Lawyer Fees Cut as Company Counsel Network for Tips (Update1) ((lawyer, social network, Law Firms, Online Cliques, Peer, Review))

By Cynthia Cotts

Sept. 9 (Bloomberg) — Steven Weinberger, general counsel of Wisdom Natural Brands, boasted on an online social network last month that he saves money by drafting his own trademark applications before sending to outside lawyers for review.

Paul Escobar, corporate counsel atCumberland Gulf Group of Cos., wrote back saying he, too, sometimes drafts legal documents to establish content and tone before outside counsel get their hands on them.

Cash-strapped in-house attorneys are swapping such ideas and other information on Web sites like those owned by LinkedIn Corp., which connects professionals around the world. Corporate lawyers’ use of social networks — some invitation-only — grew about 50 percent in 2009, LexisNexis said after surveying 1,474 attorneys.

“Many lawyers believe that social networks are no more than the playthings of their teenage offspring,” Richard Susskind, the author of numerous books on legal technology, said in an interview. “I disagree. The business-oriented versions will fundamentally change the way law firms are chosen and the way lawyers work with their clients.”

Weinberger’s Gilbert, Arizona-based company makes sweeteners. Escobar’s, based in Framingham, Massachusetts, is a convenience-store chain in the Northeast U.S. The men met on Martindale-Hubbell Connected, operated byLexisNexis, the legal- research provider that is a unit of the London-based publisher Reed Elsevier Plc.

Martindale-Hubbell Connected has 15,000 members and is the biggest online network built for legal professionals, according to LexisNexis.

Most Popular

The most popular social-networking Web site overall is operated by Facebook Inc., based in Palo Alto, California, with 250 million users.

General counsel, under pressure to cut costs, are networking mainly to exchange information with peers, according to LexisNexis. The survey of 764 private-practice, or outside, lawyers and 710 corporate counsel was done in May and June. The top three industries represented were financial services, manufacturing and health care.

“Online networks are a fantastic tool for identifying expertise in the fields in which general counsel are looking to rein in outside counsel,” Eugene Weitz, an in-house attorney at Paris-based Alcatel Lucent, said in an interview. “Experts bubble up who have the ability to show their knowledge online.”

Martindale-Hubbell Connected, started in March, connects users to LinkedIn and provides access to 1 million lawyers in the global directory, said Laxmi Wordham, a LexisNexis vice president.

Law Firms

Law-firm attorneys are joining the sites, too, to drum up business from companies.

The Martindale-Hubbell service’s members include lawyers from 92 of the 100 highest-grossing U.S. law firms and in-house attorneys at about half of the 500 largest companies by revenue. Membership is free for general counsel, Wordham said. Law firms pay for subscriptions.

Online networks help companies cut costs and improve the quality of their legal work, said Paul Lippe, who started the online site Legal OnRamp in 2007 in collaboration with San Jose, California-based Cisco Systems Inc., the largest networking- equipment maker.

Legal OnRamp’s 10,000 members, Lippe said, include Latham & Watkins LLP;Orrick, Herrington & Sutcliffe LLP; the Los Angeles Angels baseball team; and Royal Bank of Canada. Basic membership is free and by invitation only, according to Lippe, who calls his community “very elite” and doesn’t use the term “social network.”

How Nets Work

About 10 percent of the survey respondents belong to a legal online network, LexisNexis said. The networks invite members to create profiles, exchange messages, join group discussions, read blogs and post content.

“Connected is a good place to share street wisdom,” James Wong, U.S. counsel for Chinney Capital Inc., part of a Hong Kong-based private-equity fund, said in an interview.

Escobar said he uses Connected to bounce ideas off other attorneys. Weinberger said he might use Connected to find attorneys if a matter arose in a jurisdiction where his current lawyers don’t work.

Some Legal OnRamp groups are by invitation only, giving in- house counsel a private space to solve problems collectively, Lippe said. Typical discussion subjects include alternative fee structures and how much a particular job should cost.

“It’s the kind of conversation that board members from different companies have about best practices when they meet at a common board meeting,” Lippe said.

Online Cliques

Which network a lawyer uses is matter of taste.

“OnRamp has cliques,” Wong said. “Connected is friendlier.”

For outside lawyers, the networks help increase visibility among peers, according to LexisNexis.

“People like me strongly believe that sites like Legal OnRamp provide an unparalleled chance to learn about my competition, new ideas and basically stay on the radar screen,” Fred Bartlit, a name partner at Bartlit Beck Herman Palenchar & Scott LLP, a litigation boutique in Chicago and Denver, wrote in an e-mail.

And with Connected, Legal OnRamp and others all developing systems by which company lawyers will be able to share evaluations of individual lawyers, it behooves outside counsel to participate in the online dialogue.

Peer Review

“Increasingly the key piece of information a general counsel uses to assess an outside lawyer’s reputation is not the renown of his or her firm, but the review by a trusted peer,” Lippe said, adding that the trend is more accelerated in Silicon Valley than on Wall Street.

About 26 percent of outside lawyers believe that online networks will change the business and practice of law in the next five years, according to LexisNexis. Some expressed concerns about data security and sharing personal information, while others questioned whether online legal networking will be widely adopted.

“This is a universe that has yet to be fully tapped,” Escobar said. “My attitude is you’ve got to embrace it, and if you don’t, you’ll fall behind.”

To contact the reporter on this story: Cynthia Cotts in New York

Last Updated: September 9, 2009 11:18 EDT

Posted via email from TuanAnh Nguyen | Anh Judge


One comment

  1. If you hire a new lawyer, your new lawyer should take care of the process of getting your file from your former lawyer and getting any necessary substitution of counsel filed with the court.
    You can hire any lawyer you want, as long as they’re licensed to practice in the court where your case is pending, but hiring one near the courthouse can save you from having to pay for your lawyer’s travel time.

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