Friday, March 29, 2002

Live Netcast for the "Very Bad Hotel" guys

In early January, I wrote about the PowerPoint presentation that was spreading like wildfire around the Net (the comment is at the bottom; there’s also a USA Today story about it here). It was about two guys who tried to claim their “guaranteed room” at the Doubletree Club in Houston.

Well, looks like they’re cashing in on their fame a bit – check out this e-mail I received today.

Laurence Canter resurfaces. Be afraid. Be very afraid.

The only possible reason he could be showing up in this C|Net interview is to try to rehabilitate his image, possibly to introduce yet another brilliant (ahem) scam on Internet users.

Don’t know who Canter is? He’s half of the duo who introduced spam to Usenet back in 1994. One of his infamous posts is here at Google, and there’s a great write-up about the whole ordeal here (courtesy of EFF’s C&S archive). Tennessee revoked his license to practice, so for the past several years he’s been “developing software to help traders analyze stock options.”

I know one thing – if I were a trader, I’d be worried. Set up those filters now!

Google is a fickle mistress...

Talk about a lack of patience. Back in February, Evan Williams (co-founder of Pyra, and co-creator of linked to my site. Within a few hours, Google was indexing my site daily. What a rush! But then March 7 rolled around, and I skipped a day of posting. By Saturday, Google had not only stopped visiting each day, but had also reverted to a cached version of my home page from January. Weird.

Then earlier this week a number of people linked to my post on Eisner’s goofy editorial in the Financial Times (Craig’s Booknotes, The Peanut Gallery (Will Cox), and The Shifted Librarian (Jenny Levine) among others). Sure enough, Google came crawling back to me. I was popular again. But, like yesterday’s news, I was tossed out: thanks to my sinus infection, I took Wednesday off. And by Thursday, guess what? Back to January’s cache, as if I’d never even mattered.

I promise, Google: I’ll be better. I won’t ignore my blog. I will consistently provide fresh content. I will link to others. Won’t you come back?

Thursday, March 28, 2002

This is the third time

This is the third time in a row that the “souvenir” I bring back from London is a sinus infection. Needless to say, I’m moving a bit slow. Hopefully the horse pills the doctor has me taking will get me back to normal by tomorrow. In the meantime, I’ll be taking it easy.

Tuesday, March 26, 2002

Eisner: Honest Abe would agree with us...

Found two more great law/technology blogs (by way of Jenny at The Shifted Librarian): Larry Staton’s blog at and Will Cox’s at Both are worth visiting.

Larry has a good response to Michael Eisner’s OpEd in today’s Financial Times.

Here’s my $.02: the Constitution to which Eisner refers is not about eliminating the possibility of bad behavior. It is about creating a framework in which those who are harmed by bad behavior can seek recourse. Disney and the other entertainment companies are trying to bootstrap an argument here where they can establish that the framers wanted protection, so therefore we must remove any possibility of harm.

Sorry, Mike. Not the same thing. Just like guns, cars, planes, telephones, and any other technology invention over the millenia, there are applications that benefit society and there are applications that don’t. Deal with it.

Monday, March 25, 2002

Libel or slander? Damages or jail? You be the judge...

Two former employees of Varian Medical Systems who have posted more than 14,000 messages about the company on 100+ message boards were fined $775,000 for damages to Varian back in November. In addition, the court imposed a permanent injunction on the two, barring specific libelous postings about Varian employees and their personal lives.

Attorneys for Varian go to court tomorrow to try and argue that the only way to shut the two up is by sending them to jail. You can browse some of their posts by looking at Varian’s message board at Yahoo!, or by browsing their mildly disturbing web site at GeoCities.

The case raises some intriguing questions aside from the bizarre behavior of the defendants:

  • Are judges allowed to visit web sites that are material issues in a case?

  • Is Internet “speech” libel (i.e., a written comment) or slander (i.e., a published statement – anything published mechanically, like radio or TV)? (Under California law, special damages are available only under libel.)

Who's watching you?

I wrote a column for this month’s ABA Law Practice Management Magazine about spyware and how to fight it. Turns out the fight between spyware and counter-spyware applications is getting uglier; this article at MSNBC details how some spyware apps are deliberately breaking the counter-spyware appliations.

You can visit Trapware’s home page for more information about “Who’s Watching Me? “, and WinWhatWhere’s home page for information about “Investigator”.

Digital Rights: Would you like

Digital Rights: Would you like some?

If so, then make sure you read Dan Gillmor’s article.  And after you read it, if you are inclined, then take some action.  Waiting for Congress to figure out how how the digital world is supposed to work is like letting Colonel Sanders babysit your chickens….
[Ernie the Attorney]

Starting a company? Use your head.

I ran across this article in Inc Magazine about two months ago. I meant to link to it back then, and am just now remembering. The best part of the story behind the rise of Cranium (if you haven’t played the board game, you don’t know what you’re missing) is the backgrounds of the co-founders: both former Microsoft employees, they took lessons from the high-tech world and applied them to building a non-tech company from scratch.

So much has been written about the old-world lessons that should be applied in the technology space that it was refreshing to see the opposite is true as well.

Something in particular in the article resonated with something I observed the last time I was at Microsoft’s campus: everyone you come into contact with knows what the mission is, who the enemy is, and how they’re going to move ahead. For a company of nearly 50,000 employees, it was overwhelming how “on message” they were. The author of the Inc piece refers to it as Gates’ (and now Ballmer’s) lesson of “the power of a mission clearly and consistently communicated.”

Why do so many companies have trouble with something that should be so simple?

Sunday, March 24, 2002

Computer vulnerabilities

Following up on yesterday’s link to Mike Deem’s comments about rolling bowling balls down mountains, I thought this post from Mike Chandler provides some good fodder for discussion. Mike took a machine, loaded it up first with Windows 2000. He was hacked within a few hours. He reformatted the machine, loaded it up with Red Hat Linux 7.2 and the default Apache web server. He was hacked within an hour.

It’s his conclusion which is something everyone should know (especially those courteous souls who see fit to e-mail me every “virus warning” they get): Ultimately, both operating systems are vulnerable if you don’t take the necessary precautions.

Moral of the story? Update the OS regularly, keep your applications current (I like C|Net’s Catch-up service for PCs), and use a firewall (Zone Alarm is a good free choice for PCs). If you’re worried about your current Internet connection, pay a visit to Steve Gibson’s Shields Up! site which will tell you just how (in)secure you really are.

An Industry on the Fritz

A picture named hollings.jpgDoc Searls includes a number of good links to the furor over Fritz Hollings‘ latest bill, the Consumer Broadband and Digital Television Promotion Act.

At issue is neither the promotion of broadband access nor the conversion of TV to HDTV. The issue is really whether the entertainment industry can flex enough muscle to regulate the technology industry. This bill would mandate any consumer electronics manufacturer to implement copy protection blessed by the studios – so that the studios can exert greater control over how their customers use the studios’ products.

This is the same issue that has arisen every time a new technology comes out. And somehow, the entertainment industry keeps going back to the well – just to see how far it can get the courts (or, in this case, Congress) to go. There was Sony vs. Columbia, which went all the way to the U.S. Supreme Court before the studios grudgingly admitted that people could, in fact, record programs that the studios willingly broadcast over TV. Later, we had the DVD mess – which resulted in the ridiculous “regions“ being created for DVD sales. And now Fritz brings us this.

I can’t help but go back to the original Sony vs. Columbia case, in which none other than Mr. Rogers himself was asked whether, as a copyright holder, he viewed technology as a threat:

“Very frankly, I am opposed to people being programmed by others. My whole approach in broadcasting has always been ‘You are an important person just the way you are. You can make healthy decisions.’ Maybe I’m going on too long, but I just feel that anything that allows a person to be more active in the control of his or her life, in a healthy way, is important.” (Testimony is available here, note 27)

Won’t you be my neighbor, Fritz?

Saturday, March 23, 2002

So he works for Microsoft,

So he works for Microsoft, but you can’t really argue with this logic:

If you ask me, getting a kick out of being successful with a virus on Windows is sort of like claiming fame for rolling a bowling ball down a mountain. It isn’t very hard to get the bowling ball to the top, and it has no where to go but down. [via Mike Deem’s weblog]

Friday, March 22, 2002

How do they pick the

How do they pick the cities they show on the inflight map? Right now, we’re somewhere high above Canada (36,000 feet, to be exact) in between Goose Bay and Chicoutimi. Absent from the map? Montréal, Toronto and Québec City.

Now they’ve gone to the large map – so you can see western Europe and the east coast of the U.S. The major cities listed? Algiers, San Juan, and London and Chicago.


Wednesday, March 20, 2002

London Taxi Cabs are without

London Taxi Cabs are without a doubt the best in the world. Now if there just weren’t so much traffic, getting around town would be convenient and quick. Any time four adults (including two of us well over 6’) can fit comfortably into a vehicle with a driver, you have to be impressed.

Why can’t we have these in the States?

A picture named taxi_interior.jpg

Tuesday, March 19, 2002

Announcing Microcontent News

Received an e-mail from John Hiler today, the guy who wrote the Google bomb articles from a couple weeks ago. Turns out he’s launching a new e-zine about weblogs titled “Microcontent News“. The article announcng the new zine is here, and here’s a snippet from the article that explains why Hiler is so enthusiastic:

If you map Personal Publishing onto Personal Computing, it’s the mid-1970s.  Popular Electronics just published the first article on the MITS Altair, the first desktop computer in the world.  Microsoft just wrote the first BASIC language for the Altair.  The Woz just demo’d the first Apple I at a meeting of the Homebrew Computer Club .


One of the things that

One of the things that was really starting to make business travel bearable last year was high speed Internet access in every hotel room I stayed in. I’m a Hilton bigot (as a HHonors Diamond member, they upgrade me to embarassing rooms when I check in; how can you turn down a 1900 square foot suite in the city center?), and was loving the fact that with the VPN enabled, it was as if I’d never left the office. (And as someone who lived through the nightmares of trying to get early Windows machines on a network, I’m still amazed every time I walk into a hotel room, boot up my computer, plug in the ethernet cable, and voilà: instant Internet.)

Post 9/11, however, it appears as if this perk has gone away. A couple hotels have claimed that the companies that provided the access went under in the post-9/11 travel depression, but I’m not so sure. Does anyone know? Is it the providers that are having trouble, or is it the hotels simply cutting costs?

Law firms and Knowledge Management: There is Hope

Originally published: March 19, 2002
Edited: April 16, 2002
by Rick Klau

Six years ago, I was in the main conference room of a Top 100 law firm. I was trying to convince the managing partner of this 400 lawyer firm that the firm needed an intranet. “Strip away the technology, the bells and whistles,” I said. “What we’re talking about is making your firm more efficient.”

He paused, then looked at me. He smirked. “You do that, Rick, and this firm goes out of business.”

In retrospect, it wasn’t the smartest thing I’ve ever said. But I was less than a year out of law school… I didn’t know any better.

Today, I know better. But the legal profession – and other professional services firms, for that matter – have not yet embraced efficiency. Why? The roots run deep: the business model, the compensation structure, and the clients themselves.

Business Model
Law firms operate on a “write once, sell once” model. Because they bill based on the amount of time they put into the matter and not the value of the finished product (whatever that “product” might be), there is no incentive to reduce the amount of time it takes to produce the finished product. The irony is that lawyers all went to law school – where the ultimate measure of accomplishment (the grade) was tied not to the amount of time you put into your work, but in the finished result: the exam. (If only all those 18 hour days could have earned me an A on their own…!) But once the lawyer graduates, she is compensated on the amount of time it takes her to do her job. That just doesn’t make sesnse.

The law school example bears more discussion: the purpose of law school isn’t to teach you how to find information. The purpose of law school is to teach you what to do with the information once you find it. Then – and only then – do you acquire knowledge about the subject matter. Because law firms reward individuals for finding information (which, after all, represents the majority of time spent on a matter), there’s less reason to actually turn that information into knowledge, and that knowledge into strategy.

Compensation Model
As long as lawyers are paid based on the number of hours they bill (or the amount of business they individually generate), there will be little or no incentive to actively pool resources in the firm. In the UK, where compensation in law firms is based on the “lock-step” compensation model (individuals are compensated partly based on seniority with the firm and generally make the same as others with similar seniority), firms have been far more interested in leveraging technology to replace manual processes.

The Clients
Clients are demanding more from their law firms, but not enough. DuPont made waves in the early 90s by reducing the number of firms they dealt with from more than 300 to just over 30. The price to be in the game? You had to commit to being part of the “DuPont Legal Network” (a Notes-based knowledge sharing network), agree up front to a fee structure that would provide predictability to the law firm but would be controllable by DuPont. (Both sides agree to discuss any “unusual circumstances” where the flat-fee arrangement might not work.) The results? DuPont controlled its legal budget, and the law firms developed a much deeper relationship with their client. Others have followed suit, but the number of clients exercising this amount of effort with their law firms is still small.

Law firms today have the applications inhouse to analyze how much they bill on types of matters – so it is theoretically possible to see how much it costs the firm to provide the service on a patent prosecution, or a trusts and estate matter or a merger. And yes, there are variables in each case: but the variables aren’t beyond definition, or measurement. If the firms know how much it costs to provide the service, they can figure out what it’s worth in the market, and set a price for the service. This goes on every day with other industries – pricing is an art. Law firms shouldn’t be immune from it. And once they establish a value for the client, then there will truly be an incentive to do everything possible to lower the cost of providing the service: the result will be higher margins and greater profits.

Which brings us to KM. If such an incentive did exist, how can the firms deliver on the promise of KM?

In his post titled “Law, Technology… and what really matters“, Ernie (a practicing lawyer) writes that “computers and fancy software will not automatically make lawyers more articulate, or more responsive to their clients’ needs.” In this, he’s absolutely right. But go back to the point I made above: a lawyer’s job should not be to simply find (or manage) information. Finding information is something that individuals are inefficient at: it takes time and they can’t manually process a lot of information at once. If the finding of the information could be improved, then the lawyers could free up time to focus on the stuff that matters: synthsizing the information that they find and strategizing about how it applies to the client.

In the end, synthesis is impossible until you have all the information. Today’s practice ends up devoting an inordinate amount of time to the discovery of information – to the detriment of the real valuable role a lawyer brings. If I’m the client, I want the lawyer thinking, not looking. (True story: I once spoke on a panel with an Alabama defense lawyer named Davis Carr. He showed the audience a copy of a recent invoice he sent to a client. The largest line item on the invoice? “Thinking: 14.2 hours.” He said he never had a client reject a bill.)

Last week, Ernie wrote about weblogs and KM at his firm using the example of a secretary who handles the filings for her firm. In it, Ernie suggested that perhaps that individual would maintain a Radio weblog so that others in the firm could access her knowledge about recent changes, updates to procedures, and so on. John Robb expanded on this, by pointing out that Radio allows “her expertise to bubble to the surface” through categorization and institutional “awareness” of her value.

There’s really two issues here: the first is capturing the useful information. Ernie rightly points out that a DMS is a crude KM system at best (I come by the opinion honestly: I used to work for a company that sells DM solutions and had a fair percentage of the legal market), since it’s a highly structured system that requires a fair amount of awareness on the part of the user: unless you know what you’re looking for, it is going to be hard to find. A structured approach to KM is counter-productive, and probably doomed to failure. (See my post from January titled “Cancer and DNA“ where I explore this in more detail, and speak specifically to Robb’s vision of K-Logs: “K-Logs shift the synthesis back to the people, and make the systems simply a mechanism for the collection of the information.”)

The second issue raised above is how to encourage the “bubbling” of information that Robb talks about. In order for it to work, the system should be capable of making certain inferences about information that I should be interested in (“You read Alice’s posts a lot, you should be interested in Bob’s”) as well as telling me about what sites and/or pages are most popular among my peer group. Add to that a flexible search interface (Google), and you’ve got a powerful tool for capturing and disseminating knowledge throughout an organization. Elements of this are what the Radio Community Server is all about.

As for law firms, in order to benefit from the scenario above, they’ll need to first align compensation with the firm’s objectives: they will need to reward sharing of information. (And if that’s not possible, at the very least they need to not discourage the sharing of information.) Then, put in place a system that can easily capture useful information and handle the publishing and distribution of that information. Only then will a firm be capable of being the sum of its parts.

Will we get there? Absolutely. This all ties back to Ernie’s real question: When will the billable hour die? Fortunately, I think the pressures are too great to ignore and too pervasive to go away without effecting real change on the profession. Within 3-4 years, firms will have moved away from a revenue model based on effort (which measures time committed to the case) and towards a model based on results. (And no, this doesn’t mean it’s a get-paid-when-you-win model. It just means that the focus is on the result of the lawyer’s synthesis – the strategy – not on the time it takes to get there.) This is no doubt a scary model to imagine for many practicing lawyers. But the law, like accounting and financial services before it, is facing dramatic change. Firms can either choose today to embrace these challenges – and invest in their future – or risk committing themselves to a business model and a strategy that will eventually fade, leaving them with declining revenues and fleeing clients.

The ultimate goal has to be to develop a stronger, more sustainable business model. KM promises to help a law firm transform itself into an efficient, profitable organization that is benefited by – not threatened by – increased cooperation among its members.

For more on this topic, check out this article in the March, 2002 issue of Global Counsel: Knowledge Management and Professional Development. While the focus is on large, multi-national law firms, the issues it addresses are broadly applicable and address a number of points raised in this piece.

Law, Technology and What Really Matters

Another good post from Ernie the Attorney about technology’s potential impact on the practice of law. And it forces one to ask a fundamental question: when does Ernie find time to bill time?

Just checked in for my

Just checked in for my trip to London. Interesting notes: even though the Feds have taken control of security, the separate check-in for first class/frequent fliers was still open at O’Hare. They’d said it would be closed a month or two ago – but hey, I’m not complaining.

And what happened to the National Guard troops guarding the security station?

Monday, March 18, 2002

All the News that's fit to Blog

Great article about the growing importance of blogs in April’s Fast Company. One thing that bothers me, though: why mention only I guess the article was just about web publishing, but Radio does it better than blogger. And Radio is a powerful KM tool to boot…
Anyway, couple key quotes from the article:

The market for analysis, commentary, and opinion has shifted because the underlying technology has changed. The emergent technology — the one that we use every day when we email and instant-message one another and the one that gathers ever- greater force with each new increment of connectivity — is peer to peer.
Peer groups organize themselves in hundreds of different ways. But what they all have in common is a shared sense of mission: what the military calls “unit cohesion.” That cohesion — a kind of network effect — is what makes the peer group, or team, much stronger than the simple sum of its parts.

Major news organizations breathed a huge sigh of relief when dotcom mania came crashing down. That meant that the barriers to entry in their markets were reerected and that their ( mostly ) monopoly positions were resecured. Now the bloggers are at the gates, eating into the media’s value-added proposition. It’s no small threat, because the peer-to-peer technology that underlies it is what the military calls a “force multiplier.”

London Forecast: RAIN

Don’t even know why I bothered to check the weather (I’ll be there all week starting tomorrow):

Sunday, March 17, 2002

Oops, I paused it again...

Another demonstration that TiVo’s business model has legs. Back in December, John Robb wrote that TiVo’s year-end sales spelled the death of free TV. But I’m not so sure. As I said in response to John’s original post, TiVo is providing alternative methods for advertisers and others to derive value from the TV audience. Then, I talked about the Lexus ad campaign – and its staggering 20+% response rate from all TiVo subscribers.

Now comes word that the NFL paid TiVo for business intelligence services: an analysis of the viewing habits of more than 10,000 of TiVo’s subscribers during the Super Bowl. Turns out that the Pepsi commercial with Britney Spears was the most “paused, replayed, and watched in slow motion” of any commercial during the Super Bowl. Who knew Bob Dole had TiVo?

By providing alternative means of advertising (i.e., the Lexus campaign) and providing B.I. services like the analysis for the NFL, TiVo could very well continue to sustain advertising-supported broadcasting.

NY Times: Renew Your Passport

Saw this in today’s New York Times. The only reason I’m mentioning it is that I just went through this process last week – I leave for London on Tuesday and discovered that my passport had expired in January. (OK – I’ll fess up: I knew it had expired in January, and had just procrastinated doing anything about it.) Fortunately, I live in Illinois – we have a passport office in Chicago. Most shocking about this was how little time it took me to renew: I called ahead, booked a time slot. Showed up about 20 minutes early, waited in line for less than 10 minutes, and spent just 10 minutes at the window with the appropriate info (proof of itinerary, prior passport, ID, photos). I returned three days later – walked up to the pick-up window, retrieved my passport, and left. In all, I spent 45 minutes in the office – and I don’t have to do it again until 2012. Not bad. (But for those of you who aren’t fortunate to live near a passport office, or are leaving in the next 24-72 hours, the services mentioned in the Times article might be useful.)

Saturday, March 16, 2002

KM for law firms

Ernie the Attorney’s at it again. This is a terrific essay on what KM should be, and starts to identify why lawyers haven’t quite made it yet. I’ll be picking up a few threads in Ernie’s post later this weekend.

Avoid the Four Perils of CRM

This links to the abstract of February’s Harvard Business Review article titled “Avoid the Four Perils of CRM”. The article is a good read, authored by three senior Bain consultants. There is also an “ enhanced edition” of the article here, that “draws out the main points and an annotated bibliography that points you to related resources.” The gist of the article? CRM is not a panacea – you need a customer strategy in place, supported by senior management before the technology can help. Once those pieces are in place, CRM software can then support the strategy.

Elected officials need tech experience?

Brief story about NYC Mayor Bloomberg’s recent address to the New York Software Industry Association. The most interesting notion is that elected officials will need business and technology experience to be truly effective. While I’d like it to be true, I wonder: do our leaders need a technical foundation to be competent in their jobs? More coverage on Bloomberg’s keynote and other presentations from the NYSIA Press Room.

Thursday, March 14, 2002

The big sites get bigger...

Business Week Online claims that the big .com sites are getting bigger, claiming more eyeballs, and more of your online time. “The online winners today are the winners, period.”

Well, fine. For a few years. But there was a time that K-Mart was the king, and Wal-mart was an upstart. And who would’ve guessed Subway would become the largest fast-food chain in the U.S.?

The point is, eBay, Amazon and Yahoo are the biggies today. But it won’t last. As the Net continues its progression to become more like the rest of what we do, “online” will be even less unique and alluring than it is today. Think about it this way: do you think about which companies are your favorite to deal with on the telephone? Didn’t think so. So why should our online habits be that much different?

We’re still in transition. But for BW to think that our buying habits – and our browsing habits – are set in stone is naive.

Wednesday, March 13, 2002

GE's new CEO is settling in

Jeff Immelt talks to Knowledge @ Wharton about predictable revenue growth at G.E. (“We look at a recession as a great time to play offense.”), post-Enron accounting (“We’re all going to have to find ways to live in a world that has more transparency and disclosure.”) and decentralizing the organization ( plans to shift “backroom” functions like legal, admin, etc. to the business centers will no doubt cause a number of professional services firms to panic). All-around great stuff.

Thinking about Immelt reminded me of my very own GE CEO story. My dad worked at G.E. for a number of years, and was a Jack Welch admirer. In the summer of 1994, my dad’s birthday was approaching. When I was in school, he had given me a copy of Welch’s “Six Commandments“ – a list of his rules for running G.E. – from a 1989 Fortune story about Welch. These rules are:
  1. Face reality as it is, not as it was or as it should be.
  2. Be candid with everyone.
  3. Don’t manage, lead.
  4. Change before you have to.
  5. If you don’t have a competitive edge, don’t compete.
  6. Control your own destiny, or someone else will.
A copy of those rules hangs in my office, and I knew my dad had a copy he held on to as well. On a lark, I called the G. E. headquarters office, and asked to speak with someone in Welch’s office. I got a woman named Phyllis Piano (another reason I love Google: a search on her name reveals that she is now the VP/Corporate Affairs and Communications at Raytheon) in the p.r. department who said she wasn’t familiar with the six commandments (I had asked for a signed copy), but would “see what she could do.” I didn’t expect anything – after all, I was but a lowly law clerk at the EFF – why should she call me? – but sure enough, the next day she called back. She couldn’t help out on the commandments, but would a signed book be OK?I think I stammered something like, “uh, sure…”

No kidding – three days later, a book signed by the man himself showed up in my office. My dad was thrilled – following Welch’s lead, dad sent a hand-written thank you note - and that was it. Or so I thought. Welch actually wrote back – wishing dad luck with his business, and again wishing him a happy birthday.

Class act, all around. Good to see Immelt appears to be carrying the torch.

New Windows could solve age-old

New Windows could solve age-old puzzle. special report  Microsoft is tackling the long-elusive goal of easily finding information hidden in computer files, a conquest that would deal a blow to competitors but come at a price. [CNET]

Andersen widens its search for

Andersen widens its search for a buyer. They’re busy: negotiating with the SEC to settle its potential liabilities as a result of Enron’s collapse, begging Deloitte, KPMG and E&Y to buy it… how do they have time to answer the calls from clients firing them?

Here’s what’s interesting: the article claims (and I think the writer is correct) that Andersen has to be bought. The alternative is a debacle for the accounting profession:

In essence, they said, Andersen must be absorbed by a rival quickly because a collapse would leave thousands of clients struggling to find new accountants, a huge transfer that competing firms would probably be unable to absorb rapidly.

One question: where is PWC?

Tuesday, March 12, 2002

It worked! Following the instructions

It worked! Following the instructions here, I imported all of my blogger posts into Radio 8. The only thing that took time was editing the internal links (links to previous posts) – which only took an hour or so. Next up – playing with the template to tweak it just so…

Adios, blogger.

Testing to see if the

Testing to see if the import of my Blogger posts worked…

I will be transitioning away

I will be transitioning away from to Userland’s Radio application by week’s end. I had high hopes for Blogger’s ability to serve as a web-based front-end to this site, but in the end the inability of the company to handle their own growth has proven problematic. I haven’t had reliable access to the site since last Thursday, and my experiences are far from unique. Until then, postings to the site may be sporadic. Bear with me. Things should be back to normal by next Monday.

Monday, March 11, 2002

Arthur Andersen Is Said to

Arthur Andersen Is Said to Be Near a Sale to a Rival. No surprise, the biggest issue remains how DT can assume Andersen’s assets without also assuming its liabilities:

In addition to confronting potential fines from criminal charges, Andersen is also facing possible regulatory action by the Securities and Exchange Commission as well as myriad lawsuits from companies and individuals hurt by Enron’s collapse.

Sunday, March 10, 2002

Ernie the Attorney is another

Ernie the Attorney is another lawyer/blogger who posted this quote earlier in the week:

It’s more likely that attorneys, judges and paralegals don’t know how to use the technology, or have limited interest in learning how to use new tools for old jobs. And as for attorneys, this is more true of defense lawyers, sadly (I say “sadly” because I’m a defense lawyer). They bill by the hour so “efficiency through technology” is not exactly a siren song. I could be wrong, but that’s what it seems like to me….

Friday, March 8, 2002

A report from HBS Working

A report from HBS Working Knowledge titled Customers & Services: The Customer Knows Best? Better Think Again suggests that customers aren’t always the best guide for innovation. The report is an excerpt from a Harvard Business Review article published in January, and seems to be in the Clayton Christensen school of thought (Christensen wrote The Innovator’s Dilemma, a need-to-read book about the challenge of innovation in a market-driven economy.) One quote in particular from this excerpt stood out:

“[C]oming to an understanding of what customers value is a far more fruitful exercise than merely asking them to submit their own solutions.”

Wednesday, March 6, 2002

Today's Recorder (a San Francisco

Today’s Recorder (a San Francisco legal publication) reports on Cisco’s System – that is, the system set up by its new General Counsel, Mark Chandler to manage and leverage his outside counsel. A couple years ago when Mark was an assistant GC at Cisco, he and I were speakers at an American Management Association seminar. Cisco's Mark Chandler Not only is he a sharp guy when it comes to the legal issues facing his company, his grasp of the possibilities when it comes to technology’s ability to automate processes and serve a larger strategic goal was remarkable.

Anyway, Mark is an excellent guy for the job. Speaks his mind, knows what he’s doing, and is one of those rare lawyers who knows the technology as well as his techies do. I’m also hopeful that Mark will help accelerate a change I’ve been predicting for a while (and talked about most recently back in January) – the need for the profession to move away from the billable hour business model. Chandler’s quote (keep in mind this comes from one of the Bay Area’s largest technology clients, and carries a lot of weight):

“The traditional law firm billing model is the last vestige of the medieval guild system to survive intact. And it’s going to change,” Chandler said. “Firms should be marketing to me on the efficiency of their operations and transparency of their billing.”
Amen, brother!

Tuesday, March 5, 2002

John Hiler follows up last

John Hiler follows up last week’s article about why Google loves blogs with even more information about how Google bombs can get created, the power frequently-trafficked sites have to influence Google search results, and the implications for Google users long-term. With respect to Goolge bombs, Hiler says that “the weblog community is only now beginning to come to terms with a new application that subverts the very technology that powers Google.” (I wrote about Hiler’s original post last week.)

John Robb responds, “ This is also a case of a journalist looking for a flashy, shallow angle on a story. This isn’t a scandal.” Doc Searls read the same post, and comments, “Thoughtful and thorough, as usual. More primary research grist here than you’ll find in the average print pub, no?”

Pretty funny how two people can see the same piece and reach such different conclusions. For my money, Hiler has hit on something, and with his two posts, documented some pretty compelling implications of Google’s influence and its methodology. I think the practice of Google bombing is ultimately not that big of a deal – but how far away can Google hacking be? I would define Google hacking as groups of individuals who control high-traffic sites (or, for that matter, take control of a high traffic site) using that control to deliberately influence search results. Hiler wants to know how this will make people money. I’m equally interested in how this can cost organizations money. (Think of it as inverse advertising: how much is it worth to you to have a competitor not show up in a search result box? How much is it worth to you to show up for search terms that would relate to your competitors?) And can individuals hijack search results, offering to release the #1 spot to the highest bidder?

Monday, March 4, 2002

Why do most mergers fail,

Why do most mergers fail, but some succeed? A recent report in The McKinsey Quarterly suggests that some organizations are able to make mergers and/or acquisitions a part of their long-term growth strategy. (This is a follow-up to a McKinsey study from last fall dissecting why most mergers fail. I wrote about that report in Peer to Peer magazine last November.)

McKinsey chart on market capitalization and acquisition activity

Some interesting revelations from this study: just 2% of companies in the software sector accounted for 63% of the appreciation in market capitalization since 1989. Those same “gold standard” companies do twice as many deals as their competitors, and form “up to 10 times as many alliances” as their competitors. To make the acquisitions strategic, McKinsey argues that the companies focus on smaller deals (relatively speaking) and try to identify mature, noncore businesses to divest to free up capital to acquire companies with larger upside.

This study focuses on the high tech markets. I don’t have the data in front of me, but I sure would be interested in turning this analysis to the professional services world: in the consolidation frenzy among law firms (and their accounting brethren), how many are focusing on acquisitions as opposed to mergers? McKinsey makes a compelling case that mergers (where the acquired company represents more than 50% of the acquiring company’s capitalization) are laden with opportunities for failure (larger integration costs, for starters) – so why aren’t more services firms focused on acquisitions?

Friday, March 1, 2002

The European Court of Justice

The European Court of Justice ruled on February 21 that the Dutch Bar’s ban on MDPs was valid. This ruling is yet another implication of the Enron debacle, as Europe has traditionally been more friendly towards lawyer/non-lawyer partnerships than the U.S. (See my 1/29 post which discussed the possible implications of the MDP debate in the U.S. in light of the Enron situation, and this appendix at Everett Gaskins Hancock & Stevens’ web site discussing the differences between international approaches to MDPs and US approaches). If the ECJ ruling is any indication, it would appear that the weathervane has turned. Most dramatic will be the impact on Andersen Legal (their press release from last week criticizing the ruling is here), PWC (see a press release from 1999 on this issue from PWC’s site here), and the other organizations who employ legions of lawyers in addition to the accountants, auditors and others who make up the other core businesses.

I still think that MDPs are the right direction for the services profession. Markets, not regulation will ultimately determine what protections are afforded to clients. The patronizing view that the bar associations take towards the clients (“Only we can protect you!”) seems ridiculous. Yet the issue isn’t getting any attention outside the profession.

Knowledge@Emory reports that AOL's President

Knowledge@Emory reports that AOL’s President of Worldwide and Interactive TV Richard Friedman says that AOL’s brand is “the power of a blend of ideas, a sense of identity, and it helps consumers make decisions in a crowded marketplace.” Later in the article, Friedman cites these three examples as evidence that everything at AOL (a “destination”, he says) is about making it easy to use:

Am I the only one with an issue here? If AOL is truly a destination, then Friedman’s got a problem: examples two and three were of sites that are non-obviously AOL properties. When I think of AOL, I think of the stand-alone site – the one that users connect to when they dial in. The Harry Potter tickets were sold through AOL subsidiary, and the Lord of the Rings trailer was at the site New Line Cinemas built. In other words, only the Volvo example shows the reach of AOL. And in that example, .1% of their userbase participated. Not exactly earth-shattering.

AOL needs to figure out if it wants to be a consumer destination – something it does quite well today – or a media company. Friedman made his mark by fashioning MTV in the early days ( wonder what Adam Curry has to say about him?) as a “destination network” and is trying to do the same thing with AOL today. The odd thing is that for all of MTV’s brash posturing, Friedman’s trying to shape AOL by the bland “it’s just so darned easy!” mantra that hardly inspires an emotional attachment.

The ultimate flaw in Freidman’s examples is that two of the three aren’t part of the destination. Valuable services? Yeah, Moviefone is good. But nobody thinks of it as part of AOL, do they? And LotR wasn’t exactly seen as an AOL property. So which is it, Rich? Destination? Or a brand? Can they really be the same?

And financial results aren’t pretty either. As The Motley Fool recently noted, AOL/Time Warner’s lackluster performance (4% revenue growth) could have been a lot worse. “How bad could [things] have been if AOL hadn’t grown subscribers, Warner Music had not landed three of the top five selling music CDs, and the company’s Harry Potter and Lord of the Rings celluloid been anything short of box office gold?”

Bottom line? This is still two companies. Despite Friedman’s claims to the contrary, there is no brand here. Just a couple divisions waging war for the soul of the company.