Dispute Resolution is Shifting – Attorneys Will Shift or Shrink

Dispute Resolution is Shifting – Attorneys Will Shift or Shrink

A global pandemic has created upward pressure on the number of unresolved disputes. Downward economic pressure resulting from the full spectrum of the inability to deliver to the inability to pay has created more disputes. Reduction in funding and the inability to hold in-person court sessions has reduced the number of disputes courts have been able to resolve. Attorneys – by and large – feel like the legal services industry is shrinking. It’s not, but it is shifting.

The Decentralized Arbitration and Mediation Network (“Network”) is a proposed global, borderless communication and transaction platform to resolve disputes globally. The Network would facilitate parties dispute resolution on its online platform. Not only is the Network scalable (it is more responsive to changes in the economy, environment, and such) it offers options that are not offered by courts such as

-> who will decide (with options of one person or algorithm, pools of random jurors, pools of experts, a collaboration of the parties, mediation, etc.);
-> how long the decision-making process will take;
-> party anonymity;
-> and whether the dispute and the resolution will be made public or remain private.

Most disputes have always been and still are resolved through private negotiation. One person claims they are owed something from another. A response is made, then a counter-response and this cycle continues until the dispute is resolved. Private judges have resolved disputes in the United States since at least 1866.1 Arbitration as a method of dispute resolution was formalized in the United States by the United States Arbitration Act (commonly referred to as the Federal Arbitration Act) in 1925. Mediation was practiced in Ancient Greece and it could be argued that every war between humans was followed by mediation of some sort.

Parties, including the government,2 may enter into a binding arbitration agreement to resolve a dispute in an alternative, private forum.

Beyond the United States, organizations like the New York Convention facilitate dispute resolution globally.

The Network will allow parties to resolve disputes whether they are local or global and unlike the jurisdiction of the local court, the resolution is enforceable globally. And perhaps more significantly, the Network does not require that parties, even legally created parties like corporations, be represented by attorneys.

Certainly, parties in dispute may rely on attorneys but the attorney role will be more of a consulting role rather than that of an expensive litigation role. Further, parties in dispute may be motivated to look for attorneys who have developed skills in areas that are not traditionally considered part of an attorneys stock and trade – such as crafting claims and defenses for resolution by algorithms rather than people.

Attorneys do not recognize this shift or deny it may be experiencing shrinking revenues. Attorneys, however, who shift and develop new skills to serve their clients may experience a revenue boom.

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Brandon Blankenship
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  1. Woodruff v. Dickie, 31 How.Pr.REp. 164 (Sup. Ct. N.Y. Co., 1866).
  2. 5 USC 575(c); FAR 33.214(g).
Not Your Grandfather’s Law Practice Anymore

Not Your Grandfather’s Law Practice Anymore

Just a couple of generations ago, professionals stayed in their lane. The clergy ministered. Accountants did accounting and attorneys practiced law. Those days are over.

Pressures from the Financial Crisis of 2008 resulted in a distinct shift in the legal services industry as more general counsels brought work in house. Legal budgets were cut. This was nothing new. The legal services industry had been soft in previous financial downturns. What made this season different is that rather than rebound, the legal services industry shifted.

Companies started looking for non-lawyer specialists to provide non-legal services that attorneys traditionally provided like strategy and dispute resolution. Technology provided more and more internet platforms resourcing individuals and companies to help themselves to services that otherwise would have been provided by a law practice. Technology opened the door for disputes to be resolved using artificial intelligence platforms. Non-lawyer ownership of law practices has gone from consideration to realization. Legislators have expanded the services that para-professionals may provide without a law license and professionals are getting out of their lane.

Deloitte, an industry-leading audit, consulting, tax, and advisory accounting firm is one of the giant Big Four professional services. This month it doubled the size of its U.K. legal arm. The company will take on all 29 partners from Kemp Little, a law firm specializing in technology and digital media. Deloitte is also expected to take on approximately 57 additional lawyers in a deal expected to be complete next quarter. Michael Castle, the managing partner for Deloitte Legal in the U.K., said in a statement: “Today’s announcement is a milestone in the evolution of the delivery of legal solutions. Kemp Little is market-leading in the practice areas that Deloitte Legal has identified as being core to its offering. These areas are all synergistic with Deloitte’s wider business, meaning that we will be able to offer end-to-end professional services in areas like commercial technology and digital media.”

This is not an end to an attorney whose law practice is in the top third of the legal services industry. It is the end of the attorney whose law practice is in the bottom third. And it is the squeeze on attorneys whose law practice is in the middle to shift or get out.

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Brandon Blankenship
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Fixed Law Is a Partnership Between Attorneys, Technology, and Community

Fixed Law Is a Partnership Between Attorneys, Technology, and Community

If I was going to launch a website titled fixedlaw.com, it would concentrate on attorneys (the people part of attorneys), technology, and community.

During the pandemic of 2020, the global response was some form of quarantine and social distancing. Community took a hit. Like a small plant growing out of a crack in concrete, the human need for community manifested itself first in Italy. Individuals started going out on their balconies and singing, full voiced singing. And before too long, others joined them as an individual voice became a choir. And then others brought out their instruments. Dancing followed.

The first iteration of innovative technology came in the form of strapping champagne glasses to long poles. Again, from their balconies, Italians extended their poles across narrow streets to toast.

And then people across the globe started using video conferencing platforms like Zoom to start meeting. The meetings grew in quality and quantity until just about every type of people was getting together virtually. Businesses meeting may have lead the way, but social hours, games, family reunions, weddings, and even meeting strangers led the way.

Noticing what people have done naturally is a promising roadmap for attorneys. Attorneys do not do well in isolation either. They and their clients need community. And what about the time constraints attorneys suffer because of the high demands of blending their professional and personal lives? I don’t know what the technology is that will help attorneys build a client community. Maybe it does not exist yet. But it is better to toast from the end of a long pole, than not to toast at all.

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Brandon Blankenship
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Talking to Clients During a Pandemic is a Best Practice

Talking to Clients During a Pandemic is a Best Practice

Talking to clients during a pandemic is a best practice. Actually, talking with clients is always a best practice. If you are not already doing it, a pandemic might be a great opportunity to develop the habit.

Clients will remember who communicated with them, and who didn’t.

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Brandon Blankenship
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Defining Culture of Compliance for Law Firms

Defining Culture of Compliance for Law Firms

While developing the “Culture of Compliance” materials for the Enemy in the Camp continuing legal education course, I struggled for an accurate definition of a “Culture of Compliance.” There are lots of resources surrounding a Culture of Compliance – books, videos, lectures, white papers, etc. Few attempts have been made, however, to define it. I could not find a single attempt to define a Culture of Compliance in the context of a law firm.

To me, law firms are unique organizations in this regard as several of their collective sworn duties give safe harbor to those who intend to work against a Culture of Compliance. For example, the duty of confidentiality encourages groups within the firm to safeguard client information not just within the firm but within sub-groups in the firm. This lack of openness has shown to be fertile ground for non-compliant attorneys and staff employees (sometimes referred to as a Corporate Silo). To restate, the lack of openness resulting from the desire to protect client confidence gives a hidden enemy room to act out of sight.

In his book, The Righteous Mind: Why Good People are Divided by Politics and Religion, social psychologist Jonathan Haidt, explains why the definition is so elusive. The “Culture” is not one thing that can be identified. It is a set of connected things or parts forming a complex whole – a system. His definition is found in his search to define morals:

Moral systems are interlocking sets of values, virtues, norms, practices, identities, institutions, technologies, and evolved psychological mechanisms that work together to suppress or regulate self-interest and make cooperative societies possible.1

When defining a Culture of Compliance in a law firm (or elsewhere), each of these things or parts that make up the system has to be developed in such a way that they work together to form the Culture. Each thing or part omitted leaves room for a hidden enemy.

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Brandon Blankenship
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  1. Haidt, Jonathan, The Righteous Mind: Why Good People Are divided by Politics and Religion, P. 224.
Protect Your Law Firm From a Social Engineering Fraudster

Protect Your Law Firm From a Social Engineering Fraudster

If you thought the picture above was of Barack Obama, look again. It is not President Obama. It is an impersonator. Impersonation is one of many ways that a social engineering fraudster (a social hacker) is using technology to defraud attorneys across the globe. Hackers used to be highly technically skilled people who were proficient at using their technology skills to get into accounts that did not belong to them. Once hackers were in accounts, all manner of stealing took place from unauthorized money transfers to fraudulent credit accounts established with the help of identity theft. This new form of social hacking, socially engineered fraud, uses the power of the internet to leverage relationships to overwhelm victims.1

Today, hopefully, there aren’t any attorneys left that might fall victim to emails from strangers (especially Nigerian strangers) requesting help with a financial matter. What attorneys are falling victim to, however, are socially engineered attacks. Now the email comes from a friend or a family member who knows a lot about you. It might start something like this, “It was good to see you at the reunion last week. A bunch of us are talking about sending money to our friend Greg to help him through his recovery …”

The catch is – the email is not from a friend or a family member. It is from a Social Engineering Fraudster.

The latest hidden enemy, the Social Engineering Fraudster, has better emotional skills than technical skills. Every day they refine the art of influencing people to disclose information that they shouldn’t and do things that they ought not do but are willing to do for a friend or someone they trust.

The Social Engineering Fraudster usually starts by trolling social media (LinkedIn, Facebook, Twitter, Etc.) for a potential victim. Once a victim is identified they use social media to learn as much as they can about the victim and the victim’s social and business networks.

Over Half of Businesses Globally Have Been Victimized

Nearly half of global businesses surveyed reported being the victims of one or more social engineering attacks.2 There are many examples of a socially engineered attack. One example may be impersonation. By using resources that are accessed for free on the internet, a Social Engineering Fraudster can learn enough to impersonate a victim. While impersonating a person of authority, employees can be instructed to wire funds or transfer assets, release confidential information or proprietary information.

Another example is vishing. Imagine that you finance a car through Big Bank. The next day, you receive an automated call from Big Bank. The caller I.D. shows “Big Bank.” The automated voice announced that the call is from Big Bank. It goes on to thank you for trusting Big Bank with your financing needs and asks you to confirm the first three numbers of your social security number. If you punch them in, you just became the victim of vishing. The Social Engineering Fraudster already had the last six numbers of your social security number. The first three digits of your social security number had been blacked out on a traffic ticket you got ten years ago. Now that the Social Engineering Fraudster has your complete social security number they can start getting credit cards issued in your name. A few simple steps can establish a human “firewall” against socially engineered attacks. Here are four of them.

Use Emails You Know

When you get an email from someone purporting to know you, resist the convenience of simply clicking reply. Instead, start a new email and use the email from your contacts, the email that you regularly use. Social Engineering Fraudsters often use fake email to communicate. It is masked to look right, but it isn’t.

Verify Transactions By Phone

Before you make a wire transfer or payment for a client, verify the payment information with your client by phone (or in-person). Again, use the phone number from your contacts rather than the one that is provided to you.

Verify Information Changes

When a person requests that you change information in your payment or access systems, verify the information change request from someone other than the requestor.

Create an Aware Culture

Social Engineering Fraudsters use their high level of emotional skills to select victims. Everyone that comes in contact with your law firm is a potential victim. If the managing partner is not accessible, an IT gal that has access to the managing partner’s email will do. Consider buying lunch for everyone in your firm once a month. During lunch have a presentation that educates everyone about the latest socially engineered fraud schemes. If everyone is watching for an attack, it is hard for a fraudster to penetrate your firm. If you use contracted services, remember to include them in the process. Some vendors have as much access to internal systems as employees.

It is only a matter of time before a Social Engineering Fraudster makes an attempt on someone in your firm, your firm, or one of your firm’s clients.

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Brandon Blankenship
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