Strategic Legal Technology

To intermediate or dis-intermediate, that is the question. The web has upended the traditional publishing model where editors select and filter content. BlawgWorld 2007, released today, is an example of “re-intermediation." 

Pre-web, we had little choice but to rely on reporters, editors, and publishers to deliver news and information. My presentation Legal Publishers in 2007 and Beyond points out the web can make anyone a news source, an editor, or publisher. No longer must we rely on intermediaries for news.

Dis-intermediation has pros and cons. Information is plentiful but finding and evaluating sources is hard. I still read newspapers and magazines because I value the intermediation; I want trustworthy reporters and editors to exercise their judgment in selecting and covering stories.

Blogs are a great source of information. The number of legal blogs - blawgs - is astounding. But how do you select which to read? Directories such as Blawg, Justia BlawgSearch, Blawg Republic, or law.com’s Quest directory provide extensive listings but limited editorial guidance.

BlawgWorld 2007 (10 meg PDF) is an example of re-intermediation. It “features a remarkable collection of essays from the legal blogosphere.” The editors (at TechnoLawyer) have published highlights from from 77 useful blawgs, offering one easy way to find and evaluate them. (Note: See the PDF press release for more info. Disclaimer: I am not dis-interested since this blog is one of the 77.)

The 1st edition of BlawgWorld in 2005 was downloaded 45,000 times. This volume suggests demand for re-intermediation, for editorial guidance in navigating the blawgosphere. It will be interesting to see how BlawgWorld evolves and whether we will see more re-intermediation in legal publishing.

BlawgWorld also contains a vendor-sponsored problem and solution guide for common legal technology questions. [Will that dis-intermediate legal technology consultants?] The PDF format is well-done, with all content no more than 3 clicks away.

Knowledge management may be all about “not re-inventing the wheel.” Just how far can lawyers go in re-using know-how? Can we define “best practices?" 

The consensus answer is “no.” I recently wrote KM Best Practices (llrx.com, May 29, 2007). This short piece reports on discussion highlights of a panel on KM best practices that I moderated at a February meeting of large law firm KM professionals. In brief

The bottom line is that most large law firms have, at best, only a few ‘best practices’ …. KM professionals should not bother with best practices absent special circumstances… Instead, consider the metaphor the audience evolved: The world is a dark and dangerous place; swamps are everywhere and dry land precious. KM professionals merely help keep the lawyers on dry land by providing some guideposts.

Contrast this with medicine, particularly the warranty surgeons offer for heart bypass surgery, as described in In Bid for Better Care, Surgery With a Warranty (New York Times, May 17, 2007). Offering a 90-day warranty on this surgery required defining and following best practices for about 40 steps. I think everyone acknowledges the complexity of bypass surgery. If surgeons can establish best practices for this, it’s still not obvious to me why lawyers can’t define at least some best practices.

The Knowledge Management Peer Group of the International Legal Technology Association hosts educational sessions at the annual ILTA meeting on August 20, 2007 in Orlando. The entire ILTA conference runs from August 20-23. 

The annual ILTA conference is arguably THE annual legal technology conference. Both the educational sessions and networking opportunities are excellent (ILTA registration info here). Among the extensive set of sessions (see the 50-page PDF agenda) are four KM sessions on Day One (I am moderating the fourth one).

The Alignment of Information Management, Knowledge Management and Records Management. A panel discussion on where these management disciplines converge: how firms deal with the convergence; the issues and goals; who is looking after the collection of electronic records; and the risk management issues.
Speakers: John Szekeres of Cleary Gottlieb; Peter Krakaur of Orrick, Herrington & Sutcliffe LLP; Mara Nickerson of Osler, Hoskin & Harcourt LLP; and Sally Gonzalez of Navigant Consulting.

Stories from Client-Facing KM Implementers. Panelists from several large law firms discuss their experiences of implementing client-facing KM solutions. Each showcases examples that worked and didn’t work as expected. They also discuss the effort involved and the perceived value to their management/firm.
Speakers: Clint Moore of Littler Mendelsohn; Catherine Monte of Fox Rothschild LLP; Chad Ergun of White & Case LLP; and Fiona Gifford of Freshfields Bruckhaus Deringer.

How Wikis, Blogs and Discussion Forums Relate to Knowledge Management in the Legal Field. A panel discussion on a selection of Web 2.0 tools and how they can be used in a knowledge management capacity. The panel includes two well-known attorney-blogger-technologists and a knowledge manager from an AmLaw 100 firm.
Speakers: Kevin O’Keefe of LexBlog; Dennis Kennedy of DennisKennedy.com, LLC; Lisa Kellar of Hunton & Williams; and Gloria Fox of Blank Rome LLP.

Developing the Right IT and KM Governance Structure for Your Firm. What’s the best way to govern IT and KM? This panel offers tips on building productive alliances between IT and KM, specifically covering three KM/IT governance approaches: separate departments with informal alliances; together under the IT umbrella; and separate departments with a formal joint governance structure for technology requirements.
Speakers: David Hambourger of Seyfarth Shaw LLP; Deborah Panella of Cravath, Swaine & Moore LLP; Janis Croft of Nixon Peabody; and Ron Friedmann of Prism Legal Consulting, Inc.

E-discovery (EDD) press coverage suggests problems galore. Have we lost sight of the real purpose of discovery in litigation? 

E-discovery means more than producing relevant, non-privileged documents. It means winning by telling the best story possible. So much of recent EDD discussion revolves around doing it right and avoiding disaster. Reported judicial opinions self-select for problems because absent a problem, no opinion issues. There’s no equivalent judicial mechanism to learn about winning discovery strategies. Nor is there any other apparent mechanism: clients and vendors seldom share details of their victories.

I would like more press and conference coverage on how to use the available tools to achieve outstanding results. Stories along the lines of “I used the text of the ideal incriminating e-mail as my search and that led me to a treasure trove of documents that helped win my case. Or “Mapping documents, e-mail, and calendar entries on a date line proved a perfectly innocent explanation for events that plaintiffs alleged constituted intent to defraud.” EDD defeats are well-documented; it’s time to start telling victory stories.

In this roundup: buzz about lawyer ratings, a note on the Indian legal market, and technology as law firm competitive advantage. 

Lawyer Ratings
The blawgosphere buzzed with news of Avvo, a lawyer rating service for consumers. (My own rating does not indicate my inactive/retired status and misses my Massachusetts registration.) Meanwhile, LexisNexis offers Peer Review Ratings on Martindale. I wonder how many GCs are using these. From what I can see, use of technology does not directly enter the rating process. See the “Top 10 Firms - Peer Review Rated - Overall”

Legal Offshoring Writ Large: The Indian Legal Market
I write regularly about legal process outsourcing and offshoring, especially LPOs in India. I have not previously covered the Indian legal market itself, which is highly regulated. For a good overview and analysis of the current regulatory situation, see Mark Ross’ blog post, Liberalization of India’s legal services market and the impact on the Legal Process Outsourcing Industry. Ross is a British lawyer who now works in the US for LPO Lawscribe.

Technology as Competitive Advantage for Law Frims
Mark of Success in the Feb 2007 issue of Corporate Counsel reports that Unilever has outsourced management of its huge trademark portfolio to Baker & McKenzie. Unilever sent RFPs to 30 firms; 27 replied. The database technology Baker offered was a key factor in the firm winning the business. Unilever cut its trademark staff from 54 to 28.

Six weeks ago I gushed about the personal productivity benefits of Sunrocket VOIP. This week, Sunrocket, suddenly and unexpectedly ceased operations, leaving me without a business “land line” though for now the forward to my cell phone works at least intermittently. 

I called the FCC to ask about phone number portability. I was reminded that the FCC does not have regulatory authority over VOIP but they are investigating if they can do anything. So my business number of 10 years may be history. Any change in technology takes time - evaluating, installing, and learning. The switch to Sunrocket was a good decision with a bad outcome. Now I’m back to evaluating, ordering, etc.

Comcast digital looks ok but costs more than Sunrocket and lacks several features that I liked and used. Skype is intriguing and, with a Netgear box, allows calls even if my PC is off. Unfortunately, with Skype, I would not be able to use my analog phone with its high-quality cordless headset. The ATT CallVantage web site does not explain if there is a web interface; when I called, I could not get a live rep. Verizon’s VOIP looks reasonable, costs less than Comcast, and the web site has more info than ATT’s. Anyone with experience and opinions on solutions can e-mail me at ron at prismlegal dot com.

Update 7/19/07: I found a press release saying Packet8 has an agreement with Sunrocket to port numbers and provide discounts. I couldn’t figure out if it was exclusive, but rather than wait and risk losing my number, I signed up. Pricing and features seem about the same as SunRocket. During the sign-up, the agent took my info for number porting. But I called back today, at agent’s suggestion “to accelerate to number transfer,” and found out the porting order had not been placed. I was able to do that on the web. When technology (or providers fail) it really kills productivity.!

It’s hard to keep up with all the developments in e-discovery. Some news and articles of recent note: firms let go of EDD expertise, Autonomy and Zantaz merge, and Information Week provides guidance for corporate IT departments on EDD and the amended FRCP. 

The Lost Treasure of EDD by Alan Cohen in Law Firm Inc. (June 2007) is an exploration of why “many big firms missed electronic data discovery opportunities because of a fixation on billable hours.” Cohen notes that while law firms do plenty of EDD work, they are focused only on a single piece of the pie. Their limited view of EDD has led to the formation of at least one law firm specialized on EDD (Redgrave Daley Ragan & Wagner) and the departure of other experienced litigators from BigLaw to consulting companies. Cohen laments the departure of EDD experts from law firms, concluding that they have lost a valuable substantive and competitive asset. This sounds historically true, but contrast this to my conclusion in June about “E-Discovery (EDD) Attorneys:” “I suspect more [firms] will hire “e-discovery attorneys” or start e-discovery practices.”

Merger news: Autonomy to acquire Zantaz. “The combination of Autonomy and ZANTAZ, market leaders in enterprise search and content archival, will redefine Information Risk Management by automating the full spectrum of consolidated archiving, e-discovery, analytics and real-time policy management which is fully integrated with day-to-day operational information systems.” Looks like more evidence of convergence of information management with EDD. [Spotted at the Orange Rag, blog of the Legal Technology Insider.]

E-Discovery: New Federal Rules Require A Proactive Strategy (Information Week, July 2/9, 2007) is a good overview of the issues facing and available solutions for corporate IT departments in dealing with e-discovery and the FRCP.

Two recent surveys and two recent LPO announcements illustrate that t he legal process outsourcing (LPO) market remains hot. Continued LPO growth has implications for CIOs and IT Directors. 

IT is no stranger to outsourcing. ILTA surveys show that many firms, large and small, outsource aspects of IT. Soon, the rest of the firm may get on the bandwagon. Back office functions such as word processing and finance and accounting can be outsourced. And so can some legal work, particularly document review in litigation. As firms evaluate options, CIOs and IT Directors will, at minimum, likely play a role in vetting and supporting the technology used to support outsourcing initiatives. Forward-thinking CIOs may well play a bigger role in re-engineering firm business processes to attain the maximum benefit of outsourcing. Now, the recent news….

The Brown-Wilson 2007 survey (see the Black Book of Outsourcing) was released recently. Top rated legal process outsourcing (LPO) vendors include Integreon, Pangea3, Merrill Corporation, QuisLex, Law-Scribe, and Mindcrest. See an Integreon press release for the lists.

Market researcher ValueNotes released its July 2007 Offshoring Legal Services to India - An Update. “Based on our exhaustive primary research and analysis of this sector, ValueNotes has identified a ‘List of frontrunners’ which includes Evalueserve, Integreon, OfficeTiger, CPA Global, Mindcrest, Pangea3 and Quislex. We have also identified ‘Emerging players’ that have potential to emerge as winners within their chosen niches. These include players like LawScribe, New Galexy, SDD Global Solutions, Tusker Group, Aptara, Lason and Quattro BPO.” The Indian LPO market has 100+ vendors that employ 7,500 people.

Pangea3, a leading LPO, announced (press release, 7/10/07) ” it has closed $7 million in Series C funding, funded by Sequoia Capital India.” The company will open in September a new 250-seat facility that will “contain segregated and dedicated document review facilities”

Pangea3 is not the only LPO expanding. An April 20th article in Pune Newsline, Boost in legal process outsourcing reports that Mindcrest opened a new 400-seat facility.

General counsel grumbling about outside counsel bills and services is mild compared to the real pressures doctors face: insurers, employers, and malpractice risks. These pressures cause medical practice to change far faster than law practice. The Wall Street Journal today reports on a healthcare innovation that could inspire forward thinking law firms. 

To Reduce Risks, Hospitals Enlist ‘Proceduralists’ (6/1/07, $) reports that hospitals are “creating special procedure services and new procedure-training programs” motivated by “growing concern about patient safety and the risk of malpractice claims from botched procedures.” One hospital reports lowering the “complication rate for medical procedures to less than 1%, compared with a national average of 2% to 5%.”

As firms grow bigger, shouldn’t they have specialists for certain common legal “procedures?” I’m not sure that they do. Arguably, knowledge management, with its increasing focus on experience location, tries to fill this apparent gap in well-defined procedures. One example of a lawyer proceduralist is the “e-discovery attorney”. One can imagine others: litigation risk assessment, due diligence manager, damages evaluation, contract drafting experts, and alternative fee assessment specialists. I am convinced that defining processes and executing them consistently could help control legal costs and reduce risk.

For many in the legal market, change is an anathema. But not all, as two sets of awards demonstrate. 

The College of Law Practice Management announced today four winners of its InnovAction award. TalentNet by Mallesons, which I called a new “‘weapon’ in the war for talent” in my post yesterday, is the only tech-based winner. The other winners: DLA Piper’s New Perimeter, a pro bono initiative; Holland & Hart’s Foundation, which builds “relationships between attorneys and staff, and between offices and practices within the firm” through community work; and Raskin Peter Rubin & Simon LLP’s Association of Media and Entertainment “to support the career development of in-house counsel in the entertainment industry. ” [I am a Trustee of the College.]

Separately, the Financial Times (London) announced its Innovative Lawyers. Blogger Adam Smith, Esq. has a good write up in his post The FT’s Second Annual “Innovative Law Firms” Awards.

The FT Private practice: Information technology category article notes that “[o]n the whole, law firms are not noted for technological innovation and this year’s entries were, for the most part, sound implementations of the tried and tested.” That said, FT IT winners (PDF) include Wragge & C0 for sharing IT best practices with clients, Linklaters for automated term sheet generation, and Clifford Chance for “20,000 users in more than 270 organisations [who] use the CC suite of online training and knowledge products in 50 countries and eight languages.”

Technology innovation is alive and well in large law firms. 

Later this week, The College of Law Practice Management will announce the winner(s) of its InnovAction award. Leading up to this, the College has been blogging each application entry. [I am a Trustee of the College but not involved in the InnovAction judging.]

Several entries posted so far are based on technology:

• Foley & Lardner’s 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.”
• Holland & Hart’s internet-based compliance management system helps its “clients increase the return on training investment, improve employee knowledge and understanding of policies and regulations applicable to their businesses, and automate retention of training records.”
• Reed Smith’s IP Management Mapping Program “provides a web-enabled “snapshot” of an IP portfolio in real time in presentation-ready format. With it, our Firm’s clients have immediate access to the most up-to-date data, displayed in either map or chart form.”
• Morrison & Foerster’s AnswerBase is “a unified knowledge management system that allows users to search across the enterprise with a single, simple search boxes, provides each user with a contextual understanding of search results by displaying the relationships between relevant data, enforces the firm’s security policies, and respects users’ privacy concerns.”
• Mallesons Stephen Jacques’ TalentNet “a web based solution for recruitment management… has vastly improved the firm’s recruitment outcome while reducing costs… [it] manages all internal and external processes in the recruitment lifecycle, from the requisition through to the final appointment. TalentNet has removed most of the administrative overhead in the recruitment process.”

The mix of innovations is interesting. Three are client-facing and one is internal (AnswerBase). Perhaps most unusual is TalentNet since it targets the recruiting market. In my March 2006 post, A New Weapon in the Talent Arms Race, I noted that big firm salaries tend to be the same, so firms need to find other recruiting differentiators. I wrote about blogging; Mallesons illustrate another “weapon” in the war for talent.

A new product illustrates one way to automate legal advice. 

DECISIONmaker Software, LLC recently released artificial intelligence software to guide HR professionals in complying with the Family Medical Leave and Americans with Disabilities Acts. The company and its founder, Alan Rolnick, an experienced labor lawyer, teamed with Proskauer to develop and vet the legal content. (Metropolitan Corporate Counsel reports on this in A Revolutionary New Software Product Benefits Employment Law Practitioners And Their Clients; see also the Proskauer Labor & Employment practice page).

In the late 1990s, I worked for Jnana Techologies, an expert system (AI) platform developer, where I helped law firms and law departments create interactive advisors conceptually like this one. (See my articles on virtual legal advisers.)

Building an interactive advisory systems is not trivial but the real challenge is the business model. Lawyers have little incentive to invest non-billable hours “porting” their know-how into software. So I am glad to see an experienced lawyer with the vision and drive to create an advisory product to serve a giant horizontal legal market.

I spoke to Mr. Rolnick, whose view is that use of this tool will be good for law firm business. For clients, the product will reduce risk and resolve some issues (though the software specifically states that neither DecisonMaker nor Proskauer are rendering legal advice). The software will also, however, identify more situations where traditional legal advice is required. So this product will benefit clients and potentially increase law firm work. Plus, it frees lawyers to work on higher value matters. His view is consistent with the arguments in my articles.

I have long been surprised that legal publishers have not pursued the interactive advisory market. More so than law firms, they have the capital and editorial resources to build product (though may lack the deep practice experience). Perhaps DecisionMaker is a harbinger of other sophisticated advisory products built by entrepreneurial lawyers. More such efforts could chip away at both publishers (and law firms) as I suggest in my presentation, Legal Publishers in 2007 and Beyond.

Of course, a possible seminal change in law firm structure - going public - could change this analysis. Capital Market Access? Be Careful What You Wish For, a recent blog post by Adam Smith, Esq., discusses the business challenges law firms might face were they to raise capital in the market. Perhaps a firm forward thinking enough to go public would also see the wisdom in investing to create a series of interactive advisers. To be sure, the lawyers would lose billable time in the short term doing so. But the long term value creation could be recognized in a higher market value.