Silicon Valley's legal quandary
If any group of professionals in Silicon Valley has attained villain status, it is lawyers. But the sad truth is, the place would fall apart without them.
Microsoft chairman Bill Gates, venture capitalist John Doerr and Hawaiian shirt-clad hard-drive visionary Al Shugart, among others, have all lambasted the men and women who pen painfully detailed and expensive technology exchange agreements, IPO documents and settlement pacts. ("For purposes of this agreement, the term 'troll' shall include all naked doll figures with outspread arms, pointy hairdos and neutered anatomical appearance as seen, but not limited to, descriptions included in Exhibit G.")
Lawyers are smarmy, argumentative and noncommittal. Believe me, I know. I am one and hated nearly every day when I actively practiced. Except, of course, the day I got to ask someone under oath: "Did you, or members of your family, employ high-pressure water devices such as a 'Water Weenie' that could have contributed to the soil subsidence found underneath your home's foundation?"
Still, without lawyers and their work, the digital future probably wouldn't exist. In the near future, expect to see libertarian dot-com CEOs tout the societal value of Chapter 11 bankruptcies.
Why? Two words: intellectual property. Tech visionaries love to talk about new products, but the intrinsic value of most of the Valley's fruit ultimately rests on the notion that any court will award protection--as well as royalties and damages--to original ideas.
Come up with a spunky product design, such as Apple's iMac, and the courts will likely say you have rights to "trade dress," or ownership to a particular look that no one can copy. If you come up with a sequence of ones and zeros yet to be exactly replicated elsewhere, copyright applies.
The abstract nature of technology makes it fundamentally open to easy piracy. Companies rarely enjoy concrete barriers to competition. It's tougher to build a railroad or a shoe factory than to set up a Web site called "The eBay of Smoked Meats."
America's love/hate relationship with litigation runs deep. Alexis de Tocqueville commented on the obsessive legal culture of the early nation during his famous visit to the United States in the 1830s. At the time, the prevailing attitude was that anyone had the right to think freely and simultaneously make a buck.
Despite their reputation to the contrary, courts quickly evolved fairly pro-business attitudes in the New World. Recognized rights to free-flowing streams were subsumed in New England, for example, when textile manufacturers said they needed to block rivers for job growth.
Corporations also got a huge boost in America. Historically, corporations were viewed with skepticism in England and elsewhere in Europe because of the layer of legal protection the Old World offered management. In a partnership, you can sue partners directly. In a corporation, a CEO and other controlling executives can't be sued without great difficulty.
Who will act more quickly to pay a disputed claim? A partner who might lose his house and end up wearing a paper hat at Arby's, or a corporation run by a CEO that can't be touched? Same for the stock market: Without the Securities and Exchange Commission, created during the dreaded New Deal, the IPO wouldn't exist.
Further, the legal world adds an air of dignity to any proceeding. With the mahogany courtroom trappings, a grown person can stand in front of a crowded room and bellow, "For his entire adult life, Jim Barkley has worked to marry his knowledge of the business world with his love for bass fishing"--without being laughed at.
Looking at these factors, you would think that law firms would be worshipped in the Valley. Unfortunately, this legal dependence also runs counter to technology's self-image. In the tech world, everyone likes to think that their products are original manifestations of a concept that the general population will intrinsically gravitate toward.
Although many ideas are groundbreaking, numerous products are merely bald-faced attempts at riding the creativity of others. PC games, for instance. The only real difference between many of these games is whether you get to use a gun or a crossbow. Some groundbreaking moments--"Revolutionary Breakthrough: Hair Transplants Now Only $3 Per Graft!!!"--seem to occur three times a week.
Another classic example: Apple sued Microsoft for appropriating the "look and feel" of its graphical operating system--an idea that Apple originally stole from Xerox.
It is a thankless task. Hence the exorbitant hourly fees.