Strategic Legal Technology

ALM (formerly American Lawyer Media) has released its latest, 10th anniversary edition, of the AmLaw Tech Survey. 

We sometimes forget how much has changed in 10 years. Highlights include the revolution in mobility (laptops, PDAs, and Blackberries), the adoption of wireless networks, and increasing budgets this year. The complete survey results are also worth reviewing for data on what’s in use, market shares of leading products, and law firm tech spending and staffing. The data confirm the growing interest in Microsoft SharePoint, the increasing importance of electronic discovery services, and client use of extranets.

In the BigLaw market, what is the fate of online legal services such as interactive advisory systems? It does not look good now but I am optimistic longer term . 

Five Year Review Back to the Future in LegalIT (UK) provides a great perspective on recent legal technology trends. The section on online legal services observes that many large firms built online services but few turned a profit. “[Linklaters’ Blue Flag] remains the only major online legal service to have turned a profit…. But in most cases, firms quietly retired their online legal service brands shortly after the dotcom bubble burst.”

I believe that the cost pressures law departments face will create demand for online legal services. I prevously reported a Cisco-led multi-client effort earlier this year to create a virtual human resources law advisor. A few more GC who think outside the box or a well-capitalized third party willing to develop systems on speculation could tip the market.

Business intelligence continues to be a hot law firm management and legal technology topic. The cover story of the current issue of Law Firm Inc. is on BI. And the October ILTA white paper (PDF) has another outstanding BI article by John Alber of Bryan Cave. 

Regular readers may recall that I have cited other BI articles and related comments by John. In Mining for Gold, John explains clearly and persuasively the business benefit and imperative for law firms doing BI. This article, directed at a more technological savvy audience than his prior ones, has an excellent discussion of some of the technology and software architectural considerations of law firm BI. On the business side, it emphasizes data acquisition (assimilation), interpretation, and most importantly, distillation into actionable information. On the technical side, it explains data warehouses and cubes and stresses the importance of data consistency and accuracy. This is an excellent article for any law firm considering its BI options.

My friend and colleague, Shy Alter, CEO of ii3, Inc., has created the latest in his great productions of ii3 TV. This one, What’s on a CIO’s Mind, interviews 15 CIOs. 

Shy traveled to the ITLA 2005 conference last August in Phoenix where he interviewed the CIOs. Now, with Shy’s editing magic, the program is complete and well s worth watching.

CIOs of law firms large and small will find this of interest. And be sure to show it to your chief marketing officer: more firms should consider this form of streaming video to reach out to clients. Imagine a selection of 2 to 5 minutes pieces offering clients practical legal advice in a format like ii3 TV instead of yet another long list of links leading to dry memos!

A boutique law firm has just formed that will focus on e-discovery. 

New Law Firm Targets E-Discovery Angst on law.com (in The Recorder) reports that a new, four lawyer, virtual firm “will offer strategic advice to businesses on improving the management of their digital information and records, how best to respond to electronic discovery requests and the risks involved in the integration of different information systems in the aftermath of a merger or acquisition.” The four lawyers met at as members of the Sedonna Conference.

I have previously suggested that large law firms appoint a senior lawyer as the e-discovery expert or “go to” person for e-discovery. This report just reinforces this idea and growing importance of firms getting a grip on e-discovery, from the legal issues, to the technology, to the management of projects.

An upcoming teleconference features DuPont’s legal model and knowledge management. 

Spotted on LegalLines, the Montague Institute is sponsoring a teleconference, Dollars & Cents of KM: The DuPont Legal Model Story: “Featured guests are Marybeth Davies, Paralegal Manager, and Pam Martin, IT Manager, for DuPont Legal Model. They will discuss their experiences with corporate programs to manage legal costs and work more effectively with external law firms.” The event is November 17th.

Soon investors will likely be able to buy law firms in the UK. That should be good news for legal market innovation. 

Legal Week reports on October 17th that the UK government is pressing ahead with the Clementi Commmission proposed reforms, which would allow 100% outside ownership of law firms.

I have already previously suggested that outside investment should foster innovation, including online legal services.

A Law Firm Adds Another Shingle: Consultant in the New York Times (10/14/05) reports that Pillsbury Winthrop Shaw Pittman has expanded its legal outsourcing practice to provide outsourcing consulting. Query: have these consultants analyzed their own firm’s operations? 

“Lawyers at Pillsbury, apparently trying to climb up what consultants call the value chain, are becoming involved earlier in such transactions, sometimes even before a client has decided whether to outsource a business operation.” Were I a prospective outsourcing client, I would ask to see sample work product, specifically the consultants’ analysis of the law firm’s outsourcing options and strategy.

Non-outsourcing clients might also tap this resource. Litigation or antitrust clients could ask the consultants to determine whether large and costly document reviews should be conducted by lawyers in India rather than by associates or contract lawyers. The return on investment on such a consulting project might well be enormous.

The article also reports that Milbank Tweed, another firm with a strong outsourcing practice, has stuck to the traditional advisory role. Interestingly, Milbank has outsourced word processing. I do not know if Pillsbury has outsourced any functions. Perhaps the Pillsbury consulting practice will publish a case study of law firm outsourcing opportunities and recommended strategy as a marketing item.

Last week at the Ark KM conference in Chicago, Joshua Fireman of ii3, Inc. and I co-led a workshop on making KM client facing. A dozen plus experienced knowledge management professionals participated and developed several potential plans. 

Joshua and I summarized the key issues of client-facing KM systems and then formed three break-out groups, giving each a different scenario with the goal of creating and justifying a client-facing KM system. (Issues and scenario presentation.) All three groups proposed solutions involving a combination of extranets and/or blogs and RSS feeds.

Personally, I believe that interactive online systems (e.g., expert systems or document assembly), contract management, or compliance assistance is ultimately more valuable than content alone (whether delivered via extranets, blogs, or RSS). But the fact that three groups of experienced professionals from multiple firms converged on extranets and content delivery suggests the difficult challenges of creating innovative client-facing systems.

I’m no mystery shopper, but I can still report on the bad attitude of some law firm IT support staff. 

I visit many law firms as a consultant, conference attendee, or friend. Two incidents are small but telling. At one firm, three visitors, all using different brand PCs, could not use the wifi signal. An IT support person said (nicely) that our machines must be at fault (in so many words). And the likelihood of that is? He later sheepishly informed us a router re-boot had fixed the previously denied problem.

At another firm, I could not send e-mail messages. I suggested to a tech that perhaps the firm’s firewall was the issue. Oh, no, that cannot be I was told (nicely), it must be your machine (in so many words). Later that day, a network engineer told me that indeed the firewall blocks outgoing SMTP mail.

I am dismayed that first-line IT staff blames users. Even if the user makes a mistake, blame is not appropriate. Lawyers are decision makers and if they get bad or condescending tech help, they are less likely to support strategic technology investments. Large firms CIOs who want to achieve bigger goals should make sure they have the basics covered.

An October 5th press release (PDF) reports that Mavent has supplied Fannie Mae with an expert system to review loans for compliance with various statutues, regs, and guidelines. 

According to the release

“The Mavent Expert System is a comprehensive automated solution that submits loan data for reviews against nearly 300 legislative acts, 200 license types, and the rules and regulations of over 60 regulatory authorities. The solution’s review functions include: loan level lender and broker license reviews; state consumer credit laws relating to such terms as usury, fee restrictions, prepayment penalties, and late fees… A network of more than 40 law firms, including such prominent firms as Hudson Cook and Reed Smith, supports the Mavent Expert System. Mavent’s outside counsel has approved each rule in the Mavent Expert System. The legal rules are identified and explained in approximately 7,000 pages of detailed legal rules documentation. [emphasis added]”

Based on my experience as a knowledge engineer, consultant, and evangelist at expert-system platform developer Jnana Technologies, I have long been excited about the prospect of capturing legal know-how in interactive expert systems.

I am intrigued by the participation of 40 law firms in this project, especially the economics. To me, an expert system represents an opportunity for a law firm to help cement a relationship and possibly identify matters requiring traditional counseling. It’s hard to tell from the press release or Maven web site, but I suspect that law firms acted here merely as content providers (at hourly rates??) If so, I wonder if these firms may not someday regret selling expertise on this basis, rather than finding ways to deliver interactively to their own clients. I am excited to see a new expert system in action, but worry that law firms may be letting more nimble players eat away at what, for today, seems the periphery of the business but may someday be viewed as core.

Comments from anyone who was involved in this project are welcome.

The Ark KM in the Legal Profession conference just wrapped up day 2 of 3. Leading knowledge management practitioners from the US, Canada, and England are participating. My take away is that KM may be morphing. 

Jason Marty, Global Director, KM, Baker McKenzie and Julia Randell-Khan, Director KM, Freshfields Bruckhaus Deringer were among the presenters. At both firms, KM appears to include many elements of what traditionally has been separate practice support functions (i.e., the more general application of technology to law practice). Both firms have carefully aligned their efforts with their firms’ strategies. At Freshfields, my sense is that KM is, at least in part, driving the firm’s strategy, not just supporting it.

Outside the conference, I have seen firms that say they “don’t do KM” but that provide significant practice support (e.g., deal databases) that is arguably a knowledge management function. And at some firms, KM professionals get pulled away from traditional KM work to act as the “translation layer” between IT and lawyers as firms roll out major upgrades.

If these firms are early adopters rather than outliers, it will be interesting to see how KM evolves. A dozen years ago, TQM and business process re-engineering were the rage. You rarely hear these terms now, but elements of those disciplines have been widely adopted. A dozen years from now, perhaps we will no longer talk of KM; it just may be embedded in other practices and departments, with a scope broader in some respects and narrower in others than today.

Collaboration is the mantra of our new economy. Yet in the legal market, computer-based collaboration is limited. Here are some possible reasons. . . 

At a recent meeting of large law firm knowledge management professionals, Michael Mills, Director of Professional Services & Systems at Davis Polk & Wardwell, co-led a discussion about digital collaboration. He posed two lawyer-team situations – reviewing e-mail messages in discovery and a working overnight to write a temporary restraining order – and observed that he could not identify collaborative tools that would obviously facilitate their work, that it was best for them to work together in-person.

I suggested that the need is less for collaboration than for adopting best practices that would guide the work. Michael re-framed the issue, suggesting that collaboration consists of
1. Coordination
2. Communication
3. Co-creation of work product
I found that a very helpful way of thinking about the issue.

Coordination encompasses at least the possibility of specifying, in advance, a set of best practices that would guide both the work and how and when to collaborate. The tools for this could include checklists, workflow, spreadsheets, project management, and guideline documents.

For communication, lawyers still benefit from in-person interaction. One participant observed that the stakes are often high enough that the perceived benefit of in-person communication (relative to virtual participation) outweighs the cost of assembling the team in-person. Unanswered was the question of more effective collaboration when the economics do not support assembling a team in one place.

Co-creation of work product still relies heavily on e-mail and document comparison (redlining) software. Extranets come into play occasionally. None of the participating firms use more sophisticated joint-authoring software. It seems to me there is more room for such tools.

Overall, my take-away is that there is more value in pushing to create best practices and causing lawyers to comply with these than in pushing a new (or old) generation of collaboration tools.