Strategic Legal Technology

BigLaw and the market it serves is hurting. Some believe the new normal will be the same as the old normal; I don’t. I am now convinced that project management - applied to law practice - will be part of whatever happens. 

Recently, I’ve seen a surge of interest in project management (PM):

• At 3 Geeks and a Law Blog, Toby Brown wrote last Friday The Evolution of AFAs: Law Firm Side, in which he suggests project management needs to be part of the answer to Alternative Fee Arrangements.
• Steven Levy, who headed the legal technology team at Microsoft for many years, wrote last week at his Lexician blog, Rethinking Legal Project Management Tools and Low-Tech “Tools” for Legal Project Management, which together serve as a good short intro to legal project management.
• Today, Levy posted Professional Project Management in a Legal Environment, which recaps a discussion with Paul Easton of the Legal Project Management blog, adding some nuance to the PM intro.
• In the last few weeks, friends at two large law firms have asked me about legal PM and suggested that it could become a big initiative at their firms.

A frequent theme for me is that lawyers must focus not just on substance, but also on how they practice law. Project management is a great way to do so. I think an illustration helps.

Two lawyers may each offer good advice and solutions. Mr. Red, as part of his process, takes a stack of papers, throws it in the air, and let’s the paper land where it will. Then he has associates gather up the paper randomly, organize their portions, and work on the stack they have collected, occasionally communicating with each. With much scurrying and constant swapping of paper among the team, an answer emerges.

In contrast, Ms. Green carefully reviews and sorts the same stack of paper. She divvies it up logically among associates, regularly tracks their progress against set goals, and makes sure each is sticking to scheduling and communicating clearly. The answer emerges quickly and on schedule.

Red or Green answers might be the same but the cost is not. Under hourly billing, general counsels have been oddly hands-off in monitoring processes, even though some are, like Red and Green, demonstrably better than others. Under AFA, then clients won’t care if the paper is “tossed” or “neatly stacked” but the law firm will. In essence, project management distinguishes Green from Red. Beyond obvious cost implications, under which approach do you think lawyers are happier and progress more systematically in their careers?

The International Legal Technology Association recently published its annual legal tech survey. From a practice management perspective, here are some findings that stand out for me. I leave it to others to comment on infrastructure. 

The 2009 ILTA Technology Survey is available with login or for purchase. It’s a great resource for law firm IT managers who want to benchmark. The survey write-up is excellent and the 60+ pages is chock full of detailed results, including data sliced into firms by five size categories.

Most large firms automate “processes like new business intake.” Almost 90% of 700+ lawyer firms do automate processes and almost 70% of 150 to 699 lawyer firms do. The percent of smaller firms automating workflows is much lower.

I was surprised that only 38% of firms have matter-centric environments. Perhaps because I’ve traveled in KM circles for some time I had the impression the percent would be much higher. Further, the incidence of matter centricity does not vary much by firm size; firms under 150 lawyers clock in around 35% and those over 150 around 45%.

Litigation support and e-discovery remain a fragmented market. The list of products and services that firms report using is long. Of course, having a product and using it exclusively is not the same, so ‘percent using’ data may not mean much. That said, two-thirds of firms have CT Summation and one-third have Concordance; no other doc review tools has over 20% using. Among firms of 700+ lawyers, 38% report using Clearwell, which seems good for a relatively new entrant.

Records management remains a challenge. This year, the survey more clearly distinguished e-mail archiving from RM. Almost two-thirds of firms report having no digital RM product. About one-third say products are not yet mature enough and one-third say they are unclear on the need (for this answer, respondents could choose multiple answers so percents don’t add to 100).

If nothing else, the survey shows that practice support and IT managers have plenty to keep them busy.

When architect Philip Johnson put a neo-Georgian Chippendale pediment atop the then-new AT&T (now Sony) building in 1984, he ushered in post-modernism. When an architect of the way BigLaw firm works says there’s a new style in town, take note. 

Hildebrandt launches the week of September 21 its LawVision™ service (PDF brochure) to help law firms adapt to a market “likely positioned for revolutionary change as market forces exert pressure on the traditional law firm model.” (emphasis added)

On the substance, Hildebrandt finesses just how much revolution to expect but notes that even limited structural changes will “ripple” throughout the firm. So, whether revolution or ripple, firms must assess how they operate. Hildebrandt’s solutions include many themes I’ve long advocated: performance metrics, analyzing the process of how lawyers work, rationalizing work allocation, outsourcing, alternative fees, and legal technology to support process change. Law firms are, in my view, long overdue in working smarter; guillotines do focus the mind.

On the spin, Hildebrandt wisely also appeals revolution deniers. The opening quote in big type by Brad Hildebrandt notes that the profession “may be transformed or it may evolve in more moderate steps, but regardless it is changing.” Further, LawVision™ is designed “to insure that there are no unexpected or unintended consequences of actions that a law firm takes to respond to new market or economic realities.” This positioning likely assuages denier fears but as I read history, real revolutions necessarily result in ‘unexpected or unintended consequences.’

This service offer is timely and well crafted. By holding out the potential both for controlled and incremental change and for truly structural change, Hildebrandt likely can gain mind share of multiple management factions.

As to the future, I think BigLaw is on a new path, like it or not. Enough firms are talking about big change - see, e.g., Above the Law re The New Biglaw Business Model, According to O’Melveny & Myers and Legal Week re Mayer Brown and Reed Smith set to champion fixed fees - that revolution may become a self-fulfilling prophecy. Those that don’t change likely will lose market share.

Just as the era of modernist glass box buildings holding a monopoly came to an end, so to may the era of pyramid-shaped BigLaw firms with their ever increasing rates and leverage. The shape of things to come is not yet clear, but it will differ. And, with apologies to The Who, the new boss likely will not be the same as the old boss.

In January 2006 I wrote about the promise of telepresence, which is high definition, room-encompassing, virtually-there video conferencing. Today I tried it and it’s great. 

I attended a KM meeting today at the DC office of DLA Piper, hosted by my friend and former colleague Jean O’Grady. Jean thought our small group would appreciate seeing the firm’s relatively new Cisco telepresence system in action - and indeed we did. (It’s not KM but hey, even KM professionals know cool tech when they see it.) She thinks DLA is among the first large law firms using it across several offices.

True to my reading, it’s like people elsewhere are right there. The rooms two rooms seemed to merge. The woman in Chicago was crystal clear. When I asked her to hold up her Blackberry and I held up mine, the person sitting a few seats from me (in DC - now you have to be clear in which location you mean!) could see each equally clearly. There is no jerky motion and the sound is crystal clear. It’s easy to connect and display a computer screen (e.g., PowerPoint).

Jean commented that the transition from conventional video to this is “like going from a Gramophone to an iPod.” I couldn’t agree more.

Last month, in As World Embraces Statistics, Lawyers Sit on Sideline, I lamented the lack of statistical mindset in the legal market. Why should we care? 

One reason: statistics can be very important at trial. Bob Ambrogi, in Statistics Surge as Evidence in Trials (IMS Expert Services August 2009 Newsletter, explains the growing importance of statistical evidence.

Another reason: to spot potentially unreliable statistics or analysis, whether for law practice or firm management. To illustrate, I deconstruct the Incisive Legal Intelligence law firm Economic Confidence Index (PDF) released in August (referenced at (an August 4th Incisive blog post).

Not Describing the Sample. To interpret a survey, you must understand who responded: how many and what demographic. Small, skewed, or unknown samples may yield unreliable results. I did not find a description of who - position/title, location, or firm size - responded to the Confidence Index. Who knows if the sample reflects large or small law firms or a mix.

Comparing Surveys from Different Points in Time. Comparing responses at two points in time requires like populations or samples. Incisive writes “[c]ompared to the beginning of 2009, the majority of firms report that business conditions have either improved or stayed the same rather than worsened.” To start, I was perplexed because the text says this is the first month of the Confidence Index. If so, it is not clear how any comparison whatsoever is possible. To boot, if Incisive conducted an earlier survey, there is no information on whether the sample was comparable.

Ask Unambiguous Questions and Help Readers Interpret Surprising Results. The Confidence Index survey asked respondents “In which of the following ways has your firm taken steps toward cost cutting/maintaining profitability as a response to the current economy?” This question does not specify a time period so answers presumably could refer to last month, 2009 year to date, since the crisis began (exactly when was that?), or some other time period. Does this matter? I think so. In this survey, 33% of firms report lay-offs in answer to the question. Compare that to data at at LawShucks, which show about 250 reported AmLaw 200 lay-offs. Surveys should not leave readers wondering about basic interpretation. If results are surprising in comparison to other widely reported data, then offer an explanation.

Report Data Accurately and Consistently. All the Incisive graphics and tables report on questions referring to 2009, the past six or twelve months, or in the next three or six months. Yet the text states “looking forward to 2010…[60% anticipate improving conditions]” What is the basis for Incisive comments about 2010? Three explanations come to mind: the survey asked questions about 2010 not reported in the write-up, the authors confuse 2009 and 2010, or the authors assume 2009 second-half data predict 2010. Write-ups should accurately reflect the data collected and the analysis.

Imagine presenting the Confidence Index to a judge who happens to understand stats and data. If you were the lead litigator, would you want to put this Incisive survey into evidence?

It’s a new era for BigLaw. For both the management of large law firms and the proper handling of litigation, law firm managers and litigators will increasingly need to collect and analyze and present data. Let’s hope, as Bob Ambrogi suggests, some lawyers and staff really can deal with data properly.

For those who do see a need to learn more about stats, law department management consultant and blogger Rees Morrison suggests 10 free courses to learn more about statistics in his September 13th post.

The legal market is remarkable for its lack of solid market research. There is much discussion about alternate fee arrangements (AFA), for example, but little data about how extensive the market is. I’m going to take a flyer and estimate total AFA from one data point. 

I learned to generate estimates from virtually no data as a management consultant. I frown on this practice but my goal here is more to provoke others to come forward with data than to call the market size.

The Alternative Pricing page at Hildebrandt.com reports that “Hildebrandt consultants have assisted law firms in the development and implementation of pricing strategies that have resulted in over $1.8 billion worth of non-hourly engagements in just the last year alone.”

I don’t know Hildebrandt’s share of legal market consulting. It’s big, long-established, and widely cited. I’ll assume it’s share is 30% and that its competitors provide comparable (to their size) levels of AFA advice. With these admittedly SWAG assumptions, then the AFA market is worth $6.0 billion (= 1.8 / 0.30). That’s less than 10% of the AmLaw 200 revenue (which was $80 billion in 2008).

Can anyone step forward to refine this estimate? If it’s right, does anyone else think the number is really low given all the general counsel bluster about fees?

The American Lawyer, in Law Librarians: ‘No More Sacred Cows’ (3 Sep 2009), reports on its annual survey of AmLaw 200 law libraries. The results, while not pretty, are perhaps not so surprising given wide-spread BigLaw lay-offs.. 

Here are the findings I found most interesting:

• About 1/2 of the 86 responding librarians reported cutting budgets and almost 60% cutting staff.
• Digital and print resources cutbacks are widespread.
• Almost one-third intend to use just one of Lexis or Westlaw. Comment: That’s a big change from past practice.
• Though two-thirds report that the library is the main source for marketing research, librarians report that they receive little recognition for this work. Query whether, given increasing demand for business research, firms are under-investing in business research or need a new strategy to fulfill demand.
• New software products now allow librarians to track online data usage, which arms them for tougher vendor negotiations. “The metrics can be compelling: A firm paying for 200 user licenses for a product may discover that only 50 lawyers are actually using it … Suddenly that resource may not be indispensable. And suddenly the vendors may budge.” This gives new meaning to “information is power”.
• Lexis and Westlaw spending fell slightly year over year but outlays for other databases were up. (I have previously noted that other Incisive surveys compare data from different respondent sets in each of two years and that therefore annual comparisons may not be reliable.)
• Librarians continue to report “wacky licensing and bundling schemes”. My librarian friends have complained about this since the days of CD-ROMs in the early 90s.
• Several respondents had favorable comments about SharePoint as a sharing and distribution platform.
• Year over year comparisons suggest firms recover less Westlaw and Lexis spending from clients. As noted, I am skeptical about Incisive year-over-year comparisons but suspect this is nonetheless true given current market forces.
• Only about 20% of librarians report having knowledge management (KM) reporting to them. Almost double that percent having records or conflicts reporting to them.

What I could not tell from the survey is whether law firms and librarians have fundamentally re-thought how the library operates and delivers services. My sense is that change has been significant over the years but nonetheless incremental. That is, other than the shift from print to digital and shrinkage in the physical space libraries occupies, firms have not stepped back to re-envision library services. Comments from readers on this?

Update (16 Sep 2009). For good follow-up discussion of whether the change has been incremental or transformative, see
- Reevaluating BigLaw Library Services - Two Views at 3 Geeks and a Law Blog
- BigLaw Firm Libraries: Looking Back From a 20-Year Old Perspective at Law Librarian Blog

Since not everyone is a Twitter fan, I reproduce here a selection of my recent Tweets.  

Do lawyers and law firm managers understand that many legal conferences are now fully monetized and heavily driven by vendor sponsorship? 1:13 PM Jul 28th

AmLaw Associates Survey 2009 http://bit.ly/WzxC7. Tables, rankings, firm-by-firm info, and multiple articles. || But do we know more now? 10:29 AM Aug 1st

One reason I Tweet is Personal Knowledge Management. But not that easy to re-use my own Tweets, esp. as corpus grows. Next: tagging Tweets? 10:31 AM Aug 1st

RT @AmLawDaily Rio Tinto.. Gold in Outsourcing http://bit.ly/Zw9tD || Using LPO instead of Crowell & Moring for FTC doc prod saves $1.5mil 4:16 PM Aug 1st

RT @PosseList Cadwalader’s new manpower model: contract attorneys http://bit.ly/3lpGP (blog) || A new model of BigLaw outsourcing? 9:40 AM Aug 2nd

‘Offshoring firms: the day has come’ Lawyers Weekly. http://bit.ly/FnXpA Canadian law firms waking up to legal outsourcing (LPO)? 9:57 AM Aug 3rd

‘Private Equity Considers Investing in U.K. Law Firms’ Bloomberg, 3 Aug 09, http://bit.ly/ZjhWs. HT @jordan_law214:00 PM Aug 3rd

I’ve seen more e-magazines lately. Even on my 19″ monitor in full screen mode, hard to read w/o zooming. Am I missing advantage over paper? 7:57 PM Aug 3rd

ABA Journal ‘Boom and Bust’ http://bit.ly/1eovCP - e-discovery growth slows, vendor consolidation. Cites Gartner, Socha. ‘Churn is constant’ 5:32 PM Aug 8th

RT @estrin Ron, Integreon/Prism Consulting joins Board of Gov. of Org. of Legal Professionals. Great addition! || Looking forward! 7:50 PM Aug 10th

10 great legal tech tips (wisdom actually) by Steven Levy in LTN at http://bit.ly/14arbc || Sage advice for all BigLaw IT managers and CIOs8:20 PM Aug 11th

As vendor, I see law firm RFPs. For some firms, if they send clients docs formatted same way, pity the clients. Format matters. 7:03 PM Aug 13th

Amazing companies force you to print paper, fill out by hand, scan, and then send. And this is a web-based supplier. What r they thinking? 2:49 PM Aug 14th

‘2020 Vision’ in CBA National http://bit.ly/l2Yn9. Vision of law firm future hits my favprotes: outsourcing, KM, working virtually, AFA 2:36 PM Aug 16th

Has law firm news become boring lately? Or is it the eventful last year and return to calm. If calm, it’s not ‘old normal’. New normal is? 2:44 PM Aug 16th

RT @ChristianUncut Aderant buys US ECM/DMS vendor StarLaw: story on www.theorangerag.com blog

I read Tweets more than blogs lately. Immediacy is a bit addicting. Plus my follow-ees usually surface the best posts. True for others?

Friend showed me very cool data visualization software tonite: http://www.tableausoftware….. Display Excel or database data easily

Indian law firm FoxMandal pays Delhi salaries after 2-month hiatus. The Lawyer http://bit.ly/3aiH2O. US firms not the only ones in trouble. 1:50 PM Aug 19th

Hildebrandt on legal market: maybe bottomed out but not growing yet. Peer Monitor 4 Aug http://bit.ly/dRFgC || Still waiting for new normal! 8:24 PM Aug 20th

It’s one thing to shrink, another to change the way you do business. Law firms have shrunk. Now, how will they actually change? 11:33 PM Aug 20th

Paralegals can do priv review per http://bit.ly/2HER7. Why do clients and lawyers typically use lawyers? Obvious cost savings ignored? 4:43 PM Aug 21st

Economist has a short but good think piece on offshoring and outsourcing at http://bit.ly/QOEO 13:29 PM Sep 3rd

Australian contract lawyer job posting at http://bit.ly/80Tqp likely for Rio Tinto legal process outsourcing (LPO) deal. 10:36 AM Sep 4th

RT @EJWalters front line in fighting terror in WSJ http://bit.ly/Hd91d @Katulis || Palantir s/w; EDD and KM take note! Intel is leading edge10:45 AM Sep 4th

Each September, Inside Counsel published its “IC 10″, the annual winners of the magazine’s top 10 innovative law departments (Game Changers: The 2009 IC-10 innovative legal departments create winning solutions). Here is my overview of and comments about the ones I find most interesting. 

Medtronic lawyers found it challenging to keep up with patents from around the world, so the law department created, with an Indian software company, its own software “dashboard” to keep track. A combination of software and Indian employees of the software vendor sort patents into “buckets", making it easier for Medtronic lawyers to stay current.

Prudential created an “executive dashboard” to monitor real-time outside counsel spending. “The dashboard includes screens that display an analysis of rates, staffing by level and expenditures with each firm over a three-year period. This helps Prudential negotiate hourly fee discounts and is laying the groundwork for more alternative fee arrangements.”

Comment on Medtronic and Prudential: I find it surprising that two big companies chose to develop software. Does this reflects truly unique needs, a market so small that vendors don’t see an opportunity for commercial-off-the-shelf software, a preference of build over buy, or some other factor?

Xerox Corporation developed a global contracting process to gain consistency and speed cycle times. The company developed consensus around a “playbook” with contract clause language. The system includes a tool to help managers price risk appropriately. Comment: I wonder if this system is custom built.

CN corporation reduced legal spend by shifting work to “small town firms” across the US and Canada. The chosen firms “complete the work much faster at a smaller [sic] hourly rate, generating closer to a 75 percent reduction in cost.” Comment:: I read a lot about shifting work to smaller firms; seems like low-hanging fruit for other GCs.

Kraft Foods adopted blogs and wikis. The deputy GC recognized adoption is purely a human issue of change management, not one of technology. He took steps to encourage lawyers and staff in the law department to participate. He says “says the blog and wikis have helped the department in several areas, including sharing knowledge and best practices, building networks and giving consistent legal advice to the rest of the company.” Comment:: What are the rest of the GC waiting for?

Overall Comment: I think all of the above are great steps but without more information, it’s hard to assess the real impact. Lawyers - and the journalists covering the legal market - seem generally averse to metrics. Ultimately, law department should reduce risk, enhance revenue, and provide counsel at the lowest cost possible. Absent metrics, assessing the true impact of these or other innovations seems pretty subjective.