Category: In the Law

NSA ceases bulk data collection

December 2, 2015 Astrid Countee Leave a comment Cybercrime, Government, In the Law, Legal News, News, Security

The National Security Agency has been collecting metadata, which is information such as phone numbers and duration of calls, since shortly after the attacks of September 11. The collection of this metadata has ceased as of November 28th. So what changed?

There is a new law in place, known as the USA Freedom Act of 2015. This law is being seen as a victory for privacy activists and tech companies looking to protect their user data. The USA Freedom Act of 2015 came about as a response to the revelations of Edward Snowden, a former NSA contractor that revealed the deep surveillance of the NSA on the American people. This new law prohibits the bulk collection of phone data previously done by the NSA. Although the agency won’t keep the bulk data, investigators will still have access to these types of records when they are investigating a particular person, or targeting specific groups. The existing metadata that has been captured during the last 5 years will be kept until next February 29th in order to ensure a smooth transition.

National Security Council spokesperson Ned Price stated that this new law, “struck a reasonable compromise which allows us to protect the country while implementing various reforms”.

Some have concerns, since the new law is going into effect so soon after the terrorist attacks in Paris. At a time when America is scaling back its surveillance, countries like England and France are considering new bills to enhance surveillance. Since American companies like Verizon would be involved, it may mean the creation of new treaties between Great Britain and the United States.  It is likely that this type of confounding circumstance will present itself more in the future due to the international nature of terrorism.

Article via ABAJournal, 30 November 2015

Photo: National Security Agency Seal via Donkey Hotey [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]

Bloomerg hosts Big Law diversity conferences

November 7, 2015 Abby Shulman Leave a comment In the Law, Legal News

Bloomberg Bureau of National Affairs (Bloomberg BNA) hosted Big Law Business Diversity and Inclusion Conferences in New York City and San Francisco throughout the past two weeks. The events helped facilitate the collaboration of some of the most prominent in-house and law firm leaders, in addition to human resource specialists, to create solutions to diversity problems in law firms and corporate legal groups.

The Chief Legal Officers of around 500 major corporations signed a pledge in 1999 to improve the diversity of their teams. Sixteen years later, only minimal progress has been made. Though one third of the U.S. population and one fifth of law school graduates belong to a minority group, less than 7 percent of law firm partners and 9 percent of general counsels of large corporations are black, Latino, Asian American, or Native American.

As Bloomberg BNA states below one of its released videos from the conference, “It is common knowledge that the legal community remains one of the least diverse.” Though law firms have made some improvements in thinking about diversity during the hiring process, “[r]etaining and developing those individuals and leveraging the diverse perspectives they convey is where the true challenge lies.”

Bloomberg BNA has posted videos from the conference, one of the most popular being “Inclusion Strategies: Retain and Promote” for those who could not attend the events.

Article via Above the Law, November 6, 2015

Photo: Scania Executive Board 2010 via Scania Group [Creative Commons Attribution-NonCommercial-NoDerivs]

The status of women in law today

October 19, 2015 Shelby Bice Leave a comment In the Law, Justice

Women have come a long way in the profession of law. For example, four women have been appointed to the Supreme Court to date, and makers are even trying to convince Lego to create figurines representing these women to encourage young girls to think about legal professions. With this in mind, antiquated views of women’s role in law firms seem not only uneducated but also comical. Consider this memo from a 1956 law firm on interviewing new lawyers. It starts off very bluntly, stating that “the firm desires to be candid about its preference for male applicants”, and the memo only gets worse from there. According to the instructions for hiring new lawyers, the firm does “not rate a girl applicant on equal terms with the men applicants” and if a male candidate’s and a female candidate’s resumes appear identical, “the man is given preference, barring some personality defect, on the grounds that being a man, he has probably had extra-curricular experience in the business world.” Even the word choice in the memo is significant: while female candidates are referred to as “girls”, implying they are juvenile, male candidates are referred to as “men”. The memo ends with the writer expressing the opinion that the firm will “not suffer” from preferring male candidates and therefore will continue doing so.

While the memo and the ideas it contains are old-fashioned and outdated, sexism still exists within the legal profession. For example, BMC Group, which provides “legal, financial and corporate information management solutions”, released an advertisement last December featuring a woman in a revealing outfit meant to resemble a business suit. After some viewers express negative opinions of the ad, BMC Group, rather than changing their advertising approach, hosted a party at the American Bankruptcy Institute’s southwest conference featuring the “BMC Group Bikini Girls”. Understandably, some women at the conference were reported to be “appalled” at the idea. Expressing one’s distaste with sexism with law can have negative consequences, though. Charlotte Proudman, a human rights lawyer, received a message from Brown Rudnick partner Alexander Carter-Silk via LinkedIn expressing several compliments concerning her picture on the site. Proudman proceeded to call out Carter-Silk’s publicly for sending her what she interpreted as a sexist message, explaining that women should be regarded for attributes other than just their appearance. Since the incident, Proudman has publicly stated that she misinterpreted Carter-Silk’s message and has apologized to him. The damage has been done, though; many have told Proudman that this incident has essentially ruined her career. The incident shows what the repercussions of calling out sexism within law can be for women, and perhaps explains why some simply choose to ignore it.

So how can law firms go about trying to support gender equality? The Women in the Workplace 2015 report, published by LeanIn.org and McKinsey & Company, offers several suggestions. Firms should begin by tracking metrics for both men and women within the firm such as promotion and salary amounts, how high-profile assignments are distributed, and how long members of different gender and minority groups stay with the firm. This allows each individual firm to assess and diagnose their unique problems. Additionally, firms should make it very clear that gender diversity is important by setting clear goals and creating training to reduce gender bias. Finally, firms should strive to level the playing field for men and women by dividing important assignments equally and encouraging networking and support programs for women.

Though true gender equality may still be a long way off—more than 100 years, according to the creators of the Women in the Workplace 2015 report—hopefully the legal profession can start making better strides towards reducing sexism.

Articles: Legal Justice League, n.d.; Above the Law, September 9, 2015; Above the Law, September 11, 2015; Above the Law, September 11, 2015; Above the Law, October 2, 2015;

Photo: LEGO Legal Justice Team @ SCOTUS 03 via Maia Weinstock [Creative Commons Attribution-NonCommercial-NoDerivs]

Disbarred judge says he will not resign

October 8, 2015 Astrid Countee Leave a comment Court, Ethics, In the Law

A disbarred New Mexico Judge is refusing to step down after being disbarred.

Corrales Municipal Judge Luis Quintana was disbarred on July 1st by the New Mexico supreme court. The disbarment was for failing to turn over a settlement check to a client from a workers compensation case. The complaint was filed by Maria Ramos, one of the Judge’s former clients. A committee found that he used the money to pay debts that he owed to other clients instead of paying Ms. Ramos. The Judge contends that his disbarment has nothing to do with his job, therefore he has no intention of resigning.

Judge Quintana told the Albuquerque Journal that the case that resulted in the courts decision to disbar him happened before he was elected. Because of this, Quintana states that he is fully able to carry out his term, which ends in 2016. Despite his claims, the Judge is facing pressure to resign.

“People like myself who are lawyers or retired lawyers are quite alarmed, not only that it happened, but that it’s taken several months for it to become public knowledge…”, says Mayor Phil Gasteyer.  Mayor Gasteyer raised the issue of the disbarred Judge at a recent meeting of the village council. Since Quintana was elected to his position as Judge, he cannot be forced to vacate it. The Mayor plans to ask Judge Quintana for his resignation.

In response to the controversy Quintana stated, “Are people going to be disappointed? Sure. I’m disappointed, too. I’m disappointed because I didn’t serve Ms. Ramos as great as I should have, you know. But that was one instance in 30 years.”

 

Article via ABAJournal, 7 October 2015

Photo: Judges Desk Partial Desat via Matthew Paulson[Creative Commons Attribution-NonCommercial-NoDerivs]

Google, Microsoft to settle patent feud

October 1, 2015 Astrid Countee Leave a comment Business, In the Law, News, Tech

Microsoft and Google agreed Wednesday to dismiss nearly 20 patent related lawsuits that they have pending against one another.

The two rivals have filed lawsuits against each other for the last 5 years over royalties related to wi-fi, smartphones and web video. The core of these lawsuits has been an ongoing fight over the use of  patents. Both Google and Microsoft have fought viciously to use patents owned by the one another, and to collect royalties for their use.

The patent disagreement started in 2010 when Microsoft filed suit against Motorola, which was acquired by Google the following year. Microsoft, like other prominent software companies, licenses patents from Google for various products and devices. Microsoft’s suit alleged that Android devices infringed on Microsoft patents and that Motorola was charging excessively for the royalties. Google fought back claiming that Motorola’s royalty rates were fair.

In 2013, Microsoft won its case against Motorola and got the royalty rate reduced to 22 times lower than Motorola was charging.

Neither company disclosed the settlement to end their patent feud, but they did say that they “agreed to collaborate on certain patent matters and anticipate working together in other areas in the future to benefit our customers.”

 

Article via CNET, 30 September 2015

Photo: Google Campus Mountain View, CA via Eric Langhorst[Creative Commons Attribution-NonCommercial-NoDerivs]