Most corporate legal work is based on a business model of the billable hour. This model creates huge incentive problems for clients and attorneys. The client wants to minimize hours and the attorney wants to maximize hours. The billable hour model also creates incentive problems inside law firms as attorneys may hoard work that they should…
In the 12/1/2008 Barron's, Tom Sullivan writes about the Big Three Rating Agenies — Moody's, Standard & Poor's, and Fitch Ratings. The SEC is reviewing how these agencies are regulated and "the basic business model employed by the largest agencies" is "open to question". What does this mean?
Business ecosystems tend to evolve into a dynamic equilibrium where all of the parties divide a growing pie — think Windows/Intel for much of the past few decades. However, when the core business model of one of the players is threatened, look for all of the players in the ecosystem to look for ways to…
The situation for General Motors (GM) is dire. The company says it will run out of cash possibly before the end of the year and definitely by next June without raising more capital. House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid wrote Saturday to Treasury Secretary Paulson to ask the administration to expand…
Newly identified problems with fasteners will further delay the Boeing 787 Dreamliner program (full story here at WSJ). What does this story tell us about business models and strategic risk?
