Four key elements: caps on total liability, exceptions to cap, limitations on type of damages, and exceptions to limits.

In recent posts, I have postulated that commercial contracting is on the following path of evolution:

  1. Reliable data as to what is market for key contracting terms will become readily available as utility models, powered by large data sets and AI, become prevalent. See Post 225 (“Can contract analysis operate like a utility?”).
  2. Companies will look to remove friction from their businesses by aligning their contract terms (and negotiating practices) with market, with some companies offering better-than-market terms in an effort to achieve competitive advantage. See Post 211 (“Competition based on better commercial contract terms”).
  3. Moving to market terms will lead to contract standardization, less contract complexity, and significant returns to the companies that adopt this approach, benefitting the economy as a whole.  See Post 228 (“The cost of contract complexity”); Post 236 (“Case study: impact of AI and Big Data on low-risk contract negotiations”); Post 292 (“The emergence of data-driven contracting: notes from the field”).

The critical foundation for this evolution is that all parties to a negotiation have reasonable access to information regarding what constitutes market.  (For a discussion of the problems associated with information asymmetry, see the works of Joseph Stiglitz.)
Continue Reading What is “market” for limitation of vendor liability? A look at the data (322)

Relevant to what’s happening today.

This post is about three empirically based theories of national decline.  It’s written as a freestanding essay.  However, some readers may want to know that it’s also Part II of a two-part project to help me better understand the root causes of the United States’ growing social and political instability.

Part I (312) explored the Gilded Age, which is the closest parallel to the present.  In addition, I wrote a shorter bridge essay (319) that provides some useful historical information on the U.S. tax code and takes a critical look at the narrative, embedded in the legal profession’s code of ethics, that lawyers have special roles and responsibilities in the preservation of constitutional democracy and the rule of law.

As noted in Part I and the bridge, I am using these essays to “build a sturdier, more informed, and more realistic intellectual frame — i.e., something that can be fully squared with the present day.” This is a difficult topic that requires a lot of work. Yet, in our present environment, and speaking only for myself, I’ve concluded that it would be unethical, immoral, and decadent to focus on other “more practical” projects.  Further, I suspect a subset of readers shares my sense of alarm.  Hence, I’m sharing my work.
Continue Reading Three empirically based theories of national decline (book review) (321)

A closer look at my work at UnitedLex.

Editor’s note:  For this month’s column, I encouraged Anusia to write about her work at UnitedLex, as it’s a complex topic of great value to the LE audience. See Post 020 (discussing the critical role of change agents in helping social systems successfully adopt innovation); Post 034 (discussing work of modern legal industry change agents).  Further, first-person narrative accounts—i.e., personal stories—are the best way to communicate the complexities of an industry in transition.  Indeed, commercial vulnerability, which is on display here, is very effective for education. wdh.

Upon my return from an energizing solutioning session with a prospective client, a family member and former 30+ year in-house attorney at a $30B+ annual revenue financial services organization based in New York, turned her gaze up to me and glibly asked, “So, did you sign them up?”

Knowing that she is quite jaded about anything new in #LawLand, I declined the opportunity to explain that signing people up is not what I do and, instead, offered a thin smile, “Not yet.”
Continue Reading “Did you sign them up?” and other questions from an industry in transition (320)

[click on to enlarge]

Apolitical technicians working in an ahistorical profession.  What are the odds of a happy ending?

The graphic above summarizes the U.S. top marginal income tax rate from 1913 (the year the 16th Amendment was ratified by the states) to 2021.  One clear takeaway is that for the vast bulk of the 20th century, the wealthy paid much higher taxes.

As the graphic suggests, however, that changed with the election of Ronald Reagan, whose inaugural address launched an ideological revolution with a simple and memorable message: “government is not the solution to our problem, government is the problem.”  Reagan Inaugural Address (Jan 21, 1981). Thus, with the public’s consent, top marginal tax rates were slashed throughout the 1980s.  At the 1988 Republican Convention, George H.W. Bush (Reagan’s VP) spoke the words, “read my lips: no new taxes,” which helped him defeat Michael Dukakis in the general election. See Lily Rothman, “The Story Behind George H.W. Bush’s Famous ‘Read My Lips, No New Taxes’ Promise,” Time, Dec 1, 2018.  Yet, the political mood of the late 1980s was also strongly anti-deficit. In 1990, when Congress enacted pay-as-you-go rules for federal budgeting, Bush, who was saddled with a massive Saving & Loan bailout, agreed to increase the top marginal rate from 28% to 31% — an act that arguably ended his political career.  See Howard Gleckman, “Reading President Bush’s Lips,” Tax Policy Center, Dec 5, 2018.

Since the early 1990s, much of the electorate has enjoyed the political stability and relative economic prosperity of the “End of History” era, which is a reference to Francis Fukuyama’s famous 1989 essay and 1992 book. 
Continue Reading The end of the “End of History” era (319)

One of BigLaw’s biggest pain points is fixable.

There are few people out there with bad intentions, but there are firm leaders with bad habits.  I recently spent an hour on a call with the managing partner of an AmLaw 200 firm who was seeking my advice on succession planning and specifically with their practice and industry group leaders, many of whom were very senior and had been in the role for well over a decade.  I began our discussion by asking five very basic questions:

  1. Do these group leaders have a formal, written job description?  Answer: “No.”
  2. Do these leaders have a clear understanding of precisely how many non-billable hours they are expected to spend leading and managing the people on their teams?  Answer: “No.”
  3. Have you provided these team leaders with any organized leadership training within the past three years, to help them enhance their individual performance?  Answer: “No.”
  4. Have these leaders been provided with any written expectations (e.g., you must, as a group, meet at least once per month) of what your firm’s leadership is expecting them to do with their teams?  Answer: “No.”
  5. Do you, as the firm leader, meet with all of your team leaders to have them share and discuss their particular problems and successes with each other, at least once quarterly?  Answer: “No.”

Continue Reading Where leadership training falls short (318)

Balancing short-term benefits against long-term costs

One bright sunny day, Jack, a junior lawyer, discovers what could be a problem—Great Idea Inc., the big-potential startup corporate client for which he is working, does not have any organizational records.  Jack’s job is to prepare Great Idea for a major venture capital investment.  He has the Certificate of Incorporation that was filed in Delaware three years earlier, but the officers of the company say that their only records consist of a cloud-stored spreadsheet that shows the equity ownership upon which the three owners have agreed.  Jack knows that the Delaware corporate statute requires an organizational meeting for the election of directors and then board action to issue shares and elect officers.
Continue Reading Will remote work adversely affect the training, productivity, and retention of lawyers? (317)

An effort to close the communication gap between legal technologists and the lawyers and called legal professionals they serve.

This post is for lawyers and allied legal professionals who are not legal technologists but want to understand some of the basic principles of constructing and operating an effective litigation management system.

The development of legal profession software —more specifically the forging of sophisticated litigation matter management systems, has been one of my core vocational functions for a period of time far longer than I wish to admit.  See Post 108 (discussing my initiation to legal in the legal department of Bristol-Myers Squibb).   It is particularly important to master and adopt advanced software of this nature when attempting to manage some of the more expansive civil litigation issues of our time (e.g., Roundup, Juul)
Continue Reading Best practices for effective litigation tracking systems (316)

Probably not, but we’ll see.  A surprising conversation with digital transformation expert Isabel Parker

It’s already been quite a year for law firm innovation.  Just last month, Norton Rose Fulbright launched LX Studio, a new “innovation-focused” subsidiary, and Wilson Sonsini unveiled Neuron, a proprietary SaaS platform for start-ups.  Exciting propositions, but the development that had the NewLaw cognoscenti scratching their heads was ‘white shoe’ firm Cleary Gottlieb launching of ClearyX, which the firm describes as a “platform for highly efficient, AI and data-driven legal services.”

What’s driving these unveilings? And, are these new platforms worthwhile?
Continue Reading Q: The first “White Shoe” law firm launched an innovation subsidiary. Does that matter? (315)

The longest-standing democracy in the world looks and feels bitterly divided.  An immigrant offers some reasons to keep hope alive for the American experiment.

On Friday, June 24, the U.S. Supreme Court overturned Roe v. Wade.

If law is the primary domain of lawyers, then it follows that the arcane complexities of constitutional law should remain the exclusive domain of exceptional legal scholars.  Many voices in the legal community – some ably and in good faith – will share their hard-earned expertise to provide technical commentary on those complexities and the jurisprudence that led us here.

I am not a lawyer, and I have no scholarly pretensions to invite debate on issues of constitutional doctrine.  Nor do I write this post with any wish or expectation to change minds about abortion.  Instead, I wish to address how the rule of law shapes American life, and I ask the legal profession to reflect on how the work of lawyers and judges affects the daily realities of your fellow citizens.
Continue Reading Hope, the Invincible Summer (314)

Our last two feature essays, Posts 312 and 314, reflect a sharp departure from usual Legal Evolution content, primarily because of the seriousness of events in the broader world.

The Legal Evolution readership is composed of innovators and early adopters. Thus, we spend a significant portion of our lives trying to improve the status quo — to make it more efficient, humane, data-driven, and diverse.  Yet, if you take the time to wade into Posts 312 and 314, you’ll see that Jae Um and I have concluded that the status quo has more foundational problems that we can no longer ignore.

In Post 312, I explore the topic of Gilded Age lawyers to better understand the present, which is marked by similar levels of economic inequality and political populism. History shows that these forces have the power to rip apart a representative democracy.
Continue Reading Too foundational to ignore (313)