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Could newspapers be a lesson for large law firms?

As interest in cloud computing and our products is increasing, I’m doing a lot of eduction to lawyers on the internet. A joke I keep using to put into context cloud computing is to say, “I think this Internet thing will be big”.

To further make my point about why the internet is important to lawyers and large law firms, and why they need an Internet-based strategy is by using an analogy between large law firms and newspapers.

Both have fundamentally the same product – writing
Both large law firms and newspapers survive on generating content primarily delivered as the written word. Easy enough. Investigations, fact checking, interviewing, proofreading, copy/contract writing — both industries are about words.

Quality content drives reputation and market share
Both industries are fundamentally driven on the quality of their underlying content. The newspaper in the United States with the highest circulation is the Wall Street Journal, a serious business driven publication.

Both are ruled by tradition-bound institutions
A look at the 10 largest newspapers and large law firms show you with minor exceptions USA Today (1982), DLA (merger in 2005), these are multi-generational institutions where organizational change is difficult.

Both self-regulate according often somewhat nebulous standards
While some are clear cut, often times what constitutes appropriate journalistic ethics or legal ethics is often in the eye of the beholder and subject to vigorous debate.

Geographic strength is critical in a fractured marketplace
Both concentrate geographically, including establishing satellite offices/bureaus to extend reach in a marketplace where even the largest player controls at most single digit market share.

Both have business models that rely on bundling of high-value content with low-value services Newspapers are driven by display and classified advertising combined on a page with original content. Large law firms rely on relevance review, basic legal research, and contract work generally done by junior associates to essentially subsidize the salaries of their senior attorneys, who deliver the highest value content.

Physical scale, once a strength, is now a weakness
It takes a lot of iron to run a physical newspaper. And tradition has it if you have a “big case” you need a “big law firm”. No longer. Technology has enabled the smartest folks to deliver the same quality content without the physical overhead and with far fewer people. It’s no surprise a substantial portion of our user base is comprised of “boutique litigation” shops.

Neither has been proactive about the Internet
Sort of the punch line here isn’t it? Newspapers have undergone an wrenching restructuring with many going bankrupt because of their inability to adapt to Internet revolution.

The industry can undergo wrenching changes with breathtaking speed
Think the Tribune Company believed in 2000 that they would be bankrupt by 2008? The Sun-Times? The Minneapolis Star Tribune? Did they believe it in 2005?

The legal industry has been largely unaffected by the technology of the internet in its daily operations minus one huge exception. email.

Is that it? email? In the end, will e-mail be the maximum impact of the internet on the legal industry? Or have we just seen the beginning?

Rakesh Madhava

Meet the guy who takes credit for the amazing work done at Nextpoint in bringing cloud computing technology that streamlines regulatory, compliance and litigation processes. Connect with Rakesh on Google Plus.

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One Response to Could newspapers be a lesson for large law firms?

  1. Jim says:

    Great call on the “Physical scale” comparison.  Paying to ensure you have enough capacity to ramp up is so 2009.

    These days, newspapers do most of their printing for Sundays.  The paper is not only printed more times due to a (much) larger distribution list, but is also physically much larger due to the uptick in advertisers wanting to reach that larger audience.

    Needing to ramp up to that volume one day a week means their presses go underutilized every other day of the week.

    Law firms face some of the same issues.  Instead of  a big printing press getting heavy use on Sunday, they need more server space and a new Concordance install as a matter ramps up.  When they ramp back down, they need to reclaim the space — or maybe find a way to conveniently archive it at a lower cost.

    Large variability in the amount of computing resources you need at any given time + an easy way to store data for cheap are two of the primary use cases for web-based (cloud) apps.

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