Articles Posted in Technology

As an aficionado of metrics and empirical data, I encourage you to take this survey. Mitratech, a leading provider of software for legal departments, is surveying legal departments to get their feedback on technology spending – which technologies are they investing in? How much are they spending? Which technologies provide the best ROI? A few moments of your time and you could learn a lot.

As part of my first-cut analyses of matter management system data from the General Counsel Metrics benchmark survey, I looked at the size of law departments. As measured by number of lawyers, the departments that use one of the eight most commonly identified systems, have a median of 27 lawyers; the rest of the group, including those that listed no matter management system, have a median of between four and five lawyers. They are much smaller.

No real surprise here; one would expect that larger groups of lawyers need more management tools, one of which is software for tracking matters and their expenses. As more data comes in from the GCM survey, it will be clearer where the so-called tipping point is: at what number of lawyers do more departments have matter management software than don’t. Of course, packages have different price points and capabilities, so even one-lawyer departments can find an appropriate match.

The other point to make here is that if size of department correlates with use of the major software offerings, then total legal spending as a percentage of revenue will look better for that group of software vendor’s clients. As revenue grows, the ratio of legal costs declines. The decline may have a bit to do with the legal software, but far more to do with other factors.

“New technology will naturally drive out the old, which it mimics in functionality and terminology, if the old is no longer available.” The quote comes from Henry Petroski, Success through Failure: the paradox of design (Princeton 2006) at 41. The opposite of Gresham’s Law, where debased coin drives out unalloyed full-weight coin, this housecleaning by better technology proved out when scanners sent fax machines packing; when PowerPoint replaced 35 mm slides; when spreadsheets made ledger books obsolete and photocopiers put carbon paper in the museums.

Attorneys and others in legal departments have seen their share of out-of-date technology banished by the brash newcomer: e-mail wiped out letterhead and envelopes; electronic billing savaged mailed invoices; online legal research rendered libraries – a venerable technology – inadequate; online portals dispatched physical deal rooms; cell phones left landlines gathering dust; iPads gobble up everything with apps.

Technologies are nothing if not Oedipal – the child supplants the parent.

It is a business commonplace that in the early days of an industry, the market teems with competitors, but equally common that their numbers thereafter shrink markedly. Combinations, withdrawals, failures, and acquisitions narrow the field. It has happened some with matter management systems for law departments but not to the dramatic degree that some industries have witnessed.

This pattern was brought to mind by Henry Petroski, Success through Failure: the paradox of design (Princeton 2006) at 26. Petroski notes that 34 companies offered slide projectors in 1979, the year of peak production, but only seven remained in 2000. For another instance, in the period 1978-1982, dozens of companies manufactured and sold early versions of personal computers but now only a few survive.

Matter management vendors have proved resilient. Some, however, have disappeared, such as CompInfo (founded in approximately 1980, ultimately acquired by Hummingbird and then discontinued), Corprasoft (acquired by Datacert a few years ago), INSLAW, TriPoint systems (acquired by Wolters Kluwer in 2005 and combined with TyMetrix), and LawManager (acquired by Bridgeway). There may well be other extinct systems.

Am. Legal Tech. Insider, Aug. 2011 has an item on page 7 about Capensys, a software training company. It trains users on Microsoft’s Office 2010 as well as other applications used in law firms.

Capensys “employs a goal-based training approach that begins by interviewing lawyers and staff to determine how they work and what they need to know. From this, learning objectives are established and the training blend determined to deliver better targeted, shorter training sessions.” If lawyers in law departments could spend a few minutes being interviewed online regarding their skill level and interest in an application, such as a matter management system, theoretically the training could much better match their needs.

Capensys offers a variety of ways to present the training. “The training blend includes marketing videos, scenario-based e-learning, hands-on workshops and post-rollout coaching.” I like the idea of just-in-time training and training by a variety of methods to appeal to differences in people’s learning styles. Some people read; some like to watch; others want to learn by doing (See my post of Nov. 3, 2009: training lawyers on software with 14 references.).

On LinkedIn I came across references to three companies that provide contract management software, and law departments that are using (or about to use) them. Remedy was described as “a contract management and work allocation system. People who need legal’s help will send their request through Remedy and the managing counsel can use Remedy to allocate work to members of the legal team and contracts, work load of attorneys etc can be tracked.”

Meditract and ImageNow are the other two packages. Another in-house attorney wrote “We have been using Meditract for my 3-hospital integrated health system, which is a nice contract management system. We’ve hired a contract manager and will be moving to ImageNow, which allegedly has a better search feature than Meditract.” I add these three to my cottage industry listing.

I also heard in a comment about a website that provides information about contract management. The site doesn’t have that much content and you have to scroll down to see what is there.

An earlier foray into erroneous thinking about one kind of software left a lot of flawed thinking to cover (See my post of Sept. 5, 2005: myths of matter management systems.). Here I have generalized common technology-related mis-perceptions.

1. The hard part is selection. Wrong: the tough sledding comes when getting the software onto users’ desktops and used effectively.
2. You can bank on the vendor’s ROI calculations. Wishful thinking: in fact, most of those calculations rest on crucial assumptions and very forgiving methodology. A good discipline, but hard to hold out as airtight.

In mid-2011, at least twenty companies have licensed software to more than a handful of U.S. law department to help them manage matter information. Allegient, BottomLine, Bridgeway, CSC, CTTyMetrix, Datacert, doeLegal, EAG, Legalbill, LexisNexis, LawBase, LT Online, Mitratech, TrialNet, and Serengeti (acquired by Thomson Reuters in 2011) (See my post of Feb. 25, 2009: eight matter management systems at LegalTech New York.).

A post five years ago listed most of them (See my post of July 14, 2006: names 11 companies that offered matter management systems.). An ILTA survey in 2009 included in this niche Practice Manager Group and Legal Files. In truth, it is hard to draw a line around “matter management systems” (See my post of July 16, 2011: difficulty delineating genre.).

Hyperion Research group has published an overview of the cottage industry and its current inhabitants (See my post of Feb. 23, 2011: strengths of Hyperion’s report; and Feb. 24, 2011: predicts entrance into the market of enterprise application vendors.). A recent report brought home that difficulty (See my post of March 6, 2011: Hyperion Research describes a dozen vendors of matter management systems.). Other posts on this blog have identified candidates in this domain (See my post of Feb. 15, 2009: LegalMaster site lists Legal Bill Review, LRI (Legal Review, Inc.), ELF, LAS (Law Audit Services), Visibility, Legalgard Litigation Advisor, ValidZone and Direct Invoice, BES, Direct Commerce, Petersen, and Stuart, Maue, Mitchell & James.).

Three international giants now own matter management systems for law departments. Since ThomsonReuters has acquired Serengeti, the alpha males of the legal industry can duke it out. From a different standpoint, the field of major players in the legal industry who offer matter management software is fuller. Wolters Kluwer came first when it bought TyMetrix and added it to the CT group. Reed Elsevier, owner of LexisNexis and much else law-related, acquired CounselLink and Examen.

Since each of Thomson Reuters, Wolters Kluwer and Reed Elsevier roam the globe widely, we can confidently predict that their respective software packages will also spread internationally.
By contrast, so many of the competing vendors are private and comparatively puny (See my post of Feb. 15, 2011: estimate that 90% of U.S. legal service providers have less than $50 million revenue.).

It is difficult to corral with assurance which software offerings should be included as matter management systems. For example, should systems that primarily focus on electronic submission of bills be treated as matter management systems (See my post of Oct. 18, 2006: lists e-bill package providers.)?

Should we invite into the tent software designed to track information about patents, trademarks and other forms of intellectual property (See my post of Sept. 5, 2009: databases for intellectual property with 11 references.)?

Related software also includes third-party report writers (See my post of May 25, 2011: leading report writers.). Portals, which come in many flavors and with many definitions, complement matter management system software (See my post of Aug. 16, 2006: portal technology; Jan. 25, 2007: boards of directors and portal software; June 4, 2009: a patent portal; Jan. 7, 2010: clients request legal services through portal; Feb. 10, 2010: data warehouses; April 28, 2010 #1: Dell wins award for patent portal; July 7, 2010: policies placed on a portal; Sept. 9, 2010: IBM’s client-facing portals for legal aids; Nov. 27, 2010: platform compared to portal; and April 29, 2011: Lecorpio’s patent portal.).