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A startup in Austin is getting off the ground with tutelage from a group of retired general counsel and big-firm lawyers with decades of experience among them. Until recently, the general counsel headed legal departments at Texas corporations Exxon Corp., Shell Oil Co. and Electronic Data Systems Corp., and companies outside Texas including Schlumberger Ltd., Hewlett-Packard Co. and Du Pont de Nemours & Co. But now, in retirement, the general counsel are spending some of their free time helping executives of eLaw.com, a nearly 2-year-old startup that maintains a database of work product that lawyers can search and buy online. Jon Dyck, a lawyer who left Baker Botts in 1999 to form eLaw.com, says the company can help lawyers avoid reinventing the wheel every time they need to do some research or write a brief. The firms providing content make some money off the sale of their work product and may pick up some business if the eLaw.com customers decide to hire them after reading their research or pleadings. Dyck says the advisory board members have been assisting with invaluable advice not only on the company’s strategic plan, but also with the nuts and bolts of selling the eLaw.com concept to customers and content providers. “With their combined hundreds of years of experience, we can ask them, ‘Is this compelling as to where you used to sit as general counsel of a major company or managing partner of a law firm?’ ” says Dyck. “ I’m in pretty frequent ongoing communications with them on any matter.” And it’s not a bad gig for lawyers who aren’t really ready to exit the business world. “It’s a great way to maintain your personal contacts, continue to work with people you enjoy being with,” says Allen Lackey, former vice president and general counsel of Shell Oil in Houston. “It’s been great fun,” says William Barnett, former managing partner of Houston-based Baker Botts. “From my own perspective, the most interesting thing about it is sort of grappling with the issue of how is the legal profession affected by the Internet and how can it take advantage of the Internet.” DINNER CONVERSATION Sometimes the clich�s about dot-coms are true. Dyck says the earliest plans for eLaw.com were jotted down in January 1999 on a napkin in a restaurant over dinner with a friend, Stacie Harris, and her husband. Dyck says Harris, a friend from the University of Texas, was then a marketing manager at Dell Computer Corp. in Austin. “[We] started talking about the Internet and all that was going on and why, despite how everything from the medical industry and financial and airline tickets were being revolutionized by the Internet, there wasn’t much going on in the legal market,” he recalls. Over dinner, they developed the business plan for eLaw.com. An advisory board was in that plan. Dyck says eLaw.com simply is taking to a macro-level what firms do anyway. “The reason you go to a big law firm is presumably [because] they aren’t doing everything for the first time.” Dyck, then a 29-year-old associate with Baker Botts in Austin, says he couldn’t get the concept out of his mind, and it really started haunting him by February 1999 when he was in New York representing Austin’s dice.com in its acquisition by EarthWeb Inc. “The acquirer was a public company with 30-year-old founders and that probably inspired me as well,” he says. “I actually wrote the first … draft of the business plan in my hotel room one night after a long day of working on documents.” With Harris leaving Dell around that time and looking for a new opportunity, Dyck says he decided to leave Baker Botts at the end of April to give eLaw.com a try. Dyck brought his business plan to Robb Voyles, Baker Botts’ managing partner in Austin. Voyles encouraged the young lawyer to go to Houston to meet with the firm’s former managing partner, Barnett, to see if he would serve on an advisory board. “I went up to Houston with my laptop and sat down and gave him a very crude demonstration of what we envisioned this would be and had a number of conversations over the next six weeks,” he says. Dyck says Barnett not only agreed to serve on the board, but also recruited C. Kenneth Roberts, former general counsel of Exxon. Then someone they both knew, Howard Rudge, former general counsel of DuPont, signed on. Dyck says around the time Barnett came aboard, they recruited Rebecca Bass, former managing director of the Lexis part of Lexis-Nexis, and Jerry Bringard, former vice president and general counsel of Ford Motor Credit Co., who was the uncle of a former college friend. The board grew from there, with members recruiting friends and acquaintances. Barnett is on the board of J.P. Morgan Chase Bank of Texas and Louis Dreyfus Natural Gas Corp., but he says the work he does on eLaw.com’s advisory board is quite different. “Those are for-profit and you have, you function as a traditional director, working not only direction but budget and things like that. Here, it’s mostly taking something that is new and trying to shape it in a way that’s most effective. It’s kind of a new deal really,” he says. ONLINE PLEADINGS In the basic sense, eLaw.com is an online library of memorandums, briefs and motions that customers can purchase online, much like they buy a book at Amazon.com. Large firms contract with eLaw.com to put their research and pleadings online, says Dyck. Customers pay a yearly fee and a per-document charge. After purchase, documents are e-mailed. A labor and employment library launched in November 2000 with documents provided by Baker Botts, Baker & Hostetler and Littler Mendelson. Plans call for expanding the online libraries, with environmental law on tap soon, according to Dyck. Customers of eLaw.com range from sole practitioners to Fortune 500 companies including Texas’ Dell Computer Corp., Reliant Energy Inc., EDS, Tandy Corp. and others with Texas operations, such as Phillips Petroleum Co., according to Dyck. Customers also include Texas Children’s Hospital and Dallas’ Cowles & Thompson. At least 10 firms have signed on to provide content, he says, although Baker Botts is the only Texas-based firm. Despite troubling times for dot-coms precipitated by the stock market plunge in technology stock nearly a year ago, eLaw.com got $750,000 in startup money and has raised a total of $12.5 million from investors including Austin Ventures. Investors also include some of the advisory board members — Roberts, Rudge and David Browning, former vice president and general counsel of Schlumberger. GOING PUBLIC? Barnett, chairman of the advisory board, says the board members first helped Dyck and Harris work through several preliminary versions of the company’s business plan. Dyck says the former general counsel and big-firm lawyers have helped them decide how to sell eLaw.com’s service to the in-house lawyers that are the customers and the firms that provide the content. Dyck says he believes the advisory board is so important that he didn’t even approach investors until after several lawyers signed on to work on the advisory board. He admits he needed their endorsement; he needed them to say they found the eLaw.com plan compelling. “At the time I was 29 years old and had practiced for three years, and I obviously wasn’t a luminary in the practice of law,” he says. “We wanted to get people who had actually been around the industry.” “They were putting their names and reputations on the line that early in the game,” he says. With the advice of the general counsel and big-firm lawyers on the advisory board, Dyck says they decided first to sign up some customers — corporate legal departments — and then try to recruit firms as content providers. “Bill [Barnett] was very instrumental in developing our approach to the law firms, in terms of who to contact, our decision to do it on a practice-by-practice basis as opposed to signing up an entire firm,” Dyck says. But Dyck says the general counsel on the advisory board have helped show eLaw.com employees how to market the product to corporate legal departments — specifically how legal departments could save money by using eLaw.com. Dyck says Roberts, for instance, pointed out that companies such as Exxon Mobil Corp. — the name changed in a merger after Roberts’ retirement in 1995 — with huge legal departments would use a service like eLaw.com if it could reduce costs or help the in-house lawyers select outside counsel more efficiently. “Lawyers in corporate law departments are a cost center, not a profit center, in their organization,” Dyck says. “Every hour that you can save them, if you make 500 lawyers 10 percent more efficient or 5 percent more efficient, that results in millions of dollars of cost savings.” Roberts says he sees eLaw.com as simply taking research to a new dimension. “The benefits come in two ways. One is to give you ideas you might not have on your own. Two, it’s a great time saver,” says Lackey. While that seems intuitive, Dyck says general counsel may see the benefit more easily if it comes from a former general counsel. Several of the retired general counsel have gone on sales calls with eLaw.com executives. Lackey and Barnett, for instance, went with eLaw.com executives to pitch in-house lawyers at Reliant Energy in Houston, and Roberts assisted at a meeting with London-based firm Eversheds, which recently signed on as a content provider. Dyck says the introduction to Eversheds came from Rudge, who had hired the firm while serving as general counsel of DuPont. Dyck says the plan calls for eLaw.com to go public, although there is no firm date. Rudge says the “kids” at eLaw.com may have a long, hard grind in front of them convincing corporations to buy work product over the Internet and firms to provide the content. But he believes it’s inevitable that as much as 60 percent of legal services will be provided over the Internet. “People resist the new and you know, the law firms are going to say, ‘What’s in it for us?’ but the practice of law is changing exponentially,” says Rudge, a retiree who considers himself a futurist. Notes Rudge, “Those who are going to cling to the old will be lost.”

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