The ABA Commission on Ethics 20/20 recently held a hearing on whether ethics rules need to be adjusted to accommodate new technologies and ways of delivering legal information and services: Your ABA: February 2010 | Clients prefer Web-based legal options, find non-lawyer vendors fill the bill.

At the hearing, Richard Granat of DirectLaw estimated that various new self-help sites have drained $75 million out of lawyers’ practices annually.

This is not the only industry to be impacted by the tendency of today’s information consumers to want to find information and, to the extent possible, execute transactions of various kinds entirely online.  The business of serving that growing self-help market is a threat to the legal services industry and an opportunity for legal publishers – and for new entrants to the legal information industry.

Jeff Jarvis has a thoughtful post about the future of journalism and the news industry:  The future of news is entrepreneurial.

In it, he argues that the news industry isn’t going away – but that the old media companies and their approach is.

The news industry of the future will consist of smaller and more fragmented players.  Journalists will be more like free agents, and money will be made – but on a smaller scale.  There will also be significant opportunities for companies to to take part in the industry by providing networks and business services to journalist-entrepreneurs.

How well do his arguments apply to the legal information industry?  Will legal publishing become similarly entrepreneurial?  Consider:

• The open access movement is making it cheap and easy to slice and dice public legal content into new products.  Big legacy publishers won’t have an advantage here.
• Where Jarvis talks about journalists, substitute the word lawyer.  Will legacy publishers be challenged by individual entrepreneurial lawyers, each of whom has his or her own printing press with a global reach? Why turn to a publisher for information when the expert is directly accessible?
• Think about the integration of practice and marketing that Web-savvy practitioners are demonstrating.  The same platforms are used for service delivery, reputation enhancement, and business development – just as Jarvis’ vision calls for small information providers integrating new business models with content and technology.
• As technology is injected into the lawyer’s workflow, the value of big one-size-fits-all services diminishes as well.  Just as a fragmented core of entrepreneurial journalists can specialize and provide increasing focus and expertise on their subject matter, so will the packaging of legal information be focused and targeted to specific kinds of litigation and transactions.  Building big technology platforms for a wide range of legal practice areas takes critical mass; building efficient practice tools that do one thing well requires considerably less resources – so here again the technology advantage of the big legal information players may be smaller than it was a decade ago.

Lawyers (like journalists) are building an entrepreneurial information environment that is a threat to the structure of the legal services industry.  Is this entrepreneurship it also a threat to the legal publishing industry?

As part of the ongoing ABA Legal Rebels series, Paul Lippe of Legal OnRamp provides a nice Preview of The 2011 Legal Landscape.  It’s a good piece that focuses on the unsustainability of the way junior associates are currently leveraged in BigLaw firms.  Lippe compares a theoretical million-dollar bill for legal services today, and the same bill, chopped down to $800,000, in 2011, and offers an explanation of where the missing $200K went.

Where will those dollars go? Four places.

• Clients will just flat out spend less, drive harder bargains and get more for their money
• Some work will go to outsourcers, whether onshore or off
• More work will go to contract lawyers or proto-associates not on any kind of partnership track
• Some associate time will get replaced by technology

In a piece for Outsell’s Insights service, Associates: In the Legal Industry’s Crosshairs (pw protected), I noted that many of the the economic and structural troubles in the industry can be traced to the system of over-leveraged and under-skilled associates.

Legal information providers, when thinking about Lippe’s theoretical 20% smaller law firm bill, have to be wondering how they will fare in 2011 and beyond as well. The party is over, less money is coming in, and there will be severe pressure on research budgets; less money coming in for firms will translate into less money available for publishers.  One way out is to focus on Lippe’s four places above, particularly the last one.  As I put it in the Insights piece,

Legal publishers and information providers looking for a better mousetrap in this market might start by asking how they help law firms (and in-house legal departments) use technology, collaboration, and/or new business models to deliver routine legal work more cheaply, and with better quality, than the typically inexperienced and inefficient first-year associate.

The challenge for legal information providers (or anyone else who wants to make a buck in this environment) is to get inside what associates do all day, pick it apart into its component pieces, and find a way to provide the same service some other way.

According to Above the Law, the new Bloomberg Law service will be officially launched  by the end of the month at a party in the New York offices of Willkie Farr & Gallagher.

The timing of this introduction is extremely interesting. Large law firms, a major target for the offering, are hurting.  They’ve cut costs and lawyers and are looking at their information services budgets very closely.  That economic environment could be a two-edged sword for Bloomberg; either buyers will gratefully embrace an offering that presents a competitive alternative to their major contracts with West and LexisNexis (and the resulting price pressure and service concessions that often accompany intense competition), or they will view Bloomberg Law as a slick but expensive nice-to-have, and will hesitate to add yet another service to their portfolio of information services in a time of cutbacks. We expect that Bloomberg will aggressively price the offering and try to take a significant share of the market rather than settle for being a niche player.

Bloomberg began offering BLAW on Bloomberg terminals in 2004, and ever since then the service has operated in somewhat of a stealth mode, with little known about its next-stage development. Bloomberg officials have rarely made public statements about its development, and most of the written commentary about it has come without the cooperation of Bloomberg itself.  That sense of secrecy and stealth is somehow part of the Bloomberg brand and mystique, but it only goes so far in a legal market where information buyers demand concrete answers about a service’s capabilities and limitations.

However, recent enthusiastic comments about the new platform, the apparent seriousness with which Bloomberg Law has tackled timeliness, comprehensiveness, integration of non-legal materials, and the gee-whiz factor of an apparantly innovative approach to research workflow all suggest that Bloomberg Law will soon move from the vaporware stage to becoming a meaningful contender for a significant share of the legal information market.

ATL also has a link to a PDF of a Bloomberg Law brochure.

[this post an excerpt from Bloomberg Law Comes Along At a Critical Time from Outsell's Insights service (password protected).]

The idea of Good Enough Information is a phenomenon that I and my fellow Outsell analysts have been tracking for several years now. A nice recent piece in Wired explores the concept of Good Enough in fields as diverse as warfare, consumer video, health care, and yes, law.   The Good Enough Revolution: When Cheap and Simple Is Just Fine.

Richard Granat of DirectLaw is a legal industry “guru of Good Enough,” and he’s featured in the piece.  His company makes solutions to legal problems cheap and accessible; he’s one of the few companies taking the Good Enough Revolution to the legal services industry.  Like other segments of the information industry obsessed with the high end market, the legal information industry has largely overlooked the legal needs of ordinary people and small companies.  Granat sees a change coming; within five years, small firms will have to adopt an elawyering approach, or they won’t make it.

Firms like DirectLaw will be helping to bring Good Enough to the legal services industry; many traditional legal information companies are too tied to the established big-firm market to see the opportunity or make the changes.

Sign of the times.  At the AALL conference this week, I talked with an executive of a large legal publisher about the changing structure of the legal industry.  He observed that they are selling more and more products designed for law firm lawyers to in-house corporate legal departments.

The conclusion? This is a sign that corporations really are taking seriously their shift away from the old model of legal servcies delivery.  They are looking for areas where their in-house people can more efficiently and cheaply solve legal problems than their outside firms can.

This will require some adjustments by both publishers and by in-house counsel, as the players figure out how that legal work can be done more efficiently and effectively from the inside; it’s not just a matter of having different bodies doing the work, but doing the work differently.

Law Technology News has a new Bob Ambrogi review of Casemaker and Fastcase.

What’s interesting here is not so much the details or results of the comparison (Ambrogi gives the nod to Fastcase), but the sense that both services have come a long way.  These are credible, low-cost commercial alternatives to the major legal research services that many lawyers are taking a serious look at.  Primarily offered as a benefit of membership in state and local bar associations, they are gaining widespread acceptance in cost-conscious times.

The new Legal Service Act in the UK will allow combinations of lawyers and non-lawyers to deliver certain legal services, and will open up the industry to new players and investors.  UK private equity firm Lyceum Capital has tucked away £255 million (about $510 million) in anticipation of new opportunities to invest outside money in law firms.  (see £255 Million Looking for a Home – How Will it Change the Practice of Law?) (pw protected)

Here in the states, WSJ has a report on more direct types of investments – in specific lawsuits: Investors Finance Lawsuits and Reap Any Benefits – NYTimes.com. Madoff-style returns – 20%.

In my recent Outsell report, Professional Networks and Social Publishing in the Legal, Tax & Regulatory Information Segment, I tried to cast a pretty wide net in my analysis of all the many ways that legal professionals can use professional networks and social media. The report covers not a single type of network or tool, but rather an array of tools that are at the disposal of lawyers today, including the services we know as professional networks (LinkedIn, for example), but also various kinds of knowledge-sharing sites, expert networks, and crowdsourcing services.

In trying to make sense of this all, the report outlines a three-tier model for lawyers’ use of the various services available.  Each of the three tiers meets some but not all of the needs a lawyer might have: for basic networking, for content delivery/marketing, and for service delivery.  Each tier also presents opportunities for legal publishers and information providers to participate in the networking world.

That last point is key; many publishers (not just in law, but other fields) assume they need to own or control a network to benefit from the networked environment. My view is that the way for publishers to work with networks is to make their content more interoperable and portable, and thereby more visible on all the networks available, rather than betting on any single network or platform. Network participants are putting out their own content; if everyone is a publisher, where does that leave publishers who keep their content locked inside old containers and inside walled gardens?

Everybody talks about unbundling legal services (it’s one of the prescriptions for a modernized legal services industry in Richard Susskind’s influential The End of Lawyers?), but nobody seems to do much about it.  Well Richard Granat, CEO of DirectLaw, is offering a course at Solo Practice University that will help solo lawyers break down their practice and create online services for certain parts of their practice, and to integrate them into a traditional solo practice.

Most of the attention on change in the industry is focused on the struggling BigLaw firms; but solo firms, with their flexibility and new, cheap tools, might actually be where the real action is.