VirtualCourthouse.com

Is Legal Process Outsourcing receding?

2012-02-29T12:48:00.000-08:00

Legal Process Outsourcing (LPO) is booming. While the Internet is riff with predictions that total global revenue will exceed $20 billion dollars by 2015, LPOs are claiming major deals with the likes of Microsoft and Rio Tinto. Despite concerns over quality control and domestic jobs being lost, even the American Bar Association endorses LPOs as a “salutary trend in a global economy”.

The reason for LPOs success and plaudits are obvious. They save lawyers time and clients money. The average billing hours of U.S lawyers are higher than virtually anywhere else, especially compared to India and the Philippines, the two main outsourcing destinations for English-speaking lawyers.

Technology is the reason why lawyers and paralegals from these countries are able to work on legal projects originating from not only different jurisdictions but also different cultures. While the Internet has led to virtual offices becoming commonplace, software can standardize documents and streamline legal processes with ease. It seems that more and more can be outsourced as technology improves.

However, the LPO consultant Fronterion suggests that the opposite will occur. It claims that, “LPO services may become automated or eliminated altogether by computer programs which cost less than even the cheapest worker”. And, on closer view, it is difficult to disagree with this view.

Perhaps the best example of the potential for this to happen is web-based document automation. In effect, this is software that creates a document as you fill out a questionnaire. LegalZoom and RocketLawyer have generated millions in revenue and investment by offering to create anything from wills to shareholder agreements this way. HotDocs and Epoq are two examples of software designed for firms to offer this themselves to clients. What used to be outsourced abroad is therefore shifted to the client. In the future, lawyers will only focus on the areas in which they can truly add value, for example doing the due diligence to customize a paragraph in a will.

Web-based document automation is a powerful example of how technology can make the delivery of legal services much more efficient. In 1971, Nolo successfully launched do-it-yourself books. With the Internet, almost the same service is being offferd to far more people in a far quicker and cheaper way.

LPOs are another layover on the flight towards the most efficient solution technology can offer. Just as lawyers moved upmarket when LPOs came into effect, so will LPOs have to move upmarket when technology reduces the need for human support.

Technology bares huge opportunities for lawyers to improve their client service. Yet, year after year, surveys are published, which reveal how unwilling lawyers are to embrace technology. The recession offers the perfect opportunity to do this, and the amount of literature online aimed to help with this transition leaves no excuse not to try.

VirtualCourthouse.com is part of the digital revolution that is taking the legal industry by storm. Lawyers (as well as, of course, mediators and the disputing parties) can efficiently settle disputes online. Since dispute resolution cannot be outsourced, the flight towards efficiency is already heading towards its final destination.

Judge Arthur M. Monty Ahalt (Ret.)

CEO VirtualCourthouse.com

Through Tom McGinn

Is scepticism curbing ADR’s rise?

2012-02-22T11:54:00.000-08:00

Alternative dispute resolution (ADR) has become more than simply an alternative to litigation. While the American Arbitration Association processes more than 60,000 cases annually, which amounts to 25% of the cases federal courts handle each year, the industry’s revenue is expected to exceed $7.1 billion by 2015.

This should not be surprising, considering the advantages ADR offers both the disputing parties and the courts. On one hand, parties can resolve disputes faster, cheaper, and by controlling the proceedings. On the other, the court’s caseload and expenses are reduced, while access to justice increases. We've already blogged about how this means that everybody wins.

What is surprising is the public’s scepticism about these potential advantages. This is despite the educational initiatives of non-profit organizations, such as the Centre for Effective Dispute Resolution (CEDR) or the Association for Conflict Resolution, despite ADR taking up more and more space on law school syllabi, and despite legislative action. While the Alternative Dispute Resolution Act 1998 requires federal courts to offer the parties ADR programs, most state courts demand that the parties attempt to resolve their dispute through mediation before they can obtain a trial date.

This skepticism seems counterintuitive. Disputes have been resolved privately since millennia. In 350 B.C. Plato declared in The Laws: “Whenever someone makes a contract and fails to carry it out … an action may be brought in the tribal courts if the parties have been unable to resolve it before arbitrators and neighbors.” Many would argue that a private resolution of disputes comes more natural to us. It is well documented how traditional societies, without a court system or other institutions of the modern nation state, resolved disputes through consensus building and the experience of the elderly.

Moreover, discontent with the law’s approach to dispute resolution is similarly embedded in human nature. In Shakespeare’s King Henry VI, Dick the butcher infamously claims “The first thing we do, let’s kill all the lawyers”. 1000 more Atticus Finches won't stop many lawyers being reminded of this on a near weekly basis. Meanwhile Jarndyce v Jarndyce, the subject of Charles Dicken’s Bleak House, passes through the court system so slowly that, by the time a verdict is reached, nothing remained of the inheritance the parties were arguing about.

Given the obvious benefits and a seemingly natural inclination towards alternative disputer resolution, what is the

cause of this scepticism? Perhaps mistrust of the law turns to fear of being disadvantaged outside of court or perhaps many simply prefer a more structured approach to dispute resolution. Or perhaps litigation-happy lawyers fear that their core business is being cut away? The solution to the first two problems is certainly education. To quote Abraham Lincoln:

“Discourage litigation. Persuade your neighbours to compromise whenever you can. Point out to them how the nominal winner is often the loser in fees, expense and cost of time.”

VirtualCourthouse.com is proud to be part of a long list of organizations dedicated to informing the public about the benefits ADR offers. We also feel obligated to create awareness about the next stage in the evolution of ADR – online dispute resolution. ADR’s rise is far from over.

Judge Arthur M. Monty Ahalt (Ret.)
CEO VirtualCourthouse.com
Through Tom McGinn

The Big Bang Theory

2012-02-15T08:31:00.000-08:00

For the English legal profession 2012 started off with a bang. While many were still celebrating the start of the Olympic year, the Legal Services Act 2007 deregulated a legal profession that has seen little change since the mid-sixth century. In many ways, this expansion is the legal market’s very own big bang, but few lawyers find it as funny as the CBS hit comedy.

The Act aims to increase competition as well as choice for consumers, and received royal assent by the Queen in 2007. However, the main mechanism used to achieve this – the alternative business structure (ABS)- only took effect on 3 January this year.

Prior to the act, non-lawyers were not allowed to own businesses that provided legal services. This prevented legal services from being offered by anyone but a registered law firm and also any investment into a law firm by non-lawyers.

The Act lifts both these restrictions for an ABS. This allows in-house counsels to offer their services to other businesses, which can turn them from profit-cutting into profit-making operations, and firms to issue shares to the public.

Deepak Chopra famously claimed, “All great changes are preceded by chaos”. This only applies to the Legal Services Act if “preceded” is switched to “followed”.

The current level of chaos is hard to exaggerate. Since the Act was approved in 2007, ABSs has become the law profession’s main buzzword (buzzacronym?). 2011 was filled with rumors causing lawyers up and down the UK to anxiously attend workshops, upload YouTube videos, and, in protest against “Tesco Law” (named after the supermarket-chain), hand out cans of beans in front of the High Court. LegalZoom and RocketLawyer expressed their aim to break into the UK market, Irwin Mitchell, a top 20 UK firm in terms of turnover, announced its intention to seek external capital under the Act and the world’s first listed firm looking to expand to London.

While the possibilities under an ABS can be limited only by one’s imagination (and also the Law Society’s guidelines), they can be generalized in form of two trends:

1. The increased competition will commoditize legal services and thus cause prices to sink - perhaps not to the extent of Tesco beans though.2. Legal services will be taken to the public, rather than the public having to seek them out.

In other words, consumers will benefit from an increased number of legal services providers (1). “Its all a about cutting costs and stripping out inefficiency”, as Christopher Tite, head of corporate finance at Lawrence Graham, explains. And the providers want to make consumers aware of this (2).

How can the big bang in the English legal services sector affect lawyers in the U.S.? The answer to this can be found in a statement by Ken Clarke, the UK Secretary of State for Justice, the day the Legal Services Act was approved back in 2007: “London is as much a legal capital as a financial capital”, and the act aims to safeguard this. Lawyers in the U.S. must ask themselves whether Washington D.C. will want to do the same.

One thing is perhaps more certain the way we deliver and obtain legal services in general, including the dispute resolution, is changing – and some are benefiting more than others. To quote our first post, for lawyers and firms unwilling to change, the party really is over.

Judge Arthur M. Monty Ahalt (Ret.)
CEO VirtualCourthouse.com
Through Tom McGinn

Everybody keeps winning

2012-02-08T10:48:00.000-08:00

Our last post discussed the emergence of websites offering legal advice online in ways that are faster and cheaper than the services of traditional firms. By reducing the barriers to enter the legal market, the Internet is forcing lawyers to lower their prices and improve their services. Consumers (and firms willing to embrace technology!) are the big winners of this reshuffling.

In midst of lawyers frantically calling for tighter regulation and arguing that clients want a “personal connection” with their legal advisor, the Internet has also changed the way alternative dispute resolution is being offered – and in this case, everybody wins.

Or rather, everybody keeps winning. Alternative dispute resolution processes help parties resolve disputes outside of courts, usually in form of a neutral third party reaching an equitable decision. It is therefore already a cheaper and quicker alternative to litigation. By allowing for disputes to be settled entirely online, the Internet can considerably enhance both advantages, while even benefiting the environment.

The past years have produced some creative forms of online dispute resolution (ODR). iCourthouse, which predates the iPod by two years, for example, gives parties the opportunity to test their legal arguments in front of a live jury. PeopleClaim.com meanwhile lets one party post a complaint, which, if not responded to within four weeks, can be made public on the site - naming and shaming in the internet economy.

It has proved very tough to formulate a single definition of ODR. In fact, nearly a quarter of its Wikipedia entry discusses these difficulties! It is easier to distinguish between two types - disputes settled entirely by technology, and disputes settled by ‘live’ neutrals with the help of technology.

1. Disputes settled by technology

Launched back in 2000, CyberSettle pioneered the double-blind bid dispute resolution system. This gives parties three rounds to negotiate, in each of which the claimant enters a demand, and the respondent enters an offer. Once the offer is greater than or equal to the claimant’s demand, the

case is instantly settled. After three unsuccessful rounds, a facilitator intervenes and tries to settle the claim over the phone. SmartSettle goes a step further by completely removing any human element from the process, instead settling cases through game theory, i.e. software that models human behavior.

2. Settlements reached through a neutral online

In contrast to these software driven approaches, VirtualCourthouse literally tries to create a virtual courthouse. Parties submit their arguments and evidence online, for a neutral of their choice to review and render a decision upon. And just like a court VirtualCourthouse enables the parties to mediate their dispute. ZipCourt, a startup that emerged last year, follows a similar method, although there are considerable differences as to the price and the number of neutrals the parties can choose from.

Conclusion

Both CyberSettle and VirtualCourthouse have existed for 10 years, and have settled thousands of cases during that time. It cannot be determined which method is better at resolving disputes. It is too simple to conclude that the difference boils down to the double-blind bid system providing quicker solutions and VirtualCourthouse offering a more personalized solution.

The choice between the two lies in the technology vs. experience trade-off. Some cases, such as internal employment disputes, might be best resolved through the quick and detached process pioneered by CyberSettle. However, for cases where the neutral’s expertise is important, whether because he can estimate the jury’s decision or because he is a subject-matter expert, VirtualCourthouse might offer a more suitable resolution process.

The suitability of any ODR solution therefore depends on the parties’ interests and the case’s facts. One thing that most types have in common though is that that they ensure that everyone keeps winning.

Judge Arthur M. Monty Ahalt (Ret.)
CEO VirtualCourthouse.com
Through Tom McGinn

For many firms, the party is over

2012-02-01T09:40:00.001-08:00

In 2001 Clement Mok claimed “Five years ago we thought of the Internet as a new medium, not a new economy”. This was in a year when geocities.yahoo.com was the world’s most visited site, and you couldn’t even access it on a smartphone.

The past 10 years make this statement seem obvious. In fact, the $8 trillion generated annually through e-commerce would make the Internet the country with the third highest GDP, and its 2 billion users would form the most populous nation in the world.

Creative Destruction
This growth is largely because the Internet has digitized various markets. By offering a more efficient way of delivering services, the Internet has reduced the market share of every off-line industry, in some cases quite dramatically. Craigslist and Google News are running newspapers out of business, YouTube is making TV seem like a constant advertisement, and iTunes has virtually replaced record shops. The 2000s were what Joseph Schumpeter would undoubtedly call years of “creative destruction”.

High Time?
This wave of change is catching up with the legal industry - perhaps slowly, but very surely. The difference, when compared to other industries, is that lawyers, at the very least, have a reputation for overcharging their clients. High legal fees have been the subject of YouTube hits, and academic criticism, many claiming that the legal market is “broken”.

If this is the case, Internet companies are fixing it by offering inexpensive legal services at the speed of your bandwidth.

PlentyOfProviders.com
LegalZoom and RocketLawyer offer document automation services, which can create anything from wills to IPOs. While LegalZoom charges around $70 for a document, RocketLawyer offers a monthly flat rate covering all documents for as low as $19.99. In light of these low fees, it is ironic that LegalZoom’s 2011 revenue is expected to exceed $100 million, and that RocketLawyer’s revenue has been growing by $10 million each year. Such is the demand for their services. Additionally, while LegalZoom has received over $66 million in funding, RocketLawyer raised another $10.8 million just this month. Such is the demand for their profits.

Another model has developed around Q&A Sites. Avvo allows users to post legal (or medical) questions publically, which any of the over 12,000 registered lawyers can choose to answer. LawPivot offers this service, but also gives users the option to ask questions privately. The confidential question is then directed to 10 lawyers algorithmically based on the key words used. In both cases clients can post and lawyers can register for free. Avvo and LawPivot are effectively social networking sites, where lawyers aim to “get a foot in the door” with new clients. And this case can certainly be made. 21% of Avvo users claimed they would hire a lawyer who provided an answer, and 47% answered maybe.

Adapt, adapt, adapt
Darvin famously claimed, “It is not the strongest species that survive, nor the most intelligent, but the ones most responsive to change”.

With the rise of various alternative providers of legal advice, there was never a greater need for lawyers to bear this in mind. The Internet has commoditized many legal services. Office locations and charisma pale in insignificance when compared to what really matters to clients when they want a formulaic documents or simple legal advice – time and money. And most providers are providing clients with an excellent return on both.

To stay competitive in this market, lawyers must embrace technology. And there are plenty of companies that can help with this. While HotDocs and Exari are just two examples of web-based automation services, which lawyers can give to clients directly, Richard Granat’s DirectLaw has transformed countless small to medium firms into tech-savvy opportunists.

The party is over, even though many firms might not realize this. Lawyers that do, should use the recession as an opportunity to explore how technology can improve their services. By offering online dispute resolution, VirtualCourthouse.com can be used to settle cases in a way that is quicker and less expensive than ADR in person. Lawyers should embrace such efficiency. Their long-term future will be safer and their clients will be happier for it.

Judge Arthur M. Monty Ahalt (Ret.)
CEO VirtualCourthouse.com
Through Tom McGinn

The Power of Our Words

2010-12-14T09:20:00.001-08:00

History records the power of words in the affairs of mankind.Rudyard Kippling put it this way - “Words are, of course, the most powerful drug used by mankind."

Kipling's used this metaphor in a 1923 speech he made to the Royal College of Surgeons in London . He uses the comparison of words to drugs to describe the persuasive effect words can have on another person. As he says in the next sentence of the speech, "Not only do words infect, egotize, narcotize, and paralyze, but they enter into and colour the minutest cells of the brain. . . ." A vivid description of the ability of a person to use words to change and influence the way another person thinks and feels. Whether written or spoken, words have the power to change and transform the world around us.Words inspire emotions for good as well as bad - they inspire love and friendship or hate and anger.They evoke sympathy and compassion or judgement and rejection.Scripture records that God spoke the world into existence with words and that words have the power of life and death.

In the legal profession words are the tools of the trade - the secret to accomplishment of a client’s lawful objective. The transactional lawyer painfully chooses the words which “express the intent of the parties’ absent any ambiguity.
To the litigation lawyer words are the first vehicle of persuasion or as misused the delivery of destruction and misery. A really competent lawyer - what I call the winning lawyer - changes the choice of words in different arenas.

The wrong choice of words is the leading factor in an advocates failure to persuade.Remember now Aristotle’s Elements of Persuasion.

Logic
Emotion
Credible Believability

All three elements have to be accomplished largely through the use of words or pictures painted by words.Thus, in close case the lawyer who uses “verbal fisticuffs” LOSES THE EMOTION OF THE DECISION MAKER AND PERSONAL CREDIBILITY AND THEREFOR BECOMES UNWORTHY OF BELIEF.
The confusing occasions of the mean spirited, sharp tongued lawyer winning the day are usually attributable to unbeatable facts and law. In other words no one - even the incompetent-could lose the case.

When the lawyer leaves the court room for the mediation room a major change in the choice of words is necessary for a successful end to a dispute. If a mediation lawyer walks into a mediation and in the opening statement starts to use sharp, mean spirited words it is almost impossible to rescue the mediation. On more than one occasion I have called a recess and asked to speak to each lawyer separately (without their clients) - usually picking the non-offending lawyer to go first. Privately, I can make sure that the lawyer knows the consequences of the chosen words and make some suggestions for a new choice of words. Suggestions like , “we could think about that”, “ I will consider that”, and “ that is an interesting point”.

Always Have a Plan

When choosing the words that will be used ask the question - what do I wish to accomplish by my words? Then choose the best words to accomplish that objective. Make sure you have a plan - then chose words to accomplish that plan. First write the words down then speak them then think about your choice again. When it comes to words always - Plan , Write, Speak and then Plan Again.

By Judge Arthur M. Monty Ahalt ( ret.)

All VirtualCourthouse Articles available - http://virtualcourthouse.info/Articles.html

Video Mediation Has Arrived

2010-12-06T18:49:00.000-08:00

In the December 10 , 2010 edition of Lawyers Weekly Luigi Benetton reports in an article The Benefits of Video Mediation “Face-to-face mediations won’t go away, but for cost reasons, they sometimes give way to video-conferencing." The article outlines the benefits of video mediation as saving money , time and ending the dispute. With the advent of Skype and “Internet meeting technology” it is only a question of time before the mediation bar takes advantage. Bottom line the technology works and helps folks find a resolution of the dispute fairly and inexpensively.
MediationLine and ADR Chambers eVideo join an increasing number of ADR organizations offering the technology to aide the ADR process.

In November VirtualCourthouse.com announced online live video mediation and arbitration in partnership with Corbin and Hook. This joint venture follows on the successful use of online video depositions. Using this technology an important executive from a national organization saved a trip to Annapolis and attended the mediation session by video connection.

eDiscovery - Should I care?

2010-11-05T17:50:00.000-07:00

The Information Age has finally arrived with all of its magnificent efficiencies and productivity changing ways. People and businesses conduct many of their necessary activities with some interface with technology - probably more that you think. If a computer, be it laptop or desktop, is in the house or office many of the activities are in some way recorded on a hard drive. If the computer is connected to a network or the Internet things become more complicated. Like it or not the world we live in has changed. No longer are we a paper based society. All of our activities revolve around a computer and its hard drive.Two retired Judges now serving as arbitrators and mediators weigh in on this evolving topic. --- read more

VirtualCourthouse Rules of Arbitration and Mediation

2010-07-27T17:06:00.000-07:00

VirtualCourthouse has posted it's simplified arbitration rules. I would be interested in any comments, reactions or suggestions - see https://www.virtualcourthouse.com/index.cfm/category/21/rules.cfm

VirtualCourthouse focus is on the parties reaching agreement on the selection of a neutral and the rules of the proceeding. However, many times the parties reach and impasse. The best way to overcome the impasse is to give the neutral the authority to decide upon the rules. An experienced neutral will get the input of the parties and fashion a result which best serves the fair , unencumbered resolution of the dispute. If either party cannot proceed in this fashion then they really ought to be in the court system where the proceedings are rule centric. After all the function of the alternative dispute mechanism is defeated when the process cannot be simplified and streamlined.

This simplified approach leads to a fair result and a much lower cost. The wide availability of neutrals to select from in the VirtualCourthouse data base increases the ability of the parties to be confident that they have selected an experienced and wise neutral.

This method should encourage the wide use of VirtualCourthouse as the ADR provider in agreements drafted by the parties.

The VirtualCourthouse advantage -

Based on the agreement of the parties
Simplified rules
Low cost
Wide selection of neutrals.

All You Need to Know About Google Local

2010-05-04T11:37:00.000-07:00

Understanding Google Local Search Criteria Leads to a Better Marketing Strategy

If you have not developed a strategic approach to your web presence as a professional, be it a neutral or a lawyer, there is no better time than the present. You may not have noticed it - but the old ways for a professional to let folks know who and where they are have changed dramatically. Learn the two step process .

Step One - Claim your Local Business Listing.

Step Two - Understand Ranking Facts

Who Controls Your Digital Footprint ?

2010-02-18T13:01:00.000-08:00

Ten years ago, a large percentage of the legal profession–lawyers, judges, administrators and marketing experts were consumed by the privacy debates. The fear, in some cases paranoia, was that “bad people” would misuse personal data. Even public data in public files at the courthouse were thought to be protected in some sort of cloak of confidentiality. After all, real estate marketers were doing “bad things” with online court data; they were obtaining foreclosure records and marketing their services to the distressed homeowner, many of who were no doubt embarrassed by their financial plight. Never mind that those “bad things” were happening in newspaper ads and handmade signs on the community telephone poles.

Consider what has occurred over the past ten years; the amount of information about an individual which is accessible on the internet, without the specific permission of that individual, is astounding. Try googling your own name and see how much information you find about yourself; you will be shocked! .......Read the whole article here

Alternate ( Online ) Dispute Resolution: A Solution for Unresolved Customer Complaints - Dr Francis Buttle What do you do when you have a dispute wi

2009-11-25T17:31:00.001-08:00

Alternate ( Online ) Dispute Resolution: A Solution for Unresolved

Customer Complaints - Dr Francis Buttle

What do you do when you have a dispute with a customer? This is not the same as a

complaint. A dispute is a complaint that has not been resolved to the satisfaction of the

complainant. Maybe the issue has been escalated internally and you've been unable to

agree a resolution. Maybe you've just been incompetent in handling the complaint. Whatever the reason, the customer still isn't happy and you have a dispute on your hands.Read the entire Article -

http://virtualcourthouse.info/Alternate-Dispute-Resolution-A-Solution-for-Unresolved-Customer-Complaints.html

50 Years of Alternative Dispute Resolution

2009-10-02T16:42:00.000-07:00

Most judges and lawyers date alternative dispute resolution (ADR) to the early 1900’s with the advent of the American Arbitration Association and other institutional forms of arbitration. However, arbitration dates to early Biblical times with one of the first noted arbitrators King Solomon. Even earlier, arbitration was used as a method to resolve territorial disputes. In England arbitration was a common means of commercial dispute resolution predating the common law as early as the 1200’s.

George Washington, the nation’s first president, had an arbitration clause in his will requiring any dispute regarding an interpretation of the will to be decided by a panel of three arbitrators. His will stated that the decision was as final and binding as any decision of the Supreme Court.... Read more