Strategic Legal Technology

“Offshoring legal work to India could transform how lawyers’ services are bought and sold in North America.” That is the premise explored in a new and useful article in the National, the journal of the Canadian Bar Association.  

In Over the Horizon (June 2006, PDF, p. 22), author Julie Stauffer reviews and analyzes the current state and future potential of offshoring in the legal market. The article is a good overview of the state of the market.

I was particularly intrigued by one tidbit: “One group of Indian IP lawyers has combed the patent portfolios of North American companies and pointed out technical flaws, offering to correct them at no charge to introduce their services. How many North American law firms make that kind of effort?” Indeed! I would say these Indian lawyers are way ahead of most US and Canadian law firms on how to sell their services. Marketing departments, watch out!

Note: see my prior post on churn among legal market offshore providers.

Offshoring continues to be a hot topic. My next post will feature a good article covering the issues. Meanwhile, excited utterances and I have updated our list of legal market outsourcing and offshoring users and providers. 

We assemble this list based on our reading and suggestions we receive. The updated list includes several companies new to the list as of June 2006. Moreover, some of the companies originally listed appear either to have stopped offering legal services or ceased doing business. We have placed these companies on a second table (scroll to the bottom) based on visiting the URL we originally identified and now finding the page inactive or not seeing any links to legal services. We did not try to determine if these companies are operating under different names or web sites.

Based on the number of new players in India, it appears that offshoring is still generating a great deal of interest. Based on the number of apparent “exits,” however, it is not clear how big the demand really is.

Finding the right information and the right people can be hard. I recently came across a new web service that addresses one angle of “finding people." 

Lawrex is a lawyer referral service started in April. It “provides lawyers with an efficient and effective forum to exchange referrals with other lawyers. LawRex is based on the principal that lawyers should not continually send out referrals, and receive no incoming referrals in return.”

I am intrigued by Lawrex’s point system and automated approach to create a referral market. It seems well conceived – the economist in me likes the incentives and process.

I’m struck by the increasing number of innovative approaches to help find people or information. Others include systems to find who knows whom (e.g., Visible Path), to find work product (e.g., my client’s product, RealPractice), and tagging systems to identify useful web sites (e.g., del.ico.us). Lawrex adds its own twist, applying the reach of the web and market discipline to help with lawyer referrals.

Though I think Lawrex targets smaller law practices, BigLaw may nonetheless learn from LawRex. Similar approaches might fix the distorted cross-selling incentives in some firms. Or provide a model for staffing matters. Ok, perhaps a stretch. But just minding the infrastructure won’t be enough. BigLaw CIOs need to think broadly about how developments like LawRex might filter back to their firms.

Note: I was pleasantly surprised to find a link to this blog on LawRex. That in no way influenced me to write about this site. A friend alerted me to LawRex.

What’s the best home for an e-discovery company? Yet another acquisition last week raises this question. 

“To expand its document management services business, Xerox… announced that it has agreed to acquire privately-held Amici LLC for $174 million. Amici is a leading provider of electronic-discovery (e-discovery) services, primarily supporting litigation and regulatory compliance.” The Xerox press release goes on to report that ”Amici was founded in 2002 and currently employs about 125 people.”

As pure-play EED vendors are scooped up, we need to think about how EED fits with the new parent’s existing business. Recent acquisitions include:
- The Phillipine phone company acquired SPI Tech
- Pitney Bowes acquired Ibis, and Compulit before that
- Integron acquired Bowne’s EED services
- Xiotech acquired Daticon
- Epiq acquired nMatrix
- FTI Consulting acquired Ringtail
- Marsh & McLennan acquired Kroll
- LexisNexis acquired Applied Discovery

It’s not obvious what the best long term fit for e-discovery players is. Is it a “pure play” legal company like LexisNexis? A large company like Pitney Bowes or Xerox with selected legal market services? Is it a more specialized legal provider like Epiq or FTI? How about an insurer and financial services company? And where is HP, EMC, IBM, and CA (which just acquired records management software and services company MDY)? It seems that e-discovery would fit well with storage management and information life cycle companies.

At this point, it’s too early to answer. I don’t think BigLaw CIOs and lit support managers need to worry. There are plenty of vendors from which to select. Acquisitions often take a long time to affect operations and service offerings. Longer term though, those buying EED services will likely need to consider ownership and its implications as one of the selection criteria.

Updates
7/25/06: LexisNexis announced yesterday (7/24/06) that it is acquiring DataFlight, maker of Concordance software. See the press release
8/1/06: Huron Consulting announces acquisition of Aaxis Technologies and of Nextra
9/27/06: Techbooks announces (9/18) acquisition of Whitmont Legal Technologies.
9/28/06: Thomson acquires LiveNote
10/6/06: Océ Business Services acquires CaseData (press release, PDF)
11/20/06: Kroll Ontrack acquires e-discovery software provider Engenium (press release, PDF)
3/1/07: Merrill Corporation Announces Acquisition of Lextranet
5/31/07: Anacomp acquires CaseLogistix
6/4/07: Syngence acuired by private investors
7/16/07: Autonomy and Zantaz merge July 3, 2007

BigLaw manages risks of all kinds. Records retention and discovery are the new biggies, but let’s not forget conflicts and insider trading, among others. Now, firms can consider a new risk. 

Common Spreadsheet Errors Can Be Found With More Testing, Some Double-Checking (6/13/05) in the Wall Street Journal reports that an academic researcher has found that there are “undetected errors in about 1% of all spreadsheet formulas… some of those errors are big – big enough to impact a decision.” For example, the researcher says that companies have had to restate earnings because of spreadsheet errors.

Law firms check written work carefully - a 1% error rate would not be acceptable. I’m not sure the same is true for spreadsheets. My sense is that, partially because spreadsheet skill is relatively rare in BigLaw, the QC is not as rigorous as for written work. Even where BigLaw relies on outside experts’ spreadsheets, the potential for error exists. Spreadsheet error can even affect law firm business decisions such as proposed client budgets or practice group profitability analysis.

This risk may not be particularly worrisome, but those lawyers and technology support staff who work on spreadsheets should at least be aware of the issue.

Legal Technology Journal is a very good new publication from the UK. 

Editor-in-Chief Charles Christian is a well-known and highly regarded writer, commentator and industry analyst who has been reporting on developments in law office technology and online legal services for over 25 years. His Legal Technology Insider publication has provided news, developments, and notes on legal technology, especially in the UK.

With publisher Legalease, Christian has created a new journal to cover legal tech in more depth, focusing more on the value ("why") of legal technology than on products.. It is targeted at not just IT managers, but also managing partners, COOs, marketers, and financial managers. See the foreward of Issue 1 from more details.

Issue 1, recently released, has many useful articles, including “From bespoke to commodity” by Richard Susskind, an overview of Allen & Overy’s Omnia (a custom matter-centric system), and a report on Freshfield’s Athena KM initiative. This is good reading for any strategically-focused CIO. Subscription info here.

The International Legal Technology Association (ILTA) has just released a new white paper on Knowledge Management. 

The KM white paper has several articles of interest. Chris Boyd, Director of Professional Development & KM at Wilson Sonsini, and I wrote one of the articles, Powering a KM Windmill, which is also available on this web site under the title Baking KM into the System. I also wrote Going Beyond E-Mail Queries, which is a case study of the RealPractice work product retrieval system at Littler Mendelson (click here for a related version at the Practice Technologies web site).

Perhaps the first and most popular legal KM blog is excited utterances by Joy London. Joy recently announced an expanded offering that will be of interest to many legal professionals. 

In a recent post, Joy explains that she is joining forces with Law Librarian News. excited utterances moves to a new location (http://www.practicesource.com/excited/) and now offers a subscription-based newsletter called “Law Librarian News & excited utterances.” Joy writes that

“Pairing my award-winning KM blog with editor Sean Hocking’s acclaimed Law Librarian News, the semi-monthly “Law Librarian News & excited utterances” will deliver direct-to-desktop news-you-can-use – by, for and about the global legal information and knowledge management market. While excited utterances will continue to deliver the same reliable online coverage of legal KM that its readers have come to rely upon, our new combined publication creates the perfect vehicle for legal knowledge managers and law librarians who want to understand the machinations of the current market.”

With Joy’s permission, you can view the inaugural issue with excited utterance here. KM professionals and law librarians should consider subscribing. Some additional information:

• To access the excited utterances blog and the LLN archive via http://www.practicesource.com (free access until July 1, 2006), you will need a password and user name.
• The content will be available every other week (on Fridays) delivered as a PDF by e-mail.
• Multiple subscriptions for enterprises are available.
• PracticeSource.com is Australia’s leading independent source for info about legal blogs, firms and news.

Does every big law firm need it’s own e-discovery attorney? That’s the question posed and thoughtfully answered by a good new article. 

E–Discovery Attorneys: Hot or Not? in LawFirm, Inc. (June 2006) by Seth Davis, a recruiter with Major, Lindsey & Africa, examines the emerging trend of law firms and law departments “seeking e-discovery managers, e-discovery consultants, e-discovery engineers, e-discovery gurus, e-discovery and document-retention specialists and, finally, attorneys who understand e-discovery. ”

According to Davis, the challenges, uncertainties, and frustrations of electronic discovery have led many legal organizations to want to hire an attorney who specializes in e-discovery. “The Am Law 100 has been bringing back former technology and litigation associates to run their internal e-discovery departments.” But Davis points out the supply of qualified lawyers is limited - probably no more than 200.

Firms looking for a quick fix to their discovery challenges should, however, be cautious. They need to “recognize that the technology your firm uses will be no different than what the vendors are using. As a result, a new e-discovery department may find itself working through problems that many vendors dealt with years before. My advice is for firm leaders to be patient with a new e-discovery attorney.”

As a consultant, I advised some of my clients to consider this type of role a couple of years ago already, so I agree with Davis’ assessment.

Google seeks a staff person to to start a contract management program. I’ve suggested that BigLaw is missing out in helping corporations manage contracts. Perhaps the Google example illustrates the point. 

The job description says “Google, the award-winning search engine, is rapidly growing and is looking for an experienced contract Program Manager to join our legal team.” Responsibilities include

* Create document and project roadmap, and plan and communicate with Google’s Business and Development groups.
* Oversee the day-to-day operational activities of Google Legal’s Contract Management System (CMS).
* Design and develop strategy for support of global implementation of Google Legal’s CMS.
* Ensure and maintain CMS’ SOX compliance as well as business rules compliance.
* Documenting and maintaining all internal and external procedures for CMS.
* Review, analyze, and manage new CMS technology initiatives from conception to implementation and through life span of application.
* Documentation creation for tracking as well as creation of user guides for training.
* Continued familiarity with Legal’s commercial documents and process and procedures.
* Assist in implementing new systems to improve contracts process.

Were I new in this position, I’d see if outside counsel could help. Any firm can help draft contracts, but how many can help think about the whole process for managing them. A bit of advice on systems and approaches to CM might position a firm for some nice on-going legal work. BigLaw CIOs may have an opportunity to help their firm develop new business - a nice change from yet another initiative that just increases costs.

Global law firm Clifford Chance plans to do more legal work in lower cost jurisdictions. 

The Lawyer reports on a memo to partners that managing partner David Childs sent recently. Childs: my vision for Clifford Chance (5/29/06) reports that the firm plans “escalation of an offshore outsourcing plan, with the aim of transferring routine legal tasks, such as litigation support and due diligence, to cheaper jurisidictions [sic].”

Update (6/5/06): A&O keeps the faith with Indian outsourcing venture in legalweek.com (6/1) reports that another Magic Circle firm, Allen & Overy, which started offshoring word processing in 2003, will continue using offshore services. The firm is seeking bids.

Video is a great way to communicate. That explains why so many people have their eyes glued to the TV. And why mobile phone and PDA makers are rushing video-enabled devices to market? Where are law firms in this action? 

In what appears a first, Canadian law firm Torys has released legal updates as videos for viewing on the web or as a podcast. Torys tunes in to latest pop-tech craze in the Toronto Globe and Mail (5/17/06) reports that Torys appears to be the first firm to offer video updates. Traffic to the web site has been good, with 900 visitors watching or downloading a clip in the first 8 eight days.

Have a look or download at Torys’ video center. I applaud the firm for breaking new ground and expect other firms will follow suit.

I was a bit disappointed that the clips I viewed are just “talking heads.” I’m not a video expert, but there are probably inexpensive ways to make video more engaging. It’s a great start though - let the law firm video wars begin. How long before BigLaw retain the services of experienced producers or directors?