Felix Salmon argues, convincingly in my view, in favor of Spotify’s reported plan to go public by direct listing, not a traditional IPO. A little background, for those unfamiliar with the term: The usual way to go public is via an initial public offering of shares, where the company creates new shares in addition to the ones in existence, sells them to the public through an underwriter, and all old and new shares are thereafter publicly traded on an exchange. However, it’s not always the case that the company actually needs the new capital it ends up raising by selling new shares. Direct listing skips this step; instead, the company just flips a switch and becomes public. (Of course it’s more complicated than literally flipping a switch – you hire, well, me to help you through the process. But it’s certainly simpler than having to market and complete a new offering of stock as part of it.)
One recent much-discussed political issue (at least until another one replaced it a few hours later) was that some of the Republican members of Congress admitted in interviews that they had not read the American Health Care Act of 2017 before voting to approve it. Democrats mocked this as further evidence of a rushed, irresponsible process. I’m not using this corporate and securities law blog to expound on my political views on the AHCA or anything else. (I do that about once every three months on my personal Facebook page.) However, on the general question of whether legislators should be expected to have read the full text of the bills they’re voting on, I’m with the “that’s a ridiculous waste of time” camp.
The Financial Samurai personal finance blog posted an argument against angel investing, based in part on the writer’s own experience with a seemingly successful investment that really wasn’t so great, upon reflection. Toward the end of the post, the author says that if you do angel investing, you should devote no more than 5-10% of your funds towards it, and don’t expect anything good to come of it. But who is really advocating for devoting half or more of your nest egg to illiquid, speculative investments, even if you have a lot of financial leeway? There are legitimate reasons for wealthy individuals to want to participate in angel investing, like the satisfaction of helping a founder with a promising idea to realize a dream. As long as these investors aren’t blowing their whole fortune on it, what is the harm?
My law firm recently joined Select Counsel, a new and fast-growing network of law firms with profiles like mine: small firms founded by attorneys with significant sophisticated large law firm experience. The resulting network is not itself a law firm, but it provides a way for both lawyers in the network and interested clients to quickly locate highly qualified attorneys in appropriate jurisdictions and practice areas. The network has also established an active LinkedIn group enabling participating attorneys to run questions past other members.
When I am speaking to potential new clients, my pitch is pretty simple: I’m the same guy that would have handled your matter when I was with a big firm, but without the big firm infrastructure, I’m able to offer those same services at more reasonable rates and with more personal service. Fortunately, I’ve found that appeal works more often than not, and I’ve built a nice practice. Sometimes, however, potential clients will elect to go with a larger firm. Certainly, there are matters that are better handled by teams at large firms (multi-billion dollar merger, IPO underwritten by first-tier investment bank), but there are certain transactions that I’m capable of handling, where the potential client makes what seems to be the safer choice of a larger firm. (I don’t want to come off as too harsh about big firms, where there are many fine lawyers – and they’re a significant source of referrals for me!)
The Select Counsel arrangement has the potential to eliminate a lot of the queasiness that some potential clients have about small firms, in particular that their expertise is too narrow to handle anything but discrete projects. With the ability to quickly locate the right kind of attorney, it’s easy to quickly assemble a team to collaborate on a matter. Of course, even before this network started, I had assembled my own ad hoc go-to team of specialists (tax, etc.), and I continue to rely on them. But the ability to fill in any gaps through the network will allow me and others in the network to replicate the geographic and practice area scope of a big firm, benefitting both me and my clients.
The New York Times recently poured cold water on the notion that artificial intelligence is on the verge of replacing lawyers. A quote from the article correctly identifies the logical error that underlies the slippery slope-type theorizing:
“There is this popular view that if you can automate one piece of the work, the rest of the job is toast,” said Frank Levy, a labor economist at the Massachusetts Institute of Technology. “That’s just not true, or only rarely the case.”
This has been the story of the practice of law for at least the past 30 years or so and didn’t start with the recent advances in natural language processing for document review and similar developments. Over the years, new technologies have reduced or eliminated time-consuming aspects of the job without eliminating the job of attorney – computers replaced typewriters, automated redlining programs replaced hand redlining, email replaced physical delivery of paper, etc. While these developments have certainly affected employment in the industry overall, with sharp reductions in support staff such as legal secretaries, it hasn’t at all changed the basic arrangement that if you’re buying a company or bringing a lawsuit, you need to hire a law firm to look out for your interests, and there is a person at the law firm that needs to oversee the process. [Read more…]