rethink(ip)

The World Really is Flat, Part II: Now that it's flat, all sailing is smooth, right?

Posted by J Matthew Buchanan at December 20, 2005 08:49 AM

Remember my story about the new IBM (Lenovo) X41 Tablet that I bought?  I relayed the story in last week's post to The World Really is Flat series.  Here's the punch-line -- the computer, once shipped, travelled from Shanghai, China to my front door in Perrysburg, OH in one day.  How's that for a flat world?

I related that example as a personal experience that allowed me to realize that the world really is becoming flat.  After I had that experience, I saw the flat world in everything around me.

So all is good, right?  There's plenty of opportunity and no problems in this new flat world, right?

As Lee Corso would say, "not so fast, my friend."

There are plenty of problems in the flat world.  Indeed, there are plenty of new problems.  The rest of my X41 story illustrates this point...

So there I am, drooling over my brand new X41 Tablet.  As I said before, I have zero patience when new tech toys arrive.  I tore into the box immediately, threw the instruction manual aside, and began setting up the computer.  The out-of-box experience was amazing...the computer is beautiful to look at, and powered up perfectly with a simple plugging in.  Ready to roll.  The desktop wasn't overly cluttered with useless freebies (AOL, etc.) and the introduction software from IBM/Lenovo did a fine job of introducing the amazing utilities provided with the computer.

So now I'm ready to make it mine.  I gathered the discs for my must-have software packages, and prepared for an afternoon of installations.  First up, Microsoft Office 2003...just place the CD in the...hey, wait a minute...where's the CD drive?  I must have missed it in the box....

Nope.  No CD drive to be found (my one complaint about the X41 is the lack of an internal CD drive...but the external drive is so svelte, that I really don't even consider it a complaint anymore).

I checked the packing list...no mention of the CD drive.  It's an "accessory" that costs extra.  I knew I had ordered it and checked my invoice to make sure.  Yep...it was ordered.

I logged into the Lenovo customer service site and checked my order.  Sure enough, it was split.  The CD drive was shipped separately.  OK, I can wait another day as it travels from China to Perrysburg.  (Remember...the world is flat and the shipment takes only a day....)

Sadly, that's just the beginning.  I tracked that package for the next two weeks.  It was sidelined in customs by the FDA (yes, the FDA) on "bird flu concerns" according to the UPS customer service representative.  Compare the tracking results for this package (at left) with those of the computer (in the first The World Really is Flat post).

What an amazing contrast.

The CD drive finally arrived.  I was somewhat hesitant to touch it, considering the whole bird flu thing.  I quickly got over that, though, and finished the setup...two weeks later. 

The FDA/bird flu "problem" completely robbed me of the amazing experience I had after seeing the computer shipped from China to Perrysburg in a day.  I was left with a sense of frustration and angst.  I love the computer...but having to wait two weeks to make it mine really ticked me off.

The lesson I took away from the experience is this.  The flat world brings new opportunities and new problems.  Bird Flu?  Customs delays on computer equipment by the FDA?  Crikey.  Who in the world expected that?  Not me.

While the flattened world presents plenty of new opportunities, it also presents new challenges and new problems.  As businesses establish new business relationships without regard (or with less regard) to geographical boundaries, plenty of issues must be addressed.  Lenovo is obviously taking advantage of the opportunities presented by the flattened world.  Should they have been aware of this problem..and addressed it?  Or do old, non-flat-world attitudes still reign - "Hey, we shipped it....you'll just have to wait..." 

I didn't contact Lenovo about the problem (I guess I censored myself with that attitude...), so I'm not sure how they would have responded.

New problems will begin to reveal themselves as people explore the new opportunities presented by the flat world.  Being an optimist, I view new problems as an opportunity for new solutions...which, of course, bring even more opportunity...

So, on second thought, maybe all is good in this new flat world...

 

The World Really is Flat, Part I: From Shanghai to Perrysburg in One Day

Posted by J Matthew Buchanan at December 12, 2005 07:07 AM

Recognition of a major change has to be, of course, the first step in taking advantage of it.  Often times, you read or hear about a major change in your world but, without personal experience that allows you to recognize the change as real, you wonder if it’s actually happening or if certain people just think that it’s happening.  You may even grow a bit cynical and start to believe that certain people just hope that the change is happening.

 

That’s where I started with the concept of the flat world.  I had heard about it and read about it, but had no personal experience that allowed me to truly recognize that the change was in process.  As a result, I had little interest in the concept and, perhaps, a little disbelief.

 

Then, out of nowhere, a brick hit me in the head and suddenly I realized that major change was indeed underway.  After that, I saw the flat world in everything around me, much like you seem to hear a particular word more often after actually learning its meaning.

 

Here’s the story. 

 

I had ordered a new ThinkPad X41 TabletPC (which, by the way, is the best computer I have ever owned…despite a few hard drive issues).  I’m like a kid on Christmas morning when I have a new tech toy on order…I just can’t wait.  I checked the status of the order each morning and was disappointed to learn that there was about a two week backorder.  Rats.

 

Finally, I was rewarded one morning when I received an e-mail telling me that my order had been shipped and that I could track it on the UPS web site.  Great, I thought…we’re entering stage two.

 

I immediately clicked the tracking link and was excited to see that the package was ready for shipment, straight from China.  Rats.  Probably another two weeks.

 

Here’s the brick.  The next morning, UPS.com told me that the package was here and ready for delivery.  Holy Toledo!  One day?  Sure enough, at 9:20 AM, the man in the brown shorts delivered my new toy, er, business tool, straight from Shanghai.

 

That’s right.  The computer travelled from Shanghai, China to Perrysburg, OH in a day.

 

Now, I know there's an international date line in there somewhere, and at least one of my fellow rethinkers believes there is funny business in the whole package tracking thing, but, no matter, the effect was the same -- the computer arrived one day after I was told it was shipped.  Very cool.

 

(imagine the effect had Lenovo/IBM been able to get rid of the two week backorder!)

 

I tore into the package even before the man in the brown shorts left.  As I tossed the instruction manual aside, the realization hit me -- the world really is flat.  The day before, a Chinese worker had held the computer in his hands as he packed it for shipment.  Now I've got it and it's ready for business.

 

Suddenly I believed that the flattening of the world…the change…was indeed in process.  I couldn’t ignore it anymore because this one simple example had given me the personal experience that allowed me to realize that.

 

I wondered about the reason for my initial disinterest and disbelief -- this is the only rational explanation I can offer.  I was born and raised in the American Midwest, where manufacturing is King.  I suspect that my initial disinterest in the change to a flat world was at least partially due to a knee-jerk reaction that a lot of people have in these parts of the country.  The reaction is based purely on fear.  Fear of outsourcing, off-shoring and the loss of manufacturing jobs, good manufacturing jobs.

 

But the computer experience had changed something because the knee-jerk reaction seemed to be gone.  Now I had the experience I needed to believe in the change, which, of course, gave me the desire to figure out how to plan for and take advantage of it.

The world really is flat

Posted by J Matthew Buchanan at December 6, 2005 10:09 PM

There has been a lot of buzz over the last few months about the so-called "flat" world. If you think I'm referring to naysayers of Christopher Columbus, you've got some homework to do. But, if you know what I mean, you'll likely be interested in a series of forthcoming posts on Rethink(IP).

Over the summer, each of us quickly devoured Thomas Friedman's book, The World is Flat. Since then, we've had numerous back-channel discussions on the concept of a flat world and its effect on the practice. Our conclusion -- the world really is flat. In fact, we think it has been permanently flattened and the practice of intellectual property law will forever change as this new world is put to work.

The series, so far, includes three posts and will appear over the next week or so. The first post describes a recent experience of mine that showed me just how flat the world is...and highlighted some new problems and challenges of doing business in the flat world. The second post details a theory of mine -- the flatter the world gets, the more important the fundamentals become (you'll have to read it to understand...). The final post details the impact that we believe the flat world will have on the practice of intellectual property law.

We hope you enjoy the series and welcome any comments you have on the posts. If you're still thinking of Christopher Columbus, I suggest a visit to Amazon.

Whats Your Definition of a Rainmaker? Bullshitter?

Posted by Douglas Sorocco at November 24, 2005 12:02 PM

I really hope that the young associate who writes the BigLaw Associate is real and not some pseudo-writing experiment like Anonymous Lawyer.  The posts over at BigLaw crack me up and hopefully offer some unintentional glimpses into some biglaw practices.

For example, BigLaw’s newest post is entitled “A New Plan” and is the most recent in a series of angst ridden posts dealing with whether he/she/it/they should leave the biglaw firm where they are currently employed.

The whole post is interesting for the fact that he/she/it/they have finally succombed to the fact that they will never leave biglaw and he/she/it/they are justifying the reason for not leaving (although, look back a few posts for what I believe are the real reasons – money, awe from peers, and “biglaw prestige”)

What I found most striking in the post is this statement regarding the senior attorney she is assigned to:

… I have come to the conclusion that perhaps my problem is not the Firm, but Senior (and myself to a large extent). We have a totally dysfunctional working relationship. Senior is a rainmaker and knows how to keep his clients happy; not so much with quality work (although he is undeniably VERY smart), as with backslapping, belly laughing locker room humour.

What? Say again? Hello?

Yikes!

I don’t think my definition of rainmaker would/should/could be modified with the statement “not so much [because] of quality work”… I wonder if their clients feel the same way.

Where I come from (all at once … “Oooooooook – la – homa, where the wind comes sweeping down the plain….” [MP3]), modifying the term rainmaker in such a manner results in that person simply being a bullshitter – someone with a good handshake but nothing of any worth to the client.

Is this the definition of rainmaker that biglaw is teaching its associates and, if so, is it any wonder why clients are demanding change in how legal services are to be delivered?  What happened to client service, attention to detail, quality work and delivery of innovative, helpful and useful counsel?  

If this is the trend – maybe instead of Chief Marketing Officers at biglaw, they should just hire Chief Bullshitters.  It would certainly be easier for recruiters to find them — you don’t really need any particular qualifications and if it is big enough of a trend, some enterprising CLE provider will start teaching “Chief Bullshitter Bootcamps” for the forward thinking law office.

I really hope BigLaw Associate is for real… it bodes well for us “little guys”, I think.

Insourcing Quid Pro Quo

Posted by Stephen M. Nipper at November 2, 2005 10:31 AM

Insourcing is one of the main reasons Matt, Doug and I were drawn together almost a year ago. It was a conversation about how to work together to promote the insourcing of patent services to inland patent firms instead of outsourcing them abroad that started this great rethinking project. We've clearly gone beyond insourcing a major Rethink(IP) theme, but that topic is still close to our hearts.

In reviewing my client base recently I noticed something I hadn't seen before (and I'm sure my fellow rethinkers see too in their own practices), namely that the amount of work we are doing for foreign patent and trademark firms has substantially increased in the past few years. Substantially. Maybe The World is Flat has just opened my eyes more to the impact of technology and the Internet on my practice.

I'm not sure whether they are ditching their big city firms and insourcing to the Intermountain West and/or Midwest for customer service, for price, or for other reasons, but it is clearly happening. What amazes me is how quickly foreign IP attorneys get it, but US businesses as a whole don't.

Foreign IP work has traditionally been "quid pro quo," in that "if you send me work, I'll send you work." Perhaps it is due to the low performance of the US dollar or perhaps other factors, but the reality is that having IP work done in the US is as expensive as ever. In my opinion, this is a fact which is causing some foreign IP firms to consider other cost effective ways of protecting their client's intellectual property in the States, and one of those ways is insourcing. The result is that foreign firms are sending lots and lots of work to smaller firms in smaller metropolitan areas, firms that can't possibly support the old school quid pro quo.

Is it the end of "tit for tat" in IP work? I doubt it, but it is sure to have ripples in the market for worldwide IP services.

Other thoughts, insight and comments appreciated (the comments are open)...

Bigger isn't always better

Posted by Stephen M. Nipper at September 14, 2005 12:51 PM

If you enjoy Rethink(IP)...you'll enjoy this article from the current (August 2005) IP Today:  LITIGATORS CORNER:  Who Says Contingent Fee Lawyers Are the Biggest Moneymakers?  [PDF]

Money quote:

No wonder large companies think litigation is too expensive. Their own need to hire big firms, coupled with runaway legal fees, is the largest part of their problem.  A defendant that shoots itself in the foot shouldn’t blame someone else for its own stupidity. Their corporate mentality, which equates size and expense to quality, is the main cause.

Thoughts on the growth of the Middle Coast for legal services - its more than just our lack of rosewood conference tables

Posted by J Matthew Buchanan at May 25, 2005 10:17 AM

Look at this money quote from Doug’s excellent post on PHOSITA yesterday:

The firms in the “middle coast” are expanding to fulfill a real need: client driven legal services, alternative billing and compensation systems, sanity concerning the number of billable hours required, and service. 

Companies are no longer willing to pay sky-high rates in order to subsidize $100+ per square foot office space rates, unsustainable associate salaries and rosewood conference tables. 

Is that good stuff, or what?

Doug’s post made me think a little deeper about the “middle coast” concept.

Why is the middle coast growing as a destination for legal services work?

I can at least offer a theory as it relates to patent work.

The new expertise has landed in Toledo…and Oklahoma City, and Boise…and Anytown, USA.

Corporate counsel continue to get hammered on legal expenses.  For patent work, India is an option but most corporate counsel that are in a position to consider it are worried about the quality of the craftsmanship.  They’ve been through a patent litigation or two (or twenty) and understand the importance of quality craftsmanship.

The hammering continues, so they slowly look for other options.

And there we are, right in the middle….offering the best of both worlds:

lower expenses (ask — you’ll be amazed!) with the same level of expertise.

I’m willing to guess that the difference in expenses has probably always existed.  But, I think the expertise issue has changed dramatically over the last decade or so.  I’m not referring to expertise in substantive patent law and practice — small firms in the middle coast have always had a high level of legal expertise.  No, I’m talking about technical expertise.

In the past, technical expertise meant engineers.  Lots of engineers.  And physicists.  Middle coasters had access to these people and therefore had the technical expertise that allowed them to compete.  But, in the last 30 to 40 years, the requirements for technical expertise have changed.  Now, patent firms must offer skills in biology, chemistry, computer science, and other developing fields — the new expertise.

Over the last several decades, big firms seemingly had a lock on this new expertise.  They gobbled up newly minted lawyer-PhD's in all of these new fields.  They took their push for the new expertise even further by hiring squads of non-lawyer PhD’s and resurrecting patent agent practice in the process.  For awhile, the middle coasters couldn’t compete…geography, money, culture and many more criteria heavily favored the big city.

But that’s changing.

All of a sudden, experts in these new fields are staying in the middle coast.  For some, the middle coast is home, making it an easy decision.  For all, its a different way of life — the sanity Doug mentioned in his post.  Have you heard?  We’ve got PhD microbiologists in Toledo now (and I’m not just talking about my wife!).  Doug has ‘em in Oklahoma for crying out loud.  That’s a little tongue-in-cheek, of course, but the point is that big cities — and big firms — no longer have a lock on the new expertise.

This changes everything.  All of a sudden, when big city and middle coast firms are compared, the spotlight shines almost exclusively on expenses, which is where we really shine.

There is another feature that attracts companies to large firms (which are typically big city firms) — raw capacity.  You want 35 associates to handle your patent prosecution needs?  There’s a big firm or two (or twenty) that can do that.  In fact, they’ll make sure those associates start on it tomorrow evening.

None of our firms, individually, can do that.

But our network can.

 

 

rethink(ip)...the IP Axis of Evil?

Posted by Stephen M. Nipper at April 13, 2005 12:35 AM

When I saw this blog post ("The IP 'Axis of Evil'") I was concerned that this rethink(ip) gig was about to come to an end...that the hate mail was starting. But, alas, it was just a post by Peter Zura on reverse engineering and patent piracy in India, China and Brazil. Peter's post is an interesting read reinforcing my earlier comment that there are security concerns in sending patent disclosures overseas for outsorced patent drafting.

Insourcing Patent Work

Posted by Stephen M. Nipper at April 8, 2005 04:27 PM

On law.com’s IP Practice Center this morning was a link to an article in the Texas Lawyer (subscription required) called the Pros and Cons of Drafting Patent Applications in India.

The article is an interesting read, discussing the concerns of exporting technology, but also mentions the “Pros” of outsourcing patent work to India, namely saving money. For instance: "It's not unusual for GCs to pay attorneys' fees of $10,000 or more for drafting a patent application and $2,000 for responding to an office action from the USPTO" and "[t]he opportunity to obtain these professional services at a discount of 50 percent or more clearly appeals to GCs with a tight budget."

Costs are always a concern, and always should be. But don't assume you have to give up legal expertise or risk disclosing your invention overseas when cutting costs. There are other options to high legal bills, namely insourcing.

Insourcing? Insourcing is sending your work inland rather than overseas. Sadly, other industries have been quicker to grasp this concept than the legal market. For instance, Conference Calls Unlimited (CCU) (in Iowa) is an amazing company who through doing business inland has become a true gem for telephone conferencing services…not by spending millions on advertising, but through providing competitive rates and great customer service (something their “big city” rivals can’t). [note: CCU’s CEO Zane Safrit has summarized his view of insourcing in his manifesto "Outsourcing Our Economy: The other shore of offshoring [pdf]"]

So why not consider insourcing your work to smaller firms in smaller cities? Having lower overhead and cost of living costs, you’d be surprised how you can “obtain these professional services at a discount of 50 percent or more” right in your own back yard. The real irony is this: the attorneys at smaller firms in smaller metropolitan areas are typically under smaller billable hour requirements (if under a requirement at all). Translation: They actually have time to stay current on new developments in the law and are willing to invest THEIR time in developing relationships with clients. Try to get both of those things from either BigCity USA or India. You can't.

Outsourcing is not the solution...rethinking IP (and insourcing) is.