image [cc] WilWheaton

In Part 5 of this series we talked about next-generation technologies that have the potential for real change, but mean computers will replace lawyers.

Beyond Private Practice – Some Examples
Law Schools
“What They Don’t Teach Law Students: Lawyering,” A title from a November 19, 2011 article in the New York Times. Deeper in the article, “The fundamental issue is that law schools are producing people who are not capable of being counselors,” says Jeffrey W. Carr, the General Counsel of FMC Technologies.”
Law Schools are under heavy attack to change as well. With student loan debt now surpassing credit card debt and with law graduates unable to actually practice law, many even within the legal industry are turning on the law schools. This debate has reached a fever-pitch. Law students are now suing their schools for not preparing them for the realities of the legal market. And law schools are suing the ABA over accrediting standards.
Law Librarians
Long held as a sacred space within a law firm, now law libraries are convenient cost cutting opportunities. Librarians are forced to defend their value and try to maintain staffing levels in order to effectively respond to lawyer research requests. Even clients have joined in this attack, specifying which time keepers are allowed on their bills, many times excluding valuable librarians.
Legal IT
Those in the legal technology space are now under an all-sides attack. Clients want to know specifically which tools a firm is using to be efficient. Firm leadership expects IT to bring every innovation to them, but then declines to fund much beyond basic upgrades. Partners want to cut what they perceive as less-utilized systems (a.k.a. the ones other partners use). Administrative leadership expects that no system will ever go down. Individual lawyers want to switch to iPhones. And IT gets to support all of this. Meanwhile, they are competing against the entire market to retain top technical talent.
Judges
While fighting with every other government agency for funding, they must stay on top of all the new technology, as every day some case is filed over its use or abuse. Meanwhile, they haven’t seen a decent raise in years.
You get the picture …
Part 7 reveals the biggest challenge facing the legal profession – its deep, traditional emphasis on precedence.
Image [cc] lemurdillo

I had the privilege of being on a panel with three amazing people at LegalTech’s CIO Forum this week to discuss how consumerization of technology is affecting the law firm technology strategy. Phillip Hoare from Wilson Sonsini really made me think differently about the topic because he came at the scenario about 180 degrees from where I assumed most CIO’s would be. His approach was to focus on the positive and downplay the negative. Although I don’t have a direct quote, his motto for dealing with the different ways in which a lawyer wants to use technology, or the different types of technology was basically this:

My job as CIO is to make sure that the attorneys are engaged in the practice of law, and we will support whatever platform or device they wish to use in order to keep them engaged in their practice.

I have to say that I was surprised to hear this type of approach because most of the time at these types of conferences the focus is on what goes wrong, rather on what goes right. In fact, I made a few comments to others that the theme that ran through most of the conference was the biggest problem with law firm technology was that lawyers didn’t stay in the “box” that the CIO or CTO designed for the firm. Issues of potential security risks, or the possibility of commingling of person and firm data, or the duplication of data into cloud servers or personal devices required shutting down the ideas of bringing in foreign technology that hadn’t been fully vetted by the firm’s IT department.

Now, I’m not living in a bubble when it comes to how technology, law firm IT Departments and law firm Partners interact. There is a delicate balance of doing what is right, what is ethical, and what is feasible… and that these three prongs are typically being challenged as new technologies are introduced. I just wanted to say that it was refreshing to hear someone look at the challenges in a way that stresses the need to just make it work in a way that is beneficial to the attorney’s ability to work in a way that he or she finds most effective, and less about drawing battle lines of what will and will not be supported by IT. I’m sure there are many challenges that face IT Departments that take on the “keep the attorney engaged” approach. However, I think that it is the better approach for IT to be flexible in supporting the way the attorney wishes to work, rather than attempting to make the attorneys work the way IT wants. As I mentioned during the panel, if IT starts throwing up roadblocks to the way attorneys want to work… you may find the attorneys have great skills in working around those roadblocks.

What resource (technological or not) would you invent to transform the legal industry?

This question isn’t about what you think will transform the industry, but rather what you would, if you were all-powerful, create to do so.
Share your thoughts. And don’t just step outside the box, get so far away from it that you can barely see it with a telescope.
image [cc] tsukubajin

In Part 4 of this series we discussed why firms avoid next generation technology and why that needs to change.

Replacing Humans
To look deeper in to what the future might hold, we will now explore two next-generation knowledge management (KM) technologies. I refer to these as analysis KM tools, as they extend beyond technology that organizes things, and become technology that performs true analysis functions.
LexisNexis has developed an analysis KM product that analyzes knowledge from multiple systems and makes decisions about the content. The Matter Experiences Module of the Lexis Search Advantage product can analyze time entries, documents and other records to determine 1) what type of work a matter is, and 2) what type of tasks a time entry includes. In our profit margin world where we need to understand the costs of providing various services, such a technology will have tremendous value.
Although it sounds straight-forward, most lawyers do not know what type of work a random matter includes. The reason is they never cared about that data point. Instead of labeling a new matter as Patent Litigation, it was called “Company XYZ vs. ABC Corp.” So firms are unable to search and retrieve by matter type. If you don’t know what a service is, you will not know where to begin to understand its cost.
But even when you know the type of matter, you will only be able to see the overall fee. This knowledge has some value. But being able to break the work down into relevant phases and tasks, lawyers will understand their costs at a much more actionable level. Firms can now know how much time is spent on a given task-type for a specified type of work. An additional benefit of having technology perform this coding work is that the results will be consistent and therefore of higher quality and value.
Another, perhaps more interesting and immediately useful analysis KM technology comes in the form of document analysis. KIIAC (pronounced kayak) has a system that analyzes volumes of documents. To illustrate its ability, here is a step-by-step description of it in action:
  1. A user submits 300 different examples of an Agreement into the system. KIIAC analyzes and then returns its best guess at the structure of an Agreement based on the content of the 300 examples. This structure includes a listing of all clauses and their relationships.
  2. Then a lawyer reviews the suggested clause structure and makes adjustments to it.
  3. A second analysis is performed using the finalized document structure. KIIAC then returns an analysis of how variable the language of the 300 examples is. This includes an identification of the most standard language for each clause.
  4. KIIAC can then generate a new document draft using the most standard, non-negotiated language.
The result is actually an identification of the standard way Agreements are written. This is a task humans could not perform.
But wait … there’s more:
5. KIIAC can then compare yet another Agreement against the identified standard, see where the new document is different and if it includes all the relevant clauses.
KIIAC is displacing humans in this process. In traditional practice, lawyers pull a few recent examples of a document type, review them all in an attempt to cull out deal-specific language and then produce a ‘clean’ draft to start the next deal. KIIAC is able to perform the same tasks, but do it using hundreds or thousands of examples. And it does it in a matter of seconds instead of hours. I might add KIIAC does a better job. If the recent examples chosen by the lawyer do not include a specific clause, it may well not end up in the clean draft. KIIAC, in its more comprehensive approach, is far less likely to miss anything. And unlike a lawyer, it can analyze a new draft, say from the opposing party, and in seconds know if it anything is missing from it.
I refer to these new technologies as analysis tools primarily because they perform the tasks of humans. This is a qualitative leap in the type of technology used by lawyers. More importantly, it is technology with a direct impact on profitability. In comparison, an upgraded version of Word has very little, if any impact on the bottom line.
Lawyers need to seek out these types of next generation technologies and find ways to implement them profitably within their practices.
Part 6 in the series looks at segments of the legal market beyond private practice and the forces of change acting on them.
Velocity App by ContentPilot LLC

As a lawyer, have you ever been at dinner with a client who asked you, “look, we’ve been having a real problem with a certain part of our business. Now I know this isn’t your bailiwick, but do you know if someone at your firm does this kind of work?”

Rather than looking like a deer caught in the headlights and watching a potential deal go down the drain, now you can whip out your handy new iPad app, Velocity.

Released in the third quarter of 2011, ContentPilot LLC bills Velocity as the first mobile app to drive sales for lawyers and professional services firms.

Sitting atop ContentPilot’s Cases & Deals product–aka, the firm’s experience database–a lawyer has instant access to his firm’s experience database from his smart device.

And with a squeaky-clean layout, the navigation is über-user-friendly. With a touch of a finger-tip, you can navigate to your firm’s practice lists, teams and phone-friendly descriptions of salient matters. It also show-cases the your own clients and practices, as well as keeping up with your client’s lastest news.

Right now, the news is just pulling from the client’s company web site. ContentPilot is hoping to partner with Manzama, a social media news aggregator, to develop a more robust news layout.

ContentPilot’s  Velocity app is the answer to the cross-selling dilemma that every lawyer in a large law firm faces: who does what in my firm?

Now, instead of having to try to remember the client’s question, go back to the office, remember to find the right guy, then trying to reconnect with your client, maybe even after he’s already found someone else, you can get it all done right there on the spot.

God, I love technology.

Don DeGabrielle, Lucy Dalglish, David Adler, Tom Forestier

Well, I don’t know about you, but  I had a GREAT week-end. Aside for a fun-filled movie marathon (Red Tails, The Artist and Hugo), I had the privilege of attending the 26th Law & the Media Program Examines WikiLeaks.

The first event of the year, the session featured Julian Assange’s lawyer, Geoffrey Robertson and New York Times Pulitzer-prize winning reporter Eric Schmitt.

Julian Assange’s English lawyer Geoffrey Robertson, kicked off the session via Skype.

For those of you who are unaware, he is one of the top legal minds of our time–it was a privilege to hear him speak. Australian born, he holds dual citizenship in Australia and England. He is a barrister and a Queen’s Counsel who has handled libel, human rights and media matters involving well-known publications, artists and writers, including Salman Rushdie, author of The Satanic Verses.

Robertson’s position on Wikileaks was that the public has a right to know and that Assange was only acting as a reporter in conveying unsolicited, unclassified documents. He proposed that governments need to create policy to ensure that documents are properly classified and then classify them.

Next up was Schmitt, who talked about meeting with and interviewing Assange when the first trove of diplomatic cables were leaked by WikiLeaks. Schmitt was on the journalistic team of four international newspapers that were given the documents for review.

A panel then discussed the issues surrounding whistleblowers, sources and reporters. The panel included Lucy Dalglish, the Executive Director of the Reporters Committee on Freedom; Don DeGabrielle, a Fulbright attorney and former U.S. Attorney; and David Adler, a federal criminal defense attorney and former CIA agent. Winstead’s managing shareholder and media attorney Tom Forestier moderated.

The session was targeted towards reporters and raised issues about the reliability of sources, maintaining a source’s confidentiality and what constitutes the status of a reporter. It was a fascinating discussion, particularly at the end. These folks who had been in the trenches, discussed how leaks, in this day of instant technology, are so much more likely to occur. Interestingly, all three panelists hearkened back to the days of Watergate when the reporters’ idea of protecting sources were parking lots meetings and notes in flower pots.

The event was held at the South Texas College of Law Saturday morning and co-sponsored by the Houston Bar Association, the Society of Professional Journalists and The Press Club of Houston.

Image [cc] Truthout.org

In Part 3 of this series we talked about new competitors to law firms and some basic economics of law firms to get deeper in to the intense pressures on firms. Here we peeled back the layers of change driven from new technologies.

The Technology Challenge
Ray Kurzweil predicts that given the current exponential rate of technology growth, by 2048 a single computer will have the computing power of all human brains. Kurzweil’s calculations are based on a thorough analysis of numerous technology trends. But even if you discount his ultimate prediction, you really can’t escape the powerful influence rapid technological innovations are having. Compare that level of change to the technology innovations currently prioritized by lawyers and firms. These can be summed up with one word: Upgrades. With some minor exceptions, most firms and lawyers are investing their technology dollars in projects like newer word processing, document management and email management systems. So while the world is automating forms and legal processes on the Web, lawyers are getting better at paragraph numbering and organizing documents.
Why?
Cost-plus thinking. In a cost-plus world, firms react by draining the company of capital every December 31st. This mind-set does not view technology as an investment, but instead as a necessary expense. Worse yet, technology negatively impacts the number of hours and respective revenue generated by them. So why would a firm invest in it?
This model has driven most legal technology vendors to focus on delivering incremental technological innovations to existing applications. So even when a firm actually wants to innovate, they do not have a lot of options.
Running against this grain is the emergence of Legal Project Management (LPM). This concept focuses on applying project management principles to legal matter management. Clients have been driving much of this dialog in their zeal to get efficiencies from their outside firms. Efficiency meaning – do the same work in fewer hours. Firms who have truly embraced this idea (i.e. Seyfarth Shaw) have seen very positive responses from clients. LPM has a ways to go to be fully embedded in the industry. But in the meantime it is driving new technology options.
There are other technology choices that highlight the possibilities and give direction to firms looking to embrace the future. First off, firms should look at the new breed of competitors to see what they are using. LPOs are investing in process automation tools to create standard methods for how tasks are done. This standardization ensures quality and efficiency. It bakes in best-practices for every piece of work. Technology for this is becoming available for lawyers, evidenced by Onit which provides a hosted (SaaS or cloud-based) process automation application for legal departments and law firms.
Vendors like LegalZoom demonstrate the value of providing smart content, online directly to clients. Some large firms have actually deployed similar technology. For example Orrick provides a Start-up Toolkit where clients can generate quality first drafts of the documents needed to form a new company. Both of these examples (process and document automation) are good examples for lawyers and firms to consider.
Part 5 will bring technology further in to focus, highlighting new technologies that perform human functions.
Image [cc] marcokalmann

In Part 2 of this series we covered the beginnings of major change in the legal market along with the initial responses from firms and lawyers.

Non-Traditional Competitors
An emerging and compelling reason for lawyers to make different business decisions is coming from new breeds of competitors. One example is the Legal Process Outsourcer (LPO) market. These companies started as off-shore (typically India) based providers for first document review in litigation. They hire English speaking, American law trained candidates in other, lower wage countries. These much lower-costing, well-enough trained lawyers were appropriately suited for this level of work. So well-matched to the tasks, that in very short order, these document reviewers became viable competitors. Most lawyers glossed over this market encroachment, seeing it as commodity level work no longer worthy of their skills. In reality, this meant millions in fees were no longer going to US lawyers.
The LPOs originally targeted law firms as their customers. But law firms were slow to respond to these offerings, in part due to the ethical constraints of profiting from third-party services. But firms were also concerned about diluting the law firm brand with low-level services. The result was that LPOs shifted their sales and marketing efforts directly to clients. With the acquisition of the Pangea3 LPO by Thomson Reuters, the market saw strong validation of this model. LPOs are now offering a broader range of services including: Contract Drafting, Contract Review, Patent Application Drafting, IP and M&A Due Diligence and other services.
It should be noted that these legal-type services are being provided by non-law firms directly to clients. To date, it appears that no regulatory authorities are investigating these practices leaving these new competitors ample opportunity to go after the legal market, which they appear to be doing. As law firm revenues have gone stagnant or declined over the past few years, LPOs have been experiencing 50% growth per year.
In the solo / small firm segment of the market, other competitors are appearing. For example, LegalZoom is a provider of online legal forms which also provides customer service to assist clients in completing the forms. Some states have taken issue with LegalZoom for, what they believe to be, engaging in the Unauthorized Practice of Law (UPL). These states’ efforts do not seem to be having much impact on LegalZoom’s growth. The company reports raising $100 million in funding to-date and $100 million in revenue for 2011. This market for online legal content was further validated via Google’s $18.5m investment in Rocket Lawyer in mid-2011. These providers are taking full advantage of 1) the ability to raise capital, and 2) next generation technology. Lawyers are barred from the first activity and generally unwilling to engage in the second one.
Profit vs. Revenue
Lawyers and firms have been living in a cost-plus business model world for the past 50 years. ‘Cost-plus’ is having the cost of a service plus a profit built into the pricing. Hourly billing rates are a manifestation of this model. As long as there were enough billable hours to go around, profits were virtually guaranteed. This model created a mind-set bent on billable hours and revenue, for which the industry is well-known. The challenge for firms now is that these rules no longer hold true. The shift that began in 2006, accelerated by the recession in 2008, changed that dynamic.
AFAs presented a viable alternative to work through the shift. Instead of looking at just hours and rates, fees and cost of delivery became part of the equation. Now firms began looking at matter financials in a profit margin way.
Most businesses operate on the margin model. Although not a complicated formula (price minus cost equals profit), it is still an elusive one for lawyers. I contend that by the end of 2009, firms were unknowingly operating in a margin world. Unknowingly since their compensation models are founded on a cost-plus model that rewards revenue versus profitability. Therefore firms have a structural blind-eye to the profit squeeze problem. They are unable to even expose the problem, when they really should be focused on resolving it.
A Suggestion
At one point in 2010, a law firm partner asked me if I could do one thing to restructure a firm for the future, what would it be? I gave a simple answer: Change the financial conversation from revenue to profit. Most of the challenges facing firms would come in to focus and receive the attention they need and deserve if that one criterion were in place. Every effort in a firm would shift from supporting a cost-plus model to the margin one that actually exists.
Part 4 provides a forecast on the technology aspect of the perfect storm. This rapidly advancing force brings serious challenges, and hopefully some opportunities to lawyers.

Today, I spent a lot of time messing around with Blogger, Feedburner and Google+.

There is a lot of change afoot with the upgrades in Google+.
Integration for the most part has been pretty smooth–I like that if you have a Google+ account and a Blogger account, it is fairly simple to integrate and feed your new blog posts to your Google+.
But what isn’t so easy is integrating co-authored blogs into Google+.
Thanks to a tip from HubSpot, I found a bit of a work-around by setting up a Google+ author tag. But I’m not completely confident it will work. Plus, I had to do something that I was completely loathe to do–submit my Gmail account to the public domain. Ugh.
Why does Google insist upon getting all up into my business?
Image [cc] Slippery Tiger

I have found that librarians at law firms walk a tightrope strung over the thorny issues of cost, risk and user demands. We have a reputation of being “gatekeepers” or impeding advances in legal research by holding on to old media at the expense of new media. Although it may be true that there are a few Luddites clinging to the idea of a traditional brick & mortar library, those Luddites are few and far between. Most librarians are actually ready and willing to adopt new ideas, media, technology, user experiences, and procedures, but they are also responsible for advising the risk involved in the adoption to the overall firm in which they work. There are times in which the risk outweighs the cool factor in moving forward.

One of the common themes I’m hearing from vendors these days is that “we need to get our products in front of the attorneys because the librarians are too challenging to work with.” It is a logical thought on their end because librarians are challenging. We look past the “whiz-bang” interface and start asking the questions of “how much does it cost?” or “who can access it?” or “does it work with our current infrastructure?” or “what happens if someone gets into something we didn’t put in our contract?” or “if we bill clients for the use of this product, can you work with us to make sure we follow ABA guidelines?” In other words, we ask challenging questions and won’t move forward until those questions are answered.

There is a reason that law firms hire librarians to manage their external legal research content. We mitigate risk – both ethical and fiscal for the firm. We report up to the powers-that-be in a firm and present the pros and cons of new products, give our recommendations, then implement the decisions that are made. Sometimes the potential rewards are worth the risk, sometimes they are not. Like it or not, librarians do not make the final decision, however we do relay that decision to the vendors (so to them, it seems that we are the problem.) There are librarians out there that never want to bring in new products or technology, but they are rare – and getting rarer.

When vendors successfully do an end-run around the library and get a Partner to sign off on a contract for their product, the librarian spends the next year attempting to undo the damage. Pull any law librarian to the side in at a conference and have them tell you the horror stories of what happened when a Practice Group bought a product (usually somewhere in the vicinity of $25K) only to find out that the firm already had a similar product (sometimes the same exact product), or that the product actually didn’t solve that problem the Practice Group thought it would. The story usually ends with how much time the librarian spent on getting the contract reworked into an existing deal (reducing the overall cost, but retaining the product) or finding some way to get out of the contract after tracking down the contract signed by the group.

Many librarians would love to adopt the newest version of a legal research product and be on the bleeding edge of technology. However, our biggest duty to the firm is to make sure that we first look at the risks associated with taking on the latest and greatest products. Skipping the library (either by a vendor, or someone on the inside of the firm) may get a product into the firm, however, it rarely comes without introducing some unforeseen risk to the firm. The librarian is then asked to fix the problem, and usually a note goes out reminding members of the firm that all contracts have to be negotiated through the proper channels, and that “X” vendor must from this point go through the proper channels. For the vendor,  the short-term victory turns into a long-term damage to their reputation within the firm. Even worse, now they have to go, hat in hand, to the very librarian they excluded, and work to make amends.