Articles Posted in Technology

An interview with the Geoff Elfman, a VP of DataCert, produced some statistics that show the penetration of invoice review and delivery systems (Met. Corp. Counsel, Vol. 13, Dec. 2005 at 57). Elfman states that his company has “almost 3,000 individual firms and vendors” using its software and “almost 6,000 law firm or vendor to corporate client connections.” Thus, they have an average of about 2 connections per user, although not every recipient is a law department if you heed the careful term “corporate client,” nor is every user a law firm.

Even if a user is a law firm, it may well be that only one or a few clients of that firm have demanded submission of their bills electronically. In other words, one cannot tell from these figures how many law departments are using DataCert, let alone for what proportion of their invoices or fees paid.

Internationally, DataCert services 100 countries and invoices submitted in 25 currencies, so some portion of the law firms do business outside the US.

“Today, forward looking legal departments have already deployed an Enterprise Risk Monitor to gain real-time visibility into their organization’s exposure in the areas of litigation, compliance and asset risks.” (Met. Corp. Counsel, Vol. 13, Dec. 2005 at 56, comments by Afshin Behnia, Mitratech’s President & CEO).

Really? Please name just one or two forward lookers.

But it gets better. “Technological advances will enable the legal team to deploy intelligent agents integral to the Enterprise Risk Monitor, which will proactively run ‘what-if’ scenarios and alert the general counsel of potential threats or exposures that may otherwise go unnoticed.” My goodness! Elfin electronic lawyers picking up the red phone.

Relatively few law departments have document management systems (the likes of iManage, PCDocs, WorldDox, and Documentum). I was therefore surprised to read a consulting-firm executive (James Veraldi, EVP of Micro Strategies) observe that “within corporate counsel, we are seeing a transition from classic document management systems which enable efficient searching and management of documents, to unified content management systems which control ALL of the electronic content surrounding a matter or deal” (Met. Corp. Counsel, Vol. 13, Dec. 2005 at 56).

The preceding paragraph, by an attorney at Legal Technologies Kroll Ontrack, states that “approximately 93 percent of all information is created electronically and 70 percent of that never reaches paper,” so controlling ALL electronic content is a tall order.

Querulous I may be, but there’s a besmirched record of legal technologists over-touting the capabilities and penetration of wares and services (See my post of today on contract management software and of Dec. 21, 2005 on spruiking.). The exaggerations make general counsel feel backward, but unjustly, and spend lavishly, but unwisely.

A report on two studies of the District of Columbia’s Office of Corporation Counsel mentioned that Nashville’s Legal Department had licensed a matter management system, paid for some hardware to support it, and hired a staff person to run it. The base numbers are now at least five years old, but probably not much older than that.

The initial fee for the software came to $170,000 plus $15,000 for hardware. Nashville committed to paying maintenance fees of $15,000 per year. The employee’s annual compensation amounted to $35,000.

If we assume the department would depreciate its investment for the software and hardware over a ten-year life cycle, after which both would need to be upgraded or replaced, then those two components added to maintenance fees equal $43,500 per year. If the employee has benefits of 30 percent on top of salary, the annual investment in the system reaches approximately $90,000. Next, top off that annual cost for five-plus years of inflation, and the annual cost over the decade for what is probably a 10-20 lawyer municipal law office nears $100,000.

Two studies of the District of Columbia’s Office of Corporation Counsel contained some comments on technology in the Office, and specifically a ratio of end-users to IT system support staff.

The recommended ratio was one IT support person for every 37 users. What that translates into for a 10 lawyer department, which if typical would have 10 other people in the department, is about half of an IT support person. In most companies, corporate IT assigns one or two people, among their other responsibilities, to support the legal function.

Intranet sites of law departments suffer because administrative staff run them but lawyers possess the knowledge that needs to be on them.

How does this hobble law department intranets? They usually languish in a state of desuetude because lawyers, the custodians of substantive knowledge, can’t be bothered to contribute. (See my post of March 5, 2005 on the unlikeliness of altruistic information sharing.) They know what they know, and see little to gain by pulling it together and taking time to put it where someone else might find it useful. (They also fear being criticized.) At the same time, all lawyers wish others would contribute to the common store of knowledge.

As substantive input to the intranet shrivels, administrative material becomes the common stock, until the site becomes a laughingstock. Where a paralegal or secretary ends up responsible for stocking the intranet, what starts as a full shelf comes in time to be empty.

Thomas Miller & Co., the venerable giant of insurance services for shippers, decided in 1997 to start developing Oasis, now an impressive, customized case and work-product management system (Legal Week, Vol. 7, Nov. 17, 2005 at 22). Thomas Miller’s approximately 85 lawyers and 150 other transport specialists use it to handle transport liability claims.

Oasis allows users to access about one million cases, in less than a second! Around 39,000 of those cases are currently open. It also holds 12 million pages of documents, adding about 1,000 a day – mostly e-mails – and an additional 1,000 work product a day.

In general, I guide law departments away from customizing a matter management system. Doing so is fraught with challenges and too many systems designed just for internal counsel can be licensed, one of which is likely to meet nearly all of any law department’s needs. Thomas Miller, however, operates in a specialty niche, has huge volumes and complexity, and has found Oasis to be its watering hole of deliverance.

Reading an old post by Dennis Kennedy (Feb. 17, 2003) I resurrected this idea (See my post of March 26, 2005 about relying on your key law firms for additional technology support.) The contact people could be in your law department or could be from your corporate IS group or both.

If your law department’s technology support people spend time with their counterparts at your major law firms, you may benefit from additional training, creative consulting (See my post of Oct. 21, 2005 about Faegre & Benson’s document consulting.), offers of free help, or new and useful ideas about technology.

LaVern Pritchard, in a post dated Sept. 12, 2005 at Minnesota Lawyer, mentions a couple of uses of extranets that do not involve litigation. The legislative group at Winthrop & Weinstein uses them during legislative sessions to keep clients informed about bills. The firm also supports a real estate client by hosting master documents that the client needs, “allowing it to close transactions several days sooner than it once could.”

Although I have been dubious about the spread of extranets (See my post of Aug. 27, 2005.), these examples widen the scope of their applicability.

An excellent review of the past five years in legal technology, in LegalIT (Oct. 11, 2005), applauds the law departments of Virgin, DuPont, Barclays, BAT (British American Tobacco) and BP (British Petroleum). Most law departments plod through the “box-ticking stage” of acquiring technology (See my post of 14, 2005 about the meaning in law departments of “technology.”) without integrating it and demote IT investment to a low priority. See, for instance, that “Using new technologies to drive efficiency” ranked 11th out of 12 “tasks or issues” in a survey of 150 European law departments, reported in Counsel to Counsel (July 2005 at pg. 12).

The praised law departments have gone much farther. Virgin “is already running systems that would rival those of a comparably sized law firm, in terms of complexity and sophistication.” Other than Virgin having an extranet, the piece did not give more specifics.

I also liked the references to four British law departments. We in American think we set the pace for all things law departmental. Not true, and we should learn from our trans-Atlantic peers.