Strategic Legal Technology

What does a law firm that takes KM seriously look like? 

Knowledge management consultant Gretta Rusanow of Curve Consulting answers this question in KM and the Law (KMWorld, 1/07).

Rusanow describes the KM program at leading Australian law firm Allens Arthur Robinson (AAR). The firm has one KM staff person for every 22 lawyers. It also “requires each lawyer to spend 50 hours a year on KM-related work.” Moreover, “that contribution is considered in each lawyer’s performance assessment.” These facts confirm my long-held view that Australian firms are way ahead of the US in KM. (The article also spells out in detail many other aspects of AAR’s KM program.)

AAR “also leads other law firms in managing knowledge relating to internal processes. By focusing on developing methodology and processes, and collecting and sharing lessons learned from past projects, AAR can use that knowledge to work more efficiently (and profitably) in future matters.” I’m not 100% sure what this means, but it sounds like developing best practices for how to work. US firms should pursue this avenue. In February I will moderate a discussion on best practices at a KM meeting and hope to have more to say about it afterwards.

Foley & Lardner understands the value it can provide clients beyond traditional legal advice. 

In Foley & Lardner Promotes Legal Technology, I discussed Foley’s innovative extranets. Via Law Technology News (Dec 2006), I learned about Foley’s Private Equity Matchmaker (PEM). According to a Foley press release (10/06), PEM enhances

“the ability of Foley attorneys to refer business opportunities to the firm’s clients… Through its automated search function and deal-matching capability, Private Equity Matchmaker brings together Foley clients from around the world who are seeking capital with those who are actively pursuing private equity investment opportunities, classified as ’seekers’ and ’sources,’ respectively… Currently, PEM features 150 sources and more than 50 seekers.”

Other firms may provide investor match-making services informally, but Foley uses proprietary technology to institutionalize, formalize, and deepen this function. Lots of firms can paper a deal, but how many systematically help the client get or invest money?

It’s a great idea but I’m curious about how it works. I suspect lawyers must populate it with leads, which raises the “what’s in it for me” question. If entering a bit of data may help a lawyer’s own clients, that may elicit active participation. In any event, the effort may be minimal. An article in Mass High Tech: The Journal of New England Technology (11/24/06), Legalize IT, quotes a Foley partner: “We all spend plenty of time sitting in on endless conference calls, and this should be something they can do while someone else is doing all the talking. They can enter the information and then move on to the next task.” I think that means the data entry is client billable, which further lowers the threshold to doing it.

The recently released ILTA 2006 IT Staffing Survey indicates that KM is on the rise. 

The survey (PDF here) asks “Who Manages KM?” (chart p. 10, table p. 15). Across all 4 categories of firm size, from small to very large, the percent of firms reporting “no one manages KM” fell from 2005 to 2006.

Focusing on very large firms (500+ users), the “no one” percent fell from 49% to 27%. That means that 13 firms added a KM manager (22% of 61 responding). I find the 2005 versus 2006 data on where knowledge management reports a bit confusing. At first I thought I could tell whether the new KM managers were in IT or not but now I’m not so sure. What seems certain - and a surprise to me - is that KM reports to IT in 37% of firms responding in 2006.

At the Ark KM Conference in October, I moderated the session “Management Views of KM.” So what do “customers” think of KM? 

I suggested and moderated this panel (moderator questions here) because full-time, practicing lawyers rarely attend KM gatherings. All three panelists (participant info here) are practice group leaders and a couple are on the firm’s management committee; their firms range in size from 100 to 400 lawyers. Their views on KM were similar, all supporting it and saying it is important. The panelists cited many KM drivers; three stood out for me:

• Informal dollar caps on matters. Clients may not ask for budgets but for some matters, lawyers know that if they go over a certain amount, it’s asking for trouble. So they want tools for efficiency.
• The need for speed. Clients often face deadlines they can’t control. If outside counsel can deliver work product and advice quickly, it helps make the client look good.
• RFPs, which frequently ask about the firm’s KM capabilities.

The panel agreed in concept about the value of KM but acknowledged that getting lawyers to change how they work is hard, though some elicited “good KM behavior” in their own practices. One way they suggested to get around lawyers not contributing was to rely more on secretaries to contribute to KM efforts.

I may be guilty of seeing what I want to, but I think the panelists confirm my view that KM needs to rely more on automated approaches and morph into a broader practice support role. For additional views on the panel, see Tom Baldwin’s comments over at his Knowledgeline blog.

This roundup covers the Opentext acquisition of Hummingbird, a review of SharePoint 2007, KM predictions, a good Web 2.0 overview, another report on BI at Bryan Cave, and info on what Pepper Hamilton is offshoring. 

Document Management
Legal Technology Insider (Nov 2006, UK) interviewed Mark Portu, a VP at Open Text, new owners of Hummingbird. Portu told the Insider that Open Text will “acquire vertical domain expertise in markets it intended to dominate [and put] its weight behind a major push into the legal market”. The article also reports on personnel departures from Hummingbird.

Knowledge Management
Tom Baldwin, KM Director at Sheppard Baldwin, speaks highly of search in his blog post Microsoft Sharepoint 2007 in SharePoint 2007 Update - Enterprise Search Rocks!!. Among other observations: “While not as feature rich out of the box as something like Recommind or Autonomy, it can likely do 70%-80% of what those systems can offer at a fraction of the cost.”

Sally Gonzalez, a director with Navigant Consulting and KM consultant, examines new frontiers in KM in Knowledge Management and Technology: Finding a Balance (Law Technology News, 12/13/06). She suggests that at progressive firms, KM will get more involved in business development, electronic data discovery, and Web publishing.

Web 2.0
Web 2.0 has been in the news and blogosphere a lot. Hype? I still don’t know. But The Web 2.0 Revolution: keynote speech in Ross Dawson’s Trends in the Living Networks, provides a great synopsis, based on a speech he gave. He cites six key characteristics of Web 2.0: participation, social media, emergence, visibility, shifting, and conversation. A good read.

Business Intelligence
I’ve written several posts discussing John Alber’s BI work at Bryan Cave. Adam Smith, Esq. has an excellent blog post with additional details and screen shots of the highly customized Bryan Cave BI system. See Managing Your Practice Like a Real Business (11/6/06).

Outsourcing
U.S. losing legal work to overseas firms in DelawareOnline News Journal (12/12/06) reports that Pepper Hamilton “sends a wide range of work to foreign firms, including preparation of trial exhibits, legal research and document management.”

Investors today need more than information; they need insight. Can BigLaw monetize insight beyond dispensing advice? 

Information drives winning investment strategies but traditional Wall Street information advantages are evaporating. The Internet has diminished the impact of huge budgets to buy information. Reg FD provides equal access to corporate insiders, eliminating the old inside edge. And wide-spread algorithmic trading and hedge fund growth makes it much harder to develop winning proprietary trading strategies. So the Street needs new approaches.

The premium now is on unique information and using the right information at just the right time. Let’s call it the transition from information to insight and action. Two recent articles illustrate this. Seeking an Edge, Big Investors Turn to Network of Informants (Wall Street Journal, 11/27/06) explains how Gerson Lehrman Group has set up a network of experts – from truck drivers to doctors – who provide investors with industry tidbits. No one tidbit may be significant, but investors put together a mosaic that tells a story and drives decisions.

From Reuters, Automatic Trading Linked to News Events (New York Times, 12/11/06) explains that Reuters has begun “selling two trading services that allow subscribers to set up automatic trading orders based on the news [to] give subscribers the ability to mine past and present Reuters news articles in real time and automatically buy, sell or hold a stock based on market-moving events.” Reuters is not offering new information, it’s just making its existing info more actionable.

So, can law firms sell insight to investors? Of course, other organizations are interested in insight as well. BigLaw regularly collects and digests volumes of information to deliver traditional legal advice. Perhaps using technology similar to Reuters, law firms could find a way to monetize their insights beyond one-off advice. The most likely way to do this is via some type of online service. Of course, like other legal online services (directory, articles), the profit might not be in the subscription revenue. Rather, it could be in deepening the client relationship and generating additional fee-paying matters.

Knowledge management typically focuses on capturing and re-using a firm’s own work product. What if you could just as easily tap other firm’s work? 

Looking Outside the Firm for On-Point Work Product (Legal Tech Newsletter, 12/8/06) by Justin Hectus of Keesal, Young & Logan explains the benefits of reviewing work product created by other law firms. His firm uses software from Practice Technologies that makes it easy to search SEC filings (via EDGAR), including the many attachments corporations file.

Hectus observes that though some lawyers “might be loathe to admit it… much of the practice of law involves the recycling of documents and information that has proven successful in the past… We’d be doing our clients a tremendous disservice if we tried to reinvent the wheel each time we had to create a new agreement, instead of leveraging previously successful work product and adding the artful interpretations and additions relevant to the current situation.”

Beyond the traditional KM goal of re-using work product (in this instance, across firms), Hectus reports that searching other firms’ work is a competitive advantage. In one instance, his firm used it to gain insight into how opposing counsel approached various issues by reviewing multiple documents it had drafted. In another, his firm refuted opposing counsel’s claim that no lawyer in his firm had ever agreed to a particular provision by finding five examples of just such a provision.

Almost 3 years ago, I wrote about the potential of ”open source law.” Open source has tremendous traction in software and virtually none in law. I don’t hold out any immediate hope that this will change, but at least with access to other firm’s work, we are one step closer to the ideas behind open source.

Disclosure: I have a consulting relationship with Practice Technologies.

My prior post asked Do Lawyers Collaborate as Much as Others? Two data points suggest opposite answers. 

Lawyers may view skeptically the eWeek article I cited, Wikis Are Alive and Kicking in the Enterprise. If so, they need to ask if Allen & Overy is the exception that proves the rule? Case study: Wiki’s law in Managing Partner magazine (August 2006, UK, $) shows that Wikis have traction in at least one global law firm. The article discusses how Allen & Overy is using wikis; highlights of the A&O wiki roll out include:
- Studied a successful wiki roll out at another organization
- Used outside consultants to tune the deployment to A&O needs
- Focused initially on groups likely to use the tool
- Identified 3 types of uses: internal work communities, project teams, and general office
- Combined blog and wiki functionality in the same interface
- Used e-mail alerts from posts to generate initial interest
- Included tagging features (with social bookmarkgin) to make it easier to find content
- Achieved 500 members using wikis in several months
With support of senior partners, the firm moved quickly from 3 test groups to pilots in a few practices. One immediate impact was a drop in e-mail traffic.

Now for another data point. One frequent expert witness wrote in response to my collaboration post:

“Although, my view is limited to that of an expert witness, I can state without reservation that:
1. Basic collaboration tools are seldom used (IM, journaling, etc.).
2. Tendency to believe that consultation with others is redundant.
3. Evidence of “I am right and don’t tell me what you think.”
4. Tendency for division of labor rather than sharing.”

In management consulting (and in 10th grade geometry), I learned that any two points make a line. But here, I’m not sure I can connect the dots!

Do lawyers collaborate the same way and as much as other professionals? 

In thinking about this question, first consider 3 recent articles

• Smashing The Clock, the Business Week Dec 11th cover story, explains how Best Buy is moving away from a culture of office “face time” to work anywhere, anytime, as long as the job gets done.
• Designed For Success in the same BW issue presents awards to several buildings for design excellence; many awards cite new design elements that foster collaboration.
• Wikis Are Alive and Kicking in the Enterprise in eWeek (11/20/06) reports on the increasing traction of wikis in corporate America, especially at Motorola.

Now consider my January 2003 article, The Future Law Office: Going Virtual (Law Practice Management) which argued that firms should support lawyers working outside traditional downtown offices. Anecdotally, it seems law firms still expect lawyers to show up in the office if they are not on business travel. If that’s because collaboration is so important, why don’t we see more evidence of work place flexibility, radical office re-design, or adoption of new collaborative tools as suggested by the articles above?

Instead we have limited law office design change, as described in Office Spots to Meet and Mingle, Legal Times (12/4/06). My take on this article is that the law office design changes described are more about amenities, socializing, and looking cool than about fostering collaboration.

So, a question emerges: do lawyers collaborate less than other professionals? I’m not sure how to measure “amount of collaboration.” And maybe it is not so much about “amount” as “type.” Perhaps lawyers collaborate in ways that differ from other professionals. Legal work may more readily sub-divide into discrete tasks with fewer interactions required than in other businesses. Or perhaps the tasks are linearly sequential, meaning more “pass the baton” than real-time collaboration.

Am I wrong or is this just simply explained by the usual - law firms are slow to change? Let me know what you think - please comment or e-mail me: ron at prismlegal dot com or here.