the death of the giant firm? (Work in progress) Started this on the plane to Chicago. Since our grade is partly based on whether we’re ethical, I can’t forget to credit Sandor for arguing that the legal product includes trust, and Justin Colannino for arguing that Westlaw and Nexis will be assimilated into Googles and Wikipedias. Now that I'm going online to upload it, I just discovered i got a b minus in torts, so don't take any of my arguments too seriously.

Eben believes that law firms will be extinct by the time we look to inherit them. I’ll entertain his theory. What made giant firms so successful, and what is making them obsolete? The richest corporations want their legal work mass-produced and custom-fit. Larger firms grab richer clients by exploiting economies of scale. The vertical deep bench supplies young apprentices to do the tedious bidding of their mentors, who shed scales of wisdom for them to grow into. And horizontal cross-pollination stimulates creativity, so giant law firms pack specialists under one roof, like the interdisciplinary research university or think tank —only this network is proprietary, and for profit. The centrifugal force of cheap information has been disaggregating other knowledge industries. Cheap information cut the costs of creativity in objective ways: Music brokerages (recording companies) are as obsolete as telephone switchboard operators. Corporate management hierarchies flattened, crushing out the “switchboard operators” in Middle Management. Blogs broke the newspapers’ monopoly on distributing news. The investment banking continents lost mastery of the sea to an archipelago of hedge funds, run by irreverent geniuses like my three college classmates who started trading currencies as bored second semester seniors. When these friends chose to open their own hedge fund, they were selling short the long-term prospects of the giant law firm. with these trends in mind. But aren’t we lawyers special? continent Those other innovations were in distribution channels—_ _ . The lawyer’s “distribution channel” is the neurons in judges’ and jurors’ brains. Those other innovations could be objectively measured: compare _ to the market __. But every legal case is unique

Sandor: PROBLEM:Reputation / black box SOLUTIONS: break open black box Justin Colannino—Competitors to Westlaw and Nexis will be cheaper and searcheable like google and wikipedia Scan it in, automate the piracy

How much of our profession will be “opened up” in this way?

cf. Coase: market or firm? An innovation (here, internet) doesn’t just lower cost of market—it lowers cost of firm. And so firm may become consolidated (e.g. internal Wikis ...)

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-- AndrewGradman - 19 Jan 2008

I'm not awake enough to address the main question, but I just want to note that Wexis may not disappear as much as add value to hang on--for example, headnotes, the key number index, and so on. The core of the judicial opinions--public domain--is increasingly available free on court websites and on Columbia's own altlaw.org, but until someone starts writing public domain headnotes and indices (or until someone develops a MUCH smarter search for law), Wexis will be here to stay (without even mentioning all the secondary sources that will need to be freed or still bought and made available in print). Anyway, until someone starts writing these for free, competitors will need to pay someone to write their own or pay West etc. and keep feeding them.

-- DanielHarris - 19 Jan 2008