I find numbers fascinating and even better when they are put into context with digestible displays.  Data visualization is key and people with these skills will be in demand for my lifetime and well beyond.

Two recent experiences with large data sets has been satisfying to me.  Unfortunately, both are showing the continual deterioration of the U.S. economy, but from a consumption standpoint, they are very interesting.

1.  Heatmap over time of U.S. Unemployment.  This is outstanding work, if not completely depressing;

2. If you are interested in the major law firm layoffs, which measure an incredible 14,457 people since January 2008 (5,677 lawyers, 8,780 staff), then Law Shucks is the place to go.  Their layoff trackers are great for digesting exactly what is going on and I’ve been told that even better displays are on their way.

Enjoy.  Or at least respect the work behind the bad news.

The other day, Nick Cronin, CEO of Lawbidding.com emailed me for me to check out his site.  In short, allows folks to confidentially post their legal issues for free, and then allows attorneys to search through the cases and place bids on that work, also for free. 

The bids can be based on an hourly fee, flat fee, contingent basis or ‘other’ bid.  This allows attorneys and clients to easily create alternative fee arrangements.   The client can then select their attorney based on the bids and by looking at the profile the attorney has set up.  The selected attorney is then sent the clients contact info. The website has attracted thousands of users (attorneys and clients) from all over the U.S.

It’s a relatively new site (and I can’t vouch for it, as I haven’t used it), but it is yet another example of people thinking creatively about the legal profession business model.

Good luck Nick. 

Today, I learned that former classmate of mine at the University of Michigan has started a blog for startups dealing with intellectual property issues.

Jill Bowman is a great person and her blog is not only informative, but is also written in her voice, not legalese.  (Her husband says it’s too “girly” but I totally disagree). 

Jill promises to dish on IP “train wrecks” (her words) that she’s seen over the past decade and hopefully her wisdom can save some folks future headaches.

She also promises to talk about costs savings in IP controversies and expose how some big firms are ripping off their clients. 

Her first post is Ten Smart Reasons to Learn About IP Law.  Jill, welcome to the blogosphere.  We are happy to have you. 

My friends at LegalRiver.com have released two document generators for quickly and easily assembling standard terms of service and privacy policies.

Much like other document generators, you fill in a few pieces of relevant info and “boom” (to quote John Madden, whom I am sure is following this blog closely) you are done.

Check the terms of service generator here and the privacy policy generator here.

*** After posting this blog a friend of mine sent this to me:  “Confidentially: for these two items alone, I received a bill from a law firm (that will remain nameless), for more than $10,000. Yup.”

One of my premises in my Law Firm 2.0 series has been that lawyers are going to leave the big firms and create boutiques that will charge 30-40% less per hour, provide the same quality service and allow lawyers to make comparable compensation with working less hours.

They won’t have the bandwidth for some of the large corporations and potentially will lose out on “rocket science” work (maybe not), but for 80-90% of all core work they will do the trick for most venture-backed companies.

Recently, one Silicon Valley stalwart of the big firm model, John Fox did just that.  I’ve worked with John in the past and he is a really strong lawyer, so this is very interesting.  I would not expect this to be the case of him being on the downside of his career or not at the top of his game and being forced out of BigLaw. 

We’ll see how this plays out in 2010, but this New Year’s eve article certainly piqued my interest.

As I had posted earlier, the editors of the ABA Journal today announced Mendelson’s Musings as one of the top 100 best websites by lawyers, for lawyers.

I thought that was cool, especially given that my time dedicated to legal issues is only a part-time job on this blog.

Today, I learned that I won my category.  I’m very pleased and sincerely thank all of you who voted for me.  I promise to do my best to earn your recognition in 2010, as well.

Thanks again.

Happy New Year.  I’m back.

I’ve decided 2010 is the year that I admit my Law Firm 2.0 thesis is wrong.  I blew it.  BigLaw is alive and well – perfectly efficient and constructed – and all of my ramblings were just that.

Yeah…  right.  It’s not April 1.

But I AM pretty pissed off at people not paying their lawyers.  Even if their lawyers are inefficient, frustrating and sometimes comical.  (But still more expensive than hiring Dane Cook or some other C+ list comic to perform at your kid’s Bar Mitzvah).

Why am I mad?  Aren’t I the guy who is constantly picking at the big firms for their business model issues and imploring them to reduce client costs? 

Yes.

But the people refusing to pay their lawyers and / or are always demanding discounts are not helping the situation.  They are only making it worse for themselves and the rest of us.  Here’s the scoop:

I’m hearing from more and more lawyers (and “proud” clients) that their clients are expecting discounts on every bill their lawyers present them.  It ranges from hard and fast rules (e.g.,we’ll pay 80% of your bill and 0-100% of the remainder depending on performance or if we feel like it) to haggling on each individual bill.

And what do the lawyers do?  Well the first step is to protest, but normally, the firm bends and gives into to some form of discount.  (a really interesting blog quoting internal Simpson Thatcher documents about client discounting is a must read)

At the end of the year, the firms figure out their revenue and profit margin and realize that they didn’t make as much as they would like, so what do they do?  They raise their hourly rate.  If they are going to provide discounts, they want a larger base to discount from. 

The outcome of this is that now everyone is paying higher hourly rates and we are all worse off.  In fact, those of us who pay our bills are subsidizing those who don’t during the year. 

Lawyers used to never discount, but accounting firms have ever since I’ve been working with them.  Accounting hourly rates were always known to be exorbitant, but the game was that they’d come and cut you a “good guy” discount, sometimes as much as 50%.  So this game is nothing new.  I fear this is where BigLaw is going. 

Now, I’m not arguing that you should NEVER ask for a discount.  There are plenty of instances where the firm deserves to give back some money due to a host of issues.  I’m just peeved at those who make their Law Firm 2.0 thesis one of simply not paying their bills.  If you have that much issue with your outside counsel’s billing rate, address the situation in a transparent manner or hire new lawyers. 

Because if you don’t, you are only incenting the firms to create a billing eco-system that is even more inscrutable and opaque.  This is ultimately worse for all of us, unless we all collude and adopt the same method of payment.  Which we won’t.  And besides, it’s stupid.

Law Firm 2.0 depends on the clients too.  We must do our part.  Short cuts like this aren’t Law Firm 2.0, rather short sighted window dressing.  Work with your partners to get them more efficient and show them the way if the can’t themselves.

And if not, find a new firm.  There are plenty out there that are starting to get religion.

Welcome to 2010.

Wow.  On September 26th, 60,746 people took the LSAT (the law school entrance exam).  This is the largest single administration in the history of the exam.

Are people not aware what is going on in the legal industry?  These folks are going to be saddled with six-figure debt and then attempt to enter an industry that is shrinking faster than any that I can think of.

Folks, seriously, go get your CS degree.  Or go work at a big-box retailer.  Or be a ski bum.  You at least won’t have the debt.

For a full report, check out Most Strongly Supportive’s post. 

Editors of the ABA Journal today announced they have selected Mendelson’s Musings as one of the top 100 best websites by lawyers, for lawyers.

That’s pretty cool, especially since I don’t focus all of my efforts on the legal profession.  But to quote them:

“Mendelson’s Musings drew our admiration this year when Boulder, Colo., lawyer/venture capitalist Jason Mendelson tackled a weighty project: Law Firm 2.0. Over a 10-month period, Mendelson discussed frustrations with start-up lawyers, re-architecting law firms and what clients need to do to get law firms to implement change.”

Now comes the fun part, as I can be voted best in category.  If you like to vote for me, please go here. 

Thanks to all of you who support my efforts here.

Adam Smith may have written the Wealth of Nations and been a seminal economist underpinning our capitalist thinking, but evidently his name-saked website about law firms doesn’t understand crap about law firm economics. 

Yesterday, The Wall Street Journal printed an Op-Ed about The End of Big Law.  In short, the author argues that we’ve seen the end of the big law firm as we know it.  It’s a must read for anyone interested in the subject.  Any reader of this blog knows that I’ve been predicting this for quite some time as part of my Law Firm 2.0 series. 

Today, however, I read one of the worst rebuttals I’ve ever read.  Adam Smith, Esq. is a website that purports to be experts on the economics of Law Firms.  According to their site, they provide consulting services to Big Law firms, so clearly there is no bias there, right? (sarcasm intended).  You can probably guess that they argue the the End of Big Law is a myth. 

The "rebuttal" (in quotes, because it really doesn’t deserve the description) is that Big Law is just like any other industry hit by the recession.  What they are missing are the massive changes that have taken place in the past decade in the Big Law ecosystem.  I won’t go into detail (if you want detail, read my Law Firm 2.0 series), but how can supposed experts on law firm economics not see that these changes are only being hastened by the recession, not caused by it?  The changes started a long, long time ago.  The recession is just putting the nails in the coffin. 

Secondly, any credibility the author may have is completely destroyed in my mind by two ridiculous assertions:

1. "I have yet to meet a managing partner not exquisitely attuned to the sentiments of their partners and the perceptions of their clients.” You clearly don’t get out much then.  This is absurd.  If this statement was true, one would not see the massive amount of partner transfers between firms and pissed off clients.  I am confident when I say that the majority of clients think exactly the opposite and disagree that law firms are "managing their firms as smartly as they are" (quoted from a previous Adam Smith blog); and

2. "Last time I checked, we were not capital-intensive nor do we have but the most trivial base of fixed assets." This is also laughable.  First, I find it enlightening that the author uses the word "we" when referring to Big Law.  Clearly this is another tip of the cap to bias.  Secondly, law firms are notorious for getting in over their heads with fixed assets.  See: Brobeck and / or my prior posting on this.  And this doesn’t include the multiple of dozens of conversations I’ve had with AmLaw 50 partners agreeing with me that fixed costs are out of control. 

This blog is simply reinforcing what’s broken and wrong in the legal environment.   Me, I’m happy to see articles like this, as it emboldens me as a venture capitalist to exploit and profit from the inefficiencies of the market. 

Lastly, the Adam Smith post accuses the WSJ article of being  "a truly impressive exercise in the abject failure of critical thinking" and likens it to a "tabloid."  I’d call this a case of the pot calling the kettle black, but in this case there is no kettle.