Strategic Legal Technology

I have previously suggested that corporations could scan blogs as an early warning system for legal issues. Business Week’s Blogspotting has an interesting post that relates to this idea. 

Quoting an “experienced corporate blogger,” How corporations track the blogs: A blogger weighs in reports “any company that is not watching the blogosphere is missing out on a great deal of information that is quite useful/pertinent. It’s stupidly easy to do and basically, a free way to gather intelligence.” Among the sources of information one might not find elsewhere: spouses and new or ex-employees.

A forward thinking law firm could either track the blogosphere as a service for its clients or to identify possible legal issues as part of its marketing efforts.

Is systematic records management (RM) – a pressing topic for law firms and corporations alike – good or bad for knowledge management (KM)? 

Many RM policies call for both saving certain records and destroying others. Any business process designed to manage content, can in theory, provide a vehicle for capturing content for a KM system. For example, indexes created for RM purposes can help the KM cause.

Unfortunately, however, RM requirements can also work against KM. For example, a policy to destroy records can interfere with KM efforts. At a recent meeting of legal KM professionals, we discussed how to square the RM mandate to destroy with the KM mandate to save; we touched on several concerns but did not reach definitive conclusions:

• Old documents often have precedential value. Some practices find that 20 year old work product has current value. There was interest in a “carve out” to a destruction policy.
• A carve out, however, raises difficult RM concerns in the event documents become subject to discovery. Especially if a firm’s engagement or matter-closing letter states that certain records are destroyed, keeping a copy could raise difficult risk issues.
• We did not have an ethics lawyer participating so did not know whether “sanitizing” documents would resolve the issue. By removing all references to parties and identifying information (whether via human or software processes), the theory is the document would no longer be client-specific.
• As a practical matter, we were concerned that if sanitizing or scrubbing a document is effective enough to remove a document from the grip of an RM policy, it may also make it very difficult to find for KM purposes. (A separate issue is who owns the work product and a firm’s right to re-use it; some in-house counsel argue firms have no re-use rights.)
• Aside from KM issues, we observed that destroying records is hard, especially since lawyers often freely copy a document from one matter for use in another. The same document, with different document management profile data, can then exist and remain outside the scope of a destruction policy.
• Though not a KM concern, we observed that a destruction policy has implications for lawyers leaving firms. Some lawyers keep personal files of their own work product and may take these when they leave the firm. This can raise RM problems (and others). Apparently some firms ask incoming lawyers not to bring any prior work product because of RM and other risk concerns.

RM will continue to drive many decisions, both in corporations and law firms, so bears careful watching by KM professionals.

I have been remiss in not reporting sooner recent legal technology articles on knowledge management, blogging, and business intelligence.  

KM. Law firms reinvent KM in KMWorld provides an excellent account of KM at one-half dozen large law firms (as reported by, among other bloggers, Excited Utterances).

Blogging. The current issue of Law Practice magazine is largely devoted to blogging, carrying several useful articles. Alan Rothman, relatively new to the blogosphere, posts about this article and asks some interesting questions about the future of legal blogging, including whether blogs will “become certified continuing legal education provider-channels and/or will existing CLE providers adapt blogging tools to reformat and distribute their courseware” and could “a specialized search engine dedicated to the legal blogosphere alone potentially develop into a legitimate legal research tool?”. I previously touched on the second question in my ”Disintermediation Redux” post.

On the topic of blogging, I also found Washingtonpost.com Launches RSS Advertising of interest in the development of blogging. Anyone who reads my blog from its home at Prismlegal.com will see ads associated with the blog fed by the ALM network. Anyone reading my blog via an aggregator will not. Embedding advertising in blog feeds via RSS (really simple syndication) is an emerging trend.

Business Intelligence. Bryan Cave CIO John Alber has written a fascinating article on his firm’s development and use of business intelligence software. He explains that it’s not enough to have a time and billing system or typical financial reporting. Developing actionable information for partners to make the right business decision requires a lot of data massaging and presenting the results meaningfully. Using examples from his firm, John illustrates the power of good BI.

I recently commented on a Corporate Legal Times (July 2005) article on offshoring. An observation it makes about one of the challenges to offshoring - developing metrics - struck me as having broader applicability. 

From Overhyped, Underused, Overrated: The Truth About Legal Offshoring: “Be it domestic or overseas outsourcing, companies offshoring work need to set metrics by which to measure the performance of their service providers. This can be an agonizing part of any contracting process. But it’s the only way to ensure the work is handled successfully.” (emphasis added).

The article implies setting metrics is a barrier; I see it as an opportunity, if not a required best practice. Law departments should have metrics for many processes (including retaining outside counsel). And, arguably, many of the problems in and complaints about BigLaw stem from insufficient effort by law departments to measure and track. To be sure, setting metrics can be difficult, but “agonizing” seems to go overboard and miss the point of the often critical role of metrics. And the challenge is not limited to offshoring.

Of course, law firms that use technology effectively should be happy to see the wider-spread use of metrics by law departments as those metrics will likely reflect well on these firms.

Here is another post about blogs but this one is different. First, a question for readers and second, some thoughts about knowledge management implications. 

Last week I met with librarians at a large law firm. They asked if I knew of any enterprise aggregator software. Aggregator software lets individuals automatically collect new posts from multiple blogs in a single interface. It also aggregates other “RSS” (Really Simple Syndication) content, which includes many sources, for example, major newspapers.

The aggregators I know are for individual use - are there any for the enterprise? With an enterprise edition, the library or other department could maintain some subscription lists centrally. If anyone knows of enterprise aggregator software, please let me know (here).

This question got me thinking about the potential benefits of enterprise aggregators. I envision folders centrally managed (firm-wide, by practice, or by opt-in) to present relevant blogs and ones individuals manage, some private and some partially or fully public within the firm. With this model, interesting KM possibilities emerge:

• Lawyers can share subscription lists easily.
• Subscription choices can be used, among other sources, to infer both lawyer expertise and interests.
• Lawyers could nominate posts for firm- or practice-wide posting (to, say, a portal, with or without vetting).
• Users can save posts of interest, either for private or broader re-use.
• Firms could deliver valuable content more easily.

Delivery of other content seems particularly appealing. Many firms already invest heavily in update services and circulate these to lawyers, digitally or in print. In an RSS world with enterprise aggregator software, some of the challenges and overhead of this process would be easier.

And new opportunities could open up. For example, it might be possible to deliver alerts about new work product. Right now, in large firms, lawyers have no easy way to be aware of their colleagues’ new work product. Were new documents properly tagged (including RSS classification), notification would be automatic. Of course, most lawyers won’t tag work product but a tool such as RealPractice, which automatically identifies and classifies useful work product, might eventually also automatically RSS-tag. [Full disclosure: I recently formed an alliance with Practice Technologies, Inc., the developer of RealPractice; press release here.]

I am not certain about all the “moving parts” required to achieve these benefits but with Microsoft incorporating RSS in Longhorn (see Jeff Beard’s excellent explanation or the recent eWeek article), the infrastructure for this vision is fast emerging.

Comments anyone?

Cisco is taking on health care costs. Could this initiative have implications for BigLaw? 

Cisco: Paging Dr. Info Tech ($) in Business Week (7/11/05) explains that Cisco is “quietly organizing Bay Area companies to support pay-for-performance in health care.” Sound familiar? I recently wrote about a new online services initiative spearheaded by Cisco and a consortium of large law departments in which it participates. So what does this have to do with large law firms (BigLaw)? Here is the money quote from Business Week:

“Experts think Silicon Valley’s nascent campaign could help usher in a new era of health care. The payoff, they say, is not so much the cost savings that typically come with the adoption of technology. The real goal is to build huge warehouses of data about how health care is delivered, what works, and what doesn’t. With that information, companies that pay for workers’ health care can insist on the adoption of more effective and cost-efficient treatments.”

Change a few words in this quote and you can easily imagine large law departments sharing e-billing data about the performance of outside counsel. As e-billing grows, the data to evaluate law firm performance becomes more readily available. And the use of this data will be not so much to spot the errant fax charge or impermissible two lawyers at a deposition; rather, it will be, as in health care, to examine what in law practice works and what does not. This is less about following detailed rules and more about overall report cards.

Subject to any legal and confidentiality issues, the leap from collecting performance data on health care to performance data on law firms does not seem so great. And with Cisco already participating in a consortium pushing an innovative online service, the leap in fact seems more like a small step. BigLaw CIOs should welcome any such leap - or step. Clearly, when outside counsel start to evaluate law performance and effectiveness, firms that use technology effectively will come out ahead.

Three recent articles discuss offshoring legal work in some detail and provide interesting updates and insights. I continue to follow the offshoring option because I view it as similar to technology: a way, properly deployed, to lower costs and improve client service.  

The Corporate Legal Times (July 2005) carries an article titled Overhyped, Underused, Overrated: The Truth About Legal Offshoring. This title seems extreme given that the contents presents a balanced view of legal offshoring. My view of the bottom line of this article is that offshoring is here to stay but can take significant effort to identify appropriate work and set up.

The July/August issue of AsiaLaw magazine reports in detail on offshoring in In-House or Outsourced? The Future of Corporate Counsel. Fellow blogger Adam Smith, Esq. has ably summarized the article in his recent post. (Both he and I are quoted in the article.) Two items caught my attention. First, GE stopped its offshoring experiment in 2003 but Morgan Stanley and American Express now use Indian lawyers. And second, an Association of Corporate Counsel survey found that 1.8% of 167 US chief legal officers surveyed report offshoring work; another 8% express interest in doing so in the future. As the WiredGC notes, even an increase to 4% would be rapid growth and reflect real money.

Last but not least, Law Practice Today editor and CaseShare Founder and CEO, John Treddenick has a good article on legal offshoring in LPT. In Your Next Office— Bangalore? John provides an excellent analysis of why a law firm’s next office might be in Bangalore, summarizing Tom Friedman’s book the World is Flat and citing Prism Legal’s and excited utterance’s list of offshore providers.

Just in case anyone thinks I am overly optimistic about offshoring, of the several ideas I discussed with AsiaLaw, here my one quote that made it into the article: “The limits to offshoring are illustrated by the virtual lock top US firms have on many high-stakes outsourced matters. Smaller and regional US firms and New York offices of large UK firms typically cannot break the lock, so it is improbable that lawyers in India could. It’s often not about cost - it’s about results, reputation, and risk management.”

Orrick Herrington will soon form a separate business to sell support services, including tech, via its West Virginia center. 

Via an Edge International blog post, I found an article, Orrick in plan to offer law firms outsourcing service, in TheLawyer. “The West Coast firm has made huge savings by basing a global operations centre in West Virginia, which provides all accounting, finance, technology, payroll and benefit administration services to Orrick’s offices around the globe.” The article reports Orrick will turn this operation into a business within a year, possibly in partnership with another company. (I previously reported this possibility here.)

In New Reality: Temps Must Join DC Bar ($), the Legal Times (June 27, 2005) reports District of Columbia bar regulators ruled that contract lawyers must be admitted to the DC bar to avoid the unauthorized practice of law. This may have implications for offshoring, specifically hiring lawyers in India. 

Some article highlights: Hundreds to thousands of lawyers work as contract lawyers at any given moment. One firm set up a separate office recently with 400 (four hundred) temp lawyers for an antitrust 2nd request review. Deploying scores of temp lawyers is fairly common. “The opinion makes clear that placement agencies, lawyers, and law firms could be forced by the court to stop using non-D.C.-licensed attorneys or face fines.” Interestingly, the article reports that this ruling may not apply to Howrey, which houses its contract lawyers in Northern Virginia.

The DC authorities may create unintended consequences in their zeal to protect, umm, just a second, er, what is it that they are protecting given that the bulk of contract lawyers work under the close supervision of DC-licensed lawyers. OK, forget about the artificial barrier to entry issue. If Maryland and Virginia rules allow temps, firms can easily move work to one of these jurisdictions. And once firms think about moving the work 10+ miles away, perhaps they will also consider crossing an ocean and hiring lawyers in India for this instead.

I have long championed the idea of online legal services (online services list here and collection of articles here). So I was intrigued to read a recent American Lawyer magazine article (July 2005) that mentions a new online services initiative. 

Clients Unite (at p. 22) reports that last year “lawyers from eight major companies that control more than $1 billion in outside counsel legal work - including Microsoft Corporation, General Motors Corporation, and Cisco Systems, Inc. - have been meeting and exchanging information to try to improve the delivery of legal services.”

The article continues with an interesting tidbit: “In late May this coalition took its first step toward a collective purchase when it invited roughly 20 law firms, plus some other companies, to bid to create an online system that human resources departments could use to get automated answers to routine questions…”

Automating moderately complex, high volume work has long seemed to me an attractive proposition. But the market for online interactive legal services has not developed as I expected or hoped. Perhaps aggregating the demand of several large companies will change the landscape.

Separately, the article also reports that group member Jeffrey Carr, GC of FMC, will create a Web site to rate law firms. I think that’s a great idea too; see my prior blog post on that topic.

Update as of 7/20/05: An article very similar to the one cited above, Clients Unite, is now online here.