Strategic Legal Technology

My client ii3 will host a Webinar on October 14th on “A Fresh Outlook - MS Outlook as a Knowledge Hub.” Attendance is free but registration is required. Panelists include Teresa Grote, CIO of Dinsmore & Shohl LLP and Ted Graham, Worldwide Director of Knowledge Management Services at Hill & Knowlton.  

The two prior Webinars were very well received and I expect this to be as good. Quoting from ii3’s invitation:

Some of the issues to be discussed:

• If Outlook already dominates the desktop, should it become even more central?
• Is it difficult to develop and deploy information consolidation solutions with Outlook and Microsoft Office?
• Should we still focus on web browser based solutions exclusively?
• Where have solutions been built on top of Outlook and Office? What value have they created?
• How are vendors treating Outlook? What should we learn from their strategy to leverage (or not) Outlook?

The discussion is designed for:

• Knowledge and Content Management Professionals
• Business Executives looking for practical business solutions
• IT directors and CIOs who want to learn more about content, practice, and process issues.
• COOs and Executive Directors who evaluate Information Technology and KM budget requests.

See my related posting for a link to the Q&A follow-up to the prior Webinar on Information and Knowledge Portals.

Last June, my client ii3, inc. hosted a Webinar on Information and Knowledge Portals. Panelists included Jamie Booth, CIO of Hunton & Williams and Margaret Grottenthaler, a partner at Stikeman Elliott who spearheads KM at the firm. An interesting written Q&A follow-up is available. 

In the follow-up Q&A, the panelists address such questions as:

For knowledge and technology managers interested in portals and KM, the Q&A set is worth reading.

ii3 will host its next Webinar on October 14th on “A Fresh Outlook - MS Outlook as a Knowledge Hub.” See my related posting for details.

Fellow blogster Jerry Lawson and I recently exchanged e-mail messages about bloggers asking for links. That led to an interesting discussion about relationship management generally. Our shared observation is that, among other challenges of law firm CRM (customer relationship management) is that lawyers have limited views of relationships. 

I observed that lawyers seem to have a very different approach to relationship management than do business people. Lawyers seem to think relationship capital is very hard to earn and easy to lose. On several occasions I have tried to get partners to engage clients on topics relating to a firm’s use of technology. They almost always react along the lines “I am not going to risk my relationship asking favors of my clients.” In my experience, when a professional asks for a small favor, say a client’s view and a bit of help, assuming you’re not asking for too much time, it actually adds to the political capital. It seems to me most people like being asked their opinion and, in the context of an inherently one-sided lawyer-client relationship, such “asks” can help even-up the psychological balance.

Jerry seconded this idea, adding that psychological studies show that if you try to get a new acquaintance to like you, it’s better to get them to do you a favor than it is for you to do them a favor. This is exactly the opposite of what you likely expect. Most would assume that if you do something nice for someone, he or she would be more likely to think well of you. But the opposite is often true. Psychologists explain the phenomenon as a byproduct of “reduction of cognitive dissonance.” That is, the other person has a psychological need to justify having done you a favor. If you were unworthy, the other would feel stupid for having done you a favor. Therefore, they tend to convince themselves that you are a nice and worthy person.

What does this have to do with legal technology? If we are right, it means that tech managers who are developing client-facing technology should ask partners to ask clients to comment on the firm’s plans. Rather than viewing this as a bother, we think most clients would think more highly of a firm for asking. And the feedback you get is likely to help you deliver a better service. Both of us would welcome comments from marketing folks or others who can comment or expand on this theme.

This posting is also available at eLawyer Blog

I have previously written that if law firm extranets succeed, they will sow the seeds of their own destruction. Clients will not want to use multiple systems; instead, a single interface to multiple outside counsel will be required. Along these lines, Charles Christian, in Legal Technology Insider, reports on a new effort to standardize extranets.  

In the 16 Sep 2004 issue, Christian reports that Telestra (the largest Australian company) has created an extranet system that a company called nSynergy now provides to 45 companies in Australia. Moreover, nSynergy has opened for business in the UK.

nSynergy’s LegalNet product, according to the company’s website, is a common platform that offers collaboration features, status on all open matters, a way for clients to requests quotes for new matters, extensive reporting, and project tracking. An article in Australian publication Lawyers Weekly, The Online Brief Manager (21 Nov 2003) provides some interesting background on the history of the project.

Christian also reports that nSyngergy offers LegalNet free to law departments. This could lead to a situation similar to e-billing, where GC receive a service for free but firms pay fees and invest substantial internal resources (see my recent posting on e-billing).

Long-term, I believe that the most flexible and best solution to the issue of sharing data is is adoption of data standards and common technology such as web services. Also, a standards approach strikes me as a good way to avoid what seems like the messy economics that arise from giving product and services to GC for free. “There’s no such thing as a free lunch” applies here. The goal should be to reduce total system costs and share the savings. I worry that “free” really means creating extra costs and shifting costs, rather than reducing them.

On September 15th, both the New York Times and Wall Street Journal reported that Amazon is taking at aim at Google with a new search tool called A9, which has some interesting KM features and bears watching. 

According to the articles, A9 is a “search engine with a memory.” Features include saving a record of searches and sites visited, annotating sites visited with personal notes, storing and editing bookmarks, and creating lists of web pages for easy navigation among them. I have long believed that saving searches and search results would be a useful feature for online legal research, document review in litigation support, and web surfing. Likewise, the ability to annotate searches or results is powerful.

The challenge, however, is converting data to knowledge. The more files, e-mail messages, saved searches, and other data an individual or organization has, the longer the search results hit list tends to be. While it’s good to be able to find prior work (writ large), absent sophisticated search tools that surface the best items or user-created annotations, results can be overwhelming and therefore not all that useful. It will be interesting to see if consumers / users of A9 use the annotation features and how they react once they have accumulated a significant amount of history.

If A9 takes off in the consumer market, it may set a higher bar for the tools that large law firms provide their lawyers. Capturing and re-using search results, especially if the searches span multiple law firm systems (e.g., document management, web surfing, and CRM) and are supported by appropriate finding tools (automated or human-assisted via annotations), could be a promising addition to current KM efforts.

“Firms are making roof repairs rather than remodeling the kitchen.” So concludes the 9th AmLaw Tech survey of large law firm technology, published in the September 2004 issue of American Lawyer magazine. 

This survey is one of the best and most reliable for large law firm technology spending and trends. A few findings stand out:

• Slightly more than one-half of firms report increases in both capital and operating budgets, up almost 10 percentage points from last year. And more than 60% of firms have more IT employees this year than last.
• The focus on new spending is primarily on infrastructure upgrades, including remote access, telecommunications (specifically moving to VOIP, that is, internet telephony), and major software upgrades (e.g., to new versions of document management systems).
• A significant percentage jump year-over-year in number of firms using electronic evidence discovery vendors confirms the EED is rapidly growing.

The survey also finds that knowledge management is in choppy waters. KM “was a postmillennial buzzword that developed a nasty reputation.” Interestingly, this year’s survey has only one KM questions (what software does the firm use other than document management) whereas last year’s survey had five questions. The KM focus now is primarily on search (for example, West KM, or Lexis Nexis Total Search).

This KM finding is consistent with my sense of the market. Quite a few firms remain committed to KM; many are testing the waters, albeit in limited ways; and, some are steering clear. Based on the frequency of KM topics at conferences and number of attendees at these sessions, however, I do not think KM is in any fundamental danger. But we may be in a period of consolidation and more realistic expectations.

I would have liked to see a bit more about portals in the survey. While a couple of questions do address portals, it’s hard to draw any conclusions. The advent of multiple options - the leading document management vendors have released new versions of their portal add-ons, specialized products and upgrades continue to come from companies such as Plumtree or LawPort, and Microsoft’s SharePoint (which seems to be gaining mindshare rapidly) - have led many firms to consider (or re-consider) the role of portals.

The portal question is hard: the technology options are numerous and the planning issues tough. It will be interesting to see what directions law firms go in 2005 with portals. I suspect that the next survey will have some interesting findings about portals.

Consulting company McKinsey has found that information technology investment by itself has little effect on productivity. Management practices have a much bigger impact on productivity. 

When IT lifts productivity in the The McKinsey Quarterly (2004, #4; free registration may be required) reports that “a new study of 100 manufacturing companies in France, Germany, the United Kingdom, and the United States supports the view that IT expenditures have little impact on productivity unless they are accompanied by first-rate management practices. ”

Differences in any one of three “process oriented” practices (my words) - lean manufacturing, performance management, and talent management - account for huge productivity differences among companies. Differences in IT investment alone, in contrast, accounted for only 1/6th the impact of these factors. The study concludes that “companies can get the biggest benefit by combining IT investments with good management.”

Though this study focused on manufacturing, I believe the same lessons apply to law firms. Merely investing in technology is not enough. Lawyers and staff must find ways to use technology effectively. The firms with the “best” IT infrastructure and practice software are not necessarily the ones providing the best client service or the most productive. More important is considering how work is performed and managing it.

As most law firms enter the annual budgeting season, this is an important point to remember. Keeping infrastructure up to date is important. But improving client service and productivity does not automatically flow from tech investments. Lawyers and IT staff must work together to analyze and improve the way lawyers work to achieve real gains.

The article Federal Courts Propose Rules for E-Discovery in the New Jersey Law Reporter provides an interesting update on potential changes in the rules of discovery, especially with respect to digital data and electronic evidence discovery. 

Readers who follow the e-discovery world know that the on-going transition from paper to digital discovery raises a host of difficult issues, technical and legal. The article is a good read on current issues; I will focus on one: preserving digital data once a law suit begins is a concern, especially given that many large corporations have systems that are not designed to do so.

It is no surprise to read that “[t]he most controversial of the proposed rules may be an amendment to Rule 37 that would create a narrow “safe harbor,” protecting a party from sanctions for failing to provide electronically stored information in some circumstances. ” The article goes on to report that the draft rule would provide a safe harbor from the inadvertent destruction that “resulted because of the routine operation of the party’s electronic system.”

It is a surprise, however, to read that U.S. Magistrate Judge Ronald Hedges opposes this provision and “says he does not see why electronic data should be singled out for special treatment. ‘If we’re going to have a safe harbor provision, it seems to me we ought to protect information in any format, not just an electronic medium.’ ”

Excuse me? I hope this does not reflect a dominant view among the judiciary. I take no position on what rule changes would be best, but one thing is obvious: digital data and paper are different. Lawyers, including the judiciary, need to understand that. Now, if there were a type of paper that, when you opened the file drawer, it disappeared or forever changed, I might agree with Magistrate Hedges’ view. Or, if by walking in my office and turning on my light, the dates on every piece of paper in my office automatically changed to the current date, I could understand his point.

Whatever direction the rules head, they need to reflect the reality of corporate information systems, which were designed to manage data for operational purposes, not for preservation in litigation. It’s an old saw now that just turning on a computer changes some data. In a similar vein, corporations that run on SAP or other enterprise systems cannot simply turn off their systems or easily freeze all the data.

It will be hard, but I believe enough smart people are working on new rules that the right balance can be struck between the legitimate needs of business/technical operations and of lawyers in litigation. But in my view, the starting place is to recognize operational business requirements and the difference between digital files and paper. It would be a shame if our already very expensive system of litigation became even more so because discovery rule changes that end up creating unreasonable burdens to “protect” data.

My prior post suggested stepping back from the day-to-day change to examine fundamentals. Among other points, I suggested lawyers might not need notebooks. Fellow blogger Dennis Kennedy raises a good point about my comments. 

Responding to my statement that “some clear-thinking firms now understand that with the advent of Blackberries and inexpensive home PCs, it is probably no longer necessary to equip every lawyer with a notebook PC,” Dennis sent me an e-mail saying

“While there may be more nuance in your position on this than shows, I am concerned about the implications. Specifically, many IT directors can seize on your conclusion to justify equipping lawyers with inadequate tools. In fact, I’d suggest that increasingly common free WiFi Internet access makes the future of Blackberries open to question. I can see the benefits to IT directors but that approach takes lawyers backwards. I can easily make the case for more notebooks and the combination of Tablet PC or notebook, WiFi, OneNote and CaseMap and other litigation tools is extremely powerful for litigators.”

I think the resolution is the “hidden nuance.” My point, not stated clearly enough, is that IT managers must constantly monitor needs and adjust accordingly. Today, in some firms, lawyers with notebooks hardly ever use them. Some firms regularly send at IT person to walk the halls and see how many notebooks are sitting on desks. The data suggest that many rarely leave the office. To the extent that a lawyer has a wireless handheld device (and likely a home PC) and therefore rarely, if ever, carries a notebook out of the office, then a desktop computer should suffice. If, however, a lawyer has legitimate need for a notebook - to work at home or while traveling, then IT should provide one. A wireless handheld unit is by no means a substitute for a notebook for every lawyer.

The general point is to meet the reasonable needs of lawyers but that the definition of “reasonable needs” can change over time. WiFi may indeed soon completely change the tools we use (including cell phones and handheld wirelesses). Just another reason periodically to assess needs, tools, and strategies to make sure they are all in alignment.