Strategic Legal Technology

In this Roundup, an update on law firm outsourcing in the UK, law firms hiring MBAs as practice managements, and more on technology to recruit lawyers. 

Outsourcing
Outsourcing and Offshoring Gain Traction in U.K. Legal Market (American Lawyer, 9/07) reports that “[w]hen it comes to outsourcing, the U.K. legal community still lags far behind many multinational corporations and major U.S. firms – but U.K. firms are beginning to catch on.” It cites numerous outsourcing examples. I disagree with the assertion that “[n]o major U.K. firms have gone so far as to outsource legal work.” Perhaps American Lawyer does not consider Lovells a “major firm", but its so-called ”Mexican Wave” offers “ground- breaking, award-winning outsourcing service that provides the highest quality work at the lowest possible cost. Lovells carries out the higher grade work whilst managing the outsourcing of the more routine work to a select group of provincial law firms (LSP).” (emphasis added)

Practice Management: Hiring MBAs
Law firms tap business expertise (Baltimore Sun, 9/11/07) reports on a trend of law firms to hire MBAs to help manage practice groups. The article provides some examples and cites Susan Raridon Lambreth, a practice management expert at Hildebrandt International. This trend is consistent with the anecdotal information I have. It’s interesting to see mainstream media pick up on it.

Technology and Law Firm Recruiting
I’ve written that law firms should use technology for recruiting (Recruiting Lawyers in BigLaw: Where is the Technology? (9/07) and A New Weapon in the Talent Arms Race (3/07)), so I was interested to see two recent articles on this topic. Bob Ambrogi reports in Recruiting Sites That Draw Thumbs Down (Law Technology News, 9/1//07) on “some of the flubs, duds and missteps” of how BigLaw uses their web sites to recruit summer associates. Law Firms Go a Bit Hollywood to Recruit the YouTube Generation (New York Times, 9/28/07) reports that several large firms have “discovered that the law students they are trying to recruit as summer associates watch YouTube [and] parlay that discovery into a hiring tool, creating recruiting videos and Web sites with the look and feel of YouTube.” (Hey, is law firm business becoming sexy or what? Two MSM articles in a month!)

This is the first in an occasional series of “maxims” on managing legal technology. Each one is a bit edgy - you have to decide where the line is on just how true it is! 

Reverse the Persuasion Equation (also known as Don’t Push on Strings). Many CIOs, KM Directors, and others try persuading lawyers to adopt new technology, to do something different. Change directions. Supply standard productivity tools and make sure they work well. Then provide information on options for doing better to those willing to listen. In fact, make any lawyer who wants to go beyond the standard persuade you that it’s a good idea. That persuasion can be an e-mail with a couple of bullet points. Anyone who cannot take the time to do this in support of what is often an expensive change is unlikely actually to use or benefit from the new thing.

I have joined Integreon as Senior Vice President, Marketing and no longer offer consulting services. 

I have covered legal outsourcing for a long time. My fourth blog post in May 2003 was Central Back Offices and Outsourcing, the first entry in my outsourcing blog category. Plus I have written articles about outsourcing and, with Joy London, maintain a list of outsourced legal services.

So it may not be a surprise that I have joined Integreon, a leading provider of outsourced legal and knowledge services. Integreon offers e-discovery and offshore document review services (among others), two topics about which I have blogged frequently and consulted on as well. An Integreon press release provides more detail about my new role.

Though I’ve “changed hats” and no longer offer consulting services, I will still write this blog, covering the same topics, and maintain PrismLegal.com as an information resource. We all have our own perspective and “irons in the fire,” even journalists, much less most bloggers, who also have day jobs. But I intend to continue what I hope readers have found an informative, provocative, occasionally opinionated, and fair perspective in my posts.

The 2007 AmLaw Tech Survey is out. What does it tell us? 

Digital Dialogue (Law Firm Inc., 9/07) includes an article about the Am Law Tech 2007 Survey and related tables and articles.

Last year in a a post about the AmLaw Tech 2006 Survey I mused that the results could suggest undue emphasis on infrastructure. The results have a very different feel this year.

As the article title suggests, BigLaw has growing interest in collaboration technology. I share that view but I’m not sure how deep that interest is quite yet. Three specifics on collaboration struck me:

• A question on collaboration was answered by only 90 of 126 respondents. When 30% of respondents don’t answer a question, that speaks volumes about the non-responders.
• Of the 90 respondents, 3/4 use web conference software. That 1/3 do not shocks me. Granted I have a tech bent, but I’m so used to Webex, GoToMeeting, Live Meeting, and other brands of web conference that I can’t imagine how 20 large firms manage without it.
• Turning to newer ways to collaborate, blogs and wikis seem to be making good inroads: 30 firms have blogs and and 15 internal wikis. Of course, SharePoint, which seems to be more and more popular in large firms, makes blogs and wikis free.

The survey seems bigger this year than last so I won’t even try summarizing it. A few items I found of particular interest:

• Hummingbird’s (now OpenText) share dropped 7 percentage points, Interwoven’s climbed 6 points, and Starlaw clocked in at 2 points. For document management, these are sea changes given the pain in migrating brands. I was impressed with Starlaw at ILTA and am glad to see that they placed in the survey with what is either 2 or 3 customers.
• Market share of e-discovery (EDD) vendors also bounced around but I assign less significance to these movements given the transactional (i.e, case specific) rather than institutional (i.e., firm-wide) decisions typically involved. What strikes me is that 16 vendors are used by at least 15% of respondents. I’d say the market is still fragmented!
• Can we talk about e-billing? I’d think that with all the huffing and puffing by general counsels, e-billing software would be required widely. So I was surprised to see that 105 firms report that less than 25% of their clients require firms to bill electronically.
• Perhaps I’ve drunk my own Kool-Aid, but I expected to see more firms adopting what I have dubbed Enterprise Relationship Discovery software (see my May blog post Something for Nothing? Enterprise Relationship Discovery ). The article discusses some of the challenges with traditional CRM. I view “ERD” products as virtual magic marketing bullets. I was therefore surprised to see ContactNet with only 2% of 124 respondents and no mention of BranchIT.

I’ll have to re-read this rich survey to see if I can mine more tidbits. Please feel free to share your own take on surprises by leaving a comment or sending me email (info at prismlegal dot com).

In the last decade, many US and UK law firms have adopted an “operate globally” strategy, buying or building practices around the world. The rationale is to be where their global clients are. I think that in the future, successful global firms will need to do more than merely be where their clients are. 

They will also have to operate and manage more like their clients do. Law firm management has improved but still lags corporate management and operations significantly. Take for example how big companies work. How Teams Can Work Well Together From Far Apart (Wall Street Journal, 9/17/07, $) explains how “IBM uses high-tech tools to grapple with an increasingly common problem: making far-flung teams work well together.” I’ve read many similar articles recently about global teams and working virtually.

In the long term, successful global law firms will emulate not just the locations of their multinational clients, but also how they manage and operate.

Knowledge management in North America has long had a different flavor than KM in the United Kingdom. 

At the risk of oversimplifying, UK firms have focused on a relatively labor- and human-intensive KM, relying heavily on practice support lawyers (PSL). In contrast, the US firms have focused on relatively technology-intensive KM, relying far more on software than on humans.

The traditional role of the PSL, however, appears to be changing. One sign of the change is the upcoming September 20th conference in London, Capitalising on the client-focused professional support lawyer role by the Ark Group. I have co-chaired Ark KM conferences in the US, so know that Ark gives careful thought to constructing an agenda that reflects current issues.

I am intrigued to see that this conference “will review the drivers for the PSL role becoming increasingly client-focused and how professional support needs to be able to encompass elements of client service, marketing and business development in order to remain competitive with other firms.” Speakers are from leading firms, including Freshfields Bruckhaus Deringer, Allen & Overy LLP, DLA Piper UK LLP, Eversheds LLP, Herbert Smith LLP, Norton Rose, CMS Cameron McKenna LLP, Addleshaw Goddard LLP, Berwin Leighton Paisner LLP.

Enterprise search is a hot topic for large law firms. 

I recently cited John Alber’s excellent article on enterprise search. Another leading thinker about search is Oz Benamram, the mover behind Morrison & Foerster’s AnswerBase (AnswerBase article; AnswerBase demo).

In a message circulated to an ILTA listserv, Oz wrote about two additional search considerations (quoted with permission):

1) Search Engine vs. Enterprise Search:
John focused on the differences among search engines. Even even the most accurate search engine, however, is likely to yield too many results merely because most firms have so many responsive documents. What good enterprise search systems, such as Recommind’s, do to solve that problem, is to provide users with context to (i) further narrow down the results list and (ii) determine the value of each result.

For example, after searching for a “motion to dismiss” you may want to narrow down the results by jurisdiction, court, or judge, and select only those that won. You may want to focus on motions written by a specific individual or by the author’s practice group, or that were used when Bryan Cave was on the other side.

Only an enterprise search system (as opposed to merely a search engine) can connect all the parts of the information within the organization to provide you with the context you need. That’s what makes information actionable.

2) The Relevancy of Relevancy:
It is worth noting that relevancy is subjective. It depends on the user who runs the search, and the task at hand. For a litigation partner in the New York office, a document written by a colleague in New York is likely to be more relevant than a similar document written by a tax paralegal in Tokyo. Similarly, the documents most relevant to a lawyer writing an appeal will likely not be the same as those most relevant to a lawyer writing a merger agreement.

Few search vendors are addressing these aspects.

To accomplish what Oz refers to in point 1, the search tool requires “entity extraction,” that is code that allows it to determine names, courts, jurisdictions, dates, parties, and other relevant information from within a document and then present those choices as “search facets.” A facet let’s you select a particular attribute, for example, jurisdictions or deal types. For point 2, the search technology needs to give extra weight in relevancy ranking to the user’s own works and perhaps, the user’s own searches, or other indicia of the user’s interest.

Search has come a long way from “inverted indexes,” Boolean expressions, and proximity!

The College of Law Practice Management annual meeting took place on Saturday, September 8th. We spent the morning examining the future of law practice management. 

Our wide ranging discussion is hard to summarize in a few words. For each of the several broad topics we covered, I offer below a few of the observations and comments that struck me as most interesting.

Law Firm Marketing

• A leading marketing expert believes that law firms have, by and large, blown branding.
• The huge success of leading law firms inhibits marketing. Hungry firms will innovate. Except for lock step Magic Circle
• Marketing is about content and blogs are best way to get content out on the web. [ok, said and reported by a blogger.]
• Alternative billing is the future - it has been for a long time and will be in the future

Talent

• A leading legal supplier has conducted a major survey of associates in US law firms. It covers thousands of lawyers across firms of all sizes. Bottom line: lawyers are much more satisfied with their work and life than much of the press we have read would have us believe.
• New lawyers are willing to work hard but want to work smart. They find big firms don’t work smart
• A large firm is using contract lawyers extensively, not so much for low level work but more to allow flexibility for lawyers. One partner moved to contract lawyer status for more flexibility.

Management

• Promise steady compensation for partners who are retiring. Make the condition not maintaining billable hours; rather focus on a clean transition of both know-how and clients to the firm.
• Firms don’t pay for the right kind of management, especially at the practice group level.
• Lawyers need to learn how to be followers to help leaders succeed

Technology

• Technology allows workers to do the wrong thing faster and cheaper and can reinforce elaborate bad ideas

• Everyone can be a producer as well as consumer (aka Web 2.0)
• The problem today is not making a computer do what lawyers do but that lawyers now do what computers can easily do
• Technology has a dark side; it can create social isolation

In this Roundup, a report on an excellent article by John Alber on Enterprise Search, a blog post by Sun GC Mike Dillon on managing outside counsel, and a McKinsey report on web collaboration. 

Search as a Law Firm Enterprise Foundation
John Alber has an excellent article, Search at the Foundation of the Enterprise (LLRX, 8/27/07). John has previously written about business intelligence (quite a few of my BI posts cite him.) He now applies his considerable knowledge and experience to a topic every large law firm should understand.

Sun General Counsel on Aligning Law Firms with Clients
Sun GC Mike Dillon recently blogged about ways that Sun is managing legal spend, including:

• A preferred partner program (aka convergence)
• “Dyanmic bidding” for commodity aspects of legal work. Sun invited bids from around the world to review and summarize agreements. I wonder if they invited offshore legal outsourcing companies to bid
• A Global Legal Services team “focused on efficiently handling the less complex, but higher volume agreements and services we provide”

Blogs and Wikis
Mckinsey articles How companies can make the most of user-generated content (namely blogs and wikis) and How businesses are using Web 2.0: A McKinsey Global Survey help explain and further validate (as if that is really necessary) the use of these important collaborative technologies.

InsideCounsel magazine (9/07) reports on its annual 10 most innovative law departments.  

Once again, technology played a big or supporting role at several winners. Highlights from 2007’s Most Innovative Legal Departments (PDF) include:

• To address a shortage of IP lawyers, IBM’s law department turned to retired IBM lawyers, who “work from their homes and on their own schedules,” supported by an intranet. [This is consistent with my frequent suggestion that law firms facilitate working virtually. See also At I.B.M., a Vacation Anytime, or Maybe None (NY Times, 8/31/07), which notes that “40 percent of I.B.M.’s employees have no dedicated offices, working instead at home, at a client’s site, or at one of the company’s hundreds of ‘mobility centers’ around the world, where workers drop in to use phones, Internet connections and other resources."]
• Verizon has developed “a comprehensive e-discovery manual that [guides] lawyers through the process from start to finish.” Coupled with training, the company expects a good ROI.
• Microsoft applied its software know-how to create a patent classification program that saves its IP lawyers much time.
• American Express created a tool to evaluate the impact of law firm rate increases on its law department budget. Amex has “has applied for a patent with hopes of licensing the tool to an e-billing vendor.”
• Travelocity.com used an existing content management system to create a prior art database to aid in defending patent suits.

Prior related posts: Innovative Law Departments - 2006, Innovative Law Departments [2005]