Strategic Legal Technology

Are there limits on telecommuting and working virtually? 

Of course there are. Almost four years ago in The Future Law Office: Going Virtual, I advocated that large law firms take steps to allow lawyers to work some days at home or in satellite offices.

Some Companies Rethink The Telecommuting Trend in the Wall Street Journal today reports that some organizations - AT&T, Intel, Hewlett-Packard and the federal government - that pioneered telecommuting are scaling back on remote workers, citing factors such as office consolidations, security concerns, and fostering team work. Yet the IDC reports “corporate employees working full time from home are still rising, gaining 30% since 2005 to 2.44 million in 2007.”

It’s a mistake to use this article as an excuse to avoid considering working virtually. Law firms should, especially in light of both the war for talent and concern about costs, do what I suggest in my article: consciously and empirically think about optimizing work arrangements. One idea I had was scheduling meetings on specific days to foster collaboration but allow lawyers to work remotely other days. I never suggested “total telecommuting” for lawyers.

Legal outsourcing continues to be in the news. And the list of providers continues to grow. 

Joy London of excited utterances and I started tracking legal process outsourcing providers almost three years ago. We have just updated our list of Outsourced Legal Services.

Three years ago, we had under a couple of dozen entries. With this update, the number of vendors is up to 111 from 100. Other updates include:
- Moving a few vendors to “no longer offering", two because they were acquired and one because it appears inactive.
- Additions to the list of companies publicly identifying as offshoring legal work.

The growth in our list, along with the number of articles and new conferences about outsourcing, suggest that the topic remains hot.

If you innovate, earn recognition. 

The College of Law Practice Management (I am a trustee) sponsors the InnovAction Award. InnovAction honors innovation in law practice management. Law firms, law departments, and other legal service providers (but not vendors) can apply. Innovation can range from creative office design, to technology, to a marketing campaign.

Take a moment to review the InnovAction web site and consider submitting an application. For more information:

• COLPM blog post about the award.
• Prior InnovAction winners.
• About the College.
• Download the PDF InnovAction Entry form.

A new survey shows the direction legal outsourcing is heading - up. 

Jack Diggle is a principal consultant at princeOMC, which is a consultancy that provides clients with “the resources to build the right sourcing solutions…. services include … strategy formulation, service provider selection and operating model design, and governance and service management.” In the Shape of Things to Come in Legal Business (Feb 2008), Diggle presents the results of a survey (conducted with Legal Business) of over 100 senior US and UK large law firm managers. Key findings include:

• 20% of overall law firm workforce (27% practice support; 15% legal work) will be offshored by 2015.
• Legal outsourcing will shift from onshore to offshore, driven by cost savings and talent availability.
• The move offshore, however, can be complex, with law firms concerned about data protection, vendor reliability, and loss of control
• Over 50% of respondents believe that commoditized legal work will be offshored within 5 years. Moreover, about 25% believe even “specialist legal work” will “move outside the firm” in this time period. Already, 10% and 5% of respondents respectively have offshored commoditized and specialist work.
• Over 20% of respondents have already outsourced lawyer support such as word processing or research.

The complete survey is available for purchase at Legal Industry Outsourcing Trends 2008.

Yesterday I asked if blogging is dead. That post generated 3 comments and some private e-mail; here then is a follow-up. 

My post yesterday pointed out that Law Practice Management magazine’s issue on marketing technology did not discuss blogging. Dave Bilinsky, Editor-in-Chief, Law Practice Magazine left a comment which I reproduce here:

Bob Seger put it well in his song “Against the Wind” where he said:

“Deadlines and commitments
What to leave in, what to leave out..”

As the Editor-in-Chief of Law Practice Magazine, we run into the problem of what to include - and what not to - in each issue - and a decision to cover one topic necessarily limits the time and space that we can devote to another. It isn’t an easy choice. In the January/February 2008 issue, we decided to cover marketing technology trends, with a particular emphasis on the technologies that are not yet in common use such as CRM systems, Webcasts and online social networking. Blogging, however, is in our opinion, relatively well-adopted by lawyers - just look at the list of Other Blogs of Interest that you have listed on this blog! Social networking as a marketing tool is still in its infancy. CRM systems are not yet well adopted and have some significant hurdles to overcome before they are widespread in law offices. In our opinion, Webcasts are today what blogging was a few years ago.

We are trying to identify trends that are still young. I started my own blog (www.thoughtfullaw.com) within the last year and felt I was a relatively late adopter at that time!

So we do appreciate the feedback…and the blogging interest .. in the magazine. In this issue, blogging was something that hit the cutting room floor. That was an editorial decision and I stand by it. I hope we didn’t alienate anyone as a result. We do ask that you support us in keeping us *(and our readers)* in the loop by continuing to provide us with new trends, ideas and commentary.

Bloggers Jared Goralnick and Doug Cornelius also commented yesterday, sharing my view that law firms do need reminding about the benefits of blogging.

JK at Fluent Simplicity picked up on my post. He agrees blogging is not dead and rightfully credits Mr. Bilinsky for joining the debate, writing:

The ability to provide an intelligent response while maintaining transparency is to be commended. Agencies take note (one development shop in particular): if someone calls you on something, respond and join in on the conversation!

While Law Practice Management magazine may hold a differing opinion on blogs, the Editor certainly understands social computing.

For those who would like to learn more about blogging for lawyers, see also Cornelius’ Blogging Lessons Learned from a Curmudgeon Turned Blawger Feb 20th post and an Feb 19th interview by LexBlog of Cornelius on why blogg.

The current issue (Jan/Feb 2008) of Law Practice Management magazine focuses on Marketing Technology Trends. Blogging is barely mentioned. 

The half-dozen or so articles on marketing technology cover a range of internal tools (e.g, CRM or proposal generators) and external ones (e.g., webinars and social networking). Granted, blogging is not for every lawyer or law firm, but I find its virtual absence from this issue a surprise. Several large law firms see the benefit in firm-branded blogs and many lawyers at firms large and small have their own blogs covering a vast array of substantive law.

I presented at the 2007 ALA annual meeting a on the benefits (and potential pitfalls) of blogging for law firms. I am giving an updated version of Blogging: Why All the Fuss?” to the NYC chapter of ALA on March 12th.

Sometimes little details make a big difference in how law firms use technology for marketing. 

I needed a lawyer with specific expertise in a particular office of a multi-national law firm. The expertise is easily described by a unique search term, so I used the search feature to look for lawyers. I searched two AmLaw 100 web sites. One returned a neatly organized table of lawyers indicating their position, office, and practice. The other returned a list where each lawyer entry was four lines: two slightly different URLs, both with the lawyer’s name embedded in the URL; a line with the lawyer’s name; and a time stamp of unknown meaning.

Intrigued by the stark difference in search result displays, I searched on the issue in question and again, one set of results was neat and useful, the other not. With the ever-growing reliance on search to find information, I am surprised a large firm has not worked harder to present search results cleanly.

Last week I attended a KM function. (Doug Cornelius provides additional reports at KM Space.) At the end, we went round the room and large law firm participantss shared their top KM priorities for 2008. 

This was, by design, a fast exercise - “state your priority in under 15 seconds.” Below is the list, in random order based on seating. This gathering self-selected for firms committed to KM. For such firms, I think it’s a pretty good picture of current KM priorities:

1. Incorporating e-mail into KM
2. E-mail categorization and auto filing
3. Revise Intranet, e-mail filing, enterprise search
4. SharePoint workflow matter intake
5. Contextual push of info out to lawyers
6. Intranet revamp
7. Finish search engine roll out , document assembly
8. Align competitive intelligence function and KM
9. Automatically extract meta data
10. Wikify the firm
11. SharePoint overhaul
12. Blogs and wikis
13. New document management implementation
14. Matter profiling
15. Finish portal and search
16. Enterprise portal and search
17. 4th generation of business intelligence (BI) and grow BI team
18. Educate execs on KM and KM plans
19. Full time coordinator for KM
20. Enhance globalization of knowledge resources
21. Portal and search and auto categorization
22. Enterprise search
23. Training and outreach
24. Release KM client program
25. Upgrade portal
26. Training and communication
27. Better matter profile and better search
28. SharePoint 2007
29. Reconstruct matter centric DMS
30. Update precedent collection
31. Regain ground lost in a merger by rolling out firm-wide intranet and wiki
32. Complete matter intake automation - unify categorization
33. Improve info architecture

In this roundup: money as wiki motivator, Thomson into EDD biz, LexisNexis acquires another software company, and first Canadian-based legal outsourcer. 

Wikis and Motivating Lawyers with Money
Jordan Furlong has a great blog post, Money talks, about a law firm that used cash prizes to motivate lawyers and staff a non-Amlaw-200 firm to participate in a wiki. I suspect many a large law KM manager would love to have a sufficient budget to motivate lawyers. It might not take as much as you think. I’ve been surprised what highly compensated lawyers will do for a Starbucks card, dinner gift certificate, or even free lunch.

Thomson Forms Litigation Consulting Unit
Thomson, owner of West, formed an e-discovery consulting business in 2007. Thomson Litigation Consulting will, according to a 4 Feb 2008 press release, add a variety of new capabilities, including technology from Inference Data and Clearwell. “Thomson Litigation Consulting has also integrated the esteemed litigation consulting team from Baker Robbins & Company.”
LexisNexis has already made several EDD acquisitions. It will be interesting to see if West too bulks up.

LexisNexis Continues its Acquisitive Streak
On 5 Feb 2008: LexisNexis acquired Axxia, “a leading provider of back-office and integrated solutions in the mid-law segment in the UK…. The Axxia acquisition is a further step towards LexisNexis’ goal to be a comprehensive solutions business by combining local and global strategic acquisitions with existing content products.”

Legal Services Outsourcing in Canada
Legalwise is a new legal process outsourcing (LPO) company in Canada. Press release on 13 Feb 2008: “Legalwise Outsourcing Inc. today introduced offshore legal outsourcing services to the Canadian market” and indicates it is the first Canadian firm to do so. Joy London and I maintain an LPO list and have not previously come across this (we will add it in the next update). [Note, however, that a a company press release suggests it has been offering services since at least May 2007.]

More consolidation in e-discovery. 

“FTI Consulting, Inc. (NYSE:FCN), the global business advisory firm dedicated to helping organizations protect and enhance their enterprise value, today announced the acquisition of Strategic Discovery, Inc. (“SDI”), a premier firm known for its market and thought leadership as well as its steadfast commitment to advancing rational and cost effective responses for corporate clients facing Electronically Stored Information (ESI) demands.” 12 Feb 2008 press release.

I’ve known SDI founder and president Adam Bendell for many years. He is one of the best and brightest in this field. Early in my prior Prism Legal Consulting practice, I was fortunate to be able to work closely with Adam and his team. FTI is very fortunate to have SDI’s outstanding team and I wish SDI the best in its new home.

In my last post I wrote about large law firm Howrey opening its own document review facility in India. Is it a good idea for law firms to own and operate their own offshore center? 

Because I now work for a legal process outsourcer (LPO), I was reluctant to question Howrey’s wisdom in building an owned and operated ("captive") offshore processing center. An article today relieves me of that reluctance. Rethinking the India Back Office in the Wall Street Journal (11 Feb 2008) explains that captives are often more expensive than companies expect. Consequently, “Some of the largest outsourcing units are still those belonging to Western companies, including Wall Street’s biggest banks… could soon be looking to get out of part or all of the business by selling either to Indian companies that specialize in outsourcing services, to private-equity firms or through initial public offerings.”

Dollar depreciation and Indian wage inflation have taken a toll but India still offers a significant cost savings. The bigger problem is that operating a captive is expensive and hard. A recent McKinsey / Nasscom study found that captives are “less efficient than companies run by outsourcing firms that specialize in the business. ” The article continues to observe that “Once the initial benefit was felt, companies found it hard to keep on top of their costs. Salaries and the cost of office space jumped. Staff turnover has been high, and companies are having to spend on headhunting fees and training.”

My 20 Sept 2008 post, What Direction Legal Outsourcing?, also cites an article analyzing the trend of companies that built their own offshore centers to sell them.

So, to answer my own question… I think Howrey has great vision in opening an office in India and offering its clients the option of low cost, high quality services from India. But if the history of captives is a guide, Howrey’s Pune office may someday be owned and run by a third party, even if it is for the exclusive use of Howrey.

“It’s not outsourcing” says Robert Ruyak, Howrey managing partner, of the firm’s new office in Pune, India. 

So reports “Howrey Vindaloo” (American Laywer, Feb 2008). Howrey, which has long operated a document review facility 15 minutes from downtown DC, has opened an office in Pune to handle client work.

Ruyak says clients don’t want to outsource. Howrey, like any other large firm, would have little business if that were true. BigLaw primarily serves as an outsourced service for corporate law departments.

He also says the Pune office is “just like if you had people working at home or in another location.” That seems right to me though I would take that thought further. I previously suggested that outsourcing and offshoring are extensions of a long tradition of lawyers delegating work. Ownership of the resources and infrastructure seems less important than the degree of control and supervision. One can imagine situations where resources are owned and operated but totally out of control and vice versa, outsourcing with very tight controls and QC.

With Seyfarth Shaw using an offshore legal process outsourcer, with Howrey opening its own offshore office, and with Lovells going public on its offshore document review (Lovells loves India, The Lawyer, 3 Dec 2007), the tipping point of firms going public about offshoring seems near.

Update (12 Feb 08): Howrey Opens Office in India, Gives Clients Lower-Cost Option is now available on the web. Note the change in title from print to web.

Update (2 Apr 08): Office openings signal drive to keep panel places (TheLawyer.com, 31 Mar 08) provides some additional context for Howrey’s India office.

Live from Legal Tech NYC, a session on empirical research on e-discovery, specifically the reliability and value of using computers to review document. 

The session: “The Electronic Discovery Institute is a 501©(3) non-profit corporation dedicated to resolving the legal community’s electronic discovery challenges. The Institute’s study compares the time, cost and accuracy of traditional, manual document review processes with computer assisted categorization tools.”

The panelists:
The Honorable David Waxse, Federal Magistrate Judge District of Kansas
Craig Ball,Esq. Attorney & Computer Forensic Examiner
Julia Brickell, Esq., Associate General Counsel, Altria
Peter Gronvall, Esq., Managing Director, AdamsGrayson
Anne Kershaw, Esq., EDI President & founder of A.Kershaw PC/Attorneys & Consultants
Laura Kibbe, Esq., Senior Corporate Counsel & Managing Director, Pfizer, Inc.
Jonathan Nystrom, EDI Study Participant & Vice President, Cataphora
Patrick Oot, Esq., EDI Vice President & Director of Electronic Discovery, Senior Counsel, Verizon [MODERATOR]
Herb Roitblat, Ph.D., EDI Chairman & Principal, OrcaTec LLC
Rich Tobey, CPA, EDI Study Participant & Managing Partner,Vmax Consulting

Oot opens by pointing out that the real goal in e-discovery is justice. Rule 1 of the FRCP references securing “the just, speedy, and inexpensive determination of every action and proceeding.”

Start with the notion that assessing relevancy is difficult. Oot references his involvement in Verizon acquisition of MCI. They used traditional 2nd request review process with much manual review. 83 custodians, 2.3 million documents, 2 law firms involved with one deploying 115 lawyers and the 2nd deploying 110 lawyers to conduct privilege and relevance review. It took four months of long days. The cost of document review was just shy of $13.5 million. Note that this matter was not big by today’s standards. FTC would not allow the parties to use key word searches to narrow the document review. “There’s got to a better way to do this than all the human review.”

Oot and Kershaw started the eDiscovery Institute (EDI) to study if there is a better way to conduct document review. Kershaw now summarizes the Institute: The idea started a few years ago with a private review Kershaw did comparing two approaches to document review. Judges and others wanted more data to compare approaches. Work today has just scratched the surface - much remains to be done. Institute is a not-for-profit and is set up to do additional studies to ease the pain of conducting litigation.

EDI’s first study compared traditional doc review with an electronically assisted process. EDI will publish a white paper in early 2008; it will be peer-reviewed and available freely. Views EDI as unique organization to provide factual information (Sedonna focuses on princicples). Pfizer and Verizon are current sponsors but EDI seeks additional sponsors. EDI will not be a vendor or process certification organization - it will report on factual findings.

QUESTIONS EDI WILL ADDRESS
- Should a party consider alternative methods to brute force review?
- Is computer assisted relevancy assessment reasonable under the Rules?
- Is any process reasonable?

The study dataset: The MCI-Verizon acquisiton data for antitrust 2nd request - 83 custodians in 10 states, 13. terabytes, over 2 million documents.

Roitblatt describes study: Quantitative measurement is key. References the seminal Blair-Moran 1985 study that found that researchers are only 20% accurate in finding docs but thought they were 80% accurate. The way to measure accuracy is to measure actual performance against the “the truth.” You have to approximate the truth. [Editor: in medicine, this might be called the gold standdard.] How do you define the “baseline” of the objectively or widely accepted definition of relevance of each document. Must consider both false positives and false negatives. Precision is percent of docs selected that are truly relevant. Recall is percent of relevant docs actually retrieved. Elusion is percent of docs not retrieved that are relevant.

Key question is what we can actually measure? What are the appropriate “power tools” for e-discovery (versus manual review)? To answer, start by looking at ESI review process: training, case background, examples combined with experience lead to judgments of whether a document is responsive or not. In a 2nd tier review, typically reviewers only look at what first round designated as responsive. So two tier review has problem that relevance calls on first round are not necessarily carefully reviewed.

How does a computer get experience to separate responsive from non-responsive docs? It’s all just mathematics. The competition among vendors is who has the better math. The process with computers is based on rules, text, and math applied to docs. Computer approach may “recurse,” that is, adjust its process based on feedback from human reviewers. For study, “true” designation of document is based on original work of MCI-Verizon team.

Roitblatt describes the famous Turing test for artificial intelligence: can a human tell the difference between a computer and a human in a text interface, interactive conversation. By extension, a computer aided review should be comparable to a human review.

PROVISIONAL RESULTS OF STUDY: 4 computer systems agreement with original attorney review ranged from 72% to 88%. (For this comparison, the original review is considered as the “truth.") Note that in human reviews, where there are multiple human reviewers, rate of agreement among the humans is typically lower.

Question to Judge: what happens when issues of best method come to the court. The Judge says it’s better for the parties to collaborate to come to a shared view on this topic. Disagreement should be aired at 16b conference. Legal system requires reasonableness, not precision. Plus it requires reasonable cost. [Editor: this begs the question of how precise is precise enough to be reasonable.]

Brickell: it is no longer reasonable to presume humans should review all the documents.
Craig Ball: If parties cooperate, they can agree on a reasonable method. Cautions that studies show that human review, by some measures, are only 40% accurate. Should computers be designed to make the same errors that humans make? Compares issues here to Google ranking, where links, which are made by humans (at least in theory), are a form of group voting.
Kershaw: Many discovery requests presume way too much is relevant. These studies may help narrow scope of what we generally consider as relevant. Low accuracy of human review reflects inconsistent judgment and fatigue.

Panel discussion continues at 1140am but other Legal Tech events beckon…

[Editor’s note: In Thoughts on Full Text Retrieval (a KM and litigation support topic) (July 2003), I noted that “What we need as a profession is a mechanism to perform real-world tests, both on how the search tools perform under the most favorable conditions and how they work when actual users operate them. Unfortunately, this is costly and the incentives and structures to do so just do not exist.” It’s great to see that this is finally beginning to happen.]

Some industry commentators speculate that e-discovery as a separate product category (if not discipline) will disappear as enterprise software vendors get in on the act. 

I’ve previously written about EMC’s foray into EDD. Now, HP joins the game. A Clearwell press release (29 Jan 2008) announces that HP enters e-Discovery market by reselling Clearwell. Now that Seagate, EMC, and HP have irons in the fire, can IBM be far behind? Five years from now, big companies may well have most of the e-discovery features they need built into corporate enterprise systems. If so, it will be interesting to see the impact on the current EDD leaders.

When you run a $50 billion (US) business with 170,000 employees scattered across multiple countries working in global teams, it pays to make finding the right people easy. Global law firms are much smaller but face similar challenges. 

In Moving from Expertise Location to Expertise Deployment (28 March 2005), I described how IBM was developing an experience location system. International Isn’t Just IBM’s First Name (Business Week, 28 Jan 2008) provides an in-depth update on IBM’s success with experience location. The money quote:

“Professional Marketplace… lists more than 170,000 employees along with their skills, pay rate, and availability… managers monitor the database and serve as matchmakers between jobs and people. The databases have shaved 20% from the average time it takes to assemble a team and have saved IBM $500 million overall…. By sifting through several personnel databases with sophisticated software, IBM’s top managers can quantify the skills they have on hand worldwide and compare them with projections of what people they’ll need in six to nine months. When they spot a coming shortfall, managers coordinate with colleagues in other countries to recruit or train people. ”

$500 million is real money and a 1% increase in revenue would is a big deal in most businesses, especially such big ones. Partners who can continue raising billing rates 5% per year, however, might look at this and do a shoulder-shrug. So they may not rush to buy IBM Atlas, the commercialized version of IBM’s experience location product.

IBM’s achievement though goes beyond cost saving and revenue enhancement. It’s really about client service and how best to operate globally. CEO Samuel J. Palmisano on the challenge of managing a global workforce: “The big issues for us are: Where do you put them? How do you retain them? How do you develop them? How do you move work to them or them to work?” The software developed is a big part of how IBM answers these questions.

If the theory about large law law firm mergers is to offer clients a global delivery platform, then law firms need to be taking steps similar to IBM.