Strategic Legal Technology

Blogging continues to grow in big law firms. 

Kevin O’Keefe of LexBlog posted his State of the AmLaw 200 blogosphere, March 2008 last week. He found that from August 2007 to March 2008, the number of big law firm blogs grew from 74 to 110. Of the 110, 80 are firm branded.

Joy London and I also track firm-branded blogs. We reported our findings in Updated Directory of Large Law Firm Branded Blogs (20 Nov 2007) and at our list of Large US Law Firm Branded Blogs. The differences in our blog counts probably results from Joy and me missing some blogs, new ones since our update, and different definitions of what constitutes firm-branded.

However you slice the data, the trend clearly continues up. With many firms spending 2% of gross revenue on marketing and already producing a stream of legal content, I am surprised the number of blogs is not much higher. My analysis of blogging in Blogging – Why the Fuss, suggests that a rational assessment of the costs and benefits of competing marketing channels favors blogging over many alternative marketing activities (aka lead generation).

Many discuss legal outsourcing but few admit doing it. 

I predicted in January that more law firms will go public about outsourcing. As more law departments reveal publicly that they outsource and offshore, barrier for law firms to do the same falls.

HSBC launches offshore legal team for bulk work in LegalWeek.com (7 Feb 2008) reports that “FTSE 100 banking giant” HSBC “has set up a team of four lawyers in its global service centre in Malaysia’s capital, Kuala Lumpur.” The article also reports that BT “last year expanded its existing offshore legal function in New Delhi with two new outposts in Sao Paulo and Buenos Aires to support its US operations”

Separately, Offshoring litigation work in India is a podcast by The International Institute for Conflict Prevention & Resolution (click here for landing page for CPR’s complete podcast directory). CPR interviews co-founder Sanjay Kamlani and VP of Legal Services Shelly Dalrymple of Pangea3 (40 minutes). Starting at about time mark 26:50, Mr. Kamlani shares that Philip Morris has a 10-person Pangea3 team working on day-to-day contracting worldwide.

How many more BigLaw partners will go on record about the risks of offshoring legal work when their clients - or companies they would like as clients - are already doing so?

See list of outsourced legal services for other companies offshoring.

This first appeared at Strategic Legal Technology at Prism Legal.

Update (29 Mar 08): Picking an Outsourcing Partner (The Recorder, 31 Mar 08) reports that O’Melveny’s marketing department outsources research to India.

I started blogging here 5 years ago. It’s a good occasion to think about how my posts have evolved. I now see that both the legal market and I have moved to “Legal Technology 2.0″. 

Why, you might wonder, does a blog called Strategic Legal Technology cover topics such as working virtually, derivatives to manage law suits, business intelligence, and outsourcing? In Legal Technology 1.0, we focused on infrastructure and applications. Just getting IT to work and lawyers to adopt new systems was a huge challenge. That’s still hard, but around 2000, forward thinking CIOs began thinking about “operations” in one bin and “strategy / practice support” in another. Today, even that distinction is not enough.

In Legal Technology 2.0, firms and CIOs must deeply embed technology in their strategies. Legal Tech 2.0 stems from a two-front legal market war; each front has two battles. There is a war for talent and a war for clients. To get and keep talent, firms must offer the right mix of life style and compensation. To get and keep clients, they must offer the right mix of client service and results. See the illustration below.

In Legal Tech 2.0, firms must wield technology to win these battles. Simple “first order (1st order) technologies” as weapons no long suffice. Instead, firms need “second order (2nd order) technologies”. This is more than merely rolling out new apps. They must transform how they do business, with tech playing a central role.

It’s already happening - I’m just labeling it. Consider Bryan Cave’s business intelligence, Morrison Foerster’s AnswerBase, or Mallesons web-supported recruiting. And consider that at least two global law firm CIOs have new roles and titles that go well beyond technology to encompass business process and strategy.

Two years ago, I developed a portfolio approach to evaluating practice systems. It’s a “2x2″ framework for choosing among practice support tools by comparing revenue enhancement impact against reduction in effort effects. Nice, but not closely enough linked to business strategy.

In the diagram below, an illustration and not a comprehensive picture, I link three 2nd-order uses of technology to law firm battle fronts. ”Working virtually” is a way for law firms to offer lawyers and staff improved life styles. Outsourcing is a way for firms to reduce cost (and hence increase compensation) and improve client service (and hence gain and retain clients). Technology enables both but firms must make many other process and cultural changes.

“Results Metrics” has yet to be conquered. Firms that crack this will win market share. Using technology, surveys, interview, and research, firms or third parties must devise ways to evaluate more rigorously the results of legal representation. When clients can choose from many A-list global law firms, real data on actual results will play an increasingly important role. (Of course, 2nd order tech will be critical to improving results.)

I could have lined up other 2nd order technologies here, including ones I’ve written about such as online legal services, knowledge management, business intelligence, decision trees, etc. The point though is to figure out what the new 2nd order technologies will be. As Legal Tech 2.0 evolves, how will we as a profession and market create additional weapons to fight the battles to come?

This first appeared at Strategic Legal Technology at Prism Legal.

Knowledge management professionals spend a fair bit of time examining what they do, how it works, and if it matters. 

We have looked at times with envy and awe at marketing department budget and headcount growth. Law Firm Marketing: R.I.P. in New York Lawyer (6 March 2008), by marketing consultant Elizabeth Anne “Betiayn” Tursi provides an in-depth assessment of problems in law firm marketing. The rebuttal is Legal Marketing: The LMA Strikes Back (13 March 2008).

Will see published “KM is Dead” followed one week later by “KM is Alive and Thriving"?

Champerty is one of the those great law school words that few think about or remember in detail. Something to do with buying law suits being illegal. Funding them, however, may be a different story. 

Third-Party Litigation Funding Stepping up in U.K. in the Wall Street Journal Law Blog by Ashby Jones comments on large UK firms turning to outside cash to fund litigation. Jones picks up on External Funding Booms as Litigators Plot Upturn in Legal Week (20 March 2008), adding some of his own comments.

I have long thought that outside funding of litigation would bring a business discipline and risk assessment often lacking in litigation. I left a comment at the WSJ blog:

“In the last year, we’ve learned a lot about complex financial instruments and re-packaging risk. Maybe derivative instruments are dead forever, but I suspect Wall Street and The City will seek new opportunities.
I’ve previously suggested [in Feb 2007] “Collateralized Legal Obligations” that bundle bets on litigation.
To the extent that third parties fund litigation, I would think they would want risk mitigation strategies. This time round, the instruments need to be understandable and the risk accurately assessed. But we’re not talking unsophisticated investors here - why not let the free market bring some discipline to assessing and bundling law suits, which are, after all, much like other financial assets or liabilities, albeit somewhat less predictable.”

Upon further consideration, perhaps they are not that much less predictable. Looking at the sub-prime mess, it’s now clear collateralized debt obligations (CDOs) shuffled around the risk without eliminating the risk of a secular decline in home prices. I’m no financial wiz, but law suits are much less correlated with one another than are many financial assets, so may be just the thing to bundle.

[Update (3/21/08): Anyone interested in the ideas above might also find interesting my Fall 2003 article, A Marketplace Trial (published in the American Lawyer). It explores ways to apply economic principles to manage and reduce litigation risk. One suggestion is to hedge law suits in public markets so that the equivalent of a Moody’s or McGraw-Hill S&P could “rate” law suits. Nothing like a bit of dispassionate, rigorous quantitative analysis to assess the value of claims before investing in massive discovery.]

Two relatively new web sites offer the legal market a way to market services, share documents, and build community. To some extent, each is trying to apply the Facebook or MySpace paradigm to lawyers. 

First, some history. Fifteen years ago David Johnson, David Post, and I (then all of Wilmer, Cutler & Pickering, now WilmerHale) published Colleagues Exchange (Corporate Legal Times, March 1992). We proposed an online system for lawyers to find and connect with each other across firms and to share work product. It was commercialized as Counsel Connect by then American Lawyer (now ALM / Incisive) and was subsequently purchased by LexisNexis.

Now, two companies have launched web services conceptually similar to Counsel Connect. I’ve had personal and positive experience with Legal Onramp (LOR), which “provides content, connectivity and execution services to help legal professionals deliver higher quality work in less time and lower cost. We are working with leading professionals from major corporations and leading law firms to provide technology and services that will meet the business imperatives of the future.” It is a by-invitation community exclusively for legal market professionals, offering discussion forums, social network features, a marketplace, and shared work product. Net-Working - Web 2.0-enhanced sites get in-house counsel talking (Inside Counsel, March 2008) features LOR.

A more recent market entry is JD Supra, which “promotes the free exchange of information to benefit the legal community, legal consumers, the media and the general public.” It offers community, networking, consumer resources, real-time news, and a large document collection. (The JD Supra FAQ provides more explanation.)

Both are promising ways for lawyers and clients and to interact and share information. My take is that LOR is targeted more at high end, B2B services; it explicitly targets inhouse counsel. JD Supra appears targeted at both B2B and B2C and, at least right now, focused primarily on content rather than community. As an early proponent of this type of idea, I hope to see both sites succeed. I think given the economic pressures and bad market dynamics in both the B2B and B2C legal markets, both have excellent prospects.

Almost four years ago to the day, I started this “Personal Productivity” category. with a post extolling Microsoft OneNote. 

Four year later, I continue to depend on OneNote (now the improved 2007 version). The surprise is that more people have not heard of it, much less adopted it. So I was glad to see Product Watch by Nerino J Petro, Jr in the March 2008 issue of Law Practice. His one-page glowing review is well-deserved and closes with “The capabilities found within OneNote are truly amazing. But none are quite so amazing as the fact that this product can be purchased stand-alone for under $100. It also comes standard in many Microsoft Office 2007 versions.”

When I consider pure software products over the last 4 years, OneNote has few rivals for best personal productivity booster. I like Mozy for back-up, that’s probably the next best. VOIP and smart phones are great but more hardware and infrastructure than software. I’ll poke the proverbial hornet’s nest and say that social networking software is over-rated and perhaps a productivity drain. What are other nominees for best personal productivity booster in the last four years?

Does finding the best way to search through huge volumes of e-data sometimes feel like the quest for the Holy Grail? 

I’ve previously written about applying smart search tools and using offshore lawyers to manage e-discovery reviews more effectively. In thinking about process improvement, we should not forget the importance of human expertise in conducting search. Better Search for E-Discovery by Will Uppington at the E-Discovery 2.0 blog is a good summary of recent TREC research. A key finding: one of the most effective techniques to reduce the volume of docs to review is to have expert searchers iteratively conduct searches. As the post notes, this may be obvious but that does not mean it’s widely followed.

I think this has been true for decades and will likely remain true absent a software revolution. So I disagree with Uppington’s explanation for why iterative search by experts does not occur in all cases: “the single biggest reason is that the technology used to perform searches for e-discovery has simply not been easy enough for legal experts to use.”

Until computers can read our minds (and I hope that days never comes), lawyers and their colleagues must “communicate” complex information to software. I’m not sure that this process can be so simplified that lawyer-experts don’t have to learn something about the search tool.

The seeming simplicity of Google lulls many into an expectation that one word searches suffice. There are good and bad Google searchers. Laziness in or fear of learning to conduct good Google searches should not excuse the same when it comes to EDD. We all expect our doctors and surgeons to learn their tools - why should we expect any less from lawyers?

In January, I predicted that legal process outsourcing would likely consolidate. 

Copal Partners eyes LPO foray via buyouts in The Economic Times (15 March 2008) quotes Joel Perlman , the president of Copal, an established “knowledge process outsourcer” (KPO) that specializes in equity and credit research: “We are in discussions with 10 LPO firms in India whose revenues are in the range $5-75 million. We hope to close one or two acquisitions this year.”

The start of LPO consolidation?

The WSJ Law blog recently wrote about “a horrific tale of document review drudgery.”  

Sound of the First Year Workin’ on the . . . Doc Review Gang (15 Feb 08):

“the Law Blog was regaled with a horrific tale of document review drudgery… Reportedly, the doc review team — sedentary for so long — would conduct late-night cartwheel contests … The story was neither easy to tell nor easy to hear…. It reminded the Law Blog of our own doc review war story… What followed was four weeks of sixteen-hour-days clicking away on a computer program whose name we’ve blocked from memory. In fact, we’ve tried hard to block the whole four weeks from memory.”

While I was at NYU Law (’86) and as a summer associate in three law firms over two summers I often heard about the travails of document review work. I went to work as a management consultant at Bain when I graduated. In 1989, a now AmLaw 20 firm created a position for me that today would be the equivalent of Director of Practice Support Systems. I think I was the first non-practicing lawyer in that type of position.

When hearing about my job, most junior litigation associates said something like “Wow, that is really cool. I’m envious. I can’t believe how much time I spend reviewing documents and how boring it is.” It was obvious then that associates did not like doing document reviews.

Little has changed since then. Whether you spend your day flipping through stacks of paper or hitting the “next doc / page” button makes little difference. The WSJ blog post reminds us that though doc review is work that needs doing, many who do it would rather be practicing a different type of law.

A long knowledge management article appears today in the The Wall Street Journal. 

Putting Ideas to Work (10 March 2008, p. R11, $)) by Thomas H. Davenport, Laurence Prusak and Bruce Strong is subtitled “Knowledge management can make a difference – but it needs to be more pragmatic.” (Update: The article is also available for free at the Sloan Review.)

The authors point to a focus “solely on technology at the expense of everything else” as a key reason for KM’s limited success. That surely resonates with many legal KM professionals. They define KM as “a concerted effort to improve how knowledge is created, delivered and used” which differs considerably from my favored “the art and science of capturing and re-using know-how, whether written or not.”

Their solution to improve KM is a three-prong approach: knowledge creation, knowledge dissemination, and knowledge application. It seems to me though that the authors simply re-characterize numerous other corporate activities such as R&D, web technologies, partnering programs, portals, communities, e-learning, and after action reviews into these bins. I miss the common thread they seem to see.

I’ve frequently written about legal KM morphing into practice support. As I read this article, it suggests that corporate KM is being absorbed by the building blocks of other functions. Sounds like a similar theme to me, only one that is not articulated.

ALM announced on March 6, 2008 that it acquired Altman Weil Publications. 

“ALM, a leading media company serving legal and business professionals, today announced the acquisition of Altman Weil Publications, Inc. of Newtown Square, Penn. The group publishes surveys on the legal profession focusing primarily on the economics and management of law firms. Founded in 1974, Altman Weil Publications is a former division of Altman Weil, Inc., which provides management consulting services to law firms, law departments and legal vendors…” reports the ALM press release. ALM, publisher of law.com and American Lawyers, became part of Incisive Media not long ago.

ALM already has a strong research arm and publishes numerous surveys and reports. So it seems like an excellent fit. I wonder what this means , if anything, for Altman Weil’s consulting practice.

I frequently discuss the pros and cons of working virtually. I agree that lawyers need office time for in-person interaction but was surprised by what one Hunton & Williams partner has to say about the topic. 

In Face Time in the WiFi Age (NY Lawyer, 27 Feb 2008), Hunton partner Dionne Carney Rainey extols the virtues of requiring associates to be in the office Monday through Friday, if not more. I leave it to others to comment on the impact this article could have on associate moral.

What I find most surprising is her statement

“It is imperative that new associates be present in the office during normal business hours so they can meet other lawyers, obtain work and start forming relationships. If an associate is not sitting in her office when a partner comes by to give an assignment, the partner will move on to the next associate.”

Clients should be dismayed that work assignments depend on who happens to be in the office. In an age of specialization and high billing rates, clients should hope firms allocate work based on
(1) understanding the client’s matter and matching skills appropriately and
(2) balancing lawyer work loads so that assigned lawyers have sufficient “share of mind” for the matter.

I thought the age of the completely fungible associate had passed. If not, let’s hope billing rates reflect the commoditized skill set.

Jordan Furlong law21.ca picks up and expands on themes I raised in Benefits of Blogging Redux. 

In Lawyer blogs vs. law firm brands, Furlong suggests that firm-branded blogs cannot succeed because the voice of each lawyer-blogger will differ. Before I saw this post, I read Wal-Mart Tastemakers Write Unfiltered Blog in the New York Times (3 March 2008). This article describes how buttoned-down Wal-Mart, after some false starts with blogging, now allows some buyers to blog without censorship or review on a Wal-Mart branded blog. If the tightly-controlled Wal-Mart can deal with the multiplicity of voices, I think that large law firms can as well. In my view, uniformity of voice is not a requirement for Big Law branded blogs to succeed.

Separately, the Wall Street Journal Law Blog, in Law-Firm Blogs: Marketing Device or Mere Diversion?, picked up on the BigLaw blogging theme.

A couple of my recent posts generated some controversy about the status of legal blogging. Now, two legal bloggers share some data and comments. 

In Why Are Blogs Undervalued? at Drug and Device Law blog, lawyer-bloggers Jim Beck of Dechert and Mark Herrmann of Jones Day assess BigLaw views of blogs. Note that their very substantive blog is not firm-branded.

The entire post is worth reading (plus the comments) for anyone interested in blawging. They write:

“The two of us, toiling alone, with no financial help or other assistance from our firms, have (to our complete surprise) almost accidentally created the most widely read product liability blog on the internet, now receiving more than 25,000 page views per month. In that situation, wouldn’t you expect at least a few of your colleagues to wander down the hall and ask two questions: (1) How did you do it? and (2) How can we replicate it?”

The elephant in the room of BigLaw that no one likes to discuss explicitly is that much non-billable activity is about “lead generation.” Call me crass, call me a destroyer of lawyer professionalism, but even decades ago, one reason lawyers wrote monographs and articles was to establish their reputation and, in so doing, generate new clients (aka leads). The array of law firm marketing activity today - seminars, webinars, e-mail updates, branding, parties, etc. - are all fundamentally designed to generate leads even if they are discussed in terms of creating awareness and establishing credibility.

So for a blog to generate 25k page views/month seems pretty good to me, maybe even stellar. As a marketing guy myself, I would want to know the number of clients generated and the cost of doing so by this medium (blogging) versus the alternative methods. And then there is the intangible value of Hermann being quoted in the New York Times in Medical Device Ruling Redraws Lines on Lawsuits (22 Feb 08):

“Mr. Herrmann, who writes a blog about these issues (druganddevicelaw.blogspot.com), said Thursday that the decision put the onus on medical device companies and the F.D.A. to prove they can protect patients without the threat of product-injury lawsuits.”

Beck and Herrmann and the comments discuss several reasons Big Law may not support blogging. Left undiscussed is the potential tension between individual and institutional interests. Given the ease of lateral movement among law firms, lawyer-bloggers may well prefer an individually branded blog over an institutionally branded one. That way, in the event of lateraling, there is no question of who owns the content. If I were in Big Law firm manager, I would want to find a way to institutionalize and brand the effort of my lawyers.