Attorney Journals, San Diego, Volume 226 by Attorney Journals

SAN DIEGO

Volume 226, 2022 $6.95

The Competition That Kills You Might Not Look Like You

Nancy Myrland

15 Digital Content Marketing Mistakes to Avoid

Noreen Fishman Why Attend an Event Solely for Women?

Lindsay Griffiths

The Key to Building Client Trust

Joe Murphey

Is AI a Positive Disruption in Legal?

Yuriy Zaremba

5 Ways Law Firms Can Build a Brand

Julie Ackerman & Lesley MacLean

Law Firm of the Month

Dallo Law Group, San Diego A Ten-Year Focus on Tax Controversy

SPECIALIZING IN COMPLEX BUSINESS LITIGATION

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2022 EDITION—NO.226

TABLE OF CONTENTS 6 The Competition That Kills You Might Not Look Like You by Nancy Myrland

8 Why Attend an Event Solely for Women? by Lindsay Griffiths

EXECUTIVE PUBLISHER Brian Topor

10 The Key to Building Client Trust

EDITOR Wendy Price

by Joe Murphey

CREATIVE SERVICES Penn Creative

LAW FIRM OF THE MONTH

CIRCULATION Angela Watson PHOTOGRAPHY Chris Griffiths STAFF WRITERS Dan Baldwin Jennifer Hadley CONTRIBUTING EDITORIALISTS Julie Ackerman Noreen Fishman Lindsay Griffiths Lesley MacLean Joe Murphey Nancy Myrland Yuriy Zaremba ADVERTISING INQUIRIES Info@AttorneyJournals.com SUBMIT AN ARTICLE Editorial@AttorneyJournals.com OFFICE 30213 Avenida De Las Banderas Suite 200 Rancho Santa Margarita, CA 92688 www.AttorneyJournals.com ADDRESS CHANGES Address corrections can be made via email or postal mail.

16 Dallo Law Group, San Diego A Ten-Year Focus on Tax Controversy by Dan Baldwin

22 Five Ways Law Firms Can Build a Brand by Julie Ackerman & Lesley MacLean

24 Fifteen Digital Content Marketing Mistakes to Avoid by Noreen Fishman

26 Is AI a Positive Disruption in Legal? by Yuriy Zaremba

Editorial material appears in Attorney Journals as an informational service for readers. Article contents are the opinions of the authors and not necessarily those of Attorney Journals. Attorney Journals makes every effort to publish credible, responsible advertisements. Inclusion of product advertisements or announcements does not imply endorsement. Attorney Journals is a trademark of Sticky Media. Not affiliated with any other trade publication or association. Copyright 2022 by Sticky Media. All rights reserved. Contents may not be reproduced without written permission from Sticky Media. Printed in the USA

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Lawyers, The Competition That Kills You Might Not Look Like You by Nancy Myrland

the recent Legal Marketing Association conference (#LMA22) in Las Vegas, our keynote presenters on the first day were Richard and Daniel Susskind, the visionaries we have all come to know, like, trust, and respect in this industry and profession. Richard and Daniel study and look at the future of the profession and give recommendations and insight as to how firms can protect, nurture, and grow their businesses. During the conversation, Richard shared a reminder that the competition that kills you might not look like you. That got a lot of people in the audience thinking because, in the legal profession, many tend to look at the law firm down the street, or across the country, or across the world as their primary competition. These are the obvious choices because they have been for a very long time. We can see them.

The Not So Obvious Sources of Competition for Lawyers Today and in the future, you must realize that your competition does not just come from traditionally structured law firms, but from those you might not even be imagining. What would happen if groups of lawyers from different firms went out on their own and created completely different business models that allow them to serve your clients just as well, if not better than you do? It’s easy to say that this won’t happen, or that others have tried it and failed. You are safe because your business is healthy. It is easy to put those blinders on, but let’s look at what has happened in other industries. • Look at taxis that have been eaten alive by Uber and Lyft. • Look at traditional bookstores that have been replaced by online digital sources of information. • Look at the retail industry that has been decimated by efficient and not always less expensive digital powerhouses such as Amazon. • Look at CPAs who have lost a bit of business to those who use TurboTax at home. 6

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The Pandemic Has Changed Everything Richard told us that more people signed up for Harvard’s online services in one year during the pandemic than had enrolled in Harvard’s history. Harvard offered, and students found, a solution that was likely never imagined by Harvard 10 years ago. Just as with institutions like Harvard, the pandemic forced you and your clients to embrace technology in order to continue to communicate and conduct business. This trend will not reverse. It is nearly impossible to forget or unlearn those skills and ways of doing business that you and your clients have learned.

Alternative Service Providers (ALSPs) Will Figure out How to Give Your Clients What They Want and Need The point is that there are people out there thinking about better ways to do what you do. You can’t get complacent, thinking that won’t happen. A wise course of action is to figure out what your clients want, need, and expect, even if it isn’t obvious to them. Richard reminded us that your clients don’t want lawyers, they want the results you offer.

Do the Results You Offer Match What Your Clients Need? Knowing that your clients want results, it would be wise to regularly ask yourself what results you are offering your clients. What results are they looking for? What emotions, problems, anxiety, fears, and other challenges lie beneath the challenges they are able to articulate?

I Was Asked What Firms Can Do to Prepare for This New Competition Last week, I was invited to network by a fairly new legal marketing and business development professional. This professional has been in our industry for two years, so she wanted to connect and ask my opinion on a few legal business issues. During our conversation, she referred to Richard and Daniel Susskind’s keynote, and asked me what I thought some of the things are that law firms can do to prepare for, and set themselves apart from, that competition that Richard said might not look anything like us. I offered my thoughts on a few different solutions. Of course, I mentioned technology and personalization and the ability of those tools to reach clients, potential clients, and other influencers in a way that nurtures and solidifies relationships. I also agreed with the Susskinds that we need to continue to step up our knowledge and strategic use of technology to build reputations, relationships, and the more efficient execution of the tasks that we must do to run our firms and practices.

Technology Is Great, But Let’s Back up a Bit As critical as legal technology is to just about every function in your firm, it is equally important to take a step back and look at some very basic principles because, without them, the latest and greatest technology will not be as effective as it can and should be.

The Question Lawyers Must Ask Themselves When competition surfaces, what is it that consumers of products and services use to determine who they will do business with? What are the measuring sticks used to help make their decisions easier? Are those measuring sticks tangible, or are they more subjective? In other service-based businesses, if a new business or firm pops up down the street, or strategically places an ad in front of a buyer on the Internet, what would cause that buyer to not jump ship and leave their favorite provider to try out that new service?

Put Yourself in Your Clients’ Shoes You need to put yourself in the same decision-making position as your clients and potential clients. Ask yourself, or ask them, what are those things that would cause these people who are so valuable to you and the future of your practice and your firm to be so secure, confident, and pleased with your working relationship that, when faced with alternate sources for service that you offer, they would easily

make the decision to continue working with you? What is it that you do, or could start doing, on a regular basis that helps them realize that: • You are easy to do business with • You provide service in a way that no one else can • You understand their business better than anyone else • You go the extra mile to make sure they are prepared for any new developments in their industry • You truly value their business and your relationship

Make Yourself Unbeatable Spend some time brainstorming the answers to the questions above. Please don’t wait until the next pandemic or recession starts to try to make yourself indispensable and unbeatable. This is not a short-term task that you can accomplish at a moment’s notice, but one that is worth your time, effort, and resources to work on now. • Gather your team. • Brainstorm. • Ask your clients. • Observe what your clients react to.

Practice Account-Based Marketing (ABM) Form an effort around each client and prospect. Create a plan that speaks directly to making each one happy. Think about all of your clients’ and prospects’ team members, taking into consideration their skills and knowledge and how you can also help them succeed so they are prepared for their current and future responsibilities, and so that you nurture relationships you might rely upon one of these days when your primary contact leaves.

Remember, Your Competition Might Not Look Like You As Richard Susskind shared, your competition might not look anything like you. Even more important, your competition might not act anything like you, either, and that could very well be your advantage, now and in the future. n Nancy Myrland is a Marketing, Business Development, Content, Social and Digital Media Speaker, Trainer and Advisor to lawyers, legal marketers, and law firms, specializing in helping you grow your firm and your practice through the understanding, creation, and integration of marketing and strategic plans with content, social and digital media. Learn more at www.myrlandmarketing.com.

Attorney Journals San Diego | Volume 226, 2022

Why Attend an Event Solely for Women? by Lindsay Griffiths

ince 2019, I have had the pleasure of being involved in the Empowered Women’s Event series as a committee member, with our organization as an in-kind sponsor. The event focuses on storytelling and according to event founder and host Susan Freeman: “Stories have a transformative power to allow us to see the world in a different way than we do if we just encounter it on our own. Stories are an entry point to understanding a different experience of the world. Storytelling, presenting a different perspective of the world, is important when it comes to connecting with each other. It gives us an opportunity to learn from another person’s experience and it can shape, strengthen, or challenge our opinions and values. When a story catches our attention and engages us, we are more likely to absorb the message and meaning within it than if the same message was presented simply in facts and figures. When someone tells their own personal story, we catch a glimpse of a view of the world that may be slightly or radically different from our own. When we see the world as they see it, or walk in their shoes, the experience can inspire empathy.” I never fail to leave the event inspired, challenged, engaged, and enthused. Volunteering as a committee member is a lot of work when you do it well, but it’s incredibly rewarding and never more so on the day of the event itself. Yes, other genders are welcome too (and encouraged!) and we learn so many lessons throughout the day. So why attend an event designed for women? I asked some of our committee members in the weeks leading up to Empowered Women 2022 and added my own thoughts and this is what we said.

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Learning How to Harness the Power of Vulnerability Not only is this the topic that speaker Eva Wisnik connected with us on, but it’s something we learn over and over again at these Empowered Women Events. This is the special sauce that you’ll get when you’re in the room at EWE. So many women shared their stories—on stage and off—in ways that they never had previously. It was truly beautiful.

Connecting with Amazing Women Leaders We had 12 incredible women speakers who showed us the power of storytelling throughout the day, women leaders from 22 phenomenal sponsors and their guests who were in the audience, another 12 powerhouse committee leaders, not to mention over 100 attendees who brought their own leadership skills with them. It was an amazing room full of phenomenal women.

The Chance to Open Your Mind When we’re working in the day-to-day and often in our personal lives, it’s easy to get stuck in the details—and of course, those details are important. That’s how we get things done and it’s how we move from one thing to the next. But stepping back and attending a conference like Empowered Women 2022 allows us a moment to breathe, to take in other women’s stories, and other perspectives, and to open our minds in a way that may let some new ideas in. A quick anecdote—I remember being at a legal marketing conference a number of years ago when the keynote speaker was from Zappos. A few attendees muttered that they didn’t know what shoes had to do with legal marketing and skipped the session—but it was immensely valuable. Something doesn’t always have to be within our wheelhouse

for us to benefit from it; in fact, many times, we benefit from something because it’s different from our experience. I have notes upon notes from Thursday’s events to follow up on in the coming weeks.

Flex Your Empathy Muscles Empathy is my superpower, so I love this one! With everything going on in the world at the moment, it can feel like we’re in empathy overdrive. But the opportunity to be in a room with so many incredible people, who are sharing their raw and honest stories with us allows us to be both compassionate and hopeful. We shed so many tears last week, but we also got actionable items to walk away with that made us all feel powerful.

It Fills You Up Many of us are running on empty these days, between demanding careers and equally demanding personal lives. It’s hard to imagine taking the time out to do one more thing (am I right?). Particularly when we’re also being called to show up in the world around us for some pretty heavy stuff. But what I’ve found at Empowered Women Events is that the day fills me up in a way so that I’m able to recharge and re-center; I better connect with myself and what my purpose is, so when I return home and to the office, I am fresh again. I felt so ready this past Monday to hit the ground running, and that’s thanks to the amazing women in that room.

Learning How to Support Other Women We’ve all heard a lot about mean girls and bullying—how to spot them, how to avoid them, etc. But we don’t hear as much about how to find your “girl gang,” how to lift women up and how to tangibly support other women. Not only does that happen at EWE, but there are concrete examples given for how to support other women, both at the event and afterward. We heard the stories and we connected with each other, both offline and on, so that we can continue to support each other.

Investing in Yourself A whole-day event can feel daunting, but it’s truly an investment in yourself. Everyone in the room was committed to each other and the discussions that we were having, the stories that were being told, and the follow-up. We invested in ourselves and we’re investing in each other.

We’re Back in Person! This may seem silly, but while virtual meetings can be and are valuable and last year’s Empowered Women Virtual Event was amazing, there is something special that happens when everyone is in a room together. You have the benefit of social cues and body language, studies say that you gain more trust and pay more attention, and there really is just *something* that happens when we’re together. There were so many great hugs, meaningful glances, real connections, and lifelong friendships made in that room.

Supporting Dress for Success Each year, we partner with Dress for Success and ask all of our attendees to bring a gently used handbag (or two) to donate and the response has been tremendous. We love working with them and helping to further their mission of empowering women to achieve economic independence by providing a network of support, professional attire, and the development tools to help women thrive in work and in life. I thought I knew a lot about Dress for Success already before last week, having partnered with them over the last three years, but it turns out there is a lot more to them than I realized! So if like me, you think you know all there is to know about them, maybe take a quick look at their website and see what else they do and where you can pitch in to support them better.

Being Inspired and Empowered For everyone who has attended the EWE before, there is something magical that happens there—it sounds hokey, but it’s true. Whether it’s the strength of over a hundred women being together in a room, the vulnerability of our speakers sharing their personal stories, or the recognition of ourselves in each other, everyone leaves feeling a fire within themselves. I certainly did! This is just one women’s event (and admittedly, it’s a pretty special one!!). But there are many women’s events and other types of dedicated affinity group events that celebrate the people you identify with best—find the one that makes you feel the most connected and engaged. Maybe it’s even Empowered Women 2023! n Lindsay Griffiths is the International Lawyers Network's Executive Director. She is a dynamic, influential international executive and marketing thought leader with a passion for relationship development and authoring impactful content. Learn more at www.iln.com.

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Trust Me! One Mediator’s Search for the Key to Building Client Trust by Joe Murphey

“No one cares how much you know, until they know how much you care.”

he above quote is attributed to Teddy Roosevelt (TR). Even aside from having the pleasing, lyrical flourish of a phrase well turned, this statement succinctly expresses a profound truth about how we come to place our trust in others. Put another way: the pathway to trust begins with our intentions (how much we care) not our competence (how much we know). As a mediator, I meet clients every morning I will be asking to place trust in me—both in my skills and my intentions—by late afternoon as they are confronted with conflicting options and agonizing choices. From the first time I heard the TR quote above, it has been a guiding light to me; the key to earning and holding the trust of clients. Only recently have I taken a deeper dive into the concept embodied by this quote, to see what’s really under the hood. Is there more than just clever wordplay at work here? Turns out there is a lot of research, much of it scholarly, on point. TR was really onto something.

The Science Behind Trust in Human Interactions If you Google the phrase “Why do people trust in others?” or “What is the basis of trust?” you’ll tap into a geyser of information. The questions of why, how, and when trust forms in human interactions have been given much thought and deliberation. If you’re looking for a onestop-shop where the notion of “trust” has been analyzed across multiple disciplines—psychological, philosophical, societal, economic, and more—I found just the place for you to click: Trust Project Videos. https://www.kellogg. northwestern.edu/trust-project/videos/browse-all-videos. aspx. The Trust Project at Northwestern, per the home

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page, “features scholars and executives exploring trust in videos that cover theory, research and practice.” (RabbitHole Warning: These videos are fascinating, extensive, searchable and they scroll real-time written transcripts as you watch. The transcripts are also “clickable” for even deeper dives into the extensive research behind every assertion made. You can spend a lot of time in there if you’re not careful. I wasn’t careful.) But after I finally surfaced from the depths of the Trust Project website, I was only more convinced of the truth of the TR quote above. Teddy really summed up in one sentence what it took NWU researchers a lot more time and space to elaborate upon and prove through rigorous study. That is not to say these researchers and scholars wasted their time. Knowing why trust begins first with intentions and only secondarily relies upon competence, is very enlightening. And to a mediator, a person for whom building trust with strangers is a daily requirement, it is beyond fascinating—it’s El Dorado. Let’s explore some of what the Trust Project researchers tell us, and then riff on these concepts with scenarios of our own.

The Three Elements of Trust in Business Transactions Kent Grayson, NWU Professor of Marketing, isolates three elements of trust in business transactions. (I’m focusing for this article on trust in business transactions. Trust in longterm, personal relationships involves complexities that are far beyond the scope of our inquiry.) The three elements of trust in business transactions are: competency, honesty, and benevolence. The latter two are somewhat overlapping. Competency means essentially that you know what you’re

doing. Honesty means you can be believed. Benevolence means your intentions are good and respectful of the needs of the other person(s) in the transaction. Most honest people are perceived as benevolent, and vice versa, thus the link between those two elements. Teddy Roosevelt, and most of the researchers at NWU, agree that when it comes to trust, the honesty/benevolence part is more important than the competency part. I concur, and a couple of simple thought exercises will drive this point home.

Thought Experiments in Building Trust Let’s say you develop acute appendicitis while on a trip abroad and require emergency surgery. You’re rushed to the hospital where you learn there are two surgeons available to perform the operation. The first is highly skilled and widely regarded as the most gifted surgeon in the entire country. However, this doctor has also been known to conduct bizarre experiments on patients during operations. The second doctor finished last in his class at medical school, but through hard work and experience has learned to be a reasonably competent surgeon. This doctor is also beloved by the community for being kind and well-intentioned in all respects. There are no other options. Who do you want operating? Another scenario: You are stranded in a remote location and use your rideshare app to arrange a pick-up. You are given a choice: Driver one has an impeccable driving history with no reported accidents across thousands of trips. However, she is prone to taking passengers to places they don’t want to go. Driver two, on the other hand, has had a driver’s license for only a few months and has been involved a couple of minor accidents in that short time. But Driver two faithfully takes passengers to their chosen destination and offers mints and bottled water as well. It’s easy to see in these examples that competency, while important, is secondary to honesty and benevolence. A brilliant doctor, who is also a mad scientist, is not the better option. A skilled driver who won’t take you where you need to go, is not the better option. But you can also see from these examples, that skill is not entirely irrelevant. If the “nice doctor” in scenario one wasn’t even a doctor, but just a well-intentioned person posing as a doctor, that’s also not an option. If the “nice driver” in scenario two was a child whose feet can’t reach the pedals, that’s also not an option. The ideal person for the job, of course, is one with high competency matched with high levels of honesty/benevolence. My question is, for a mediator,

which of these do we lead with when forming the bonds of trust with a stranger. President Roosevelt and most of the NWU experts say it’s the honesty/benevolence part. But how do we do it?

How Does a Mediator Build Trust? Now to relate these findings to mediation and negotiation. We’ve learned that a neutral’s skill and experience (“I’ve mediated thousands of cases with an impressive success rate”) is probably less important to clients than the perception the mediator will take care and lead them somewhere they actually want to go (“Before we begin, let me make sure I know what it is you want out of today’s session”). But we all make the mistake of opening with our qualifications, not our intentions, when meeting clients for the first time. It’s human nature to lead with one’s credentials. (“Humble brags” comprise about 85% of what comes across my LinkedIn feed. When was the last time you saw a L.I. post that said, “Hey, I learned something today by caring and actively listening to what someone else had to say”?) Now that we know it’s important to start with projecting our good intentions in building trust, how exactly do we do that? Introducing yourself by saying, “Hi, I’m your mediator. I’m very honest and benevolent” would probably have an opposite effect of that intended. Among the various experts who contributed to The Trust Project, the economists may provide the best answer to this dilemma. Professor Niko Matouschek, an economist at the NWU Kellogg School of Management, says “trust is an issue that most people don’t associate with economics, yet economists care a great deal about trust.” In the absence of trust, important economic transactions simply cannot take place. The buyer, in the absence of experience with a particular seller, needs to know the seller is “virtuous”; i.e., is acting in good faith and with benevolence. Professor Matouschek refers to the assertion that Quakers, per many economic historians, were so impactful on the British economy of the 18th century because they, as a group, were known to be trustworthy.

Associating with the Right People To bring this lesson home—how a neutral can gain trust at mediation—you might begin by associating yourself with groups known for trustworthiness. Many ADR firms, like Miles Mediation & Arbitration with whom I am associated, have impeccable institutional integrity. They have a reputation for honesty and fair dealing. Also, there are many reputable professional groups and

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associations for neutrals, such as the National Academy of Distinguished Neutrals. Such organizations typically boast very particular standards for membership (experience, reputation, integrity) and require peer sponsorship and recommendations, all of which can give you credibility by association. On a more local level, there are the ADR programs associated with the county and regional Court systems, many of which also have high standards for skill and reputation for inclusion on their approved lists.

Longevity as an Indicator of Virtuosity Per Professor Matouschek, another way “virtuous sellers” establish themselves in the marketplace is by the natural long-term advantage they have over less scrupulous actors. To extrapolate to the field of mediation, a neutral who routinely cuts corners with honesty and fairness, for the purpose of getting a particular settlement, won’t be around for long. Bad reputations travel much more quickly than good ones. I was planning a trip to Paris a while ago and asked a friend—who had been there many times—for restaurant recommendations. She said, “If a restaurant in Paris is in business, then it’s a fantastic restaurant.” Apparently, Parisians are very picky about their food and the bad restaurants don’t stick around. In summary, the mere fact you have developed a thriving mediation practice will signal to prospective clients that you are “virtuous” as well as competent. But what if you are just getting started with your career in ADR?

Other Tools to Get Your Reputation for Benevolence Known For those just starting out as neutrals, you can’t yet rely on an established reputation as a neutral. But you can get out your message, nonetheless. First, if you’ve come to ADR after a long career as an attorney, judge, or other professional, then you need to find a way to market that longstanding good reputation to prospective ADR clients. Websites, blogs, and social media posts provide an excellent platform for you to showcase your virtuosity. Unlike the “humble brag” (which I derisively mocked above), actual client testimonials are a great way to put the trumpet that heralds you in the hands of others. Even a fledgling mediator has some satisfied clients. And, as you approach these clients about giving testimonials, perhaps you focus on those who were most impressed with your kindness, benevolence, sensitivity, ability to actively listen, etc. Again, the concept here with testimonials is to lead with “how much you care”. That’s not to say a smidge of “how much you know” in a testimonial would hurt, of course.

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In the End, You Really DO Need to Care Professor Matouschek speaks of the non-virtuous seller who, realizing the economic value of being perceived as virtuous, will imitate the actions of the virtuous seller initially (to gain trust) but will then exploit that trust later for pure economic gain. That scenario reminds me of the quote (attributed to Groucho Marx, George Burns, and a host of others) that “In Hollywood, sincerity is everything; once you can fake that, you’re in.” That’s amusing, but the truth is this: The “impostor” virtuous seller will not enjoy long-term success. In the fullness of time, they will be exposed for what they are. And, in the end, long-term success for the practicing neutral comes not from merely projecting the image that you care. You really need to care about the clients who are trusting you with their important matters. I’ve always said there is no skill necessary to being a successful mediator that cannot be learned. But the temperament for being a successful mediator probably cannot be learned. It is innate. And it is specifically the temperament of caring about others and putting service of others above yourself and your own material gains. (“Service Above Self” happens to be the motto of Rotary International. Rotarians, in my experience, make great mediators.) We have all known brilliant and accomplished litigators who enjoyed very little success when they tried their hand at being neutrals. Their failure to catch on as mediators had nothing to do with their skill or experience with legal disputes, which they had in abundance. Their reputations in the legal community were known far and wide. But like the very experienced Uber driver from our scenarios, these folks could not convince potential clients of their benevolence and good intentions. There may be a variety of reasons one fails to obtain success in the field of ADR. But there is one constant for all who have succeeded in that endeavor—they really do care about others. If you really do care, and you also take the time to develop the skills of mediation as well, you will succeed as a neutral. Trust me. n Since 2005, Joe Murphey has mediated nearly 3,000 cases at Miles Mediation with a success rate of over 80%. When he’s not mediating, volunteering in the community, or spending time with his family, Joe is usually playing his drums and/or harmonicas with several local bands. Learn more at www.milesmediation.com.

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Attorney Journals San Diego | Volume 226, 2022

A TEN-YEAR FOCUS ON TAX CONTROVERSY While it is tempting to be a ‘one-stop shop,’ I purposely focused my practice on tax controversy matters. My highly skilled staff could easily provide bookkeeping, tax preparation, or entity incorporation services and leave it at that, but I did not want to distract from our core strengths. In doing so, we have set ourselves apart as true tax controversy experts,” says Michael Dallo, CPA, J.D., LL.M, founder, principal attorney, and CEO. Founded 10 years ago, the firm’s typical clients are individuals and small businesses with complex or high-stakes tax issues or problems and companies impacted by COVID-19 government orders seeking significant tax refunds from the IRS under the CARES Act Employee Retention Credit Program. Many of the firm’s attorneys are also licensed CPAs or have extensive tax and accounting backgrounds. In addition to being skilled and effective advocates, they have the technical knowledge needed for effective and robust tax representation. This extensive tax controversy expertise paid off when the firm represented a young mother/entrepreneur who had a passion to prevent drowning and making swimming lessons accessible for all Californians. She formed a company to match up independent swim instructors with families for private lessons at the family home or other accessible pools. Her passion and commitment to her business resulted in expansion to many states outside of California and she had nearly 5000 potential swim instructors seeking opportunities to connect with potential clients through her. The EDD audited and assessed nearly $200,000 of back taxes and would have required her to put all instructors on her payroll—a tremendous burden that threatened to shut down her business. Dallo Law Group appealed the assessment and won a full reversal at the CUIAB level. The victory was of such a profound precedential impact that EDD appealed the ruling to the Board of Appeals. The firm won again at that level. Because of their advocacy, the attorneys protected this young woman from overly aggressive tax authorities and ensured she would be able to operate her business and provide for her family.

Attorney Journals San Diego | Volume 226, 2022

by Dan Baldwin

THE TRIPLE THREAT Dallo earned two bachelor's degrees from the University of San Diego—Bachelor of Accountancy and a Bachelor of Business Administration (Finance Emphasis)—and graduated magna cum laude in the top ten percent of his class. He attended law school and obtained his juris doctor from the University of San Diego where he graduated magna cum laude, order of the coif (top ten percent of his class). He then went on to obtain his Master of Laws in Taxation (LL.M.) from NYU Law— the most renowned tax program in the nation. He started his career as a CPA working in the tax department of a

JOURNALS

LAW FIRM

OF THE MONTH

2022 2021

Dallo Law Group Team Members: Joann Navarro (Legal Secretary), Brandon Burger (Tax Associate), Sally Reddy (Supervising Attorney), Michael Dallo (Principal & CEO), Cortney Dallo (Chief Marketing Officer), Kevin Waldron (Tax Associate), Faye Putrus (Tax Accountant), Joanmarie Ehman (Executive Assistant)

San Diego based multi-national Fortune 500 Company, where he was an integral part of the tax team. He has also worked at the Tax Division of the United States Department of Justice in Washington, D.C. He soon realized a passion for tax advocacy, which solidified his desire to become a professional advocate for people and organizations needing such specialized services. Seeing that there were few law firms dedicated to tax advocacy and controversy, he started his own firm immediately upon graduating from NYU Law. A personal tragedy added impetus to his drive. While finishing his last year of law school, he unexpectedly lost his brother, Branden. “During the lowest and most difficult point of my life, my passion for tax and the law was my driving force

in helping me not only finish school, but graduate at the top of my class. My brother always believed in me, and he was and continues to be a driving force in my conviction, passion, and hard work,” Dallo says. The triple threat title applies to Dallo’s expertise as an aggressive and committed legal advocate, a CPA, and a tax professor teaching at the University of San Diego in the Business and Law School. These professional “hats” give Dallo a unique perspective on handling the often-complex cases handled by his office. He says, “most tax controversy firms focus on the past mistakes that are at issue with the current audit or collections matter without regard to the client’s future business operations. Our approach to resolving tax Attorney Journals San Diego | Volume 226, 2022

controversies, while including strong advocacy, also involves counseling taxpayers to ensure continued tax compliance in the future. We strive to have no returning clients—once we solve a tax problem, our goal is to ensure the taxpayer will not have any issues in the future.”

SPEAKING THE LANGUAGE Dallo speaks four languages fluently: English, Spanish, Arabic, and Chaldean-Aramaic. He has studied and worked in Paris, Barcelona, Hong Kong, Madrid, and Rio de Janeiro to understand the tax field in many different capacities. “Knowing and understanding diverse languages is a great asset because as a linguist you have to listen not only to what is said, but also how it is said and what is actually meant. It’s a very nuanced skill, but a very valuable one for an attorney,” Dallo says. Accounting is also a language, he says. “We can’t stress enough the importance of having an attorney-CPA do this work. Having the administrative background in IRS procedure and the financial literacy to understand a tax return is invaluable. This combination provides the proper and necessary tools to advocate and defend our clients before the IRS and state taxing agencies. Accounting is the language of a tax return and law is the language of negotiation. Both are necessary in my practice.” Being fluent in that language is a significant advantage for the firm’s expanding client list. Tax problems are scary

Attorney Journals San Diego | Volume 226, 2022

for the individual person or organization involved, but also for attorneys not experienced in the multiple disciplines in play. Dallo Law Group’s attorneys understand small business owners. They have a policy to not judge their clients and to offer a safe place for clients to be open about their past mistakes. They understand the challenges of operating a business and keeping up with tax filing and payment compliance. Their goal is always to ensure a fair resolution of any tax problems resulting from past mistakes and to make future compliance easy. “Our attorneys, while highly intelligent and skilled in tax law and advocacy, are also kind. Our approach to tax controversy cases is to provide a calm and safe place for individuals and business owners to resolve tax problems,” Dallo says. For example, the firm represented a client who received a bill from the IRS for hundreds of thousands of dollars. Their small business had been audited without the firm’s knowledge and the IRS disallowed all deductions. This liability would have wiped out the company and ruined the family's life. The taxpayers endured many life and business challenges during those years and were forced to close the business. Recreating the pieces needed to fight the IRS was a significant challenge. The attorneys used their CPA skills to substantiate the deductions despite a lack of accounting records, and then used their attorney skills to defend and advocate for their client. In the end, they convinced the IRS to abate all the tax, remove all penalties, and were able to get a refund back to the clients.

FINDING AND FILLING A VOID IN SERVICE “I have challenged the firm to be revolutionary in the way we practice tax law and to not be afraid to work on cases that few are venturing to explore, thus filling a void in tax practice. Those voids mean not only opportunities for new business, but opportunities to help people and organizations with their legal and tax challenges,” Dallo says. His concept is to broaden the firm’s tax services and client list within tax controversy through a willingness to explore new legal territory, which is a constant factor in the rapidly evolving arena of tax law. Expanding a niche is not common for a tax law firm. While tax law is already a specialized field, the specialties within are even more niched. Rarely do boutique or midsized tax law firms venture into new areas of tax law and unchartered territories. For example, Dallo Law Group is a pioneer and one of the only tax law firms in Southern California that has a dedicated practice to assisting with the IRS Employee Retention Credit (ERC). The ERC is a tax refund available to certain small business employers who were particularly impacted by the COVID-19 pandemic. It requires precise payroll analysis—a process which Dallo has streamlined with his accounting expertise. Some employers can demonstrate a sufficient revenue decline during the pandemic to automatically qualify for ERC. But for the many who cannot, eligibility often requires complex legal argumentation coupled with in-depth financial analysis. Being CPAs and attorneys, Dallo Law Group sets itself apart in its ability to handle such a matter. The firm patiently works with its clients to fully understand the pain they felt during the pandemic and then identifies where that pain translated to the clients’ bottom-line. Dallo Law Group advocates to the IRS that the small businesses that were forced to endure the economic shutdowns of 2020 and 2021 deserve to have some of their tax dollars paid back. The firm has assisted hundreds of small businesses claim more than $50 million dollars (and counting) in IRS refunds. Pioneering is a necessity in tax law because there isn’t a roadmap of how to specifically deal with the nuances that new areas of tax law present. The ability to handle changes in tax controversy brought on by new laws, and the knowledge and experienced gained in that effort, adds a significant amount of value to their clients.

“We didn't know what to do, who to contact, or what to expect when we ultimately reached out to you after researching online. We came in very panicked due to owing $819,214.00 to the IRS but your cautious yet optimistic assurances helped calm us and left us with no doubts in hiring you. Along the entire process, everything went better than we could have ever expected with the limited physical resources on hand after the length of time that had passed. Your expertise and the support of your office personnel got us through a dreadfully scary episode of our lives, and we honestly feel very indebted to have this finally behind so we can officially proceed to move ahead with our lives. We came in owing the IRS a large sum of money and ended our case with receiving a refund of $147.00 from the IRS! Thank you again from our hearts. The best to you, your family and your office!” In addition, Dallo Law Group has developed long-term, cooperative relationships with other law firms, attorneys, and CPAs requiring expertise in criminal tax representation. “We represent several clients who were duped by their previous attorneys who purported to be a ‘one-stop shop’ Cortney and Michael Dallo

Dallo says, “The pillar of our firm is framed and finished by the skills, continued education, commitment, creativity and perseverance of our qualified attorneys and employees individually and collectively. This becomes the solid foundation on which our partnering clients build their trust and continue to honor us with their confidence.”

Attorney Journals San Diego | Volume 226, 2022

and ended up getting them hooked up with illegal tax shelters among other problems. By spearheading a team of independent attorneys and CPAs, we ensure these clients are confident that they can trust the advice moving forward because of the built-in peer review,” Dallo says.

THE EVOLUTION OF A FIRM AND ITS FOUNDER Dallo says his approach to the law and managing a law firm has evolved and matured during the decade he has been in business. Early on he says his style was micromanagement, something he no longer practices. At the time, however, it worked. He grew up working in his family’s grocery business. “Micromanaging is the name of the game in that business. And so, naturally I started the firm kind of on my own with my own methods. I was very much a micromanager.” Shortly after forming Dallo Law Group, he realized that he couldn’t manage in that manner and grow the firm. “I stopped being so much of a micromanager and became more of a teacher and a mentor to my staff. I now focus on fostering an environment of commonality in our goals and objectives but let the attorneys define the best individualized path for success for our clients.” He says the cases that really stand out as examples are those where the issues were difficult, and the taxpayers felt like they were at the mercy of big government agencies. “Fighting for cases like these reminds me of what my practice is all about and why I do this work,” he says. One of those meaningful cases involved a small trucking business in an income tax examination. The IRS agent working on the case was extremely aggressive and during the course of five years, the examination expanded to over 15 different audits of the taxpayer, his family members, other businesses, and involved income, payroll, and international tax considerations and significant penalties. The client felt the weight of the government and knew that without help the IRS would drive him out of business. The IRS eventually determined that the taxpayer owed more than $10 million in taxes and penalties. Through zealous advocacy and going above and beyond the call of duty, the firm ultimately got the overall tax bill reduced to less than $500,000. Even though the cards were stacked against their client, Dallo was confident that they were in the right and fought hard to obtain that result in appeals and in tax court. Dallo says, “When a client meets with me or meets with my staff, they are justifiably frightened of possible outcomes. No one wants to get a letter from the IRS; that’s always scary stuff. And they hire me because they’re worried

Attorney Journals San Diego | Volume 226, 2022

about what could happen. I always try to give the client my game plan, because I've done this for a long time. I assure them that I’m going to take care of it. When they leave the office, there's a sigh of relief, they tell me, ‘I feel much better already.’ And that's very important to hear. Because my job is to give them peace of mind and confidence that we will zealously advocate to resolve their tax issues.” Dallo is quick to note that key to his evolution as the founder of a law firm, and as a human being in business, is the inspiration and support of his wife, Cortney, and their children, Celeste, Sienna, and Michael, III. n Contact Michael Dallo, CPA, J.D., LL.M. Dallo Law Group, APC 2150 Fourth Avenue San Diego, CA 92101 619-795-8000 www.dallolawgroup.com

Michael Dallo (Principal & CEO)

5 Ways Law Firms Can Build a Brand by Julie Ackerman and Lesley MacLean

In the United States, there are more than 1.3 million active lawyers practicing at more than 425,000 law firms. How does a law firm differentiate itself from its competitors? Start by building your brand. Many lawyers and law firms know they should have a brand, but maybe you’re not clear on exactly what that means—or how to do it. We’re here to help. Keep reading to understand more about law firm brands and how to create one that reflects your firm’s unique culture.

what makes your law firm unique and a better choice— especially when so many firms are offering the same services and making similar boilerplate statements. Here are a few questions to help you brainstorm:

 Understand What Brand Means

• What characteristics do you see among those who work for your firm that produce a better result for your clients?

Lawyers learn many things in law school, but marketing and branding is not typically included. First things first... What is law firm branding? Your law firm brand is the collection of all elements you create to portray your firm’s personality and your promise to clients. A clearly defined law firm brand identifies the right tone for the firm, understands its current and aspirational perception in the market, and guides the creation of materials that effectively communicate who you are and what you do. In short, your brand is the indelible impression you make upon your audience. A law firm’s brand consists of several parts: • A unique differentiation between your firm and the competition that will in some way offer a distinct benefit or advantage to your audience. It is the reason to choose your firm over another. • Your graphic identity, the style of which should visually support your brand. • Messaging that communicates what your brand stands for simply, clearly, and consistently. Branding is essential in a competitive marketplace, including for law firms of all sizes.

 Determine Your Law Firm’s Brand You may be thinking that figuring out the brand of your firm is easier said than done. For some, it can be difficult to identify 22

Attorney Journals San Diego | Volume 226, 2022

• Why did you pursue a law career in the first place? • What did you want to accomplish with your own firm that you couldn’t working for another law firm? • What makes you passionate about what you do?

• What do you think your law firm does consistently better than any other law firm? There is an excellent chance that somewhere buried in the answers to the above questions is the essence of your law firm’s brand.

 Build Your Brand No brand shares the same story. There is something your law firm brings to the table that no other firm can. What is that? Your history, a higher purpose, formative life experiences, number of attorneys, singular focus, numerous landmark victories, unparalleled compassion—there are many possibilities. When you identify what makes you different, you can build your law firm’s brand around it. It’s what you will be known for, and the promise your brand represents. You should communicate what your brand stands for simply, clearly, and consistently. Most importantly, your brand must be based in truth. A brand built on who you’d like to be, rather than who you are, is only a façade.

 Create a Tagline and Logo for Your Law Firm

Your tagline and logo are part of your brand. Each supports your message in a different way.

If you do not already have a tagline included with your graphic identity, consider using one. Taglines can be extremely useful in helping to communicate your brand. A logo is part of your graphic identity, which supports your brand. The purpose of a logo is to instantly identify the brand of any organization, product, or service and remind the audience what it stands for—so you don’t have to make the case over and over. If you haven’t communicated what your brand stands for, then your logo doesn’t represent much. Also, your logo shouldn’t look like anyone else’s logo, as confusion would defeat its purpose.

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 Build Your Website Around Your Law Firm's Brand

Now that you’ve determined and built your law firm’s brand and created a tagline and logo, it’s time to communicate your brand to the world. Your website is a powerful showcase for your brand. It is your opportunity to reach the widest audience and make the case for choosing your firm. How do you communicate your law firm’s brand on your website? • On homepage, less is more: Help visitors by giving them bite-size key information upfront and enabling them to click deeper for more. • Keep homepage copy short and sweet: Put your firm’s brand differentiation right up front on your homepage: who you are, what you do, and why they should choose your firm. But keep it short. You can elaborate elsewhere on the site.

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• Use fresh design: Visual appearance makes a strong impression. Design your law firm’s website with a fresh, functional style that aligns with your brand.

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• Choose visuals with punch: Photos and graphics are not placeholders; they amplify the effect of your words. The words echo the visuals, the visuals echo the words: when they work together the impact is greater than the sum of the parts. Building a brand is much more than picking a name and designing a logo. A clearly defined brand identifies the right tone for the firm, understands its current and aspirational perception in the market, and guides the creation of materials that effectively communicate who you are and what you do. n Julie Ackerman is a Communications Manager + Legal Content Writer at Legal Internet Solutions, Inc. (LISI). Lesley MacLean is a Creative Director at LISI which is a legal marketing firm. Learn more at: www.legalisi.com.

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15 Digital Content Marketing Mistakes to Avoid When Marketing Law Firms by Noreen Fishman

hances are you’ve heard the phrase “content is king.” This is the reality in today’s marketing landscape. However, just as great content can propel your growth, bad content can hurt your brand and have a negative impact. Here are some of the most common mistakes that can make a negative impression when marketing law firms.

Content Marketing Mistakes to Avoid When Marketing Law Firms  Going Overboard with Promotional Content Reading this type of content is similar to being stuck in a conversation with a bragger. Just hearing how great your firm is won’t be interesting to readers. According to the Content Marketing Institute, you should follow the 80/20 rule, with no more than 20% of your content involving self-promotion. When choosing what to publish, put your audience first.

 Inundating with Email If your law firm’s departments tend to be siloed, you are at risk of over-emailing your database. For example, if contacts receive a marketing email, then an automated newsletter, then a request for feedback from your client service team, they will start to tune out your emails. Make sure to coordinate with other departments and review your workflows to ensure that recipients aren’t getting too many emails in a short timeframe.

 Leaning into Negative Content It’s become a trend that negative content is more likely to be clicked on and shared, but that doesn’t mean you should

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produce more of it. If you are going to talk about difficult topics, try to focus on the solution or other upsides.

 Bringing up Controversial Subjects It’s a good idea to avoid politics and religion in any form of content. Bringing up highly polarizing topics is not a good play when marketing law firms unless they are part of your core business or mission.

 Publishing Poor Writing or Design No matter how compelling your content is, if it is full of grammar mistakes, unappealing graphics, or language that’s hard to read, it will only receive negative attention. Always take the time to proofread and use high-quality graphic design elements. Avoid using too much complex legal jargon that may leave readers confused.

 Using an Inconsistent Voice Your content should mirror your firm’s general tone and personality. It’s OK to vary your messages, but make sure the material reflects your core personality.

 Using Boring Subject Lines According to one study, 64% of respondents say that they decide to open emails based on subject lines. Create subject lines that encourage people to open the email and let them know what they will get out of it.

 Using the Same Content on Every Platform

Will they find value in your information? How informed are they already on the subject matter? What else do they need to know?

 Including Outdated or Incorrect Information

It’s important to remember that social media channels are not all the same. Each has a unique audience with different interests and demographics. While cross-posting some content is a time-saver, you don’t want to do it too much or you’ll alienate some social media users. When marketing law firms on social media, think about each platform and the audience that uses it and tailor content accordingly. For more information on platform-specific tools and best practices, check out this complimentary eBook: Advanced Social Media Strategies for Law Firms.

You want to be viewed as an authority and credible source of information in your niche. That’s unlikely to happen if you are sharing information that’s not true. If new information comes out that makes your previous content inaccurate, take it down. Always fact-check and include the latest facts. Whether your content is old or new, make sure not to publish something unless you have proof.

 Not Giving Credit

 Trying to Game the SEO System

Using someone else’s content and passing it off as your own is a bad look. Most content creators wouldn’t do this on purpose, but using images, quotes, survey results, or other elements without linking or citing the original sources is problematic. When you use information from another source, cite it and link to the original publisher.

 Overusing Hashtags Hashtags have an important purpose: they help people to find your content and help to make your content visible. However, adding too many can make the content difficult to read and dilute the impact of your message. In most cases, using between 3-5 hashtags per post is good enough.

 Posting User-Generated Content Without Reviewing User-generated content can play an important role when marketing law firms. However, posting indiscriminately can be bad for your brand. If you are going to post user-generated content, always do your research. Review the creator’s profile, double-check any facts published, etc.

 Writing About Topics That Aren’t Relevant to Your Audience As we mentioned above, keeping your audience in mind is paramount to content that performs well. As you create content, ask yourself if it’s appropriate for your readers.

In the old days, content stuffing and creating extra pages of content for the purposes of SEO could work. Now, Google and other search engines are more focused on expertise, authoritativeness, and trustworthiness (EAT). They are looking for content that meets the searcher’s intent. Serving that purpose is the most important thing to keep in mind when posting online content.

 Following Trends That Aren’t On-Brand Hopping on viral trends can be an impactful way to drive new traffic. However, what you’re posting needs to align with other content that you’ve posted and your overall tone. Don’t confuse your audience by posting content that has nothing to do with your brand, just because it’s popular at the moment. Takeaway: Making any of these content marketing mistakes can hurt your brand. At the very least, these errors can prevent your content from being effective and helping you to reach your goal. Make sure to steer clear of these actions when creating content. Our goal with digital content marketing is to strike a balance between communicating clearly what you want to get across and creating content that’s important to your audience. If your law firm struggles with content marketing, start with this guide to help. n Noreen Fishman is the director of client services at Good2bSocial. Her primary responsibility is to help clients achieve their digital marketing goals. This includes managing the Good2bSocial team, ensuring constant communication with clients and updating them on their progress. Connect with Noreen on LinkedIn or www.good2bsocial.com.

Attorney Journals San Diego | Volume 226, 2022

Is AI a Positive Disruption in Legal? by Yuriy Zaremba

What Is Innovation? In general terms, innovation can be described as creating something that generates value. To complete the loop, the amount of value generated often depends on how innovative that something is. Innovations can occur with both emerging as well as timetested tech. An example of the former might be augmented or virtual reality, while cell phones and smartphones are an instance of the latter (keeping in mind that telephones were invented in 1876). It’s also possible that an innovation can be the result of combining both emerging and established tech.

Attorney Journals San Diego | Volume 226, 2022

Types of Innovation When it comes to innovation, there’s no “one-size-fits-all” definition. Just like we mentioned that innovation can appear from emerging tech, established tech, or a mix of the two, there are also several types of innovation. Some are small steps that build off of previous ones, whereas others are massive, lifealtering, game-changing leaps (you know, “One small step for man, one giant leap for mankind”). There are many ways to categorize innovation. But one of the simpler approaches is to think about it as if it were a graph. On the y-axis, you have the “newness” of the technology. In other words, how young and novel it is. On the x-axis, it’s the impact the product or service will have on the market. With both axes set, you can divide the graph into four main quadrants: incremental (low newness, low impact), sustaining (low newness, high impact), radical (high newness, low impact), and disruptive (high newness, high impact).

Market Impact

he word “disruption” triggers heavy, often negative, images or connotations. Almost no one likes disruptions, such as not being able to go to work due to illness or Netflix lagging due to bad internet as you’re trying to watch Lucifer. And even over the past two months, the lives of millions of people have been disrupted due to war and conflict. The instability and uncertainty that are generated by disruption can be extremely unsettling. But as much as we fear and dislike disruption, there’s also plenty of reason to enjoy and even celebrate disruption. That’s because the definition of disruption is a break in the status quo, or some interruption in the normal way of carrying out some activity. In other words, there’s no reason why disruption must always be bad. There are many cases when disruption has been a force of good that has greatly enriched the lives of everyday, ordinary people. The definition of disruption is a break in the status quo, or some interruption in the normal way of carrying out some activity. Artificial Intelligence (AI) is frequently described as a source of disruption, and that it will steal the jobs of hard-working individuals. It is true that AI is a disruption, but before you cave in to all the fear, uncertainty, and doubt (FUD), don’t forget that AI is a source of positive disruption. What the naysayers often leave out is that AI is not just a positive disruption capable of greatly improving peoples’ lives, but it’s a game-changing innovation.

Low

Sustaining

Disruptive

Significant improvements to a product that's trying to maintain its position in the existing market.

New technology or model that disrupts the existing market.

Incremental

Radical

Gradual, continuous improvements to an existing product.

Breakthrough that transforms the existing market or product

Technology "Newness"

Let’s explore each quadrant in a bit more detail.

High

Incremental Innovation Incremental innovation can best be described as a gradual, continuous improvement of whatever products and services currently exist. New products or concepts aren’t created. Instead, only small, marginal improvements take place. It’s nowhere near as flashy or sexy as its radical and disruptive cousins, but incremental innovation ensures that a company avoids stagnation and that its bottom line continues to grow. An example of this would be Gillette razors. The act of shaving has been around for centuries, and one of the first “modern” razors was invented in the 1760s. Flash-forward 260 years and not much has changed. It’s still a blade on a stick that’s meant to cut hair. Yet Gillette consistently finds ways to innovate, whether it’s by inserting an additional blade, installing a pivoting head, or adding vibration and heat functionality. Each of these small changes is a good example of incremental innovation.

Sustaining Innovation Like incremental innovation, sustaining innovation uses “older” tech. However, whereas incremental uses small steps to add value, sustaining tries to reimagine new purposes for what presently exists. To some extent, this may even occur as a natural part of scaling, upgrading, or optimization. The hope is that large-scale changes will result in better-performing products that lead to a significant gain in the market share. Laptops are a clear example of sustaining innovation. The characteristics and capabilities of many laptops are roughly equal to those of personal desktop computers. But while their performance is largely the same, laptops offer a high degree of portability, something that PCs don’t have.

Radical Innovation Then there’s radical innovation. It capitalizes on a technological breakthrough that can transform industries while creating entirely new markets. Perhaps the most famous example of a radical innovation is the iPhone, which completely transformed the cell phone industry while creating a niche market of smartphone users. At the time, Blackberry was one of the leading names. The device was impressive enough that it was the go-to choice for professionals who needed to email and text on the go, often winning over trendy flip-phones like older Motorola Razrs and swivel phones like Samsung’s X830. It was ubiquitous enough that even the former U.S. President Barack Obama famously used a Blackberry during his term at the White House. The fall of Blackberry is a cautionary tale to learn from. In the face of such a massive radical innovation, companies must evolve or be left behind. Blackberry ultimately chose

not to, sticking to characteristic features like its small physical keyboard. Initial flaws in the iPhone’s early designs, like rapid battery drain and a glitchy digital keyboard, led Blackberry to consider the iPhone a non-threat. And in the end, as we all know, once the initial flaws were worked out, iPhones (and smartphones as a whole) asserted dominance over the market.

Disruptive Innovation Disruptive innovation is strongly related to radical innovation. Like the latter, the former also capitalizes on a technological breakthrough. But unlike the latter, it affects (or “disrupts”) the current, existing market. Because of its game-changing nature, disruptive innovations are the most likely to make the news. Airbnb and Netflix are both examples of companies that embraced a service with the power of disruptive innovation. Personal computers, digital music, cloud technology, video streaming, and more are all disruptive innovations that have become commonplace. Something to keep in mind is that it can take years for disruptive innovations to fully mature. Netflix, for example, spent several years as a rental video mail service, and even when it transitioned to streaming it was several more years before it gained traction. It’s for this reason some argue that cryptocurrencies are a disruptive innovation, considering how easily, cheaply, and quickly money can be sent across borders (faster than both SWIFT and SEPA).

AI as a Positive Disruption for the Legal Industry Artificial intelligence can be described as one of the most important disruptive technologies, if not the most, of the Fourth Industrial Revolution. Anything that relies on or is built using machine learning, deep learning, artificial neural networks, facial recognition, or natural language processing is ultimately dependent on AI. Rarely does a day go by when we don’t see mention of one of the more popular uses of AI, such as digital assistants (Siri, Alexa, Cortana), self-driving cars, Roombas, or vehicle recognition (although vehicle recognition might not be as popular; if you recently got a speeding ticket, it might have been the result of AI). We even hear about how AI can address labor shortages for certain industries, such as agriculture. One thing is for certain: AI has already disrupted the legal industry. When used, it has helped cut down on contract costs and routine work, as well as legal research and outcome predictions. So if AI is already a disruption for the legal industry, how can AI prove to be a positive disruption?

Attorney Journals San Diego | Volume 226, 2022

Example: Health Industry To some extent, we can look to the health industry. Technology is being deployed to augment the care provided by health organizations. Many of us who have been to a hospital or clinic are intimately familiar with the queues, paperwork, and wait times associated with each visit. When acquiring health tech, organizations search for something that can easily integrate into their current workflows while improving efficiency without sacrificing the quality of care. If successful, patients win. Legal tech is no different. If it can be added easily without generating its own problems, and if efficiency improves while ensuring legal affairs are in order, the clients win.

Fears About AI Numerous legal professionals have raised ethical and legal concerns regarding the use of AI, especially about data sets and potential biases within the data. And due to the complexity of the algorithms used, many lawyers can’t easily understand why an AI system does what it does. Still, some of the biggest fears and concerns about AI—that it’s challenging to implement, that it isn’t accurate enough, and that it’ll replace people—are more misconceptions than truth. AI and its many subsets are often perceived as difficult because vast data sets and countless hours are required to train an AI to the point where it can be used. Fortunately, legal companies don’t need to worry about this, because that’s where legal tech companies like AXDRAFT get involved. We specialize in working with and processing the data to ensure that an AI is kept up to date. All that’s needed is for legal companies to integrate it as they need. Some of the biggest fears and concerns about AI—that it’s challenging to implement, that it isn’t accurate enough, and that it’ ll replace people—are more misconceptions than truth. And when it comes to lack of accuracy, tech companies give their all to ensure that their AI can minimize any mistakes. That’s also why job insecurity is another misconception— there are plenty of things that AI can’t effectively do whereas people excel. Traditional ways of business don’t have to be completely scrapped, and disruptive innovations needn’t completely replace existing realities. Instead, as some believe, disruptive innovations can work together with current infrastructures, augmenting one another to forge a new world of digital operations.

Role of AI Simply put, AI doesn’t need to revolutionize the legal landscape in order to be considered a positive disruption. We already mentioned that AI has disrupted legal. Thanks to it, lawyers spend less time, energy, and money dealing with data, processing documents, and completing other routine

Attorney Journals San Diego | Volume 226, 2022

busywork. It can be argued that these improvements are already positive, but frankly speaking, something can only be a positive disruption if it generates additional value. Even if a lawyer saves 80% of the time they normally spend drafting a contract, although it’s cool, it’s not positive if the lawyer then does nothing. Instead, for it to generate value, the lawyer must do something more, something that an AI can’t do, such as finding ways to resolve conflicts or interpret grey areas in a sympathetic or empathetic manner. Something can only be a positive disruption if it generates additional value. Think of AI as similar to a tractor. Tractors never replaced farmers. Instead, they’re an all-purpose workhouse that enables its operator to cover much more ground, which in turn maximizes the potential harvest or yield. AI is much the same. It will never replace lawyers and paralegals. Instead, they will enable legal teams to work with more clients while efficiently processing mountains of documents.

The Future Many GCs and legal professionals are getting ready for significant disruption. In 2019, a survey reported that a majority of individuals questioned believed that tech would disrupt the legal industry in a positive way, if it weren’t already doing so. One of the disruptions on the way? Artificial intelligence.

Conclusion Something to remember is that it’s possible for a single product, company, or service to experience all four types of innovation. We used Netflix as an example of disruptive innovation, but it has experienced its fair share of the other three types. One of the hardest aspects of innovation is the need to keep innovating. Failure to do so leads to stagnation, which in turn drastically increases the likelihood of a company’s collapse. Within the legal industry, it may seem challenging to find ways to innovate, but as the world of legal tech develops and matures, the opportunities will quickly multiply. Now is the time, while most are still trying to understand what’s expected of them in the future, to get ready. AI is a positive disruption that has the power to transform not just how we conduct our business and legal affairs, but also the who, what, where, and when. n Yuriy Zaremba is the General Manager at AXDRAFT (contract processing company). By the age of 25, Yuriy became the youngest Legal 500 lawyer from Ukraine, which he achieved by building a top tier real estate practice in just two years. It was then that Yuiry became obsessed with solving one of the biggest pains that lawyers have—contract processing. Learn more at: www.axdraft.com.

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