The Language of Change

by Jerry Lawson

Failure to keep up with the latest jargon can lead to embarrassment. I was dramatically reminded of this while moderating a panel at a recent ABA conference on new methods of delivering legal services.

One of the panelists was Richard Cohen, the co-founder of Desktop Lawyer, a British business that sells custom-drafted legal documents through the Internet. Users have the option to contact lawyers through the site for an additional fee, but the software works so well that few users feel any need to do so. In just a few months after its introduction, Desktop Lawyer captured a significant percentage of the market for divorces in the United Kingdom.

Before the program, Mr. Cohen told me he planned to talk about "The Commoditization of Legal Services in the United Kingdom." In an effort to be helpful, I gently suggested that he reconsider his phrasing: "The word 'commodity' may not have the same connotation in England, but here it has derogatory overtones. Talking about 'commoditizing the law' may offend some people.'

When Mr. Cohen said nothing, I again tried to help the poor foreigner who appeared to be having some problems with the subtleties of the American language: "You see, in this country commodities are cheap. You can't charge high fees for something that is a commodity."

Again Mr. Cohen said nothing. After a few seconds of trying to figure out why his gaze seemed to be filled with pity for his dim American cousin, I finally got the point: "He wants it cheap. That's how he's going to make money."

The American Lawyer Media article about the conference bore the headline "Technology From Hell Challenges Lawyers, Scares ABA."

The Industry Standard, a trade paper for the Internet industry, ran its own story about the conference, entitled "First, Get Rid of the Lawyers." The author observed that the new technology would "undermine the profession by positioning traditional lawyers as overpriced and expendable." 

The Chicago Kent College of Law has placed videos of the entire conference, including Mr. Cohen's segment, at its web site: http://www.kentlaw.edu/clc/tech2000/.

Since the conference, Mr. Cohen, who appeared to be motivated at least as much by idealistic reasons as a desire to make money, has licensed his software to at least one U.S. business. He, and a host of others like him, are deploying technology that may change the face of the legal profession. Confronted by such challenges, we would all would be well advised to familiarize ourselves with the broader implications of new technology. Here is a sampler of the more significant new Internet terminology: 

Broadband. Very high speed Internet connections, such as those delivered by TV cable connections, or the new telephone technology known as Digital Subscriber Lines, or DSL. These technologies are important because they make using the Internet qualitatively different. Applications that are impractical, or only marginally feasible over slow dial up phone connections, like full motion video, become practical with broadband. 

Convergence. Term used to describe the trend of having functions formerly performed by separate appliances being combined into fewer appliances. For example, games like $299 Sony PlayStations will be able to access the Internet. This trend is important for lawyers because it will contribute to the ubiquity of the Internet, which will probably become the world's most important communications medium in a few years, if it is not already. 

Digital Signature. A method of using mathematical formulas built into software to prove who sent a computerized message, and to verify that the message has not been altered in transit. The American Bar Association web site has a useful Digital Signature Tutorial. Digital signatures and encryption (scrambling information so it can only be read by authorized persons) are critical to doing business on the Internet. These concepts are important to lawyers, because as they become more widely understood by the public, they will reduce consumer fears, a leading barrier to further use of the Internet for buying goods and services, including legal services. 

Disintermediation. Cutting out the middleman. A striking Internet phenomenon, as illustrated by the many stockbrokers, travel agents and insurance brokers who have been displaced by Internet-based competitors. Some analysts believe that as Internet service delivery mechanisms become more sophisticated, lawyers in certain areas of practice may be at similar risk. 

Dot-Com. Trendy name for any Internet-based business. 

eLawyering. Alternative name for an ABA program called "Lawyers Helping Society Through Technology,' intended to help lawyers use technology to provide better services to middle and low income Americans, and in the process, defend themselves from competition from other legal service providers using the Internet. The project has a web site at http://www.elawyering.org. 

Frictionless. Refers to the fact that the Internet reduces transaction costs. Radically lower overhead makes new business models possible. For example, the Internet makes practical many class actions that were previously infeasible. The idea of a "frictionless economy' and its consequences is derived from the work of the Nobel Prize winning economist Ronald Coase. 

Gravity. Traditional attitudes and other factors that make it difficult for older businesses to compete on the Internet. 

Infomediary. While the Internet eliminates some traditional middlemen, it also makes new niches possible. "Information intermediaries' use the Internet to gain the trust of consumers, and then serve as intermediaries between consumers and vendors of products and services. This concept is developed in Hagel and Singer, Net Worth (Harvard Business School Press 1999). Many Internet businesses are trying to turn themselves into intermediaries, helping consumers find qualified lawyers at their price point. Because traditional lawyer referral services do not use the Internet, an increasing number of consumers find them less convenient than newer alternatives. The fact that traditional referral services often operate as mere client funneling mechanisms, providing little value to consumers, makes them even more vulnerable to new competition. This is a good illustration of a common theme: it is a mistake to assume that services delivered via the Internet must be inferior. They often will be of higher quality. 

Internet Appliance. A device that is not as powerful as computers commonly in use, but that is able to access the Internet. Sometimes referred to as an Internet terminal. WebTV, now owned by Microsoft, illustrates the concept. This trend will help make Internet access ubiquitous, making it a primary way in which consumers seek access about a variety of goods and services, including legal services. 

Intranet. A private Internet site, used to facilitate the internal operations of an organization. Extranets are similar, but they are opened up to selected outsiders, such as clients. Providing valuable services to clients through intranets and extranets is a way of making yourself "sticky." 

Latent Market for Legal Services. An idea popularized by Richard Susskind in his book The Future of Law (Oxford University Press 1996). Susskind's basic observation is that many consumers who could benefit by hiring a lawyer, and have the money to hire a lawyer, fail to do so, for various reasons, including inconvenience, high fees, and fear of high fees. Studies of U.S. consumers confirm Susskind's theory. Many Internet legal service providers are targeting this market initially. A goal of the ABA's eLawyering project (see above) is to help traditional lawyers serve this market more effectively. 

Mindshare. Public awareness. The overhead for distributing information on the Internet is so low that it is a standard practice for businesses to give away information there that was traditionally sold. This trend is cause for concern since many lawyers make a good portion of their income through aggregating information and selling it. 

Nailed Up. An Internet connection that is always "on," so that when the user's computer is turned on, there is no lengthy delay in accessing the Internet, as is typical of most modem dial up accounts. Cable modems and high capacity DSL (Digital Subscriber Lines) are two popular examples. Dial up account users who switch to a "nailed up" connection may notice dramatic changes in Internet access patterns. When it only takes a second or two to access the Internet, instead of a minute or so, it frequently becomes more convenient to find answers on the Internet than to use a paper reference book that is near your desk. Consumers with nailed up connections will eventually find it easier to access a lawyer through the Internet than through traditional means like the Yellow Pages. 

Portal. A web site that tries to attract large numbers of users to select it as their preferred entry point. Many of the major search engines, like Excite, http://www.excite.com, have tried to become portals by adding directories, free e-mail, maps, discussion groups around various themes, and so on. A Vertical Portal, sometimes called a "vortal,' is a portal targeted at a particular industry or interest group. Findlaw, http://www.findlaw.com, tries to be the premier vertical portal for the legal profession. 

Sticky. The quality of a web site that makes it inconvenient for users to stop visiting it. For example, web sites that provide free e-mail may encourage users to store address book data on the web, because the investment of time necessary to recreate this information on another site. 

Sub-optimization. Settling for less than the highest quality product or service available. The Internet frequently makes this attractive for consumers. For example, the Washington Post's Legi-Slate congressional information service was widely respected for its high quality, but it recently went out of business. Sub-optimization is believed to have been one key contributing factor: many consumers elected to save money by using free Internet sites instead of paying expensive fees. Some analysts believe that sub-optimization will result in many consumers of legal services opting to purchase legal services through the many Internet sites like Arthur Miller's Americounsel.com,  instead of retaining conventional law firms. 

Unbundling. Sometimes known as "discrete task representation.' Giving clients the option to purchase specific services, without necessarily requiring them to enter into a full attorney client relationship. The Internet makes unbundling more attractive as a business model. ABA Model Rule of Professional Conduct 1.2(c) provides: "A lawyer may limit the objectives of the representation if the client consents after consultation."

More Definitions

The Desktop Lawyer software is only one of many technology-driven challenges that the legal profession will face over the next decade. In my view, other new business models, some of which are hinted at in the definitions above, will probably be even more serious challenges in the long run. It will not be easy for lawyers to work out sensible strategies for dealing with the coming changes. The first step toward understanding the issues is to keep up with the new terminology. A web page with hypertext links to all the web sites mentioned in this article and other definitions of technical terms relevant to the legal profession is available at:

ABOUT THE AUTHOR:

A practicing lawyer for 20 years, Mr. Lawson has written numerous magazine articles about the practical aspects of lawyer use of the Internet as well as the ABA Law Practice Management Section's popular book, The Complete Internet Handbook for Lawyers. Much of the book's online pocket part is also open to lawyers who do not own the book.