Strategic Legal Technology

I’ve been using Twitter (http://twitter.com/ronfriedmann) for a few months now. I post only items of professional interest. Here is a roundup of posts. 

Rees Morrison blogs that the Gap outsources legal work to India, citing ACC Docket. His post at http://bit.ly/14Ra9

UK lawyers skeptical about social media and lawyer blogs. article at http://bit.ly/oTnX 4:08 PM Jan 25th

Law school fesses up to “lottery shot” at high pay job after debt piles on. http://bit.ly/ylJl Whole system sends bad ethics message 11:18 AM Jan 23rd

Ironic that GCs develop best practices for diversity and work-life practice (http://bit.ly/VVeA) but not for practicing law. 12:09 AM Jan 15th

Jan AmLaw mag: Bartlitt Beck requires reading Tufte’s Envisioning Information. Why don’t other firms stress visual presentation of info? 12:45 AM Jan 12th

Jan AmLaw mag: McDermott doubling number of staff lawyers. Why do GCs pay the mark-up when they can hire contract lawyers directly? 12:42 AM Jan 12th

How many URLs do you control? Facebook, Linkedin, Twitter, blog, personal website, more? Is there a website that aggregates control? 7:06
PM Jan 5th

Many send e-mail attachments with meaningless titles. Many don’t change subject lines when they should. Why do senders burden recipients? 2:36
PM Jan 4th

Estate plan time. What happens to blog posts, articles, Tweets at death? Is there legal + practical way to keep on web? Is that good? 4:16 PM Jan 3rd

Good AmLaw post on lack of law firm innovation http://bit.ly/oAoP. Ex-Wachtell partner: clients cling to firm model same as partners do. 8:49 PM Dec 29th, 2008

Law firm convergence results disappoint. Are we surprised? Rees Morrison post at http://bit.ly/OTEO. GCs re-arranging chairs on Titanic? 12:42 AM Dec 28th, 2008

AmLaw on firms doing biz in India. Ethics help please. Last sentence wrong? Conflates law practice w/ outsourcing? http://bit.ly/4iX9YT 11:02 PM Dec 23rd, 2008

Article on why firms don’t promote legal secretaries at http://bit.ly/x3OG (law.com). My view is traditional secretarial role will vanish. 10:47 PM Dec 23rd, 2008

Getting bored reading about law firms dissolving. Should BigLaw partners be more nervous? “Can’t happen to my firm!” True? 12:44 AM Dec 23rd, 2008

Nice idea to control outside counsel spend by Rees Morrison at his blog post http://bit.ly/EDXC - One firm proposes, another disposes 12:51 PM Dec 21st, 2008

How do lawyers know “right” clauses for a contract if they have not been through work-out process where similar deal / clause is challenged? 4:34 PM Dec 19th, 2008

Anyone know how number of BigLaw lay-offs in 2008 compares to number in 1991-92 recession? List keeps growing - Dechert this week. 1:02 PM Dec 17th, 2008

When will law firm 2.0 replace law firm 1.0. Or has it happened already? If so, what about 3.0? 10:17 PM Dec 15th, 2008

Web 2.0 + marketing. WSJ article today (in supplement) To read tonight. Will lawyers will get 2.0 faster than they did Web 1.0? 11:23 AM Dec 15th, 2008

Grocery 1st for me. Handheld wireless scanner - check-out as u shop. Big innovation in low margin biz. BigLaw too profitable to innovate? 9:55 PM Dec 14th, 2008

Working virtually not for lawyers? Justice Stevens does it. http://bit.ly/NIyr. If he can, why can’t most lawyers in BigLaw? 12:30 AM Dec 12th, 2008

English law firms rapidly adopting legal outsourcing. Susskind in TimesOnline citing RSG report. Article: http://bit.ly/KUSo 1:08 AM Dec 11th, 2008

Why don’t more companies use contract management software? Easy win but uptake slow. Good evidence of challenge of change management? 11:58
PM Dec 10th, 2008

Lunch with law firm manager friend who recently switched BigLaw jobs: “All large firms are weird in their own way” 4:04 PM Dec 9th, 2008

BigLaw billing rates by firm and associate class. Good sampling of firms and cities, free with registration. NLJ: http://bit.ly/12l2n 3:58 PM Dec 7th, 2008

Just came across another managed discovery review service - Black Letter. Anyone have a list of all managed
review outfits? 12:35 PM Dec 6th, 2008

More BigLaw lay offs: Proskauer. 35 associates, 25 staff. AmLaw Daily. http://bit.ly/PPJC 4:43 PM Dec 4th, 2008

Reed Smith lays-off 115 today (+50 secretaries earlier). MP cites technology and 24-hour client call center. law.com - http://bit.ly/p5ia 7:31 PM Dec 3rd, 2008

Cool learning from @time2simplify: bit.ly offers traffic tracking per URL, no registration. tinyrurl does not 1:24 PM Dec 3rd, 2008

ABA’s top 100 Blawgs at http://tinyurl.com/5dxqm5. Mine did not make it. Sigh. 11:45 PM Dec 2nd, 2008

On Jeff Beard’s tip to open two Outlook windows - you can drag items across open windows. Works great, esp. with 2 virtualized screens 10:33 PM Dec 2nd, 2008

NLJ article about Mumbai attacks and impact on legal outsourcers there. I am quoted. http://tinyurl.com/6ml6vh 10:29 AM Dec 2nd, 2008

Cravath moving to fixed fees. Hard to believe? Business Week article http://tinyurl.com/6667ht 10:49 AM Dec 1st, 2008

My worlds intersect: outsourcing and social media. “social media outsourcing” at http://tinyurl.com/2ene7j- anyone outsourcing tweeting? 10:15
AM Nov 30th, 2008

Adobe 8.x update crashed PC, no Adobe on re-start. Had to get 9.x. Every doc opens in its own window. Way to fix back to single window? 8:23 AM Nov 17th, 2008

Laid off BigLaw associates can join www.legalonramp.com, online network for lawyers. Good networking, resources, stay plugged in 8:40 PM Nov 13th, 2008

Full page Autonomy EDD ad in WSJ today. A first? Some claims I found surprising. Blog: http://tinyurl.com/6eapyr 8:21 PM Nov 12th, 2008

White & Case lays off 70 lawyers and staff 100 reports WSJ blog. http://tinyurl.com/64vosm 6:58 PM Nov 11th, 2008

Survey shows GCs trying to control cost focus too much on payment + price, not enough on how lawyers practice. http://tinyurl.com/4z75xh
12:33 AM Nov 11th, 2008

Wondering if SAAS e-mail archiving to cloud, eg Sonian, will impact EDD and how foucsed products like this compare to CA or HP ILM suites 5:11 PM Nov 8th, 2008

Linkedin adds apps today. Is there a universal interface yet for all the collaborative and social network sites?
Do we need one? 5:29 PM Nov 3rd, 2008

Anyone read Am Law article “Chronicle of a Future Foretold”. Not sure it says all that much 3:19 PM Nov 3rd, 2008

If you attend Legal Tech in NYC next week, you might want to attend the ILTA KM cocktail party. 

Register for the ITLA KM Cocktail Reception, which takes place Wednesday, February 4th 2009 from 5:15pm to 6:30pm at the Bridges Bar in the Hilton (main conference venue).

I’ve found it worth attending in years past. It’s a good chance to network with other KM professionals.

I recently found an excellent inhouse counsel perspective on why litigation risk analysis and decision trees are critical tools for litigators and lawyers working on settlements. 

Settlement Perspectives is a blog by John DeGroote, Executive Vice President and Chief Legal Officer at BearingPoint, Inc. DeGroote has years of in-house experience. His post Why Should You Try a Decision Tree in Your Next Dispute? lays out how decision trees help inhouse counsel explain litigation and its risks to internal business clients. This is a must-read for inhouse litigators (especially those skeptical of learning decision trees).

Decision trees are one of many tools lawyers can use to improve how they practice. DeGroote has another post that relates to improving law practice with technology, Get to the Point, and Get It Across, with a Mediation Mind Map, which explains the value of Mind Maps for communicating.

Lest anyone get the wrong idea, however, this blog is, as its name suggests, about settlements. DeGrotte is a lawyer who understands how technology sharpens his practice. Here, software helps achieve better settlements.

Technology is now ubiquitous yet many lawyers have not incorporated highly useful applications into their practices. If law practice were agriculture and technology tools to work the land, many lawyers would still be using oxen and ploughs; only a few driving combines.

[And by the way, for any list keepers, this is another legal blog by inhouse counsel.]

Law firm lay-offs continue aplenty. How should firm management decide about cutting staff? 

Staffing Cuts Multiply, but Are Associate Cuts a Better Solution? by Karen Sloan (The National Law Journal, 23 Jan 2009) recounts the many BigLaw staff reductions and suggests “firms should be cautious in their reductions and should be careful not to cut staff too deeply. Arbitrary cuts in key departments, such as marketing and technology, could ultimately hurt the firm by undermining efficiency and long-term growth plans. ”

My recent post Law Firm Staffing Reference Model argues that firms must “determine what support lawyers need [and] know what lawyers should do on their own and what they should delegate.” I’ve not seen evidence that firms systematically assess support needs.

In the NLJ article, Reed Smith managing partner says his firms cuts were evenly cut across departments because “Our intention is not to let any of these services slip.” The logic eludes me; maybe the cuts should be concentrated.

Absent rigorous analysis, cutting evenly across the board suggests that a firm has no idea what support is really required. Evenly distributed cuts imply that rational decisions were made in the past, that support needs remain constant over time in spite of the march of technology, and that wild gyrations in practice group revenue have no impact on support needs.

I suspect this crisis is going to waste. Many BigLaw firms will muddle through, a few more may collapse. But will any really get rational about how they operate their very expensive support?

Autonomy announced on 21 January 2009 that it will acquire Interwoven. 

The Autonomy press release spells out the rationale for the acquisition:

“The combination of Autonomy’s Meaning Based Computing technologies (IDOL) (with its ability to understand content) with Interwoven’s suite of products (focussed [sic] on managing the interactions of people and content) will create a new set of technologies, updating and enhancing Interwoven’s products by significantly reducing the levels of manual effort now required… Interwoven’s products know what the customer interactions are, and Autonomy’s IDOL will allow them to know what they mean…. The combination creates the largest company dedicated to the legal information management industry with over 20,000 customers including 1,200 top law firms…. Autonomy and Interwoven have a shared vision to develop the next generation of legal and compliance software, allowing businesses to further automate the organisation, management and processing of human friendly information (text, forms, emails, voice and video) from disparate internal and external repositories. Interwoven is already a user of Autonomy technology within its products, and there are many joint customers already in place, including Bank of America, Bayer, Deutsche Bank, DLA Piper, Shell, Tesco and White & Case.”

I’m not 100% sure what this means but the combination is interesting. Autonomy is heavily advertising its e-discovery products in legal and general publications. Interwoven is a very strong player in law firm document management (and appears to have won market share from OpenText recently). That said, in large law firms, e-discovery and DM purchasing decisions are typically quite distinct. Also, firms change DM much less frequently than they do e-discovery tools.

Interesting questions include:

• Can Autonomy use Interwoven contacts to sell law firms e-discovery systems?
• Will Interwoven DM users get new search options?
• Does this reflect convergence of content management and e-discovery more generally?
• Will this change BigLaw KM strategies?
• Will this present new and better options for corporate compliance managers?
• Will this drive other acquisitions? I can imagine that managers at companies such as OpenText, Recommind, Attenex, Clearwell, Kazeon, and others are reading about this acquisition with interest.
• Will new e-discovery features emerge, either from combining technologies or the financial heft of a bigger player?

More questions than answers until I can ponder the news further.

Money pours into e-discovery. Courts rule on it. Lawyers debate it. Seemingly missing though are statistics. 

Is e-discovery and document review today all that different from litigation support 20 years ago? Sure, technology has changed. The underlying process, however, has not. The biggest difference is the volume of data.

There’s a field dedicated to dealing with high data volumes: statistics. EDD debates rarely includes a serious discussion about statistically valid sampling and comparisons of review approaches.

If the US system of litigation had a mechanism to pay for statisticians to assess alternative approaches to e-discovery an document review, I suspect EDD discussions - and judicial decisions - would be very different.

The February 9-13, 2008 Georgetown Law E-Discovery Training Academy has an outstanding faculty and well-conceived syllabus. As I read the session descriptions, I don’t see that statistics will enter the discussion. I hope that future e-discovery training programs will include a session devoted to statistics.

As a one-time econometrician (statistical economist), I think litigators should have enough knowledge to make an informed decision about whether statistics would help manage the EDD and review process. If lawyers doing EDD were pilots, including stats is not like making the leap from visual to instrument flight rules. It’s more like flying with your eyes open rather than closed.

Three years ago I blogged about the productivity benefits of dual monitors. Today, the New York Times published a long article extolling the virtues of bigger or dual monitors. 

Boss, I Need a Bigger Screen. For Work Efficiency, of Course by Farhood Manjoo (15 Dec 2008) reports that

“host of studies by specialists in human-computer interaction suggest that combining two displays, or using a single huge monitor, can significantly enhance your productivity. The theory is simply that the bigger your monitor, the more of your work you’ll be able to see and the more you’ll be moved to do.”

I’ve found this is true. In my office, I dock my notebook and make my external 19″ monitor an extension of the notebook screen. This “virtualization” of screens, a standard Windows XP features, is not the same as merely viewing your notebook screen on a larger monitor. You can literally move the cursor and applications across the 2 screens.

GCs paying for lawyers by the hour should insist timekeepers have sufficient screen real estate. That’s how big a difference I think it makes. When I travel, working from just the screen of my notebook PC really slows me down.

Mr. Manjoo either does not like to remove his hands from the keyboard or misses a useful Windows feature. He reports “as I’m writing this story in Word, I’m switching back to my text editor to search for pertinent data. When I find that information, I select it, copy it and switch back to Word to paste it.” Mouse users can simply drag highlighted text from one application into another, across open applications or across two screens.

One caution is in order. If you use a set up like I do, when you undock, all the applications revert to the notebook screen. When you re-dock, you have to move all apps manually back to the second screen. I have not found a utility to do this.

How should law firms support lawyers? 

Sounds simple but is it really? Firms can compare their staff ratios or cost as a percent of revenue using survey data. The averages, however, conceal huge variations. For example, I know that three large NYC law firms have lawyer to secretary ratios of 2.9, 4.7, and 6.0. And I’ve seen surveys reporting IT spending as a percent of revenue range from 3% to 7%. Can the extremes both be “right"? Are averages best practices? In my experience, the variations arise randomly, not from objective factors such as practice mix.

To determine what support lawyers need, firms must know what lawyers should do on their own and what they should delegate. Should lawyers dictate or type? Do legal research or delegate it to a research lawyer? Make their own travel plans or use a travel agent? Do their own analysis in Excel or rely on a business analyst? These are hard questions but if firms don’t ask them, how do they know the appropriate support?

If firms do ask these questions, how should they balance the potential tension between what lawyers want and what’s best for the institution? Individual lawyers may well say “do everything for me” but the firm may say “be as self sufficient as possible”.

Could we build a law firm reference staffing model based on clearly articulated principles and reproducible analysis? Would this be helpful? Is anyone aware of any work along these lines?

The Financial Accounting Standards Board (FASB) has proposed a new standard for public disclosure of pending lawsuits. This raises interesting legal technology and management questions for general counsels. 

Reporting Rights in the January 2009 issue of InsideCounsel reports on FASB Statements No. 5 and 141[R]. These now-delayed rules would lower

“the threshold for reporting the potential loss from a lawsuit from the current ‘probable’ to anything short of ‘remote.’ …. Currently, because many loss contingencies are reasonably possible rather than probable, companies usually deal with significant litigation by describing it and stating that an estimate of loss cannot be made. That’s a far cry from the detailed liturgy FASB’s original proposal mandated, a liturgy that critics say will not only fail to work as intended, but will prejudice companies in a variety of ways.”

It strikes me that you could view the proposed FASB standard as the moral equivalent of financial mark to market rules. Failure to mark financial assets to market contributed to the current economic crisis. If corporations now have to report more financial assets at market (rather than book) values, why not also the moral equivalent for lawsuits? I wish the article had analyzed whether the mark to market debate will affect the FASB rule-making.

Whatever the final FASB rule, legal technology can help law departments value lawsuits. Litigation risk analysis with decision trees is a proven way to estimate the value of a lawsuit. Building decision trees is not easy, but neither is valuing financial assets. (Many financial institutions have invested heavily in valuation models.)

Also, law departments should maintain databases of all their prior cases to track what cases looked like at filing and how they resolved. An input to these databases can be likely settlement values extracted from proprietary jury verdict databases. Though matter management and e-billing systems are more widespread than in the past, I see no evidence that law departments have systematically used these systems to create historical records of - and, more importantly, forecasting tools for - their litigation costs.

Beyond FASB requirements is a more interesting question. How are GCs managing corporate risk if they do not know the liability of pending suits?

Instead of a New Year prediction, here is a fictional account about how the legal market revolution began. [References to articles and blog posts appear below.] 

The Setting: CEO’s office in an innovative, multi-billion dollar company. It’s late December 2008, so relatively quiet. The CFO walks in and starts a conversation.

CFO: We need to talk about how much we spend on legal. Since our fiscal year ends in November, I usually have time over the holidays to do some real thinking. This year, I read up on the legal market. It’s not pretty. And I’m not sure our general counsel is the solution.

CEO: Ok, you catch me at a good time. Yeah, I agree our GC is not controlling costs. What can we do?

CFO: Legal costs keep going up, both in absolute dollars and as a percent of revenue. Other cost centers – HR, Marketing, Facilities, and even my own Finance department – have driven costs down as a percent of revenue. Sure, we face more regulations and law suits. But give me a break. Lots of articles report on inhouse lawyers complaining about costs. The GC response? Precious little beyond begging for discounts.

CEO: You’re preaching to choir. I hear lots of complaining about legal costs. The whole legal thing is like that movie Ground Hog Day with an even worse twist. Every day is the same but nothing ever improves, lawyers don’t learn from re-plays. It’s hard to figure out how a whole economic sector got so stuck.

CFO: Actually, it’s easy to see why we’re stuck. Who buys legal services? Lawyers. Where do our lawyers come from? The law firms we retain. Do our lawyers think the same as our outside firms? Yes. Are lawyers trained to manage? No. What do our inhouse lawyers do? Lawyering, not managing. So we’re stuck with buyers who share the same bad traits as our suppliers and who travel in the same circles. The hard question is how to get the system unstuck.

CEO: Something tells me that you have some ideas about that. Hey, unlike lawyers, you come in not just with problems, but also solutions.

CFO: Yep, I have some ideas. Let me set it up for you. It really hit me what’s wrong when I read a Business Week article about health care. A Harvard prof wants to put consumers at the center of it. Interesting approach. Her critics say you can’t trust consumers but her response is, why not, they can choose from 200+ models of cars.

CEO: Ok, but what’s that got to do with lawyers?

CFO: I was getting there…. Law is like health care - the consumer / client is lost. Lawyers treat our business unit managers like they can’t deal with the law. Our managers are smart enough to deal with business; they are also smart enough to deal with lawyers. But lawyers don’t get it. That’s where another Business Week article hit me, about how Apple, with the iPhone, won control of consumers from the cell carriers.

CEO: I think I see where you are going. You’re saying that we need to find a way to put business people in charge and make the lawyers work for them the right way. But how do we get there?

CFO: Exactly, and right question. I found a blog by a law department management consultant. His idea is like sharing cake: one person cuts, the other chooses. He says have one law firm propose a budget for a matter and give another firm the option to do the work at the budget. I think we can extend that idea.

CEO: How so? How would that work and what happens to our law department?

CFO: OK, my idea still has some rough edges. Start with how much it costs us to manage matters. I asked the GC how much we spend managing our lawyers and outside counsel. He doesn’t know. For discussion, let’s say it’s 15%. So we take 15% of our legal spending and use that to retain one or two law firms whose only job is helping our inhouse clients retain and manage other outside counsel.

CEO: So you’re saying we figure out the management cost and then spend that money on a fixed fee deal with a law firm . That firm doesn’t get to rack up hours doing legal work. Well, I guess they’d need to do some initial assessment. But they’d mainly focus on finding the best firm for each matter and then actively managing it?

CFO: Exactly. One cuts. The other chooses. Only a little more complicated. We’ll need to structure the management fee so it motivates reductions over time. And the management firm must ride herd on other firms to make sure they find the lowest cost, most effective way to handle the work. One big firm ought to know what it really takes to do the work and manage it. Of course, I don’t have fantasies. I’m not convinced that any large firm really does know how to manage. But I can set up a set of financial incentives to motivate all this.

CEO: Hmmm. Sounds promising. What happens to our law department? And can you really find a law firm to do this?

CFO: I don’t think all our lawyers go away entirely. We keep the GC and a few lawyers who help on legal strategy and keep an eye on the new arrangement. But they’ll just have a high level advisory role and if they can’t get with this program, they’re outta here. As for finding a law firm, I’m willing to consider smaller, non-traditional firms for the management role.There’s a chance we’ll have start this in England. With legal reform over there, I’m sure we’ll have new options soon.

CEO: It sounds very promising. But what’s our upside? We save some bucks but a flop leaves the company and us personally pretty exposed.

CFO: I hear you and I’ve thought about that. Remember - we’re known for doing cool, new things. So if we innovate here, we get good PR as well as good results. If we fail, we go back to the old way and the market still gives us points for trying. Plus, I think I can get you some air cover.

CEO: Wow, you’ve really though about this. What kind of air cover?

CFO: We talk to some key suppliers and customers. Share with them our idea and see if we get some on board to try the same thing. No arm twisting but they’re just as tired of their legal spend. If we can really drive down costs along our whole supply chain, we gain share with ultimate consumers. So we’d all win – lower legal costs, lower product costs, less headache, and good PR.

CEO: Ok, I’m sold. Let’s do it.

* * * * *
REFERENCES:
- Law department consultant Rees Morrisson blogged in Dec 08 that outside counsel spend as a percentage of revenue has increased steadily over 25 years
- If Health Care Were Run Like Retail… is the article about the Harvard prof who wants to focus on consumers (22 Dec 2008 print edition, Business Weeks)
- Cell Phone Carrier Lose Their Grip, from the same issue, reports on “How Apple’s iPhone Reshaped the Industry”
- Rees Morrison also proposed in December the idea of One firm proposes, another disposes – a clever budget technique?

By now I assume most readers have at least heard of Twitter, a microblogging service. (If not, you definitely need to read this post).  

Twitter allows anyone to create an account or home page - mine is http://twitter.com/ronfriedmann. You can then post, from a PC or mobile phone, an unlimited number of “microposts", that is messages of up to 140 characters. You can follow an unlimited number of other “Tweeters” and likewise, be followed. As of now, I am following 51, 94 are following me, and I have posted 87 updates since Oct 29, 2008 (almost all purely professional rather than personal).

Before anyone rolls their eyes, think back to e-mail, the web, and blogging. Lawyers resisted each much longer than most; today, however, e-mail is indispensable, it’s hard to imagine a law firm without a website, and blawging is mainstream. Be prepared to add Tweeter to that list.

That said, I am not yet 100% persuaded its value. Yes, there are law firms, legal publications, and mainstream media (MSM) that Tweet. So Tweeter is a good way to keep up with developments. Here are the challenges I’ve found so far for use as a professional tool:
- Too many people to follow
- Too many people posting uninteresting personal information
- Hard to filter types of posts
- Competition for my share of attention

Enumerating the above, I risk the wrath of the Twitter cognoscenti, who will tell me that I can use third party services such as Tweetdeck or Tweetgrid to “enhance my Tweeter experience.” Precisely the problem. I’m busy enough that I’m reluctant to spend a lot of time learning a whole another ecosystem. I know many will argue that doing so is easy, not time-consuming, and worth the effort. But we all need to make trade-offs with how we spend our time.

I’ve also created a Facebook profile, I blog (here and at my employer’s blog), I maintain two websites (this one and my employer’s), I subscribe to ~100 RSS feeds, I participate in Legal Onramp, and I stayed connected on Linkedin. So, for the moment, I spend some time on Tweeter, viewing it as an “option” to stake my ground in the future.

One business note. It’s interesting to see a whole ecosystem develop around Tweeter, a free service that does not have a long-term obvious way to generate revenue.