Join Facebook And Save On Legal Fees?
I found an amusing article on Bloomberg from yesterday. You can do more on websites like Facebook than just stalk your former high school classmates. Apparently, firms are increasingly using online social networking for a far more useful end: to save money in legal costs. Huh? The reason how might not be immediately obvious, but Bloomberg explains:
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 at Cumberland 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."
Hmm. That last statement might be a bit of a stretch. Firms attempting to save money on legal costs by preparing drafts of legal documents themselves isn't that novel of a concept. During my days in finance, I witnessed some firms relying on their in-house counsel to do the bulk of the legal work before turning it over to the pricey outside corporate attorneys.
Think about the numbers. If you're paying a lawyer in your internal counsel somewhere between $150,000 and $250,000 per year, that amounts to somewhere in the ballpark of $60 to $125 per hour. Corporate lawyers regularly charge hundreds of dollars per hour for their services. For any firm conscious of expenses, this is a no-brainer.
Of course, there's a reason why you pay so much for big law firm expertise: they have the experience to know how to properly draft legal documents. But if you can get boilerplate versions of those documents beforehand, then you could save many hours of their work -- and thousands of dollars.
So I'm not shocked we're seeing social networks and even websites specifically geared towards this end. You can't copyright legal document templates, so there's no reason a sort of public domain for boilerplate versions of common documents couldn't pop up before long. Frankly, I'm surprised it's taken this long to get off the ground, as the internet has been around for a while now. With information exchange as easy as it is nowadays, even technical lawyer jargon might be susceptible to more widespread understanding.