The Internet\u27s global reach has had a significant impact on the legal profession. This essay explains a few of the key developments in this area, including: competition fueled by outsourcing legal work to lower-wage earning lawyers around the world,  virtual work  changing client interaction and attorney work schedules, law firm reputation as a result of information availability on the Internet, work-product monitoring and the commoditization of legal services, and work force diversity spurred by the influence of international clients.
Globalization of The Legal Profession, Symposium. Indiana University School of Law-Bloomington, April 6, 200

Bierman, Leonard

Hitt, Michael A

English

Indiana University Bloomington Maurer School of Law

Indiana Journal of Global LegalStudiesVolume 14 | Issue 1 Article 3Winter 2007Globalization of Legal Practice in the Internet AgeLeonard BiermanTexas A&M UniversityMichael A. HittTexas A&M UniversityFollow this and additional works at: http://www.repository.law.indiana.edu/ijglsPart of the International Law Commons, Internet Law Commons, and the Legal ProfessionCommonsThis Symposium is brought to you for free and open access by the LawSchool Journals at Digital Repository @ Maurer Law. It has been acceptedfor inclusion in Indiana Journal of Global Legal Studies by an authorizedadministrator of Digital Repository @ Maurer Law. For more information,please contact wattn@indiana.edu.Recommended CitationBierman, Leonard and Hitt, Michael A. (2007) "Globalization of Legal Practice in the Internet Age," Indiana Journal of Global LegalStudies: Vol. 14: Iss. 1, Article 3.Available at: http://www.repository.law.indiana.edu/ijgls/vol14/iss1/3The Globalization of Legal Practice in theInternet AgeLEONARD BIERMAN* AND MICHAEL A. HITT**ABSTRACTThe Internet's global reach has had a significant impact on the legal profession.This essay explains a few of the key developments in this area, including: competitionfueled by outsourcing legal work to lower-wage earning lawyers around the world,"virtual work" changing client interaction and attorney work schedules, law firm rep-utation as a result of information availability on the Internet, work-product monitor-ing and the commoditization of legal services, and work force diversity spurred by theinfluence of international clients.INTRODUCTIONWe live in the age of the Internet. New York Times columnist Thomas L.Friedman made this point forcefully in his recent best-selling book The World IsFlat: A Brief History of the Twenty-First Century.' The Internet's "flattening" of theworld has had a significant impact on the legal profession, as discussed by variousobservers at this Journal's recent conference, Globalization of the Legal Profession.2This essay explains a few of the key developments in this area.I. GLOBAL COMPETITIONToday we live in a world of global trade and commerce, and lawyers, alongwith other American workers, are increasingly competing with workers from*Professor of Management, Mays Business School, Texas A&M University.**Distinguished Professor of Management, Mays Business School, Texas A&M University.1. See generally THOMAS L. FRIEDMAN, THE WORLD Is FLAT: A BRIEF HISTORY OF THE TWENTY-FIRST CENTURY (2005) (discussing the ways in which the Internet has "flattened the world" andaffected the ways businesses operate).2. See Symposium, Globalization of the Legal Profession, 14 IND. J. GLOBAL LEGAL STUD. I(2007).Indiana Journal of Global Legal Studies Vol. 14 #1 (Spring 2007)©Indiana University School of LawLEONARD BIERMAN AND MICHAEL A. HITTother countries. For example, three of the five largest (based on revenues) lawfirms in the world are headquartered in the United Kingdom (i.e., CliffordChance, Freshfields, and Linklaters), and each of these firms has over half of itslawyers located in various foreign countries.' Moreover, there is an increasingtrend, as Thomas Friedman predicted,' to outsource (via the Internet) basic legalresearch and document preparation to lower-wage earning lawyers in English-speaking India.5 Indeed, as Professor Jayanth Krishnan recently documented, therange of legal work being exported to India has steadily increased in recent years.6At all levels of work, U.S. lawyers are facing ever growing global competition fu-eled at least in part by Internet technology.II. 24/7 WORKLIFE AND VIRTUAL WORKRemember the days before e-mail and the Internet? Remember the dayswhen leaving the office truly meant "leaving the office"? Those days are gone!Today the world has approximately 700 million adult Internet users, with 152million of those living in the United States.7 E-mail and related "work flow soft-ware" such as Blackberrys literally make it possible to "be at work" on a 24/7basis.8 Time zone barriers, for example, that once gave U.S. attorneys with over-seas clients some defined "off-time" from direct client interaction have largelybeen eliminated. Today a client or co-worker can send an e-mail from Moscow toNew York at any time, with the expectation of a fairly quick response. Similarly,work files, draft documents, etc., can be sent back and forth via the Internet tovirtually anywhere in the world. Cell phones allow individuals to be reached withease even when they are not in the office or at a computer.9 Being an attorney, es-pecially one with an internationally oriented practice, is increasingly becoming a24/7 occupation.3. See Michael A. Hitt, Leonard Bierman & Jamie D. Collins, The Strategic Evolution of LargeU.S. Law Firms, 50 Bus. HORIZONS (forthcoming Jan.-Feb. 2007) (manuscript at 5 tbl. 2, on filewith authors).4. See FRIEDMAN, supra note 1, at 239.5. See generally Jayanth K. Krishnan, Outsourcing and the Globalizing Legal Profession, 48 WM.& MARY L. REV. (forthcoming 2007) (discussing legal outsourcing using the United States andIndia as case studies).6. Id.7. Oliver Ryan, Leading Indicators: A Compendium of Revealing Stats, FORTUNE, May 29, 2006,at 19.8. See FRIEDMAN, supra note 1, at 71-81.9. See id. at 213.GLOBALIZATION OF LEGAL PRACTICE IN THE INTERNET AGEThe reverse side of the Internet's 24/7 demands, however, is that "virtualwork" has become increasingly accepted in the profession (and by clients as well).A growing number of law firms have begun offering attorneys the opportunity towork part-time or from home for part of the week." That said, only 3 to 4 percentof lawyers currently take advantage of this option, and male attorneys tend to beparticularly reluctant to adopt such a work schedule." Potential "stigmatization"appears to be of concern here; attorneys believe that even if the firm's manage-ment says that a flexible work schedule is acceptable, adoption of such a workschedule may still be perceived as a lack of the attorney's commitment to thefirm. 2 Moreover, management researchers have found that employees on "non-standard" work arrangements can at times cause resentment and other problemsin the workforce. 3 Consequently, it remains unclear to what extent "virtual work"is likely to emerge as a major factor in the legal profession.11. "BE GOOD"In the second edition of his book, published in 2006, Thomas Friedmanadded a clever section entitled "Be Good."'4 In this section, Friedman cautionsreaders to live their lives "honestly, because whatever you do, whatever mistakesyou make, will be searchable one day."'" The world of "Google," and indeed theInternet as a whole, has had a tremendous impact on the amount of informationpublicly available about lawyers and law firms. While not required to report tothe SEC, the nation's largest law firms have in many respects become quasi-publicentities. Trade publications such as American Lawyer gather and annually pub-lish, on the Internet and elsewhere, extensive financial data about these firms, andacademic researchers conduct comprehensive analyses using these data."6 Internet10. Marci Alboher Nusbaum, Lawyers Push to Keep the Officeat Bay, N.Y. TIMES, Sept. 7,2003,§3, at 13.11. Hitt, Bierman & Collins, supra note 3, at 8.12. Id.13. See generally Joseph P. Broschak & Alison Davis-Blake, Mixing Standard Work and Nonstan-dard Deals: The Consequence of Heterogeneity in Employment Arrangements, 49 ACAD. McMT. J. 371(2006) (discussing a study that examines how proportions of individuals in standard and nonstan-dard work arrangements affect workplace relationships).14. THOMAS L. FRIEDMAN, THE WORLD Is FLAT: A BRIEF HISTORY OF THE TWENTY-FIRST CEN-TURY 185-86 (1st updated and expanded ed. 2006).15. Id. at 185.16. See, e.g., William D. Henderson, An Empirical Study of Single-Tier Versus Two-Tier Partner-ships in the Am Law 200, 84 N.C. L. REV. 1691 (2006); Michael A. Hitt et al., Direct and ModeratingLEONARD BIERMAN AND MICHAEL A. HITT"blogs" such as Silicon Valley Media Law,'7 Legal Sanity," and Adam Smith,Esq. 19 update and extend this information on an almost daily basis. Law firmreputations and the reputations of their attorneys are now almost constantly "inplay."In many ways this change mirrors what organizational theorists have notedas the shift in large law firms away from a "professional," or so-called P-2 model,to that of a traditional "corporate business" or "Managerial Professional Business"model. 20 Most of the current large law firms no longer act as true "partnerships,"'and they certainly no longer enjoy any shroud of partnership secrecy. Whateverproblems or successes they may experience, the Internet, particularly via blogs,ensures that their competitors, even overseas competitors, and others will find outabout them in short order. In such a context, and with their reputations constantlyon the line, law firms and attorneys are indeed best off following Thomas Fried-man's advice to "Be Good"!IV. WORK-PRODUCT MONITORING AND WORK-PRODUCT COMMODITIZATIONComputer and Internet technology has made it increasingly easy for all typesof firms to monitor their supply chain and production cycle. In the case of lawfirms, clients such as E.I. du Pont de Nemours and Company2 can use this tech-nology to carefully scrutinize services billed to ensure that they receive full valuefor every dollar of outside legal services purchased.Moreover, the Internet and related technologies are helping to make the prac-tice of law more and more of a commodity type of business.23 Once-complicatedEffects of Human Capital on Strategy and Performance of Professional Service Firms: A Resource-Based Perspective, 44 ACAD. MGMT. J. 13 (2001).17. Silicon Valley Media Law Blog, http://www.svmedialaw.com (last visited Apr. 10, 2007).18. Legal Sanity by Arnie Herz, http://www.legalsanity.com (last visited Apr. 10, 2007).19. Adam Smith, Esq., http://www.bmacewen.com/blog (last visited Apr. 10, 2007).20. See David J. Cooper, Bob Hinings, Royston Greenwood & John L. Brown, Sedimentation andTransformation in Organizational Change: The Case of Canadian Law Firms, 17 ORc. STUD. 623, 625,635 (1996).21. See Leonard Bierman & Rafael Gely, So, You Want to Be a Partner at Sidley & Austin?, 40Hous. L. REv. 969, 970-71 (2003).22. See Sarah Kellogg, The Business of Law, WASH. LAW, Oct. 2005, at 23, 24, for a discussionoutlining how the DuPont Corporation and other companies are increasingly playing "hardball"in terms of monitoring law firm billings to make sure they receive appropriate value for every dol-lar spent.23. See generally George P. Baker & Rachel Parkin, The Changing Structure of the Legal ServicesIndustry and the Careers of Lawyers, 84 N.C. L. REv. 1635 (2006) (discussing a shift toward a com-GLOBALIZATION OF LEGAL PRACTICE IN THE INTERNET AGElegal research tasks are now accomplished with relative ease using computers andelectronic files and records. As a result, these searches are increasingly completedby in-house corporate legal departments rather than farmed out to expensive out-side law firms.24 Exclusive corporation/law firm relationships of days of old (e.g.,the long-standing relationship between Chase Manhattan Bank and the blue-chip Milbank Tweed law firm in New York City)" are literally being replaced bycorporate online auctions for legal services.2 6 For example, in 2004 General Elec-tric Corporation began using a web-based provider of strategic e-sourcing solu-tions, "procuri.com, ' 7 to create online competitive bidding rooms through whichmajor law firms could competitively bid to provide specific legal services to GE.2"Procuri.com has been called the "Priceline.com" for large law firms. As NYULaw Professor Geoffrey P. Miller has recently pointed out, the old days of"clubby"law firm/client relations are clearly no longer the rule in the current Internetworld.29V. WORKFORCE DIVERSITYFinally, it should be noted that the Internet and related technology has madeit possible for law firms to do work for clients throughout the world even withouta physical presence in given countries, and this development may have an impacton increasing attorney diversity in U.S. law firms. In recent years, major corpora-tions have increasingly pressured their law firms to have a diverse attorney work-force for "market-based"3 and other reasons.3 For example, Wal-MartCorporation recently informed its leading outside law firms that at least "one per-son of color and one woman" must be among the top "relationship attorneys"modity relationship and an increased reliance on business-getting in the legal services industry).24. See id. at 1654-55.25. Id. at 1654-55 n.41.26. See Anthony Lin, Like Any Vendor, Law Firms Are Asked to Compete for Business on the Web,N.Y. L.J., Nov. 6,2003, at 1.27. See Procuri.com, Supply Management Excellence on Demand, http://www.procuri.com(last visited Oct. 5, 2006).28. Lin,supra note 26.29. Geoffrey Miller, From Club to Market: The Evolving Role of Business Lawyers, 74 FORDHAM L.REV. 1105, 1111 (2005).30. See David B. Wilkins, From "Separate Is Inherently Unequal" to "Diversity Is Good For Busi-ness": The Rise of Market-Based Diversity Arguments and the Fate of the Black Corporate Bar, 117HARv. L. REV. 1548, 1554-58 (2004).31. See Karen Donovan, Pushed by Clients, Law Firms Step Up Diversity Efforts, N.Y. TIMES, July21, 2006, at C6.LEONARD BIERMAN AND MICHAEL A. HITThandling its business,32 and Sara Lee Corporation and other major companieshave taken similar actions. 3 In many foreign countries corporate diversity hasrecently become an even greater priority than in the United States. For example,Norway and Spain will soon require that women hold at least 40 percent of allcorporate board of director seats.3' Thus, to the extent large U.S. law firms repre-sent multi-billion dollar Norwegian companies like Norsk Hydro and Statoil, orSpanish companies like Repsol, these companies may bring greater pressure fordiversity, especially senior-level female diversity, in these law firms.CONCLUSIONThe Internet's "flattening" effects are certainly being felt by the legal profes-sion across numerous dimensions. In particular, the Internet has hastened theprofession's globalization. Traditional time and location barriers have largely beeneliminated in the Internet age. That said, the elimination of these barriers has alsomade the practice of law more competitive, with the full impact of this unbridledcompetition yet to be seen.32. Meredith Hobbs, Wal-Mart Demands Diversity in Law Firms, FuLTON COUNTY DAILY REP.,July 6, 2005, http://www.law.com/sp/article.jspid= 1120579809481.33. Id.34. Charles Penty, Spain Tries to Counter Corporate Machismo, Hous. CHRON., July 28, 2006, atD8.

Globalization of Legal Practice in the Internet Age

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