5 Business Model Innovations Solos Need to Truly Compete with BigLaw
Posted Sep 30, 2010 8:15 AM CST
By Christian Mammen
Editor's Note: We asked solo practitioners to write an essay or record a video telling us how they innovate. Specifically, they were asked to answer this question: “What innovation will be most valuable to you in your future practice as a solo practitioner?”The author of the best submission will get a check for $5,000. This year's winner will be announced Friday, Oct. 1. And Monday through Thursday, we're posting submissions from the runners-up.
I practice intellectual property litigation and strategy as a solo practitioner in the San Francisco Bay Area. Technological innovation has made simple what seemed inconceivable only a few years ago—with e-filing, a desktop scanner, cloud computing and storage, Google Apps, VOIP, a smartphone and nifty new software apps practically daily, I can seamlessly do more on my own than I could at a BigLaw firm five years ago.
Further technological innovation is not an impediment to the success of my practice.
Instead, the innovation that will be most valuable to me in my future practice as a solo practitioner is business model innovation. Historically, IP litigation is dominated by the BigLaw establishment model: a few partners leveraged over a larger number of associates within a single firm; custom-crafting pleadings, discovery and briefs while billing by the hour. With the financial crisis of 2008-2009, every part of this old model has come under scrutiny, even in a traditionally high-end field like IP litigation. Specifically:
Leverage. Leverage, or the associate-to-partner ratio within a firm or practice, is good for reportable profits per partner. But it is not necessarily good for clients. As clients push to cut litigation costs, leverage declines. This trend favors solos and less-leveraged practices.
Within One Firm. Historically, the transaction costs associated with assembling a team of lawyers not located under the same roof made it prohibitive to build a competitive litigation team from a network of solos. But the rise of Web 2.0 is changing that. With my LinkedIn/Facebook/Outlook network of colleagues, I can identify, customize and assemble a team in less time than it used to take to walk the halls of my old BigLaw firm. But we need innovation in the areas of contractual arrangements and the laws governing lawyers to fully deliver on the promise of the ad hoc, Web 2.0, virtual law firm.
Customized. In most areas of law practice, as the field matures, more and more aspects of the discipline become standardized.
Off the shelf. The opposite of build-it-by-hand-from-scratch-every-time. Compared with some other fields of law, IP litigation has been fairly slow to progress in this manner. It has therefore remained—relatively speaking—profitable custom work. But we are starting to see some indications that aspects of IP litigation are being made more routine, even standardized. This is a good development for the solo IP litigator. As formerly labor-intensive-but-routine pieces of IP litigation evolve into off-the-shelf modules, we are freed up to apply our creativity and good judgment to the more strategic aspects of the case, with a diminished need to spend time supervising large teams as they custom-polish a third set of interrogatories or research for the nth time how to apply the Brown Bag Software case to a two-tiered stipulated protective order. Innovation in off-the-shelf litigation modules is starting to arrive, and more is needed.
Billable hours. It has been proclaimed and repeated that the billable hour is dead. Well, maybe not quite. But it is certainly open to competition from alternative fee arrangements. We have enough data and experience now that we can start to accurately predict IP litigation costs. And we can bill a la carte, charging fixed fees for different pieces of litigation. A menu might include one fixed fee for pleading-through-pretrial conference, a per-deposition fee, a per-custodian document discovery fee and so on. Models continue to evolve. Clients want their lawyers to share the risk—to have some “skin in the game”—and to have incentives for efficiency. Innovative billing models are coming.
As a solo, these are the innovations I hope for.—Christian Mammen
Christian Mammen is a solo practitioner in Berkeley, Calif.