The Shifting of the Law Firm Business Model in the Disruption Era

The flow of globalization, liberalization and the development of information technology must be anticipated by every law firm. Especially with the massive development of information technology where such condition is often referred to as the disruption era.  It means that the development of information technology in an industry has the potential to replace old players with new ones. In the disruption era, old physical technology will be replaced with digital technology that produces something that is completely new, more efficient and also more useful. In the management of law firm, there are at least two areas of innovation that must be developed: legal service and legal process. To realize an effective and efficient legal process there are two steps that can be taken, the development of Knowledge Management Systems and Knowledge Management Technology.In the perspective of the law firm business model in the era of disruption, in addition to developing legal processes in the form of Client Portal, Information System and Virtual Data Room, it is also necessary to develop electronic document and records management systems (“EDRMS”). The EDRMS development is also carried out to anticipate the application of Case Administration in the Electronic Court (e-Court) which was imposed based on the Republic of Indonesia Supreme Court Regulation No. 3 of 2018. Keywords: Business Model, Law Firm, Disruption Era DOI: 10.7176/JLPG/89-15 Publication date:September 30th 201

Knowledge Inputs, Legal Institutions and Firm Structure: Towards a Knowledge-Based Theory of the Firm

Corporate scholars rely on traditional theories of the firm to analyze corporate organization and corporate contracting. Traditional theories of the firm, however, have long neglected the role of knowledge in shaping the internal structure of firms. Current analyses of firm structure that rely on these theories therefore suffer from serious shortcomings. This paper begins to address this gap by analyzing knowledge resources and investigating their influence on internal corporate governance structures. We propose a new typology that explains firm internal governance structure based on the types of knowledge used in the production process. We analyze the interaction of law and knowledge management. We investigate how firms can bind knowledge by means of patents, trade secrets and private contracting, such as covenants not to compete. We propose a principle of efficient knowledge allocation, which holds that organizational structures result from the necessity to maximize the use of knowledge resources. We discuss specific hazards that emerge from transactions with knowledge inputs. We discuss particular applications of the typology. We show how the management of knowledge resources required in mass production, high tech and law firms differentially affects the decisional hierarchies of these firms and also their compensation structure in certain instances. We argue that knowledge resources drove the change in the organizational structure of mass production firms from the U-form to the M-form, affecting decision making rights. We show how the adoption of stock options plans in high tech firms aims at constraining knowledge hazards. Stock options prevent leakage by retaining individual knowledge and discouraging hoarding of knowledge. We argue that the model of profit splitting and the hierarchy between partners and associates in law firms are also explained by the necessity of maximizing the use of knowledge resources. We then examine how the change of knowledge types used in law firms is affecting their organization. Finally, we investigate how certain business transactions like mergers, joint ventures and licensing contracts are shaped by knowledge inputs. We show that knowledge considerations provide a positive explanation for firm structure and a normative view in that the principle of efficient knowledge allocation should be an important concern of policy makers concerned with corporate reform

Expert System Development for Law Firm Using Information and Communication Technology in Indonesia

Information technology has changed the order of business and industry, including the legal services industry. This change requires law firms to be more creative and innovative in implementing legal processes in the development of information and communications technologies. To survive, a law firm cannot rely on its strengths in reputation and service quality only but also needs to consider the strength in using technology tools. The purpose of this study is to map the need for expert system development in law firms as an effort to deliver an effective and efficient legal process. The method used in this research was the normative legal method with a statute approach and conceptual approach. The results of this study were expected to provide an overview of the modern law firm structure model based on information technology. The results of the study showed that to anticipate changes to the demand for efficiency and the encouragement of regulations related to the use of information technology both in the judicial system and in registration statement processing procedures a law firm must adapt and develop information technology as the basis for the legal process. The stages of development begin with the development of Knowledge Management Technology based on Knowledge Management Systems. The next stage is the development of expert systems in the form of diagnostic systems, planning systems, procedural systems, intelligent checklists, document modelling systems, and argument generation systems. Keywords: Law firm; ICT; legal services industr

In-House Digital Libraries for Law Firms

In the current legal research and knowledge management environment, digital libraries and in-house knowledge management systems are not only a growing field but also are a necessity for a law firm’s continued survival. For a law firm to compete in the present world, a knowledge management system, which maintains a usable and searchable database of the firms work product and shared knowledge, is an absolute must to a collaborative work environment and client relations. This paper will focus on creating and maintaining such knowledge management databases, i.e. digital libraries, in law firms. First, this paper will define digital libraries. Second, it will discuss the history of digital libraries in general. Third it will discuss the current trends in knowledge management of law firms. Fourth, it will shift into a discussion of various database platform software options and what is necessary for selecting one, with a focus on selecting a vendor maintained software versus on open-source one. Fifth the paper will look at licensing and copyright concerns. Sixth, it will discuss metadata principles. Seventh, this paper will look at the problem of updating information. Lastly, this paper will discuss a land use database created using the principles studied for this paper

Varieties of Capitalism and the Learning Firm: Corporate Governance and Labour in the Context of Contemporary Developments in European and German Company Law

Research in corporate governance and in labour law has been characterized by a disjuncture in the way that scholars in each field are addressing organizational questions related to the business enterprise. While labour has eventually begun to shift perspectives from aspirations to direct employee involvement in firm management, as has been the case in Germany, to a combination of 'exit' and 'voice' strategies involving pension fund management and securities litigation, it remains to be seen whether this new stream will unfold as a viable challenge to an otherwise exclusionary shareholder value paradigm. At the same time, recent suggestions made by Delaware Chancery Court Vice Chancellor Strine, to dare think about potentially shared commitments between management and labour - and UCLA's Stephen Bainbridge's response - underline the viability - and, the contestedness - of attempts at moving the corporate governance debate beyond the confines of corporate law proper. While such a wider view had already famously been encouraged by Dean Clarke in his 1986 treatise on Corporate Law (p. 32), mainstream corporate law does not seem to have endorsed this perspective. This paper takes the questionable divide between management and labour within the framework of a limiting corporate governance concept as starting point to explore the institutional dynamics of the corporation, hereby building on the theory of the innovative enterprise, as developed by management theorists Mary O'Sullivan and William Lazonick. Largely due to the sustained distance between corporate and labour law scholars, neither group has effectively addressed their common blind spot: a better understanding of the business enterprise itself. In midst of an unceasing flow of affirmations of the finance paradigm of the corporation on the one hand and 'voice' strategies by labour on the other, it seems to fall to management theorists to draw lessons from the continuing co-existence of different forms of market organization, in which companies appear to thrive. Exploring the conundrum of 'risky' business decisions within the firm, management theorists have been arguing for the need to adopt a more sophisticated organizational perspective on companies operating on locally, regionally and transnationally shaped, often highly volatile market segments. Research by comparative political economists has revealed a high degree of connectivity between corporate governance and economic performance without, however, arriving at such favourable results only for shareholder value regimes. Such findings support the view that corporate governance regimes are embedded in differently shaped regulatory frameworks, characterized by distinct institutions, both formal and informal, and enforcement processes. As a result of these findings, arguments to disassociate issues of corporate governance from those of the firm's (social) responsibility [CSR] have been losing ground. Instead, CSR can be taken to be an essential part of understanding a particular business enterprise. It is the merging of a comparative political economy perspective on the corporation with one on the organizational features, structures and processes of the corporation, which can help us better understand the distribution of power and knowledge within the 'learning firm'.Corporate Governance, organizational theory, innovative enterprise, learning firm, employee involvement, corporate social responsibility, European/German corporate governance

College education

Space Grant Colleges and Universities must build the space curriculum of the future on the firm basis of deep knowledge of an involvement with the present operating programs of the nation and an on-going and extensive program of leading edge research in the aerospace sciences and engineering, management, law, finance, and the other arts that are integral to our planetary society. The Space Grant College and Fellowship Program must create new academic fields of enquiry, which is a long and difficult process that will require deeper and broader interaction between NASA and academia than has previously existed

The Teaching of Law Practice Management and Technology in Law Schools: A New Paradigm

The teaching of law practice management in law schools is becoming more critical for our profession. Employment with a traditional law firm used to provide the training and mentorship necessary to practice law. As a result of fewer employment prospects with traditional law firms, law students are now faced with the prospect of entering into law practice without this critical training and knowledge base soon after they become members of the bar. Additionally, the Internet and information technology is transforming the practice of law and, as a result, the management of law firms is also being transformed. Lawyers must understand the benefits and risks of information technology in law practice in order to ethically and efficiently serve clients and to develop a productive legal career that allows them to compete in a changed legal marketplace. This article presents a survey of the practice management skills required of the 21st century lawyer and proposes new approaches to the teaching of this subject in law schools

The Effect Of Knowledge Management Systems On Absorptive Capacity: Findings From International Law Firms

This case study is engaged in examining the effects of knowledge management systems (KMS) on absorptive capacity (ACAP). Often regarded as the major source of innovation and firm competitive advantage, ACAP raises questions of how to value, assimilate and apply new knowledge. Based on a multiple case study design we specifically investigate KMS as antecedent of ACAP. We interviewed six experts employed in knowledge management functions at two different international law firms operating in the Asian-Pacific, American, and European legal market. The findings from our case study analysis demonstrate that KMS have a positive effect on ACAP, especially on knowledge acquisition and assimilation

Entrepreneurial Supply Chain Management Competence: Predictors of Work Motivation Advocate

Abstract— This research paper investigates the impact of five factors indirectly on entrepreneurial Supply chain management competence and two other factors SCM strategies and performance of firm. Innovativeness Orientation, Risk-taking characteristics, Pro activeness, relational capital, coordination capability, SCM strategies and performance are the multi-dimensional factors effecting entrepreneurial SCM competence in Advocate Performance Analysis.  This study aims to analyze the influence of advocate's work motivation on advocate performance partially, knowledge of entrepreneurship of advocate on partial advocate of performance, independence of advocate work on partial advocate performance, and advocate work motivation, knowledge of entrepreneurship supply chain of advocate and independency of advocate work simultaneously. The population of this research is Law Firms that exist in all the Greater Jakarta area. While the sample is 25 percent of the existing Law Firm, then Obtained 123 Law Firms. In general, there are two divisions of the Legal Firm namely division of litigation and non-litigation division. Thus Spake Obtained the number of units observed are as follows: 2 x 123 = 246 units. The research is Quantitative analysis method using multiple linear regression analysis, Followed by determination analysis (R Square) partial hypothesis testing (t test) and simultaneous (F test) with alpha 5 percent (0.05). Prior to further analysis, the data quality and classical assumption test were conducted. Analytical tools using SPSS version 23.0 for Windows. The result of the research shows that the work motivation of advocate has an effect on the performance of advocate partially, the knowledge of entrepreneurship supply chain of the advocate has an effect on the performance of the advocate partially, the advocate's independency has an effect on the advocate's performance, and the advocate's work motivation, knowledge of entrepreneurship and independency of advocate influence on the advocate's performance simultaneously at the advocate's office Law Firm in Jabodetabek Data quality and classical assumption test were conducted

Risky Business

This article is part of an exchange including Anthony Alfieri and William Simon in the Georgetown Law Journal on the implications of law firms\u27 increasing reliance on the concept of risk management as the focus of efforts to ensure ethical conduct by lawyers. A risk management program involves the adoption of various policies and procedures designed to minimize conduct that may lead to individual and firm liability. Conflicts checking procedures, standard terms in engagement letters, and the requirement of a second signature by a disinterested partner on legal opinions are but a few of such measures. On one hand, the risk management paradigm reflects appreciation of the importance of situational incentives and pressures in shaping behavior in organizational settings. This is an advance over conceptions of legal ethics that assume that behavior is principally a function of individual character. Law firms are now major business enterprises, and their systems of rewards and sanctions, as well as their cultures, necessarily influence the conduct of those who work in them. Attending to the ways in which these influences can reinforce or discourage certain types of behavior can help firms establish and maintain environments that enhance the likelihood that lawyers will act ethically. On the other hand, a risk management approach risks inculcating an instrumental view of legal and ethical provisions. To the extent that it conceptualizes ethics as a matter of avoiding liability, risk management may foster the attitude of Holmes\u27s bad man, who cares only for the material consequences which . . . knowledge [of the law] enables him to predict. The bad man wants to avoid punishment, but has no commitment to legal compliance as a good in itself. This can lead to an impoverished view of law and ethics, in which the choice of behavior is contingent on the costs and benefits of a given course of action. This tension in the risk management model has been examined in the context of corporate legal compliance programs, and law firms may draw useful lessons from that research. Social psychologists and management theorists have identified complex connections among program characteristics, group dynamics, individual perceptions and motives, and employee behavior in the business setting. In particular, they have suggested that instrumental and values-based programs proceed on different premises and contribute to compliance in different ways. Instrumental programs can be effective by affecting employee cost-benefit calculations, while values-based programs can foster appropriate behavior because the employee identifies with the values that this behavior expresses. Scholars suggest that compliance programs with both dimensions generally are necessary, but integrating them into a single program requires careful consideration of how they may interact. The article closes by suggesting that this research on corporate programs may offer useful insights for law firms. It cautions, however, that applying this research will need to take account of the ways in which law firms both resemble and are different from typical business corporations