LloydLaw LLP

Changes in the Legal Landscape

This year is going to see a great deal of change in the legal profession. It's not going to be extreme or drastic but the economic climate will have an impact as much on us as everyone else. Not that I'm all doom and gloom because to some extent, the changes being forced upon us are inevitable, but it's going to hurt.

What we've got now is a situation where there are loads of professionals sitting around with not enough work to do. Imagine you are a conveyancing solicitor in London. Do you think they are going to be busy? Almost certainly not. But if you do employment, litigation, or rather more obviously, insolvency, then you are currently manically busy and supporting the rest of the firm.

What this actually means in reality is unclear. The Law Society Gazette (the Law Society's official weekly publication) reported back in December 2008 that some 1,250 firms were in "financial intensive care" with their banks. There's no definition of what that actually means, but the inference is clear. Law firms are not all cash rich and some will start to go under. 

Even the President of the Law Society recognises that there will be change. "My instinct tells me, after the current recession, the legal landscape witll look very different. The profession must now anticipate quite how different it might look to ensure there there is a properly remunerated independent legal profession to protect the rule of law on the other side."

What all this means for clients is unclear, but  my strong sense is that it will push forward the move towards commoditisation which Richard Susskind has been talking about for a few years because even the heavyweight commercial clients will be looking to cut costs. And it will force lawyers to reinvent themselves, if they haven't done so already. Very few of my contemporaries are doing what they started out doing 20 years ago and that rate of change will accelerate. This firm will have to adapt as well, and I intend to look at ways we will be doing that in the next few weeks.

OFT Guidance for Businesses

The Office of Fair Trading has just published a free guide on how to comply with increasingly complex competition and consumer laws. Aimed at smaller businesses, the 32 page PDF document which is relatively clear and well presented deals with areas like online selling, offering credit and what to do if you think your business has been subjected to anti-competitive practices.

Free Legal Boot Camp - a great idea from Winston & Strawn

Law firm marketing is a bit of an odd beast. It's one of those things that we all do, to a greater or lesser extent, but it's very hard to get right. Very impressed though with Winston & Strawn's idea of monthly evening sessions in London aimed at digital, internet and technology businesses.

Billed as Essential Law for Start Ups and Emerging Tech Businesses, I first saw it mentioned in the FT. Timely as ever, this month's event was held last night and there's a great write up from one of the attendee's here. Not much help for November but if you are an internet start up then I can't see what you've got to lose by signing up for future events. They even offer free beer and pizza at the same time as their expert advice. 

There's a website which is a good use of a meetup.com page and the fact that Bootlaw has got it's own Twitter feed and the two partners are Twittering away (as @bazv and @danversbaillieu for those who are interested) suggests that they really do know what their prospective clients are looking for.

If you don't know,  Winston & Strawn LLP is an international law firm with offices all over the place. The London office is at 99 Gresham Street, London EC2V 7NG. And just for the record, I've got no connection with them at all.

The assignment of copyright in bespoke software.

A company that commissions bespoke software from a developer won't necessarily own that software unless it agrees clear contractual terms. The most recent restatement of this important principle came earlier this year when the Court of Appeal dismissed a claim by Meridian International Services Limited that there was an implied term that the copyright in bespoke software should be assigned to it.

The case, known as Meridian International Services Ltd v Richardson and others, makes for interesting reading. It's a story about software developers who fall out with each other and never formally agree in writing who owns the financial forecasting software which had been developed for the Consumer Healthcare Division of GlaxoSmithKline.

Both the High Court and the Court of Appeal found that the software, known as StratX, belonged to the actual developers who wrote the code, rather than Meridian who had won the work and asked the developers to do the build StratX.

After reviewing the background which included the evidence of unreliable witnesses, the "phoenix"-like rebirth of Meridian International Services Ltd, immediately after the insolvent demise of Meridian Associates and the tangled web of the financial arrangements that existed between Meridian and the developers, the Court found that it could only imply terms into legal contracts when it was "necessary", and in this case they didn't think it was. It's a reminder that courts can only ever imply terms into agreements when they are "strictly necessary" and not just convenient.

Meridian had argued that they had to own the software not only because they wanted to be able to sell it to other customers, but also because it contained "confidential information". The Judge in the High Court, and supported by the Court of Appeal, took a very different view. Since the software was bespoke it couldn't really be resold to anyone else, unless their processes were identical to GlaxoSmithKline- which the judge commented was an "unlikely eventuality".

As to the idea there was confidential information in the software, the judge didn't actually agree, but mentioned that even if there was something confidential in there, then it could be protected as confidential information and that didn't mean the court needed to imply a term that the copyright should be assigned.

Aside from being a useful reminder that the courts are always reluctant to imply terms into agreements unless they really have to, the principles of copyright ownership are unchanged:

 

• The author of the work (or his or her employer) is the first owner of the copyright;
• The position is not changed simply because the work was commissioned;
• In any commercial transaction involving the development of bespoke software, there needs to be written agreement about the ownership - and assignment - of any copyright.

Post script:  I have linked to the High Court judgment of Mr Robert Ham QC in the body of the post, which as I have said, provides an interesting (even dare I say it, entertaining) read.

There's less detail in the Court of Appeal's judgment which is here. Plus there's also a note of the respondents' application for security for costs which was held before the full Court of Appeal hearing. The respondents (i.e. the actual developers of the software) would have been keen to ensure that if Meridian lost on its appeal, they would be able to recover their costs. It provides information on the high costs involved in this sort of litigation, with Meridian ordered to provide security of £53,000.

Commissioner for Oaths - RIP

Just over two years ago I posted about Commissioners for Oaths, who they were, what they did, and offered to provide the service myself. In part it was a test, to see what Google would do with it. Well, it's been so successful that somewhat reluctantly, I've decided that I can no longer offer the service. I say "reluctantly" because it's become apparent that it's incredibly hard for people to work out how to get documents sworn or affirmed. Recently, I had a phone call from a very charming elderly lady who desperately needed to get a document sworn. She told me her own solicitors (Fisher Meredith) based in Stockwell had advised her to go to the local County Court where the service is free, but that when she had gone in, they had refused to help her.

She was therefore prepared to make the effort to travel a fair distance to see me simply to get this relatively straightforward adminstrative task performed.

Shortly after that, another lady contacted me to get a document sworn - at the statutory fee of £5. I hesitated, but she seemed to be clear about what she wanted and I agreed to see her. When she came in, she told me that she had been quoted £60 by other solicitors to carry out the service - which should only take a few minutes. And of course, there's the rub. What should only take a few minutes often takes a great deal more than that, and it has got to the point that I have realised it is far more trouble than it is worth.

Whilst I understand why certain documentation require formal swearing or declaration, I think the burden should fall on the larger firms who are best placed to provide the service and not on the smaller firms who are already over-burdened. I accept that most of these firms are outside residential areas, but I don't see why they shouldn't be obliged to offer the service between certain times on certain days to members of the public. Given my own experience, it's clear they could easily use their own websites to both promote and manage the service and if my experience is anything to go by, the public would undoubedly benefit. It would also give some of the younger lawyers a chance to meet real people, often with real problems which are a far cry from the day to day work of the average commercial lawyer.

Do business websites need to provide a phone number?

The recent ECJ (European Court of Justice) ruling requiring any business website which deals with consumers to provide a means of contact in addition to their postal and email addresses has caused a fair degree of consternation. It's still not clear whether the UK will follow the ruling which appears to have given the generic "contact form"  a status above and beyond the poor man's email address.

The ECJ ruled that businesses dealing with consumers needed to provide either a telephone number or a contact form (described as an "electronic enquiry template") giving consumers the opportuntity to contact them rapidly in what the court described in a "direct and effective manner" before any contract was formed.

The case was about a German car insurance company, known as DIV, that offered its services exclusively on the internet. On its website DIV provided an email address but no phone number. The body representing German consumers took legal action on the basis DIV had an obligation to mention its telephone number to give consumers a chance to talk to DIV before they entered into any agreement.

On the face of it, that makes sense because we all know as consumers there are times when it is quicker and simpler to pick up the phone. On the other hand, it's obvious there's a cost impact of employing staff to answer those questions. I assume that DIV could probably offer more competitive rates than over insurance companies because it didn't trouble itself with answering the phone to its customers, who presumably could have gone to another insurance company if they had wanted to.

Be that as it may, the judgement is relatively clear and businesses operating in the consumer market in the UK are now on notice that they may be required to provide either a phone number or a contact form which must be responded to promptly if they are going to enter into contracts with consumers.

There's a helpful,detailed note on Out-Law.com about the impact of the decision on UK businesses with a post script noting that  BERR (The Department for Business Enterprise and Regulatory Reform) was still considering the impact of the decision for UK businesses operating in the e-commerce sphere.

Remember to Smile

Alan Weiss, a leading US management consultant, speaker and author whose blog I find both provocative and informative - which is as it should be - spoke to an association of lawyers in Australia last week:

On Friday morning, I keynoted for a legal association...... the theme of the conference was about doing things differently and refreshing the profession. I think if you want to do things differently, first you have to smile!

Good advice and if you see me, I'll make sure I am smiling.

Changes in the Business of Law

The news that Moneysupermarket.com, the price comparison website is going to start offering consumers access to law firms who will pay for these leads, is a strong indication of the way in which the internet will have an impact on the legal business.

It's taking a long time to trickle through, and for the time being it's only going to affect the conveyancing, probate and employment sectors (with personal injury to come) but the same changes will inevitably affect lawyers like us, offering services to business.

Let's face it, conveyancing is generally done on price. Whenever I get a call from a client who wants to buy or sell a house, I tend to suggest they either get some personal recommendation or to got for the most reasonable option, provided they are satisfied they will get a decent service.

As it stands, feedback on lawyers' services is extremely limited and most people never know who to contact when they need the advice of a lawyer on something personal. As Professor Richard Susskind told the Law Society Gazette: "This is a market worth £10bn and the means of selection of lawyers is usually hit and miss. If 66% of people in the UK use the internet, you only need a small number of these to choose legal services (in this way) to make this a serious issue".

There's a more detailed analysis of the impact of commoditisation on the legal industry here.

UK - CTO

Prolific blogger Robert Scoble has been blogging about whether America needs to have its own  Chief Technical Officer. His vote would go to Larry Lessig which makes sense.

It's the sort of role we could do with in the UK, what with the NHS computer chaos, data leakages including the latest PA Consulting debacle, and the seemingly haphazard approach to IT in schools.

Not sure who would be best suited to it let alone want to undertake the task.  My vote would probably go to someone like Ross Anderson who strikes me as someone who understands the complexities of this stuff, or even Richard Susskind who is currently IT adviser to the Lord Chief Justice. Anyone else got any ideas?

Google Chrome

I have got no idea whether Google's new browser, Chrome, will become as ubiquitous as its search engine, but there are a few things that struck me about last week's launch:

1. It was odd that a business normally so polished should make a hash of the standard terms and conditions - something which no business can overlook. The story is best explained along with comments from Google's product counsel for Chrome on Tap the Hive  - and covered too by the BBC. The issue of who owns the rights to content passing through a browser is an intriguing one and it's faintly ridiculous that the browser creator could claim the rights, but it does highlight the dangers of reusing universal terms and conditions without reviewing them. Assuming, of course, that is what happened.
2. I heard Rory Cellan-Jones, the BBC's Technology Correspondent talking on Radio 4's Today Programme, saying that most people in the UK wouldn't have a clue if you asked them which (internet) browser they used. It's a useful reminder that not everyone cares about this sort of stuff.
3. Most corporate users will be untroubled by this for a while yet - a point well made by one commenter on Techcrunch UK who says: "I’m a developer working on corporate web based apps (BI, BMP, ERM, etc), and our customers pretty much only use I.E. That’s definately not going to change soon, I don’t think. MS dominate the corporate desktop and web-based office-apps from anyone other than MS are unlikely to make an impact there".
4. The strategy behind it is interesting and worth considering. Google Apps are definitely gaining   some leverage (I tend to think the news that the Telegraph Group signed up back in August 2008 is a clear indication of this) and the thinking behind what Google is doing - or not doing - is addressed by both John Naughton in The Observer and Scott Berkunn in the Harvard Business Review. Scott has even reviewed Chrome on his blog, although I confess, I have yet to download it. Having only just come to terms with Firefox 3.0 I can do without the complication.