VirtualCourthouse; Issue 4.8
E-Commerce - Courts and Lawyers

Judge Arthur M. Monty Ahalt

Hardly a moment goes by that we are not reminded of the information age. Pick up any daily newspaper, weekly magazine and you are confronted with advertisements calling you into the electronic world. It seems almost a daily happening for some industrial age service or product to be offered on the Internet with the familiar "www " Is this phenomenon here to stay or will it merely be another bursting bubble? Will we one day soon have e-law firms and e-courts?

One telling sign is found by following the money. In August, a slow IPO month, there were twenty-five Internet-related IPOs which opened as of September 10, 1999 - 182% higher. That's almost one new public Internet company a day. In September, the numbers will more than double to 58 new public Internet companies. New Internet stock indexes track this investment dynamic. USA Today's Internet 100 Index reports on nine separate Internet stock categories:

E-Business

E-Infrastructure

E-Solutions

E-Advertising

E-Commerce

E-Retail

E-Financial

E-News Media

E-Service Providers

The financial markets are continuing the reality of e-commerce with an exclamation point.

So how do the courts and law firms fit into this electronic commerce picture? According to MIT e-commerce professors Westland and Clark in their textbook Global Electronic Commerce, there are three major types of electronic commerce:

Business to Consumer

Business to Business

Closed Group Networks

Industrial age goods and services are made available to the consumer through marketing channels. The information age has taken these channels out of the paper world into the electronic world. For the most part, courts and law firms fit the model of business to business (B2B) electronic commerce. The fit is not 100 percent because there are definite elements of business to customer involved in the businesses of both courts and lawyers. But, to the extent that courts and lawyers transact the business of dispute resolution, a clear case can be made for the B2B e-commerce model.

What is the dispute resolution channel of commerce? The channel begins with the facts of the dispute. That may be a simple automobile accident or a broken promise. Those underlying facts become the basis of a claim. Usually the claim takes a written form such as a letter, but many times the claim is made orally by an individual to an organization. If the claim is not finally resolved then usually a lawyer is consulted. The lawyer then makes contact with the individual or organization and attempts to resolve the dispute. If the dispute is not resolved at this point then the lawyer typically will file a lawsuit in a court. Ultimately the court renders a judgment and the suit is finally resolved.

How does e-commerce and the information age affect this channel of commerce? Generally speaking e-commerce changes a service-related channel of commerce to a transactional-related channel. In the transactional world, time space and location become less significant. A channel's hierarchy is reduced and sometime flattened as many steps in a process are reduced to fewer steps. The result is that firms can concentrate on their core competencies becoming less distracted by matters outside of their competencies. Thus the availability of networked information and high-speed computers allows for smaller, more nimble competitors to operate more profitably by focusing on their core competencies. In the industrial age, location was a driving consideration. You know the three rules of the value or real property - Location, Location and Location. In the information age location is becoming insignificant as networked individuals and organizations compete from any place in the world.

If we apply what is happening in other industries to lawyers and the courts in the dispute resolution channel of commerce, we can expect the following changes to occur.

1. Time delays are reduced. Post office delays are eliminated.

2. Time uncertainty is reduced in financial transactions as a migration to electronic billing and purchasing occurs.

3. Immediate acknowledgment of receipt of information allows for a better and more trusting relationship between lawyer and client and lawyer and Judge.

4. Communication of service completion to clients allows clients to plan other business transactions more timely.

5. One time keying of information allows for greater efficiencies, reduced costs and increased profits.

6. Paper and mail costs are reduced or eliminated.

7. Financial transactions can be automatically placed into proper accounting categories.

8. The danger of lost or destroyed paper is eliminated.

Recently I attended the CTC6 court technology conference in Los Angles. One Judge posed the following question to the audience. If a taco can be prepared, served and paid for by a high school graduate with the only paper being the taco wrapper, what are the public's expectations of lawyers and the courts?

by Judge Arthur M. Monty Ahalt - September 1999

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