Strategic Legal Technology

What’s hot in knowledge management? Tania Daniels, an experienced KM professional and consultant with eSentio, and I collaborated to answer that question. 

The occasion was a presentation we gave jointly at at eSentio’s annual CIO Roundtable Retreat yesterday. Here are some of the highlights of our discussion:

• Is KM a separate initiative or just part of law practice? This raises questions about firm staffing/organization and information repositories. Our view is that the better answer is “part of law practice.”
• Can KM be “baked into the process” of practice or firm management? We concluded that the best opportunity is when opening a matter. If a firm does any change management related to KM, it should do a better job of characterizing new matters.
• What’s the best approach to expertise location? This is a fast-evolving area. It depends how you view expertise. There are several products that can help, but many firms are creating their own solutions. The focus on expertise reflects the realization that it’s often more valuable to talk to an expert than look at a document.
• What are the future trends? Our call: a focus on automated solutions with less reliance on lawyer or staff intervention; a resurgence in online collaboration, which will give rise to new KM opportunities; the possibility that e-discovery semantic analysis tools will be re-purposed for KM; marketing departments as important KM supporters; and finally, internal firm blogs or wikis.

Drum roll please…. ALM (formerly American Lawyer Media) will soon release the AmLaw top law firm ratings for 2004. Read on for a preview. 

Five Am Law 200 firms posted gross revenue in excess of $1 billion in 2004, the largest number ever. The preview of the top 10 firms is here. ALM has provided the preview to this and other blogs in its blogging network.

Some quick (and unrelated observations):
1. Though it may be big news in the legal market that five firms now generate annual revenue greater than $1 billion, that level is relatively small still by corporate standards.
2. To the best of my knowledge, recent mergers have not changed the top-10 rankings. A couple of firms in the top 10 did merge - Sidley Austin with Brown & Wood; Mayer Brown with Rowe & Maw - but that was a couple of years or more ago if memory serves.
3. Anecdotally, I would say that all of the top 10 firms have decent or better technology. I am not sure that would have been true 5 or 10 years ago.

I have previously suggested (here) that general counsels could analyze the blogosphere as an early warning system for potential legal issues. Blogs as radar is now happening in consumer markets. 

Last Thursday, the Wall Street Journal, in Marketers Scan Blogs for Brand Insights (free WSJ content), that a “growing number of marketers are using new technology to analyze blogs and other “consumer-generated media” … to hear what is being said online about new products… Purveyors of the new methodology and their clients say blog-watching can be cheaper, faster and less biased than such staples of consumer research as focus groups and surveys.”

For companies interested in preventive law, trying blog analysis seems worth investigating. Many companies already pay outside services to scan the Web for use of their trademarks. This goes a step further to analyze potential trends or mentions that could affect the company’s overall legal health.

I have previously argued that large law firms should create firm-branded blogs (here and here). Fellow blogger Robert Ambrogi has an excellent discussion of the pros and cons of large law firm blogs. 

He opens with the observation that “as sure as thesis breeds antithesis, blogging’s popularity within the legal profession is drawing some to question its value, mostly with regard to marketing.” He cites and summarizes two recent pieces that offer different perspectives and offers his own views and conclusions.

For anyone at a large firm (or small for that matter) considering a firm-branded blog, Bob’s post is mandatory reading.

Yesterday the Wall Street Journal reported that “anesthesiologists pay less for malpractice insurance today, in constant dollars, than they did 20 years ago.” This is a result of a conscious effort - one with lessons for lawyers. 

In the lead story, Once Seen as Risky, One Group Of Doctors Changes Its Ways ($), the Journal reports on many measures anesthesiologists have taken to reduce problems. Patient deaths have been cut by a factor of 40 (forty)!

Twenty years ago, when hit with rising malpractice claims, anesthesiologists did not try changing tort law; rather, they examined their own medical procedures in detail. “Anesthesiologists left their practices for days at a time to pore over [thousands of] closed insurance claims.” Data was coded and fed into computers for analysis. What they learned led to significant changes in medical practice.

Lawyers are totally accustomed to examining the past to see what happened. Litigators look at cases, transaction lawyers at past deals. They are not accustomed, however, to examining how they did their work. If lawyers examined how they practiced, they would undoubtedly discover many ways to improve.

In health care, the third party payment system has driven other, similar efforts to improve practice. In the large law firm market, third party payment is not a significant factor and malpractice rates, while up a lot, are still manageable. Until general counsels exercise their market power, lawyers will have not motivation to introspect, analyze, and improve law practice.

I have predicted that law departments will eventually control extranets to avoid dealing with multiple outside counsel systems. In the mean time, however, many law departments are not ready to do so and many law firms continue to find value in providing clients with customized extranets. Bill Gratsch, web technologies manager at Dykema Gossett, writes a good article about the evolution and evaluation of Extranets at his firm. 

In Law Firm Extranets (originally published in a January 2005 ILTA white paper, The World of Intranet, Extranet and Portal Technologies (PDF) and now reproduced at eTECHNews), Gratsch explains his firm’s evolution in the development and presentation of Extranets to both internal and external users. The key lesson learned is to keep initial roll outs simple: “we now deploy initial extranet sites with a focus on the key features that the attorneys wish to use right away, such as a document repository, contact lists and site calendars. Other, less immediately critical features are left hidden in the wings, ready to be added only as necessary.” The firm adds functionality over time as the legal team needs it. Though the firm starts simple and with some common features, “no two sites are exactly alike.”

A combination of simplicity to start with the ability to add features as required is a good formula for introducing many new technologies in large law firms.

The e-discovery explosion creates a risk that firms will lose sight of the larger litigation support picture. There may not be a single right way to “do lit supp” but firms should analyze their processes and strive to develop consistent guidelines. 

The table here presents a framework for thinking about litigation support. Columns represent phases of a case and rows represent player roles, software involved, and issues to consider. (Apologies, but putting the table in the blog does not work for tech reasons.)

The text in each cell is merely suggestive. Each firm, indeed each case, may have different answers. Even the rows and columns can differ. The point though is twofold:

1. Make explicit and informed litigation support decisions.
2. Analyze processes at both a micro and macro level and strive to develop a consistent approach based on adherence to a set of guidelines that covers typical scenarios.

Decision trees are a formal method to assess risk in litigation and estimate the expected value of a case. My former colleague and now law professor David Post and I explained the basics of risk analysis and decision trees in a 1990 article (the concepts have not changed since then). I have now come across new software for doing decision trees. 

The June/July issue of Law Office Computing, in Distinguished Decisions reviews two decision tree software options. One is Data, by TreeAge, referenced in our article. New to me, and the one favored by the reviewer, Grace Suarez, is DecisionPro by Vanguard Software.

Most litigators are not familiar with decision tree analysis, which I think is too bad. Granted, learning to use risk analysis is not a snap. But it strikes me as the only and best way systematically to evaluate a case. Especially with many corporate counsel now focusing on early case assessment, I have not figured out why decision trees have not gained traction. Comments anyone - am I missing something or are litigators missing something?

Notice to legal market innovators: replace the arrows in your back with an award that recognizes your hard work and risk taking. I posted about this in March - the deadline is June 14th. 

College of Law Practice Management in concert with Edge International announces The Second Annual InnovAction Awards recognizing innovation in law practices around the world:

“The InnovAction Award is a worldwide search for lawyers, law firms, and other deliverers of legal services who are currently engaged in some extraordinarily innovative effort. The goal is to demonstrate to the legal community what can be created when passionate professionals, with big ideas and strong convictions, are determined to make a difference. Each year, we will present the coveted Nova to those unsung heroes and rising stars from within the legal profession who dare to think differently and succeed by doing so. ”

Click here for the 2004 award winners, here for more detail on the awards, here for how to enter, and here for a list of the sponsors, publication partners, media partners, and friends.

As a Trustee of the College, I am pleased to be a friend. I encourage you to learn more about the awards; apply if you are an innovator and, if you are not, tell your innovative friends about this.

A half-dozen years ago I participated in the partner retreat of an Australian law firm. I was impressed by the business focus of the firm. Now, there are signs that some of this discipline is coming to US shores. And with it will perhaps arrive a more systematic assessment of the opportunities to deploy technology for client advantage. 

The Australian firm had a Chief Strategy Officer who presented to the partners. A spirited discussion ensued concerning various strategic, marketing, and competitive issues. In contrast, a few months later I participated in a large US firm’s partner retreat. There, the managing partner extolled how the firm was “high quality” without mentioning strategy or competition.

I was therefore intrigued to see that Dickstein Shapiro has appointed a chief strategy officer (reported in the June 9th issue of Washington Business Journal). The new CSO is “responsible for ensuring that all firm initiatives - both internal and external - are in line with the company’s strategic plan.” I am not aware of many other large US law firms that have chief strategy officers. So it will be interesting to observe how this role evolves, in general and at Dickstein.

An empowered CSO should have some say in how a firm deploys technology to serve clients. And if there is someone with strategic vision, able to focus on the market, client needs, and competition, that bodes well in my opinion for a firm using technology to serve clients more effectively.

I recently came across an interesting new Web-based form of communication that law firms should consider for CLE and delivering client updates: web-based TV. 

My friends at ii3, Inc. recently released ii3 TV. The concept is simple: short, professionally produced TV segments streamed to a web browser. The initial topics are the business case for KM and taxonomies. These 15-minute segments are worth watching for any KM professional. More broadly though, partners or marketing departments attempting to reach clients with updates in an engaging manner should consider this format. (Professional development managers can also use this format for CLE.)

ii3 CEO Shy Alter says “As a consultancy focused on the legal market – with a special emphasis on knowledge and information management – ii3 is always looking for innovative marketing tools. We have been very successful in educating our market on knowledge and information management related business issues, via seminars and Webinars. Lately, we have turned to web-based video streaming as a means of creating widely accessible, high impact knowledge programs. We now create high quality programming that relies primarily on tightly edited interviews with peers and practitioners.”

Unlike newsletters - printed or e-mail - delivering TV over the web offers the potential to track viewing patterns. ii3 has chosen not to require registration but firms could do so. Webinars, with the combination of audio and PowerPoint slides or software demos, may not be suitable for legal content. ii3 TV illustrates how a law firm could feature several lawyers speaking about current topics. With all the dollars flowing into content prep and marketing, it seems firms should at least experiment with this media.

Speaking of ii3, I have now affiliated with the company to offer consulting services on a joint basis. I first met ii3 when I was CIO at Mintz Levin. When I started consulting, they were my first client. We’ve now transitioned our relationship to a joint venture (press release). I look forward to working with my friends at ii3 on consulting projects.

And if anyone wants details on the mechanics of this type of TV, let me know and I’ll put you in touch with the production folks at ii3.

Via the editorial in the June issue of Corporate Legal Times, I learned today about a fascinating organization called The Open Compliance and Ethics Group. 

OECG is a not-for-profit consortium that, among other goals, seeks to “provide a flexible and practical best practice framework for integrating governance, compliance, risk management, and integrity into all business processes [and] Provide a community of practice for exchange of information, tools and feedback for the continual improvement of the Framework.”

I have previously posted about the idea of open source law. As I understand it, OCEG is more a compliance framework than an interpretation or setting forth of specific rules, but it seems very much of the open source spirit.

If the 100+ page draft framework document gains traction, it will be interesting to observe if any law firms create enabling technology for companies adopting it. This could include anything from extranets with more particular guidance to workflow systems to online training. Though counseling typically does not have the same leverage (and hence margin) as do transactions and litigation, an offering in this area might well position a firm for high margin work that occurs when a compliance problem occurs.