Tag Archives: New York Times

500 to 1

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I contemplated the effects of technological changes on law jobs several weeks ago when I posted a link to news reports about IBM’s Watson winning Jeopardy.  The New York Times has written what essentially amounts to a follow-up article, and it’s eye opening:

Quantifying the employment impact of these new technologies [that help automate the legal discovery process] is difficult. Mike Lynch, the founder of Autonomy, is convinced that “legal is a sector that will likely employ fewer, not more, people in the U.S. in the future.” He estimated that the shift from manual document discovery to e-discovery would lead to a manpower reduction in which one lawyer would suffice for work that once required 500 and that the newest generation of software, which can detect duplicates and find clusters of important documents on a particular topic, could cut the head count by another 50 percent. [emphasis added]

To be sure, 500:1 may just be the talking point of a businessman who is trying to sell his particular solution. Nonetheless, it seems clear that technology like Mr. Lynch’s is already fundamentally altering the economics of the legal profession.  We probably are headed towards a future with fewer lawyers (at least, ones performing discovery-related tasks).

What are some of the broader economic implications?  The NYTimes piece also quotes from  David H. Autor, an economics professor at the Massachusetts Institute of Technology:

“There is no reason to think that technology creates unemployment,” Professor Autor said. “Over the long run we find things for people to do. The harder question is, does changing technology always lead to better jobs? The answer is no.”

Settling the score

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Daniel J. Wakin over at the New York Times has a write-up about Edward W. Guo and the International Music Score Library Project (IMSLP):

The site, the International Music Score Library Project, has trod in the footsteps of Google Books and Project Gutenberg and grown to be one of the largest sources of scores anywhere. It claims to have 85,000 scores, or parts for nearly 35,000 works, with several thousand being added every month. That is a worrisome pace for traditional music publishers, whose bread and butter comes from renting and selling scores in expensive editions backed by the latest scholarship. More than a business threat, the site has raised messy copyright issues and drawn the ire of established publishers.

Has it ever.  Apparently, all this free music sharing of hundreds-of-years-old music is not putting money in the right people’s pockets:

While a boon to garret-living, financially struggling young musicians, the library has caught the attention of music publishers.

Take that, struggling musicians!  Music publishers are feeling the heat!  Though, really, it’s only going to hurt all of you in the end:

“I don’t know if I would call it a threat, but I do believe it hurts sales,” said Ed Matthew, a senior promotion manager at G. Schirmer in New York. “It is that profit that helps us to continue to bring out more composers’ work.”

Wait…what?  It is the profit from selling/renting sheet music composed by long-dead composers like Beethoven at above-market prices that allows the G. Schirmer company “to bring out more composers’ work”?  Insofar as this even makes sense, they can only mean one of two things:

1.  Traditional music publishers can only continue to publish public domain scores if they can continue to sell it at monopoly prices (e.g., $30-50 for “[a] set of parts for a mainstream string quartet”, according to the NYTimes article).

Analysis:  Good riddance.  IMSLP will publish it for free.  Deadweight loss triange:  gone.

2.  Traditional music publishers can only afford to take a bath on contemporary composers if it can subsidize them with profits from public domain scores of dead composers.

Analysis:  Whatever this is, it’s not a business argument.  There are plenty of reasons to support new composers (and musicians generally) that have nothing to do with business, of course.  One may think that the arts are intrinsically valuable, or may want to give back/pay it forward, or may simply want the prestige of having one’s name connected rising talent as a “patron”.  All fair enough.  But there’s no business reason for a traditional music publisher to subsidize new talent with monopoly money.  Why should it do that?  It would make much more money if it simply sold the old public domain stuff and told new composers to take a hike.  (Unless, of course, it does make money off the new composers….)

You can’t have it both ways, G. Schirmer.  Either you do make money off new composers (in which case the issue is completely unrelated to your publication of public domain scores) or you don’t.  If you don’t, you have been running a charity, not a business.

I should point out that if G. Schirmer (or any other traditional music publisher) has been effectively running a charity for new composers up until now, I thank them.  Seriously.  This was very kind of them and the sort of thing that should be encouraged.

I hasten to add, however, that just because a music publisher may have used some of its profits to support the arts doesn’t mean that they should be able to assert legal rights they don’t have to public domain musical scores just because the Internet is threatening their traditional business model.  The arts can be supported much more directly and efficiently.  There’s no need to expand copyright law to allow a revenue stream to continue flowing into the publisher’s pockets that a trickle may eventually find its way into the tip jar of the up-and-coming composer.

Update 2/27/2011: TechDirt selected my comment summarizing this post as an “Editor’s Choice” in their comments-of-the-week wrap-up!

Of “non-genius” and gratitude

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In a previous post, I commented on the surreality of watching The Social Network, the recent movie about the founding of Facebook, at a movie theater just off the Harvard University campus.  Facebook’s founder Mark Zuckerberg is getting a lot of scrutiny in the movie’s wake, including over at the NYTimes where Robert Wright suggests that–contrary to the movie’s portrayal–Zuckerberg may not be a genius.  Wright asks rhetorically:

[C]an you be considered a genius, a visionary, if the globally dominant network you built wasn’t the fruit of far-reaching vision — if, indeed, the network’s internal momentum was such that it was almost destined to build itself, and the question was only which driven and capable entrepreneur would happen to be standing at the right place at the right time when it started to unfold?

I think that Wright’s observations are relevant–if familiar to anyone who’s ever gotten advice about finding a job.  The platitudes about “making your own luck” and “something will turn up eventually if you keep trying” may have played out on a vastly larger scale for Zuckerberg than they do for most of us, but the difference is in degree rather than kind.  Deep down, we all know that the race is not always to the swift (sorry Orkut, Friendster, et al.) and that the real world is less of a meritocracy than we delude ourselves into thinking.

To which I say:  thank goodness.  I think Wright’s right in his observation of the mechanics, but I disagree with his implication.  Zuckerberg may have benefited (unfairly!) from “positive network externalities,” but so have we all.  We all benefit from centuries of mathematical, scientific, and agricultural discoveries that allow us plentiful food and leisure.  Particularly in the U.S., we benefit from a long-running, stable democracy that few of us have made significant sacrifices for–and none of us started.

Thank God for positive network effects.  It doesn’t take a genius to remember that our response to the Zuckerbergs of the world must not be jealousy but gratitude for the unmerited, unearned gifts we ourselves have received.

Strong copyright enforcement in a corrupt world

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There is an ongoing scholarly debate within U.S. legal circles about just how vigorously copyright violations should be pursued and punished.  In the U.S., this debate often takes the form of whether 6- or 7-figure judgments should be levied against single moms or 20-something grad students who copy music.

In more authoritarian countries, however, the stakes for alleged copyright infringers are often much higher.  Clifford J. Levy over at the New York Times recently posted this interesting piece entitled “Russia Uses Microsoft to Suppress Dissent” highlighting the plight of an environmental group which

fell victim to one of the [Russian] authorities’ newest tactics for quelling dissent: confiscating computers under the pretext of searching for pirated Microsoft software.

Across Russia, the security services have carried out dozens of similar raids against outspoken advocacy groups or opposition newspapers in recent years. Security officials say the inquiries reflect their concern about software piracy, which is rampant in Russia. Yet they rarely if ever carry out raids against advocacy groups or news organizations that back the government.

Such self-serving enforcement will always be a danger in copyright enforcement.  Copyrights protect non-rivalrous goods:  users can duplicate a copyrighted work without disturbing the author’s own enjoyment of the work.  This is in direct contrast to tangible property, which is rivalrous:  if I steal your laptop, I now benefit from your laptop and you suffer from its lack.  Put another way, my theft of a rivalrous good has not created two laptops the way (illegally) copying a non-rivalrous good (say, Windows 7) creates two fully functional copies.

This is not to say, of course, that copyright owners are not harmed when their works are pirated.  Indeed, owners do lose revenue to the extent that, in a parallel universe without the piracy, they might have been paid for the additional copies of their work (assuming the now non-existent pirate prefers to pay the market price rather than simply to go without).  Many scholars argue that copyright exists precisely to allow authors to benefit fully from every copy made of their works.

It is important to remember, however, that such vigorous protection comes at a privacy cost.  If I steal your laptop, a physical act has occurred that leaves you tangibly and noticeably poorer, and the police have something specific (i.e., a laptop) to recover.  If I copy Windows 7, no physical act of theft need occur (perhaps I obtained the first copy from Microsoft legitimately), and the police have nothing concrete to pursue.

As a result, law enforcement is left with two broad strategies when pursuing copyright infringement:  (1) incentivizing whistleblowers and (2) conducting fishing expeditions.  Within the U.S., (1) is encouraged and (2) is usually legally suspect.  In countries with fewer legal protections and more corruption, however, (2) presents a convenient excuse for harassment and intimidation whenever needed.  Robust copyright enforcement in such a context thus comes at an astronomically high privacy cost.

The economics of tutoring

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The New York Times has a piece analyzing the ROI of private, non-remdial tutoring.  On the one hand, journalist Paul Sullivan quotes a “cynic” who likened “tutoring and private school as a forward contract on the Ivy League, with anything less being a disappointment.”  On the other, he notes

[o]n the positive side, for children, tutors can often comfort them and let them talk to someone beyond their parents. “They can say what they want and that person will translate it to Mom and Dad,” Ms. [Sandy] Bass [editor and publisher of Private School Insider] said. “That’s what the kid needs because they’re afraid of letting Mom and Dad down.”

I sense that non-remedial tutoring is driven more by the former than the latter.  I wasn’t personally tutored in grade school or secondary school, but I did take the ubiquitous BarBri bar review course after graduating from law school.  I took this course because I felt that I had to:  everyone else was taking it, and I couldn’t afford to not have the same “edge.”  (Never mind that state bar exams are designed to test one’s knowledge of the law, a skill presumably learned during the preceding three years of law school.)

Is non-remedial tutoring just an arms race?  I’d be curious to hear your thoughts and comments.

Colleges have debt too

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The New York Times has published an opinion piece by Mark C. Taylor, the chairman of the religion department at Columbia University, that puts a slightly different spin on the perennial college-costs-are-out-of-control argument.  He suggests that the institutions of higher education are themselves as indebted (and troubled) as their students:

There is a similarity between the debt crisis on Wall Street and what threatens higher education. Just as investors borrowed more and increased their leverage in volatile markets, many colleges and universities are borrowing more and betting on an expanding market in higher education at the precise moment their product is becoming affordable for fewer people.

It’s an interesting observation with potentially far-reaching implications.  There is always going to be demand for higher education, but it’s hard to see how a university like N.Y.U. can sustain debt levels higher than its endowment (“a staggering $2.22 billion debt with a relatively modest $2.2 billion endowment,” according to the article) in a world where “four years at a top-tier school will cost $330,000 in 2020, $525,000 in 2028 and $785,000 in 2035” if present trends continue.

How to file 3 lawsuits an hour

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The New York Times is reporting that the recession is causing a boom for some lawyers:

As millions of Americans have fallen behind on paying their bills, debt collection law firms have been clogging courtrooms with lawsuits seeking repayment.
Few have been as prolific as Cohen & Slamowitz, a Woodbury, N.Y., firm that has specialized in debt collection for nearly two decades. The firm has been filing roughly 80,000 lawsuits a year.
With just 14 lawyers on staff, that works out to more than 5,700 cases per lawyer.
While reporter Andrew Martin makes much of the shock value of the numbers and implies that there is no way such large-scale suing could be done responsibly, these numbers don’t strike me as inherently extreme.  While I am sure that abuse can and does happen in debt collection, consider the following:
  1. 5,700 cases per lawyer works out to just under 3 cases per billable hour (assuming a 2000-hour working year).
  2. Collecting a debt is not like proving that someone committed a crime.  It’s not like creditors have to prove to a jury that debtors owe money beyond a reasonable doubt.
  3. These lawyers are using automation software.
  4. These lawyers have a large support staff (who presumably handle most of the clerical work).

Unemployment and the millennials

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The New York Times reprints some unemployment figures:

For young adults, the prospects in the workplace, even for the college-educated, have rarely been so bleak. Apart from the 14 percent who are unemployed and seeking work…23 percent are not even seeking a job, according to data from the Bureau of Labor Statistics. The total, 37 percent, is the highest in more than three decades and a rate reminiscent of the 1930s.

…and fleshes out those figures with the anecdote of Scott Nicholson, a 2008 college graduate who is still looking for work:

The daily routine seldom varied. Mr. Nicholson, 24, a graduate of Colgate University, winner of a dean’s award for academic excellence, spent his mornings searching corporate Web sites for suitable job openings. When he found one, he mailed off a résumé and cover letter — four or five a week, week after week.

I think what makes this story so interesting is its intergenerational comparison of Scott, his father, and his grandfather and the opportunities available to each.  Louis Uchitelle makes a strong case that fundamental opportunities have shifted, that the millennials’ equivalent of “go West, young man” means leaving the U.S.–and its moribund economy–entirely.