Are Macs Viable In Law Firms?

I love technology.  It is exceedingly difficult for me to not purchase the latest gadget, and eventually I succumb regardless of my intention.  Therefore, I own both a Mac and PC even though I have no practical use for a Macintosh.  But they are now using Intel chips!  And Windows can get so irritating – can’t I just use a computer and it work as intended?

Well, that was my intention in purchasing the Mac.  I heard all the great things from Mac folks.  They are a die-hard group that nearly died before Steve Jobs came back to the company and did an incredible imitation of Bill Gates – except to cool people rather than geeks.  That is, if you find a guy wearing a black mock turtleneck cool.

The question for me, however, wasn’t whether I was going to learn how to run Mac applications – they were way too expensive for me – it was whether I could run Windows inside of OSX, Mac’s operating system.  So, my first foray into the Mac world was definitely through the lens of someone wanting to keep his desktop, but just access it through another operating system.  A thoroughly weak reason to purchase a computer (which ended up being a 15 inch MacBook Pro).  However, shortly after blowing a few hundred on a few virtual machine apps (Parallels Desktop and VMWare Fusion) and feeling my lap burn from the intense heat generated from running both applications, I realized I was wasting my time.  This is a Mac.  Don’t run Windows on it unless you have to.

From that point I set out to learn how to use it on its terms.  In many ways it reminded me of the old OS/2 Warp look and feel, but definitely mature and full of features.  But can it run my office?

The simple answer is no.  I know of no legal software vendor who is actively developing Macintosh native applications – at least any that write to a database.  So in my view, the debate is dead in the water until Apple or a software developer on that platform begins to cater to attorneys.  There are some tempting technologies that may make platform irrelevant – for example, cloud computing – but these are still emerging technologies and last I checked law firms were not cutting edge in utilizing technology.  Cloud computing is a newer model where a vendor sells a web application that is hosted on their end but accessible on any compliant web browser.  This simplifies roll out, training, and administration.  It also holds confidential business information off-site.  In my world that won’t do.  There are ways to host web applications locally but you’d best find a good consultant or an in-house developer or you will be nickel-and-dimed to death by vendors.

I use mine primarily to manipulate images, video and other intensive artistic endeavours that PCs are getting better at doing but are far behind Apple in perfecting.  In a legal environment that pretty much limits its usefulness to marketing, website development etc.

I know of some firms who have attorneys who just like the look and feel of the Mac keyboard and the superior touch pad (that allows you to scroll by using two fingers, for example).  Still, the key to them is connectivity to a Windows environment.  Windows Terminal Services allows just about any platform to connect to a server and run applications as if you were sitting at your desk using Windows.  This allows anyone with a prior propensity to use a Mac the ability to use it at work.  But this technology has been around for a while.

The bottom line, in my opinion, is that whatever platform your end users prefer, the back end is still going to be Windows.  With the relatively stable Windows XP and the coming Windows 7 (which, like every other version of Windows, incorporates some of the best ideas from Apple into it), the only reason I see at this time to use a Mac is to just want to use a Mac.  Administratively and for the end user, there are complexities you must overcome that are on top of what other Windows users already face (unless you run the entire network through terminal services).  

Therefore, I see no reason for using Macs in the law firm unless you just want to be cool.  And I mean the figuratively, because if you run either of the virtual machine applications listed above on a MacBook, your desk/lap/whatever the laptop sits on will be searingly hot.

If your firm uses Macs and your experience differs from mine, please feel free to share your experiences in the comments section.

Are Law Firms Ready For Rate Deflation?

After hitting 5% in July of 2008, inflation has dropped rapidly and is now in negative territory (annualized) for the first time in 54 years.  This creates tremendous spending opportunities but there are many risks.  One of the risks to law firms is a deflating billable rate.  With deflation hitting most aspects of the economy (food and energy being notable exceptions that at least in the latter case isn’t expected to deflate for a while and in fact may be the next credit “bubble” if, err, I mean when cap and trade is passed), it is only a matter of time when clients will either request more discounts or a reduced rate – and if clients don’t ask, other attorneys will offer lower rates to lure new clientele.  Many businesses will be working from much tighter margins while the cost of doing business, including defending lawsuits, won’t lower with their margins.  Something will have to give – either longer A/R outstanding or reduced rates.

It may not come.  But there is reason to believe it will.  Attorneys from large law firms who have been laid off are finding themselves entering the mid-firm market and some enterprising ones will start their own firms, determine a model that maximizes profit, and “Wal-Mart” some out of business while still raking in incredible profits.  All it takes is better efficiency in serving clients (and, in my view, an unprofessional but very business-like approach to targeting and accepting clients).  The relationship you have with your clients puts you at an advantage right now.  However, in forecasting models you should prepare for a fight for your business based on  rate.    

If you are faced with reducing rates to keep clients, efficiency is key to making up the lost revenue.    Don’t rely on volume alone as it can fool you into thinking you are in a better financial position than you are.  You may end up hiring excessive numbers of attorneys, especially as the costs of attorneys goes down (another inevitability that is already happening – salary reduction for new associates).  If you are still making minimal margins because you are too busy to implement efficient processes and you get undercut by someone willing to lower their rates, your firm will be in for a rather intense correction.

Even assuming rates don’t increase, there is a high probability that any planned rate increases will be difficult to implement.  Firms have been contracting for several months and most have already cut costs as low as they can.  A reduction in rate is an unplanned occurrence that can place even more pressure on firms to reduce costs.

From the firms I have consulted, most are still unwilling to invest in efficiency – rather, they are placing more emphasis on productivity and staff reductions.  There are a few firms who are changing their model to streamline processes – those who invest in better procedures will not only be in a better position to absorb rate stagnation (or deflation) but will be in a better position to increase profitability later this year when the economic numbers start to improve.  The test will be whether they retain earnings, a concept that is anathema to many firms.

Please note that due to the activism of the Federal Government to re-inflate the credit markets, there are arguably two possible results:  massive inflation or another asset bubble (which will lead to a result similar to what we are experiencing now).  Either way, the pattern of erratic markets is not likely to end anytime soon and with trillions being poured into the economy, money may get loose for a while – smart firms will invest in their firms (take advantage of the deflation) and set aside sufficient amounts to take short hits on revenue rather than make distributions (in case of a rapid spike in inflation or another asset bubble).  We are in for a long period of uncertainty.  Universal health care, carbon emission taxes, and of course the obvious tax increases to pay for the action taken already and to sustain the new entitlements.

Law firms will not be needed less (and in fact in some areas they will be needed more) but they are not immune to shifts to the economy.  There will be areas of rate inflation but your firm may not be one of the beneficiaries.  Some areas of law that have flourished for decades will suffer greatly and some boutique firms will cease to exist entirely.

Prepare for it.  If your firm flourishes and all the doom and gloom above doesn’t come to fruition, great.  Your bottom line thanks me for helping you have such a strong equitable position during your time of saving – go buy a new touch screen whiteboard or make a distribution so you can pay for all those projects at home.  If the firm struggles, however, you may avoid having to make decisions that are not only uncomfortable but can lead to a fracturing of the firm.

All Bets Off – Massive Deflation And Fed Still Lowers Rates

All the ingredients are coming together for protracted, painful and seriously impaired economic conditions.  As stated in an earlier post,  a deflationary crash is characterized in part by a persistent, sustained, deep, general decline in people’s desire and ability to lend and borrow.   It appears we are in the midst of one.  Consumer prices, after a record decline in October, set another record in November, pushing inflation down to 1.07%.  After a year that saw inflation hitting almost 6% in July, this is a painful indicator of things to come.  In spite of OPEC’s threat to drastically cut production, oil prices are still relatively low.

Worse, the Federal Reserve appears to be acting counter-intuitively by lowering interest rates to “zero to .25%“, leading to speculation that once our economy does rebound, hyperinflation will be the next crisis.  It doesn’t help that our government continues to spend money it doesn’t have.

On top of all this, President-Elect Obama announced that his “stimulus plan” will be somewhere between $600 billion and $1 trillion.  The spending spree never ends.

The time to voluntarily liquidate assets has passed.  Foreclosures dipped in November, but few expect that trend to be anything but temporary in spite of Fanny Mae’s Christmas gift to renters of homes in foreclosure proceedings.  Best to hold on to assets and try to keep as much cash on hand as possible.

We can hope that the aggressive moves by the Federal Government will prevent another depression, but it sure seems like we are about to embark on the same policies of the Roosevelt administration that arguably kept the country in a depression for an entire decade.  One of the proponents of further governmental intervention is oddly a scholar of the Great Depression.  Fed Chairman Ben Bernanke believes that the cause of the Great Depression was the lack of action by the Hoover administration to stop banks from failing and by keeping interest rates too high.  In Bernanke’s mind, it was Hoover’s inaction that caused the depression, not Roosevelt’s activism.

There are (at least)  two arguments as to what caused the Great Depression.  One argument postulated by Irving Fisher and furthered by Bernanke states that debt deflation caused the Great Depression and, in at least Bernanke’s case, government inaction during the 3 1/2 years between the stock market crash of 1929 and the swearing in of Franklin Roosevelt caused productivity to become depressed and unable to recover in spite of FDR’s programs for an entire decade.

Fisher was not exactly on target with his arguments in his lifetime (from wikipedia):

The stock market crash of 1929 and the subsequent Great Depression cost Fisher much of his personal wealth and academic reputation. He famously predicted, a few days before the Stock Market Crash of 1929, “Stock prices have reached what looks like a permanently high plateau.” Irving Fisher stated on October 21st that the market was “only shaking out of the lunatic fringe” and went on to explain why he felt the prices still had not caught up with their real value and should go much higher. On Wednesday, October 23rd, he announced in a banker’s meeting “security values in most instances were not inflated.” For months after the Crash, he continued to assure investors that a recovery was just around the corner.

Once the Great Depression was unavoidable to notice, he theorized that debt deflation was a major cause – debt deflation that could have been avoided (according to some) had the Hoover administration taken more aggressive steps to intercede.

The other argument is that it wasn’t Hoover’s inaction that led to the Depression but the Smoot-Hawley Act of 1930, which raised tariffs on goods sold to trading partners and led reciprocal action, skyrocketing unemployment and global isolationism.   Those who would argue this would point that both low interest rates and ample liquidity were available in 1930, but that due to economic uncertainty, few wanted to borrow and take risks.  Further, FDR prevented the economy from pulling itself out of the depression by overly taxing the population (specifically the producers) and redistributing wealth using a “trickle-up” philosophy of using government to employ the people.  Even with FDR’s policies, unemployment was still over 19% in 1938.

You can argue both arguments are right and wrong.  It is plausible that at least having a Federal Reserve that would have released funds to troubled banks could have avoided the panic that led to over 9,000 banks failing in the 1930′s.  However, there is ample evidence that government intervention did more to exacerbate the Depression than remedy it.  The primary force that led us back to economic expansion was the Second World War.

Unfortunately for Bernanke, debt deflation is intensifying in spite of his actions to improve liquidity.  What may come from all these measures, however, could spur the same depressed conditions that he is trying so hard to avoid.  If liquidity does improve, even moderately, inflation will be a large concern.  The question will then be whether it would be better to allow inflation to run amok or to raise interest rates and threaten the improving economy.

One thing I feel relatively certain in predicting:  so long as the government intervenes in the economy, there will not be a lot of certainty in the markets, which will result in further volatility.  And, it doesn’t appear the government is planning on taking its hands out of the economy anytime soon.

Review of Kensington Slimblade™ Trackball Mouse

Everyone has a favorite mobile mouse; that is, except me.  I have tens of them and can’t seem to get comfortable with any of them.  One thing all have in common, though, is that they are bluetooth.  I hate having to plug something into my USB port to just run a peripheral and already have to do that with my scanner and presentation remote.  I don’t want that with my mouse.

Kensington seems to be moving more and more into the business traveler’s briefcase and with their innovative mice, they look to be establishing a foothold on the market.  I have both their Slimblade™ Bluetooth Presentation Mouse and the Trackball Mouse.  This review will focus only on the trackball mouse.

First, a little history of my distaste for trackballs.  Whenever I had to help someone at their desk and they had one of those large, rounded trackball mice, I winced.  I hated having to try to maneuver around the desktop with this clumsy and uncomfortable mass that seemingly required strong middle fingers.  I never felt comfortable using them and never really gave one a chance to convince me that there was utility in the idea.

With that prejudice, I did find the concept of this mobile trackball mouse intriguing.  The reason is not so much the trackball itself; it is more the functionality possibilities.  Kensington didn’t just place a trackball in it – it gave the user the choice of using the trackball as a pointer (regular mouse function) or as a (rounded) wheel to scroll down and across documents.  To change the function of the trackball, you need only double-click a button surrounding the ball.

Before I get to how well Kensington delivers on this, I’ll speak to the basic functions of the mouse.

1.  Footprint – the mouse is acceptably small (not the smallest and it won’t fit in your outdated PC Card slot as some will but it doesn’t take much space in your bag) and is light as you would expect from any portable peripheral.  It uses two AA batteries and has a power-saving mechanism that puts it into sleep mode when your computer is turned off.   You can also turn it off by pressing the button surrounding the trackball for 3 seconds.

2.  Usability – I read some reviews where users complained about dirt getting into the trackball roller and causing it to lose its trackball function.  I haven’t experienced that yet but understand any frustration that this would cause since it doesn’t appear that you can take the trackball mechanism apart to clean it.  In my experience with the mouse, the trackball worked flawlessly as did the laser that sits under it for normal mouse function.  As a regular mouse, it works well.

Underneath the mouse is a cover that opens and closes around the laser – I assume this is for transit but not sure why it is necessary if the mouse goes into sleep mode.  There is also a large (relative to other mice) blue button that is used to pair the mouse to your computer.

The reason why I wanted to review this mouse was to see if the trackball function would allow mobile users to use a mouse in cramped spaces where you didn’t have room to use a traditional mouse.  How did the Kensington deliver on this feature?

Pretty well in my opinion.  I have found myself using it in chairs and couches, resting the mouse on the arm (or on my lap) and using the trackball as a pointer.  Then, when I want to scroll the document, I double-click on the button, wait for the short delay, then scroll.  When I am ready to use as a mouse again, I double click again.

Granted, this took some getting used to.  At first I found myself trying to will the mouse into behaving the way I was thinking.  However, after some mental training on my part, I became pretty adept at utilizing the mouse as intended.  It literally allowed me to use the trackball both to scroll documents and as a pointer without moving my hand.

The only drawback goes back to my distaste for trackballs.  To me they have always been inelegant and take too much effort to use with any precision.  In this regard, I have to admit that with practice, the trackball can be pretty precise and without much effort.  It is really just an issue of training yourself to work with your finger rather than your wrist.

I can happily say that the Kensington Slimblade™ Trackball Mouse was a good purchase that will be the only mouse in my laptop case for a long time as long as it functions properly.