Strategic Legal Technology

A group of large law firm knowledge management professionals recently compiled a list of KM resources. 

This list was compiled in November 2004. It is neither comprehensive nor exhaustive. It lists both free and for-pay resources.

Thanks to my professional colleagues who compiled this list.

Suggestions for additions are welcome.

I have also added a link to this list on the Useful Links page of prismlegal.com

My prior post discussed a recent article suggesting that the search for best practices may be fruitless. I believe that the problem is less in defining best practices and more in the mindset of lawyers. 

[Since my prior post, the article, The Quest for the Best Law Department Management Practices, is now available online without registration at Corporate Counsel magazine.]

The quest for best practices is not so much to define an eternal best practice as it is to examine systematically how law is practiced and, for time-consuming or costly tasks, to decide consciously how they are conducted and managed. The goal is to identify what works and what does not and what is efficient and what is not.

Achieving this goal requires collecting and quantitatively analyzing data, a task with which most lawyers have little experience or skill. It also requires the discipline to enforce standards. Many lawyers have no problem enforcing their own standard but cannot abide following a standard set by someone else.

I am not sure that I can definitively prove this hypothesis, but several observations support it:

• Relatively few lawyers are skilled in using spreadsheets, an essential tool to analyze data.
• It does not appear that many law departments analyze e-billing data to determine cost trends over time or across firms. To date, e-billing seems relegated to the auditing bills for minutiae rather than focusing on how much work should really cost and how it should be conducted.
• When inhouse counsel say they are managing matters, it seems to me they talk much more about the substantive aspects of cases and strategy than how the case is run.
• The discipline to enforce standards in law departments seems lacking. I have heard several stories of failed matter management systems. The problem was not technology; rather, it was that no one entered data or lawyers were unwilling to change the way they worked. Separately, I recently heard in a Webinar about a law department that retained a bevy of consultants to set up a collaborative system to share work product among outside counsel. Unsaid was that this law department did something very similar about a decade ago. Both stories suggest a lack of will to enforce standards.

I would welcome being proven wrong about this hypothesis. But I believe that weak empirical skills and lack of will to enforce changes in how lawyers work better explain the failure to identify and establish best practices than any other hypothesis.

I periodically blog on the topic of best practices so was intrigued to read ”The Quest for the Best” in the Legal Times (11/15/04, subscription required). In it, management consultant Rees Morrison argues that the quest for best practices is akin to the search for the Holy Grail. Morrison is one of the most astute observers and analysts of the legal market, so it is with some trepidation that I take issue with his conclusion. 

Morrison writes that “[l]aw department manager crave best practices - otherwise known as the accepted optimal management strategies… Sadly, the cravings go unmet.” He argues that “law department management is too complicated for any particular practice, removed from is complicated history and context, to stand above the rest.”

In support of this thesis, Morrison turns to philosophy, economics, psychology, and sociology. Some of the key points he makes (quoting from his captions) include:

• Induction can’t prove that a practice is best.
• We can’t pin down cause and effect.
• ‘Best’ can’t be agreed upon.
• All practices exact trade-offs.
• Our decision making is flawed.
• Group think quells inquiry into best practices.

For these and other well-argued reasons, Morrison concludes that “[b]est practices are illusory” and general counsels should evaluate practices as “contenders - not crowned champions.”

Though I cannot disagree with Morrison’s individual points, I think he lets general counsels off the hook too easily. Challenges exist to be sure, but GCs must constantly evaluate and analyze how they and their outside counsel practice. At any given point in time, they should consciously choose methods and approaches that are best, even if only backed by anecdotal evidence.

At the risk of relying on inductive reasoning, I will cite two examples of fairly well-accepted best practices:

• E-mail. In 1989, when I arrived at Wilmer Cutler, almost every lawyer had a PC and the firm was completely dependent on e-mail for its daily work (practice and admin). Though it was patently obvious that e-mail was demonstrably efficient, much of the legal market was only dragged to it kicking and screaming by business people and clients. Had lawyers - at firms or departments - actually analyzed how they worked, it’s hard to see how they could have concluded not to use e-mail, if not in 1990, then certainly by 1993 or 1994. Yet adoption by lawyers did not occur until well after the Internet took hold around 1996.
• Document Databases in Litigation. Most litigation support professionals and many litigators understand that investing in a database early in a case to manage discovery documents is almost always a cost-effective decision. Lawyers who do not cause databases to be built upfront often incur huge costs in lawyer review or vendor overtime to make up for not having a database at the right time.

I have intentionally chosen two examples that should be widely understood to illustrate the point that seemingly obvious best practices take a long time to adopt or are still ignored. I believe that there are many areas of law practice where attention to the actual means of practice can identify better, if not best practices. In future posts, I will discuss my theory for why this is true - and I do not intend to let lawyers off the hook.

Enterprise search - the ability to conduct full-text search across multiple information repositories - comes up at many of the knowledge management meetings I have attended over the last year. Anecdotally, it seems that many firms are evaluating Recommind. So it is interesting to see that Freshfields has chosen Verity. 

According to a Verity press release, Freshfields has selected Verity K2 and associated products to “form the basis of a know how system designed to help the firm’s lawyers and clients based in different countries to locate business critical information more quickly and efficiently by providing an intuitive browser-based knowledge interface.” Rollout is scheduled for early 2005.

Periodically, I share findings about how technology improves my own productivity. In this post, I have some quick comments about back-ups and full-text search. 

Last August, I wrote about using small external hard drives to facilitate back-ups. I realize that for users in corporate settings, including law firms, where back-up is often automatic, this is not a big issue. But anyone concerned about backing up a home machine might consider using SmartSync software. This software makes it very easy to copy only changed files from selected directories form your hard drive to an external device such as an extra hard drive or USB device. It’s always a good idea to consider a quick back-up after a day of work.

Separately, I have uninstalled the Google desktop search (see my prior post on this). After using for a bit, I found that I liked 80-20 better because it indexes more file types. Also, I had the sense that my machine performed more sluggishly after I installed Google Desktop, though I can’t really document that. I have no doubt that improved versions will soon appear, but for now I opted to reduce my desktop clutter and rely on a tool that I’ve used for some time.

And, for whatever it’s worth, I continue to be very happy with my Treo 600. It’s great for staying in touch with e-mail and integrating contacts, calendars, and my cell phone. My only complaint is that it’s way too hard for me to type on it relative to a Blackberry. If there are really good deals on upgrading to the 650 later this year, I would consider that.

American Lawyer magazine reports in Briefed in Bangalore (November 2004) on more examples of outsourcing legal work to India. At the same time, at least one US-based company is promoting outsourcing services based on being in the US and using US citizens. 

The article notes that “lawyers, like other professionals, have started to recognize the value of tapping into the highly educated, English-speaking Indian workforce to carry out tasks that would typically be performed by junior-level employees.” It goes on to report on several companies providing legal outsourcing services (most covered in my previous outsourcing posts). The article includes some examples I have not previously seen reported:

• Lawyers in India are performing substantive document review (i.e., responsiveness and privilege determinations).
• Dallas-based law firm Bickel & Brewer has opened a facility in India with several hundred lawyers and non-lawyers who scan, code, index, and abstract documents. The firm has spun-off this operation into a separate company (details here).
• QuisLex provides various services (e.g., research), including to small law firms.
• “250-lawyer Louisville, Ky.-based Stites & Harbison… has outsourced legal research and pieces of M&A transaction and is currently considering forming an alliance with outsourcing vendors and Indian firms.”

On the one hand, these examples suggest and increasing move to offshoring legal work. On the other hand, there appears to be a market for domestic outsourcing. I recently became aware of a domestic legal outsourcing operation, cbfgroup, at a conference. Now I see an ad in the November 8th issue of Legal Times for this company. It stresses that is “US owned and US based… and employs US citizens.”

The great thing about a free market is that it provides options. My take is that the legal outsourcing trend is growing and the market will decide what will go offshore and what will stay domestic.

A recent article suggested that law firms should make electronic evidence discovery an in-house profit center. Blogger Adam Smith, Esq. beat me to the punch in explaining why this is an ill-considered idea. 

His post, EDD: Look Who’s Not Coming to Dinner, explains three reasons why law firms should not bring EDD in-house: highly variable demand and capacity utilization, technology and processes in a constant state of flux, and disequilibrium in the state of the industry and its profit margins.

To this, I would add another caution. It is much easier to explain and justify a third-party disbursement than a law firm’s own time or line item charges (e.g, copying). Clients realize that the EDD space is rapidly changing and can reasonably expect a law firm to seek competitive bids. This does not mean that the lowest price wins; rather, it helps assure a reasonable price for the right services.

As I indicated in my prior post, I expect that law firms will develop the expertise to manage EDD. It’s one thing to have that expertise, it’s another to own all the tools of productions and manage the process internally.

Litigation support has long been a fragmented market: many suppliers and no single one with high market share. A new study suggests this will change. It also finds - and I believe this is related - that most large law firms lack electronic evidence expertise. What’s the study and what’s the connection between findings? 

Electronic Discovery in Litigation - EDD Supplier Landscape was released this fall by EDDix, LLC , which provides independent research, analysis and reporting on the Electronic Data Discovery (EDD) marketplace (think Gartner or Meta Group).

EDDix conducted the study via extensive primary and secondary research, including interviewing 15 EDD vendors in-depth. EDDix is making the study available via selected blogs. For background, a free summary, and purchase information, click here.

Two of the study’s findings stike me as particularly interesting:
1. EDD suppliers believe that only 25% of AmLaw 200 firms have the requisite knowledge and experience to handle complex EDD matters professionally.
2. Vendors believe that the market for litigation support services will consolidate. They expect the number of specialty firms to almost double in three years but the number of full-service firms to drop by 40%. Half of the 15 vendors interviewed think there is a 50% or better chance that their company will acquire or be acquired by another EDD player in the next 3 years.
Click here for the EDDIX study findings (note this opens a PDF file in a new window). In my view, these two seemingly unrelated findings are connected.

In the age of paper, lawyers could recover from bad document management decisions by marshaling an army of lawyers or legal assistants to review hundreds of boxes of documents at the 11th hour. That just does not work in the digital age. The volume of documents, the number of file types, the issues around meta-data, and the difficulty of processing data mean that special expertise is required. Moreover, an army of people cannot do much with a bunch of disk drives at the last minute. As the mechanics have changed, so too has awareness of the issues. Lawyers are wising up and realizing they need special expertise.

The finding that 75% of law firms lack expertise is consistent with anecdotes I have heard. I believe that firms will develop this expertise (after all, they pretty much have to) and that this expertise will be centralized. Whether the expertise resides with lawyers or litigation support departments remains to be seen (I have seen examples of both). But either way, the field has become complicated enough that each large firm will need its own experts.

Once lawyers realize specialists are needed and once firms create expert groups, the ground is set to shift: purchasing will move from an individual partner basis to an institutional basis. And once purchasing is institutionalized, there is a tendency to use fewer vendors and give each one more volume. So, in my view, the current lack of know-how will contribute to vendor consolidation.

Stay tuned for additional commentary on these findings.