Strategic Legal Technology

Another sizable e-discovery vendor announced it is being acquired.  

SPI Tech, a litigation support and e-discovery provider, announced the pending acquisition by ePLDT, Inc., a wholly-owned subsidiary of the Philippine Long Distance Telephone Company (“PLDT”). A public disclosure document indicates the agreement was reached on May 25, 2006.

It’s hard to say what it means when a telephone company acquires an e-discovery vendor. The transaction looks like it’s about business process outsourcing generally. So perhaps the e-discovery business fits under the new corporate umbrella.

On Friday, May 26th, Hummingbird, one of two main suppliers of document and practice management systems for large law firms, announced it was being acquired by Symphony Technology Group. 

Symphony Technology Group “is a strategic holding company that helps companies maximize operational efficiencies in the enterprise software and services market.” BigLaw CIOs should keep their eye out for future announcements to see whether the ownership change means new directions for the company or its products.

In this roundup: insight into AmLaw 100 web sites, legal marketing moves offshore, the need for project management in e-discovery, and infrastructure: managing e-mail management and smart-cards for security. 

Law Firm Marketing
Marketing expert Larry Bodine compares and analyzes two AmLaw 100 web sites in Online Marketing Challenge: Manatt vs. Pillsbury. This is a good article to understand key elements of law firm web sites.

Offshoring
Also from Larry Bodine, Offshoring Threatens Marketing Jobs, a report on law firms offshoring marketing work

E-Discovery
Applying Project Management Techniques to Litigation Discovery in LLRX.com (4/15/06) by Conrad Jacoby is a good explanation of the value of project management discipline in managing discovery projects.

Infrastructure
E-Mail Is Exhibit A in Information Week (May 8, 2006) provides a good overview of technology to manage the ever growing volume of e-mail. For an article in the tech trade press, it has a lot of discussion about records retention and discovery problems. The lead paragraph sets the tone for the article: “Before you click that ‘send’button, ask yourself these questions: Are you able to defend the statements made in that E-mail? Are you willing to do so under oath in court?”

Pentagon Sets the Stage for Advanced Smart-Card Use in eweek magazine (April 17, 2006) reports on the widespread use by the military of “smart cards” for physical and cyber-security. “Embedded in the smart card is technology from ActivIdentity, which formats and provisions the card, delivers PKI certificates, and maintains security. Personnel use the card to log on to their computers, and they can use it to add digital signatures to documents.” I know from my dot-com experience that managing the Public Key Infrastructure (PKI) is not trivial. With the military paving the way for this robust approach to security, private sector organizations concerned with security may follow suit.

A recent McKinsey & Co. survey of IT executives of big companies found that they view two new technologies - virtualization and software as a service ("SaaS") - as highly promising for real benefits. 

Virtualization: Until recently, each operating system and many applications needed ran on dedicated servers. “Virtualization” allows running multiple operating systems (e.g., Unix and Windows) and multiple applications on a single server or a group of servers. Virtualization can lower costs while improving performance and reliability.

SaaS: “Rather than purchasing and deploying applications inside the enterprise, many companies are buying access to externally hosted applications, so they pay for the software as they use it.” “Software as a service” started in the dot-com boom but is only now really taking root. McKinsey reports that popular SaaS applications include HR management, billing and order entry, sales management, and network security. SaaS can mean lower costs, faster roll-outs, and easier maintenance.

Law Firm Implications: McKinsey notes that the relatively high rate of uptake indicates “that a technology architecture transformation is beginning to take shape in many large and midsize organizations.” In my own experience, I know that some large law firms are considering these options and some are already moving in this direction. BigLaw CIOs who need ammo to explain infrastructure issues to firm management might do well to share this two page McKinsey article when they propose virtualization or SAAS.

E-Discovery Implications of SaaS?: An interesting side question: what’s the impact of SAAS on e-discovery? I’m not sure if SAAS limits the options for producing data - formats or media - or requires subpoenaing the SaaS provider. Limitations might be good; in any event, lawyers representing companies using SaaS need to understand the discovery implications. I’ve checked a few e-discovery web resources and vendor web sites and found no info on this question. If anyone knows, please drop a line or leave a comment.

Is knowledge management on the rise or fall? Not just skeptics ask; so do legal technology consultants and KM professionals. Some takes on answers….  

It’s down. So I thought when I looked at the down-sloping line of the Google trends graph for “knowledge management,”. Scientist wannabe that I am, I checked this metric for reliablity. When I looked at the flat to down-sloping line for “electronic discovery”, a topic I know is hot and rising, I decided not to draw conclusions from this approach.

I’ve written and spoken about how KM may be morphing into more inclusive approach of practice support consulting. One spin on that idea is that we are doing more KM but just using the KM-word less.

Then there’s expertise location (prior posts on this here). Many firms now automate work product retrieval (for example, see RealPractice - a product I know from consulting I do for Practice Technologies). As the “document problem” is solved, firms can shift more to helping lawyers find experienced colleagues.

If press coverage is any indication, then experience location is on the rise. The Business Solutions column in the Wall Street Journal (5/15/06, $) is titled A New Way to Keep Track of Talent. It describes the move from self-rating systems, which have generally not worked, to systems that infer experience from documents and e-mails. I have some qualms about the article but was glad to see recognition of an important issue: “For companies using expertise tools, dealing with employee resistance can be as challenging as any technological issues.” This is the second WSJ article on the topic this year (blog post about it).

If we use the WSJ as a gauge, then it looks like KM is at least holding its own. Oh, there’s more in the article: “Indeed, Microsoft Corp., though it won’t discuss specific plans, is looking at expertise location as a feature in future versions of its Office software suite.” That should get any KM professionals attention! If anyone knows about these MS plans, please drop me a line.

Update (5/19/06, 10pm EDT): : See Microsoft search wants to pick your brain on ZDNetUK for some detail on Microsoft’s approach to expertise location (spotted on excited utterances and Knowledgeline).

Years ago, a billable hour had a short life. A lawyer wrote it down, a firm billed it, and the client paid with little fuss. Once collected, the hour disappeared. Times have changed. 

Not just the pressure to bill. Not just client resistance to paying.

And not just the short life. Billable hours live on in big databases where they tell great stories, like which practice group is really most profitable. Forward-thinking law firms use business intelligence software to turn data into stories.

Law departments can use outside counsel billable hours to tell their own stories, like which firm is most cost-effective. Leveraging Your IT Investments: Thinking Like an Executive (Metropolitan Corporate Counsel, May 2006) by Robert Kirtley of consulting firm Duff & Phelps, examines the potential for GCs to apply business intelligence to analyze their outside counsel. Kirtley makes several key points:

• Law departments “have become data rich and information poor.”
• Corporations require data analysis to support decisions. The GC will perform better by practicing “fact-based decision-making.”
• Case management and e-billing systems have generated mountains of data. Though many companies make some use of this data, there is vast untapped potential.
• The GC must acknowledge the need for and value of fact-based decisions; then she can “implement a process and a supporting technology tool that delivers insight.”
• With the right metrics and systems, the GC can “predict the impact of events.” For example: “What is the likely budgetary impact of a group of new product litigation cases coming in? How would switching from one outside counsel to another impact our total spend on a group of cases? How would changing our settlement strategy impact our costs and risk profile?”

If you tell stories, be sure they’re good ones. With the approach Kirtley outlines, there are indeed some good stories waiting to be told.

The Ark Group is hosting a knowledge management conference in Toronto on June 13-14. 

As a speaker and co-chair at prior Ark conferences, I can say that Ark puts on outstanding conferences. This one will explore the intersection of “information management” with KM. I agree that Info Management is a topic of growing interest, driven by huge data volumes, “systems sprawl,” and retention/compliance issues.

Other conference topics include the law librarians and KM, portals, creating a knowledge sharing culture, and KM for professional development. Conference information and registration.

Here are two reports on this blog from the Ark KM conference in February 2006 in NYC: KM Morphing into practice support consulting and KM Haiku (really!) and links to conference materials.

Law firms increasingly use business intelligence techniques to improve profits. You can also apply similar techniques to understand the overall business environment. 

Competitive intelligence (CI) is now its own discipline. For example, West offers its Monitor Suite: “Litigation and Deal Monitor provide unique analysis of the marketplace that will inform your business development process.”

BI and CI focuses on what has been. It’s also possible to try forecasting what will be. Business Week (April 10, 2006) in Is That A Lawsuit Blowing In? describes work by Risk Management Solutions and Rand to forecast class action law suits. They will analyze court and insurance records with techniques used to forecast natural disasters.

Plaintiffs’ lawyers are likely to be the first to read the results. BigLaw, which defends both corporations and insurers, should keep up with this research as well. How does this relate to CIOs? I find that when a topic involves lots of math or technology, lawyers often mistakenly assume they can safely delegate it to the CFO or CIO. Many CIOs have a broader window onto to the world than the partners for whom they work. Whether sharing this type of news with partners who should care is a way to win friends is another story.

One “leading indicator” of legal market trends is who consulting firms are hiring. Today, Hildebrandt announced that two sourcing experts join the firm. 

According to the May 8th press release, “Christopher Petrini-Poli and Nicholas Quil will join Hildebrandt, heading up the firm’s new global Strategic Sourcing & Supply Chain Practice.” Brad Hildebrandt notes that “strategic sourcing counsel can save law firms as much as 35 percent of their non-salary expenses.”

I have long thought that large law firms underutilize technology outsourcing. With prominent consultants carrying the torch, firms may examine their options more systematically. CIOs need to stay on top of the “strategic sourcing” trends. And perhaps they should propose options before the choice is foisted on them.

Pricing may be collapsing. No, not large law firm billing rates; I mean e-discovery processing. 

Lately, my legal technology consulting friends have reported that the price umbrella was collapsing. Now comes “official” confirmation. Publicly traded Marsh & McLennan Companies, which owns Kroll, reports in a May 3rd press release on Q1 results: “Significant pricing pressures in the marketplace adversely affected Kroll’s electronic discovery business, reducing both its revenues and profitability.”

The dot-com boom is dead. Long live the dot-com boom. Two sites recently caught my eye as examples of why the boom has created a lasting legacy. 

One site is a source for specialized information. Automatic external defibrillators (AED) are life saving devices that re-start a chaotically beating heart; you can see them in airports, gyms, and offices. AED Risk Insights “provides AED law information, risk management and public policy services to organizations with AEDs, those considering the purchase of AEDs, AED suppliers, attorneys, legislators, the media and others seeking to understand the complex issues surrounding the deployment of AEDs in public settings.”

Another example is ARMA’s recently released Risk Profiler Self Assessment for records managers and for those concerned with e-discovery. “The Risk Profiler Self-Assessment for E-Discovery helps companies fully understand their potential weaknesses in litigation and discovery before they reactively implement the wrong vendor-supplied solution…. The assessment is a user-friendly, automated, guided self-assessment tool that provides a diagnostic analysis of your organization’s strengths and weaknesses. The secure, online assessment will guide you through your organization’s most vulnerable areas.”

The ease of creating web sites and ubiquitous web access for business has changed the economics of both old-fashioned printed newsletters and dispensing advice. The barrier to create a niche information product such as AED Risk Insights or a self-help service such as the Risk Profiler is much lower now than pre-Web.

AED Risk Insights is, according to founder Richard Lazar, “not a substitute for talking to a lawyer; rather it’s a tool and resource to comply with the law, both for lawyers and business people.” But these and other web sites may affect the legal ecosystem. On the one hand, they may help lawyers in their work; they may even increase the demand for advice by alerting clients to issues.

On the other hand, if specialized services proliferate, BigLaw may have to climb ever higher up the value chain or perhaps compete head-on by offering their own focused online services. Online legal services have not fared as well as I expected, but seeing these two web sites, I wonder if we won’t see a second round in the next few years.