Strategic Legal Technology

Another e-discovery acquisition. 

Access Litigation, a DC-based litigation support and e-discovery provider plus developer of NatiView Analytics, has been acquired by Edmond Scientific Company. I could not find press releases on either company’s web sites but the Washington Business Journal reports this in Edmond Scientific buys Access Litigation (29 August 2008).

I was not previously familar with Edmond, not to be confused with Edmund Scientifics, a really cool catalog company for kids, geeks, and gadget and toy seekers.

In this Roundup: GCs not impressed with law firm IT; web site that aggregates legal technology software reviews; the demise of “command and control” in KM; legal blogging weak in the UK; Pfizer capped legal fees get it only partly right. 

Inhouse Law Department Views of Law Firm Technology
Law department consultant Rees Morrison, in Usefulness of IT applications supplied by law firms, reports on a recently published survey of what inhouse counsel think of law firm IT. His aggregation of the results suggests that inhouse counsel views are significantly more negative than positive. (I do not have access to the Practical Law Company Law Department Quarterly that Morrison cites.)

Legal Software Reviews at LitiReviews
Spotted at Robert Ambrogi’s LawSites: LitiReviews is “the largest collection of free legal and litigation software reviews on the web. All reviews (100+) are full-text, and have been published in legal magazines, journals, websites and blogs. LitiReview links to copies of reviews available on the internet, or hosted by us at the author’s request.”

Knowledge Management
David Jabbari, Global Head of Knowledge Management, Allen & Overy LLP, reports in The End of ‘Command Control’ Approaches to Knowledge Management? (Law Practice Today, ABA, August 2008) on his firm’s adoption of wikis and “the demise of ‘command and control’ approaches to KM.”

Legal Blogging in the UK - Or Not
In general, I view the UK legal market as 5 to 10 years ahead of the US. Not so for lawyers blogging. I was surprised to learn in Legal blogs: isn’t it time British lawyers staked their claim in the blogosphere? (Times Online, 21 Aug 2008) that there are relatively few British law blogs.

Capped Fees, Innovation, and Legal Tech
Jordan Furlong, editor of CBA The National and blogger, writes an insightful post, Capped fees, limited innovation, about Pfizer retaining Jackson Lewis for all its labor law work. He observes that “while Pfizer is combining two innovations here, convergence and capped fees (well, UK law departments wouldn’t call law firm panels exactly innovative), it missed an opportunity to add a third when it retained the right to recoup Jackson Lewis’s unspent fees at the end of the year.” Too bad for legal technology: if Pfizer had structured this element of the deal differently, it might have encouraged better use of technology for efficiency.

The ABA yesterday released Ethics Opinion 08-451 on legal outsourcing. It’s substantively important. And separately, it illustrates, in my opinion, systemic issues with how the ABA conducts important business. 

The ABA Ethics Committee Issues Opinion Detailing Lawyer Responsibilities When Outsourcing Legal Work Domestically or Internationally press release make several important points:

• “U.S. lawyers are free to outsource legal work, including to lawyers or nonlawyers outside the country, if they adhere to ethics rules requiring competence, supervision, protection of confidential information, reasonable fees and not assisting unauthorized practice of law.”
• “Outsourcing can reduce client costs and enable small firms to provide labor intensive services such as large, discovery intense litigation, even though the firms might not maintain sufficient ongoing staff to handle the work, according to a new ethics opinion issued today.”
• “Depending on the level of supervision contemplated by the outsourcing lawyer, it might be necessary to obtain informed client consent before engaging outside assistance.”

Unfortunately, I cannot report on the text of the opinion itself. Though the press release links to another ABA web page to download the opinion, the opinion is not on that page. I was not able to find a link to the opinion on the ABA website as of 1050am EDT. I placed three calls to the ABA and none of them yielded the opinion.

I also noticed that the ABA charges non-members for ethics opinions. In my opinion, this is an outrage. I would have thought that a key mission of the ABA is to encourage ethical behavior by lawyers and that, as part of that mission, the ABA would make ethics materials freely available. It is not clear to me what philosophy - other than avarice (aka revenue generation) - supports the idea that ethics opinions should cost to read.

My experience today trying to find this opinion and then learning, even once a link becomes available, I will have to pay to read the opinion, confirms my long-held views that the ABA: (1) is hopelessly bureaucratic and inept at the most basic functions such as actually making available a document referenced by a live press release and (2) out to protect its own interests rather than that of clients and consumers or even its lawyer members.

Update, 515pm EDT A staff member of the ABA has posted the following comment:

The ABA Center For Professional Responsibility’s home page link, “What’s New,” has been changed to allow anyone to access the outsourcing opinion. The Media Relations Department was asked to make changes to the ABA’s homepage to make the opinion easier to find and download. In the future, newsworthy opinions will be available for anyone to download gratis from the Center’s homepage for a limited period.

To download the ABA Opinion 08-451. Formal Lawyer’s Obligations When Outsourcing Legal and Nonlegal Support Services, go to http://www.abanet.org/cpr/ and look for a link at the top right corner of page.

Update, 11:15PM EDT The ABA ethics opinion is the lead story on law.com now: ABA Gives Thumbs Up to Legal Outsourcing by Anthony Lin in the New York Law Journal, August 27, 2008

Jordan Furlong, editor of the CBA The National and blogger, in his excellent blog post, The rise of good enough, points out that too many lawyers “value the exhaustive pursuit of perfection over the simple expedient of just getting it done” and examines the “perfection” versus “good enough” standard. 

This post resonates for me. For years I worked for a white shoe law firm where perfection reigned. One client, a former partner, confided that he had trouble managing the firm’s work because they insisted on leaving no stone unturned. He was willing to take the business risk to look only under the boulders.

This “perfect as the enemy of the good” attitude is pervasive in how lawyers think. I saw this when I set out to analyze the document review process. In 1989, I asked a basic question: how many documents per hour could a lawyer review. Lawyers routinely told me that they could not estimate this. (Of course, no one at that time had bothered actually tracking that key metric.) So I took a different tack. I started by saying, “I’ll assume you can review 100 documents an hour,” knowing that was surely too high. Lawyers were aghast and said that was too high. So I then said, ok, let’s assume 3. No that’s too low. Inevitably, these conversations led to an estimate of between 10 and 15 documents per hour.

It was clear that lawyers feared naming a number or range and then being found wrong. As Furlong suggests, there is an economic cost in driving to perfection and in failing to accept the risk of estimates. Clients could probably reduce their legal costs if they more consciously decided how much business risk they could accept and the amount of legal work required to manage that risk.

On Friday, the Wall Street Journal ran a long story on e-discovery. It highlights some of the current issues but also, in my opinion, oversimplifies them. 

Tech Firms Pitch Tools For Sifting Legal Records (22 August 2008) by Justin Scheck opens with a provocative statement: “A growing number of tech companies are riding the rising flood of corporate email and electronic records by pitching software to sift them – and meeting resistance from lawyers who want a piece of the action.”

Implicit in this article is a topic about which I have blogged regularly: the appropriate role of software versus humans in identifying and reviewing documents in discovery. This is a difficult and nuanced issues; see, for example, my posts Computer v Human Search Revisited (22 June 08), Concept Searching in E-Discovery (20 May 08), Lawyers’ Duty to Learn E-Discovery Search Techniques (18 April 08), Improving E-Discovery with Smart [Humans] [Technology] (16 March 08), and The Gold Standard for E-Discovery Document Review (18 March 07).

Another issue implicit in the article is the difference between archiving / preservation tools and collection / processing tools. See, for example, my post Preservation versus Collection in E-Discovery (8 Aug 08), which also discusses e-discovery “convergence.”

Rather than explain the difficult “humans versus computers” review question or the “convergence” issue, the article frames current e-discovery issues, in essence, as lawyers trying to protect their billable hours. This framing oversimplifies the issue but does alert corporate managers - think CFOs and CEOs - who ultimately pay BigLaw bills that perhaps there are more cost-effective ways to approach litigation. So for that reason alone, I was glad to see the WSJ cover the topic.

And the timing of the article is perfect for the many EDD managers who will be in Dallas this coming week for ITLA. It should be good grist for discussion.

I wish I had systematically tracked large law firm staff and lawyer reductions. 

Not to single out particular firms, but I just read a couple more reports of BigLaw cutbacks. Duane Morris Lays Off Additional Staff (Legal Week, 22 Aug 08) reports that many of the 15 positions cut were in marketing. An expanded version of this article is in the Legal Intelligencer.

New York’s Fried Frank announces job cuts (Legal Week, 19 Aug 08) reports that Fried Frank cutbacks “affect almost 10% of the firm’s total of 730 global support staff, primarily affect floating secretaries, part-time assistants and paralegals and library personnel in the New York and Washington DC offices of the US firm.” According to the firm, this redundancy is not a result of the economy but rather a result of a two-year efficiency study.

I suppose it’s no wonder with both revenue and profit-per-partner falling in the first half of 2008. Forecast: Law Firms to Continue Bumpy Ride Through 2008 (American Lawyer, 21 Aug 08) by Dan DiPietro, the client head of the Law Firm Group of the Citi Private Bank, reports on slowing revenue growth and falling profits per partner at large US law firms. DiPietro forecasts continuing tough times in 2008, so we may see additional lay offs.

So far, I don’t recall reading about many legal IT lay-offs. Has anyone kept a list of firms that have let go lawyers and staff?

Update (30 Aug 2008)See About Those Law Firm Layoffs? It Isn’t That Bad, National Law Journal, 12 Aug 08 for perspective and a list of firms laying off lawyers or staff. I missed this article when I wrote the above.

AmLaw 100 law firm Dorsey & Whitney last week announced LegalMine, an integrated e-discovery service at a fixed price per document. 

LegalMine is “a powerful tool to review huge quantities of documents – efficiently, thoroughly and accurately.” According to the FAQ page of LegalMine: “Dorsey is unaware of any other law firms currently offering a per document or per-page pricing model for document review.”

This is indeed the first I’ve heard of a law firm doing this though I know that at least three e-discovery vendors announced in 2008 fixed price services: Huron, LawScribe, and Integreon. It will be interesting to see if Dorsey’s move influences other law firms or the overall EDD market. In my January 2007 blog post, Coming E-Discovery Battle between Vendors and Firms?, I discussed potential competition between vendors and law firms for EDD consulting dollars. The dimensions of the competition seem to be expanding. That said, my guess is that Dorsey’s move will have a greater impact on other law firms than on vendors. Let the document review market share war begin!

The Knowledge Management Peer Group of ILTA is hosting several sessions at the International Legal Technology Association annual meeting next week. Listed below are the KM sessions. 

Monday, August 25, 2008: KM Peer Group Sessions and KM Luncheon

KM1 - Starting a KM Program 10:30 a.m. - 12:00 p.m.
Speaker(s): Elizabeth Ellis - Torys, Cherylyn Briggs - Dickstein Shapiro LLP, Nola Vanhoy - Alston & Bird, Mara Nickerson - Osler, Hoskin & Harcourt LLP
With all of the KM tools and possible projects flying around the legal industry, it’s hard to know where to start. Everyone has ideas and expectations on what a KM program can achieve. If your firm is just venturing into the KM arena and you are wondering where and how to get started, learn from some who have been there and survived.

KM2 - Experience Management - Case Studies in Tackling a Difficult Challenge 1:00 p.m - 2:00 p.m.
Speaker(s): Catherine Monte - Fox Rothschild LLP, Kathrine Cain - Winston & Strawn LLP, Stan Wasylyk - Michael Farrell Group
A request frequently made of KM or IS professionals in law firms is to implement a way to efficiently track and report the experience of individual attorneys. Doing this can help both sell work and deliver work. However, experience management has proven surprisingly difficult. Just defining the type of work to be tracked can pose a stumbling block, as it can be tough to find the “just right” level of detail between the “too broad” and “too narrow.” This panel explores ways to manage law firm experience through case studies from firms who have made good progress. Each panelist will discuss the business challenge they faced, the tool they built or adapted to address it, the processes they deployed to ensure good tracking and reporting and the results realized.

KM3 - Enterprise Search - Impact on How We Do Business 2:30 p.m - 3:30 p.m.
Speaker(s): Robert Guilbert - Wachtell, Lipton, Rosen & Katz, Jeff Rovner - O’Melveny & Myers LLP, Rachelle DeGregory - Sheppard, Mullin, Richter & Hampton LLP, Chad Ergun - White & Case LLP
Description: Knowledge workers spend approximately a quarter of their time searching for information, but how successful are they at locating what they are looking for? Our panel members have had enterprise search engines implemented at their respective firms for over a year and discuss the changes they have encountered with enterprise search.

KM4 - Wikis in Law Firms 4:00 p.m. - 5:00 p.m.
Speaker(s): Michael Mills - Davis Polk & Wardwell, Douglas Cornelius - Goodwin Procter LLP, Ayelette Robinson - Morrison & Foerster LLP
Wikipedia has over 2,000,000 articles created and edited by users. Can you have a wikipedia for the knowledge inside your law firm? Wikis provide an easy-to-use platform for capturing content and facilitating collaboration. We discuss some of the technical, cultural and procedural issues you need to address in setting up wikis for your law firm.

Tuesday, August 26 12:30 pm - 1:30 pm: KM Luncheon
Longhorn C8&9. Join us to meet and converse with others interested in KM. Pick up your food in Longhorn Hall D (ILTA Bistro) and follow the signs to the adjacent private dining rooms (C8&9.)

The 2007 large law firm librarian survey is out. Some of the data surprise me. 

Competitive Advantage (big PDF) in Law Firm Inc. magazine (an American Lawyer, now Incisive Media, publication) includes results of a survey of AmLaw 200 law firm librarians conducted in the spring of 2008; 94 librarians responded. I was struck by what seems like a significant change in market share between LexisNexis and Westlaw.

The survey reports spending across four categories: electronic resources, print materials, LexisNexis, and Westlaw. From 2006 to 2007, the percent share of spending on print increased by two points. Based on what I’ve read in articles and blogs, I assume that this reflects price increases rather than an increase in quantity of materials purchased. Interestingly, the percent share of spending on electronic resources decreased by two points.

The percent share of spending on both LexisNexis plus Westlaw remained constant at 54% but LexisNexis lost three points to Westlaw. Measuring share of just the two relative to each other, LexisNexis lost five points to Westlaw. In a mature market, that’s a big percentage shift.

I will defer to those closer to online research to explain this seeming shift. I say seeming because if different librarians responded in 2006 and 2007, the results may not be directly comparable. The survey does hint at one possible reason for the shift - cost recovery. “Westlaw recovery is better” increased from 35% to 45% and “LexisNexis recovery is better” dropped from 11% to 10%. Separately, client pressure notwithstanding, 70% of law firms recover 61% or more of LexisNexis and Westlaw charges.

A final and unrelated factoid from the survey relates to knowledge management. The percent of librarians who play an active role in the firm’s KM efforts dropped from 84% to 75%. I suspect that reflects a rise in specialized KM professionals rather than firms pulling back from KM.

The The New York Times reported last week (8 Aug 2008) on a study analyzing the cost of not settling law suits. Defense lawyers make bad calls not to settle in almost 1 out of 4 cases. Can lawyers improve that record? 

Study Finds Settling Is Better Than Going to Trial reports that that plaintiffs would have been better off 61% of the time accepting settlement offers; defendants would have been better off 24% of the time. The average cost of defendants’ bad calls was $1.1 million.

Is this just the cost of doing business and practicing law? The Times also reports

As part of the study, which is the biggest of its kind to date, the authors surveyed trial outcomes over 40 years until 2004. They found that over time, poor decisions to go to trial have actually become more frequent.
‘It’s peculiar if any field is not improving its performance over a 40-year period,” Mr. Kiser [a study author] said. ‘That’s a troubling finding.’

Two ways come to mind to improve outcomes. One is consistent use of litigation risk analysis. I have blogged about decision trees, a technique to lay out the legal and factual issues, key decisions, and probabilities to determine an expected case value. It’s hard work and involves judgment but forces lawyers and clients to be clear about a case and its odds. Another way is predictive markets.

Whether either way would help is an empirical question. The typical lawyer’s attitude, however, works against systematically assessing how to improve outcomes. The article reports that :

Several lawyers were dismissive of the study, noting that the statistics mean nothing when contemplating a particular case, with its specific facts and legal issues, before a specific judge. They stressed the importance of a lawyer’s experience.

In other words, “trust me, I’m the expert.” Experience is indeed critical but why not improve upon it if, in fact, analytic techniques actually do improve outcomes? The presumption today is that litigators need not do risk analysis. That 1 of 4 cases mistakenly go to trial and the record has not improved in 40 years, however, shifts the burden of proof onto expert litigators to show why they should not conduct risk analysis.

I fear that for some lawyers, the right adage is less “trust me, I’m the expert” and more “what, me worry?” (with thanks to Alfred E. Neuman).

If corporations succeed in managing and preserving information, will e-discovery collection problems disappear? 

I’ve previously written about ”e-discovery convergence,” the idea that enterprise “information life cycle” management products may reduce or eliminate the need for EDD collection.

Is Preservation in E-Discovery Overrated? at the Clearwell blog (23 June 2008) argues that because litigation holds are inevitably imperfect, corporations should instead focus on rapid collection of relevant documents: “the best way to take the risk out of the legal hold process is to move very rapidly from preservation to collection.”

I view this conclusion, as I do many others in EDD, as a hypothesis that requires empirical testing. Since I lack data, I can only respond conceptually. Litigation holds are more of a “flow” than a “stock” (flows and stocks are standard ideas in accounting and economics). Collecting data at one point in time is often not enough; corporations frequently have an obligation, arising from one or more cases, to preserve data over an extended period - a “flow”. If the obligation continues as a flow, I don’t see how rapid collection helps very much. If, in contrast, there is no ongoing hold - the collection is a “stock” - then the proposed strategy seems to have merit.

One reason to take an empirical approach is that answers may change over time. Consider that companies have multiple reasons to control information. Beyond litigation holds, factors such as storage costs, knowledge management, compliance requirements, and protecting trade secrets drive preservation considerations. With multiple reasons to preserve - or destroy - data, it seems inevitable that companies will focus more effort on preservation and destruction. If so, some of the current risk of lit holds may diminish. That said, I think the points in the Clearwell post about rapid collection to assess requirements and narrow the focus has much merit given where information management is today.

E-discovery is hot. As well it should be with the explosion in data volume and relatively swift (for the legal market) transition from paper to digital data. A just-released salary survey of law firm EDD and litigation support staff puts some parameters on the market demand. 

The Cowen Group is a “leading search firm specializing in staffing and recruiting for Litigation Support, Practice Support and Electronic Data Discovery from coast to coast and abroad.” This week they released survey data on law firm salaries for litigation support and EDD; also included is the number of searches by position type that the firm has conducted since 2005. Register here to get the The Cowen Group 2008 Salary Survey.

Some highlights I found interesting:

• Job descriptions and salary ranges for positions from lit supp analyst up to firm-wide director of litigation and practice support. The salary range, for major east coast cities, is from $60k to $325k
• Eyeballing the time series data presented graphically, I’d say salaries for most positions have increased 50% over the last 3 or 4 years
• The number of searches for most positions has doubled in the same time period. Searches for senior positions in 2008, however, seem to be slowing down. This makes sense: firms have hired more senior managers over the last couple of years and asked them to build out their departments.
• No surprise that NYC positions pay more than DC or Philadelphia. My guess though is the difference does not suffice to really cover the higher cost of living in NYC.

Granted, the above are based on one firm’s experience and we have no data on Cowen Group’s relative market share for search. Nonetheless, given the paucity of good data in this market, I will take what I can get and what I see supports the more anecdotal evidence I’ve heard.

I took the plunge and created a Facebook profile a few weeks ago. I am still trying to decide if it’s worth the time. I suspect many legal professionals, from large firm lawyers to CIOs are asking the same question. 

My Web 2.0 / Social networking go-to-guy, Doug Cornelius (KM Space Blog, Goodwin Procter Bio), answered a question I posed on my Facebook Wall: “I am still trying to figure out the real value of Facebook.”

Reprinted here with his permission is our Facebook Wall to Wall dialogue. Meanwhile, the jury is still out for me.

Ron
Ron is still trying to figure out the real value of Facebook.

Doug
As with any communication tool, it grows rapidly in value as more and more of your connections communicate with the tool. “Less young” people like you and I have fewer people using the tool than much younger people.
I am polling my summer associates again. Last summer the vast majority checked into Facebook at least once a day

Ron
The challenge is finding the optimal way to communicate and digest information. Right now, we are in a situation where each new tool and technology creates another source, another place to check. At least for the “legacy” folks among us. At the moment, Facebook for me is an “extra,” not an “instead of.” Change is hard enough, but it’s even harder where the promise is “do even more work.” All that having been said, do you find it is substituting for any of your prior activities?

Doug
It is of limited value. I largely use it is a platform to tie onto other areas and, in turn, promote my brand. Most of my flow of updates and information in Facebook comes from other sources. My blog posts get pushed into my outgoing feed. I update my status using twitter, Dopple updates my trips.
It is the communication platform of Facebook that is so alluring. But frankly I spend just a few minutes a day checking my “friends” update feed to see what is going on. This is the most intra-Facebook activity I’ve had in a few months.

Ron
So you are saying that Facebook is a personalized aggregation site for other information, I think. That does make it intriguing. But let me be blunt: I am very interested in what you have to say on many topics, but why is your (or anyone’s) status and trips of interest. My friends accuse me of TMI (too much information) but given info overload, should we care exactly what our friends are doing at the moment or where they are?

Doug
Clearly there is lots of noise in all the status updates and trip descriptions and what your friends are having for dinner. You may not care about my trip updates, until you notice that one of them is Washington, D.C. or that I plan to be in South Dakota at the same time as you.
There is serendipity in the noise. It is fairly easy to filter the noise in Facebook. You can tune settings for feeds from of your friends. Less of her, more of him. I think of it as more of diversion than true value time. Check while commuting, while watching the red sox, etc

Ron
There’s a certain irony that we have to rely on this technology to identify circumstances to meet face-to-face. But for all the tech, might not we explicitly try to see each other more? Ok, all that said, given the world in which we live, I can see the value in serendipity. Though in the age of multiple of distractions - Facebook and Linkedin included - I feel like I have less and less time to actually spend with people - serendipity may strike but am I ready? I am now probably guilty of several rhetorical flaws in creating a circular argument