Image via Diana Lee
This Economist story on the changing business structure of law firms (from Partnerships to companies open to public ownership) is a great look at the legal industry, especially considering some observers lose the big picture amid the many details of these organizations.
Here are my thoughts:
As societies advance, so too will their laws, and from at least a philosophical perspective, what law firms are selling – expertise – ought to change accordingly. I don’t think there’s a good reason to preclude law firms from being open to outside investments, including equity shareholders, anymore.
But being public isn’t yet the right model for a lot of these firms. There are more reasons to prevent detailed audits and additional regulation than tolerate them, and having equity available to institutional investors could create conflicts with working on the large deals that drive revenues at many firms. The fact that these companies are structured as Partnerships help explain their attractive numbers.
That aside, there needs to be a reason to go public in any industry. Funds from an IPO could certainly pay for acquisitions, but the legal industry hasn’t had many problems consolidating during the past decade without public ownership.
Right now in the United States, regulations prohibit public law firms by mandating every equity owner (i.e., “partner”) be an attorney. (It’s my impression that this is why Bar admission is a prerequisite for law-firm partnership.) Given what’s going on overseas, domestic regulators seem likely to address this sooner or later. It is possible, however, to practice law while being open to outside investment. Business-to-business companies that sell legal services do exist in the United States, and as this Wall Street Journal story shows, they are doing well (these companies operate similar to business consultancies). Though I don’t know of any such companies that are public, some are funded by venture capital and angel investments, so in theory, they’d be free to commence a public offering.
This is a good place to start in testing the model of public law firms in the United States. If these firms can secure their initial capital and sustain multiple rounds of financing while behaving like a law firm, then maybe the industry’s next step is to consider public offerings en masse.
I participated in one of the internet’s few fantasy Olympic leagues this year, and the Here’s how I’m justifying my poor showing e-mail from other participants that’s been coming in today all sound very similar, I imagine, to the shameful Orchestrate my victory even though I have voluntarily made decisions that the market has proven were very, very wrong wailings of participants in another contest.
How much fun would the league have been if no one were allowed to lose? Edited after posting: Excuse the extended metaphor. Monday, et cetera.
I spent some time awhile ago (warning: potential overshare) designing a tattoo that I still want inked. So I picked up a copy of Tattoo Magazine the other day at the Barnes & Noble at Union Square.
There were seemingly more magazines about tattoos there than magazines about business news. Thus, this observation:
- Number of trade magazines that cover tattoos: 17*
- Number of mainstream magazines** that cover business news: 7***
I’ll concede that this is an awful way to measure the amount of content about mainstream business news, but it’s tough to not make this observation when it’s right in front of your face.
** Not counting The Economist because it insists on calling itself a newspaper.
*** From the shortlist I keep top-of-mind.
This column by WaPo ombudsman Deborah Howell over the weekend drove me absolutely batty:
Barack Obama has had about a 3 to 1 advantage over Republican John McCain in Post Page 1 stories since Obama became his party’s presumptive nominee June 4.
Good work, Deborah, and congratulations on being able to both count that high and do basic division.
But, really, do pure numbers tell the whole story? Can you do something a little more scientific than this basic arithmatic? Your quick analysis provided little info in this way.
Anything you can tell us about the stories qualitatively, rather than quantitatively?
Sadly, this is par for the course among news reporters and news creators. My recommendations to clients on measuring media coverage always involve the context and never sheer volume.
Someone spitefully nominated me for the Hot Blogger Calendar, a quest to find the 12 most-attractive male and female bloggers and
exploit them honor them in print. So I’ve assembled the few appropriate photos of me on Flickr for anyone who might vote.
One of the other nominees, I just noticed, was a classmate in my 40-person high school class. Small world, no?Serious face: Sarah Morgan, one of the two women started this hott mess, is delightful. Really.
The invitation to join this Facebook group was appreciated.
Maybe it was your old Panasonic 8-Track player with the “T-Plunger” on the top? Perhaps it was your Commodore 64? This is the place to share your favorite pieces of yesterday’s technology, post photos, tell us what made them so magical and post links to other sites that offer support or applications for old devices.
Well, I nominate e-mail. And others don’t necessarily disagree.
People who are aflutter about offshore oil drilling are missing some points. The prospects of geothermal power, on a global scale, far outweigh the potential but not certain benefits of additional off-shore oil-drilling infrastructure, the Earth Policy Institute said today.
Essentially, geothermal power is heat or steam removed from underground with heat pumps and valves, and recently developed technology has made this conversion far more efficient. Its potential benefits include:
- A low-carbon and naturally occurring source of energy
- No fuel costs
- Consistent power that does not require storage, transport, or backup
- Not weather- or sunlight-dependent
Geothermal power is differs from alternative techniques like wind turbines and solar panels because it has a deep history: the first geothermal power generator existed in Italy in 1904. If countries exploit this technology correctly, there could be 13k megawatts of new capacity online by 2010. Considering some companies have announced* cellulosic ethanol production facilities will be operational during that year in the United States, both the energy and food-price conundrums will look a lot different in the near future.
Other developed but still energy-hungry countries are also jumping on geothermal technology, and it doesn’t make a lot of sense that United States leaders (and voters) are wasting time debating off-shore oil drilling to such a large degree. When compared to other potential energy sources, it really doesn’t matter much.
* This links to a client of mine.
The topic of this 140-character discussion was this column in The Wall Street Journal about
regulating short selling bailing out companies that lost a bunch of money because of exposure to risk.
The order that banned naked short selling of banking-company equity will expire on 12 August – yes, that’s right: the order bans something that wasn’t allowed before it – and it will be interesting to see what affect this has on the health of the markets.
Determining the immediate affects is guesswork. But here’s an observation: since the order affects trading in banks that hold home mortgages through derivative exposure, its externalities will likely affect the very consumers that contributed to the conditions for manipulative selling in the first place. So regulators’ remedy is to apply a solution to the consequence instead of the condition that created the problem.
I continue to think that the culprit is the lack of technology used in financial reports. Trading has become much more complex during the past decade, but financial reporting has remained more or less static. Right now, Wall Street IT departments are atwitter about XBRL, the XML-based technology that tags financial data. Obviously, the ability to quickly sort and analyze data has pre-trade and post-trade implications.
Until Wall Street starts making decisions with a crystal ball, I think data will do a lot to legitimize or discredit any rumor meant to manipulate markets.
Not that Twitter doesn’t already have its problems, but I see a lot of posts from people who apparently think the platform is HTML-compatible. Like this post from this afternoon.
Yes, this is a minor annoyance and isn’t nearly as irksome as, say, the line at the Starbucks at 28th Street and Park Avenue South. But many users aren’t going to take Twitter seriously as a micro-blogging platform until it supports simple HTML sometime soon. Until it does that, it’ll be a glorified SMS platform, in my view.