivs]

Private Capital for Funding Law Firms Serving Low and Moderate Income Clients

December 1, 2015 Christy Leos Leave a comment Business, Economy, Finance, In the Law, News

By Richard Granat

One of the obstacles to the development of innovative software solutions that automate part of the legal service delivery process resulting in lower, more affordable legal fees is the absence of capital. Traditional methods of legal service delivery based on hourly billing rates out of reach for low and moderate income clients.  Capital investment is required to create innovative web-based software solutions that can enable low and moderate income clients to either solve legal problems on their own as pro-se litigants, or to enable law firms to offer legal solutions at a more affordable price point.

The major obstacle to making more capital available to law firms, is the prohibition on investment in law firms by nonlawyers enshrined in the ABA’s Model Rules of Professional Responsibility and replicated in the state rules of professional responsibility that regulate lawyers in their state. [ See Rule 5.4 – Professional Independence of a Lawyer ].

There has been little innovation within solo and smaller law firms to develop client-centered, web-based applications that provide a low cost solution to low and moderate income clients. Instead innovation is centered in the vendor community that provides tools to law firms, usually as a SaaS service for a monthly subscription fee. A good example is our own DirectLaw virtual law firm platform that provides a client-centered document automation application, and other tools that enables a law firm to unbundled legal services for a fixed fee to clients online. While the value of innovation outside of the law firm, within the vendor sector of the legal industry, is not to be minimized, it is the lawyer within the law firm that has the most nuanced view about what their clients need and want. The lawyer within the law firm also has the primary interest in figuring out how to develop and manage the delivery of legal services so that for certain kinds of legal problems a scalable, volume-based business model can be implemented.

Innovation requires capital. It is capital intensive to develop software applications and new delivery systems for legal services. Solos and small law firms that serve individuals and families do not have access to capital. Whatever innovation is taking place in the delivery of legal services is happening outside of the legal profession in organizations like LegalZoom financed by venture capital, or the within legal aid programs funded in part by the Technology grant program within the Legal Services Program, or outside of the United States. [See also, blog post from Lexicata – How Law Firms Can be More Like LegalZoom ].

There has been much controversial discussion with the legal profession on modifying the ownership rules that apply to law firms, with little result. For example, the American Bar Association created last year a Commission on the Future of Legal Services to address the access to justice problem, under the under the leadership of then ABA-President William C. Hubbard.   The Commission convened a National Summit on Innovation in Legal Services, in May 2015 where private investment in law firms as a prerequisite to innovation was on the agenda. But I have yet to see any progress on this issue within the American Bar Association. Unlike other countries, private investment in law firms as a way to develop new ways of serving a latent market for legal services is dead on arrival when it reaches the ABA’s House of Delegates, although 80% of the U.S. population can’t afford the cost of legal services and is unserved by the legal profession.

The evidence we have seen in the United Kingdom, where the legal profession has moved towards de-regulation, and where capital can flow freely into law firms, suggests that the United States will remain a laggard in innovation in the delivery of legal services until this problem can be fixed. In the UK, LegalZoom is taking advantage of this de-regulation by becoming an ABS [ Alternative Business Structure ].  As a private company, operating in the UK, LegalZoom can offer legal services directly to the public. LegalZoom plans to use this opportunity to develop and experiment with new end-to-end legal services for consumers with the idea that in the far distant future these innovations can be imported into the U.S. legal market.

The bottom line is that you can’t really innovate without access to capital – it is the fuel of innovation. For solo and small law firms that serve people, rather than large corporations, capital is not available for innovation unless the lawyer or law firm has generated capital from their practice and makes a conscious decision to invest in software automation and web-based solutions.

An example of a law firm that has accumulated capital (because of litigation against the mortgage servicing companies and the banks in the robo-signing scandal during the U.S foreclosure crisis) is IceLegal, P.A., a small law firm based in Florida. IceLegal, under the leadership of Thomas Ice, is launching its own access to justice initiative.  The firm has also created its own LegalYou video channel for educating pro-se litigants.  This is a project of the law firm (not of a private company), and will  provide low cost legal solutions to Florida residents. If LegalYou is a success it will serve a new latent market ignored by most of Florida’s law firms. LegalYou is the exception rather than the rule.

One would think that Internet-savvy, recent law school graduates would be motivated to serve a latent market for legal services by developing innovative solutions, but handicapped by large student loans they are forced into career roles that provide sufficient cash flow to amortize those loans. Risk-taking is not an option for them.

A Proposal: Safe Harbor for Law Firms Serving Low and Moderate Income Clients

To increase the flow of capital to law solos and small law firms who wish to serve only low and moderate income clients with automated legal solutions, I propose that:

  • The American Bar Association amend Rule 5.4 to permit private investment in just those law firms that serve low and moderate income clients exclusively.
  • Personal injury and other contingent fee practices would be excluded from this exception as capital is self-generating for successful firms in these practice areas.
  • To comfort those who are concerned that the independence of the lawyer is compromised by this proposal, the law firm must remain at least a 51% owner of the law firm. Private investors can be minority shareholders only.
  • It is relatively easy to create an income generation screen to capture just low and moderate income clients for the law firm, and exclude those of higher income. The data from this intake process can be archived and audited to comply with the exception to the rule.

Creating this exception opens up the opportunity for smaller law firms to take advantage of crowd-funding opportunities, the angel investor community, and the new SEC rules that permit crowd-funding investment. Further, the rich relatives and friends (if they exist) of a young lawyer could fund the new lawyer’s law firm, and get a return on investment, without the lawyer risking disbarment because of violation of the 5.4.

An argument can also be made that enabling law firms that serve primarily corporate entities can create capital on their own without additional incentives and should not be able to take advantage of this safe harbor. Most large law firms represent corporate entities (banks, insurance companies, health care organizations, drug companies,  manufacturers, financial organizations) whose legal positions are opposed to many consumer interests.  These firms should have to use their own capital to become more efficient so as not to tip the balances against the consumer even more than it is.

One would think that this modest proposal to enable innovation designed to increase access to the legal system for clients who can’t afford the high cost of legal fees would be an idea that that American Bar Association and state bar associations might entertain or even discuss.

However, given that the structure of regulation of the legal profession is controlled by the legal profession, this idea will probably be dead on arrival.

Article via eLawyering Blog, 4 December 2015

Photo: the shadow of justice via Jack [Creative Commons Attribution-NonCommercial-NoDerivs]

Will you #VoteHou for City Controller?

October 30, 2015 Astrid Countee Leave a comment Economy, Finance, Government, Houston

The Houston Controller Debate on Technology took place early this October at the Houston Technology Center, which was hosted by The League of Women Voters.  The topic of discussion was how technology could be used to bring the city’s controller office out of the 90’s and make spending transparent for the citizens of Houston. The city controller is similar to a chief financial officer for city government. The current city controller, Ronald Green, is not seeking re-election due to term limitations. There are currently 6 candidates running to take his place.

The room is filled with an array of people and there is a clear mix of older professionals and younger technologists. The candidates are all seated along a long table, facing outwards to the audience. This group is all male and appear to be ranging in age and experience. From left to right they start to answer questions posed from the moderator.

The first to respond is Jew Don Boney. He has a history of working on the Houston City Council and seems clear on how to integrate new technology into the system. Boney also served as mayor pro-tem under Mayor Lee Brown and represented District D, a predominantly African-American district. Currently he is an administrator at Texas Southern University.

The next candidate is Chris Brown. He is currently Deputy City Controller for Houston. Brown, the son of former City Councilman and mayoral candidate Peter Brown, has stated that his experience in the private sector working for an investment bank and his 11 years of service at the City of Houston make him the right person for the job.

Next to speak is Bill Frazer. He is a past President of the Houston CPA Society and has served on the Board of Directors of the Texas Society of CPAs for the past 20 years. Frazer is concerned with making sure that the controller’s actions are transparent and easy for the public to understand. He is interested in cleaning up the budget and making sure that the controller’s office is orderly and functioning as any accountant would.

Seated next to Frazer is MJ Khan. As a councilman, Khan proposed “Zero-Based Budgeting” for All city departments. He focused on unfunded liabilities in Houston’s Pension Systems and Retirees’ Health Benefits. Khan is also focusing on fighting for more efficiency in city government.

The next candidate to speak is Dwight Jefferson. Mr. Jefferson left his position at METRO to run for city council. He is a former district court judge with a long history of working in city government and with Metro.

The last on the panel to speak is Carroll Robinson. Mr. Robinson is an associate professor at Texas Southern University. Mr. Robinson, like many others on the panel has a long history working on the Houston City Council.

Although many issues are brought up, it always comes back to the current financial problems the city is facing, and how this can be avoided in the future. The city has a big deficit, and this has caused problems with making pension payments and beneficial spending. Several of the candidates bring up ways that the city’s website can be improved to make spending more transparent. According to the panel of candidates, the public needs an easy way to see the current status of the budget. Should the website updates an online check to allow the public to keep track of spending? Maybe the site should use a dynamic spreadsheet? Several solutions are posed by the candidates, but none are detailed enough to truly envision implementing.

This begs the question, how can the public get more involved? Houston is the not first major city that has needed to find innovative ways to bring in more technology to their processes. New York City created a new position of CTO (chief technology officer) who runs the Mayor’s Office of Technology and Innovation. The sole purpose of this office is citywide collaboration on technology issues. The city of Chicago has a Department of Innovation and Technology who looks for ways to bring in innovation to their government system. Even the White House is embracing innovation through technology. They made headlines when the nation’s first Chief Data Scientist was announced.

Jayson White from Harvard’s Kennedy School says that the focus of innovation positions in government started with education reform and sustainability. But, once the recession hit, that focus shifted to budgets, economic development, and job creation. The true benefit of having Chief Technology Officers and Chief Innovation Officers is the data driven management that they employ. One example is Louisville-Jefferson County, Kentucky. By incorporating innovation and information officers into the city government, problem solving starts with rounding up data. In turn, they have come up with interesting solutions, such as cutting down on 911 emergency trips by having nurses in the dispatch room to help determine if there is really a medical emergency or if the caller may need to go to the drug store. Now the city is accessing the data on non-emergency calls to determine if there is a market for private-sector transportation service to drive people who call 911 for non emergency transportation.

Starting with the Houston Hackathon, technology innovation is beginning to become a reality. The opportunity to bring innovation to city government structures gives the public a chance to get involved directly with the local government. The City of Houston has created an open hackathon to get citizens involved in creating solutions to government problems. Groups like Open Houston have been putting on hackathons to bring out developers, designers, marketers and others to get unique solutions to some of our city’s problems. Houston’s Mayor, Annise Parker, has made data more open to the public to encourage citizen innovation.

During the Q&A, the audience seemed interested in bridging the gap between citizens and government. Although all the candidates have amazing depth of experience and knowledge of local government, none are experienced technologists. This election is an opportunity for Houston voters to make technology an important issue. So far, a clear plan has not been established for the city to incorporate new technologies that will solve finance and transparency problems. This leaves a huge opportunity for citizens to come up with their own solution. Make sure that you vote for Houston Controller on Tuesday, November 3rd.

Photo via Justin Conception

City Controller Candidates at the Technology Forum

October 28, 2015 Joyce Varghese Leave a comment Economy, Government, Houston, Opinion, Tech

The elections for Mayor and City Controller are underway. Candidates have been working hard campaigning and talking to voters. At a technology forum held on October 8 located at the Houston Technology Center, candidates for City Controller voiced their opinions on the growing use of technology in the city and how they would utilize it. All 6 of the candidates came from reputable backgrounds. Using that to each of their advantage, candidates spoke about how technology can transform the City of Houston.

Jew Don Boney, Jr is a former city council member and worked as a Texas Staff Legislature for many years. He was appointed as Associate Director for the Mickey Leland Center of Peace at Texas Southern University. When asked about integrating the city’s IT infrastructure with the current staff and IT infrastructure, Boney disagreed with combining the two. “When I served on city council, I was so unimpressed with the city’s infrastructure and IT but I brought in own people so we built and maintained our own for the entire 6 years that I served as a member of city council.” As a result, he claimed to have had the most advanced IT infrastructure in the city.

Chris Brown is currently Deputy City Controller and has managed money in the private sector as well as city hall. When asked what plans he has to put the checkbook online, he answered “I feel like that was our first trick question because I feel like all of our candidates know and agree that our checkbook is online and I know for certain because I put it online. In 2011, I led the project team to put all of our payments and checks online.” Continuing on with making the checkbook viewing by date, vendor, and amount he said “I think in my 12 years of experience I can say this whole-heartedly. We don’t have money to do these projects right now. We’re facing huge financial challenges in the city… technology is going to be the vehicle that we create efficiencies to go forward but we have to take the cost of that into effect.”

Bill Frazer has been a CPA since 1975 and worked as an auditor for Ernst and Young for 5 years. He served as controller for several companies. When questioned about how he would educate the public on the collection and analysis of data, he answered “I’m a CPA and I was the past president of the Houston CPA Society and during my tenure I also chaired the technology committee which was responsible for continuing education to over 15,000 CPAs in the area, 1,000s of hours of continuing education including technology at the user level. Not Excel, not Word, just simple applications that can be used by all to serve the clients.”  

Dwight Jefferson became a judge in 1995. From 2010 until 2015 he was appointed to the METRO board by Mayor Parker. When asked about transparency, he brought up a solution he came up with at METRO. “One thing that we did at Metro that was very helpful, both from the standpoint of transparency and getting input from the public in our processes was placing all of our board meetings online [in a] live stream.” He plans to implement this because the public would be able to go back to it later and see if they find things that are not properly addressed.

MJ Khan has an MBA from Rice University and served on the city council in the past. When asked about making the finances more transparent, he spoke from experience about how one aspect was not being reported. “When I was in the council, one of the things I noticed was that we have this huge unfunded liability that retirees have in 3.5 million dollars. And we were not even reporting that. So I asked why is that not part of the report? Luckily, I was able to convince my colleagues and it became part of it. So I think information sharing on a real time basis is crucial for citizens can see what is going on in our financial area.”

Carroll Robinson is an Associate Professor at the Barbara Jordan-Mickey Leland School of Public Affairs at Texas Southern University. He has served as the Houston Community College trustee and served on city council. He also voiced his opinion on increasing transparency. “Well one of the things I did with the available data is I ran a 10 year revenue forecast out on my Facebook, but I think the controller should do it not on an annual basis but on a monthly basis so we would avoid these situations …when you approve spending in one year and the compounding effect generates deficit problems. The careful controller ought to be for a different purpose than just releasing it at the end of the year.”

All the candidates used each of their previous experiences to their advantage. Early voting started on October 19, 2015 and will continue until the Mayoral election on November 3, 2015.

Photo: Houston Sunrise via telwink [Creative Commons Attribution-NonCommercial-NoDerivs]