Tuesday, January 12, 2010

Wouldn't it be better if law firms were investing in "Web Tools that Help Clients?"

Last week, The Wall Street Journal ran an article entitled, "Using Web Tools to Control Legal Bills." The gist was that large law firms are finally embracing the project-budget and cost-tracking mechanisms that have long been used by their clients.

Frankly, my reaction to this piece is mixed.

On a positive note, the article cites several examples of how law firm innovation has led to new and improved means of serving corporate clients both quantitatively and qualitatively. For example, John Alber, partner at Bryan Cave LLP, created an electronic database for lawyers to efficiently and cost-effectively handle radio-spectrum licensing transactions and a Web-based service to help clients better understand international trade agreement laws. It is this type of expertise that most large law firms are equipped to provide. By creating self-service and virtual legal practice tools that can be easily consumed by both client and firm lawyers, they leverage their domain expertise in a way that scales efficiently across numerous clients.

Another takeaway from the article is that the large law firms are clearly trying to change. Creating meaningful case plans, designing and managing to time and staff budgets are all steps in the right direction -- even if they are a full decade or two behind most law departments' efforts in this regard. Unfortunately, for practical and structural reasons that I discuss below, I am afraid these undertakings, even the noble ones, are unlikely to succeed.

One practical reason that many of these initiatives will fail is that the vast majority are opaque to the client. Most of the tools described in the article are for the firm, not the client. Even when firms do invest in extranets, it is completely unrealistic to expect that law department lawyers who are handling scores or hundreds of matters will endeavor to access cases or financial information on a case-by-case basis. The single-firm extranet model ignores the fact that corporate counsel retain a diversity of firms for different matters, and that many large cases and transactions are handled by multiple firms.

So, if the law firms' intent is well-meaning but the model is flawed, what is the alternative?

Quite simply, law firms and their lawyers should ask to participate directly in their clients' matter-centric management platforms. These platforms, including TyMetrix 360, leverage the Saas (Software as a Service) model to provide unified matter, document and financial management to both in-house and outside counsel.

By using clients' chosen platforms, firms can streamline communications and create a single artifact of all the activities and financials on a given matter. At a minimum, the matter will then have a common plan, budget, progress and resolution. Advanced systems will also enable configurable workflows, embedded business intelligence, document libraries, and the ability to create and track alternatives to the billable hour.

Moreover, by collaborating in a corporation's chosen platform, firms give law departments a gift -- the ability to aggregate, index and analyze matter and financial information across the entire enterprise. It is only by capturing all corporate data in a single data repository that law department leadership can accurately assess the legal and financial risks to the corporation. Unfortunately, none of these benefits can be attained with individual firm extranets.

Accordingly, as much as I would like to, I can't celebrate firms for continuing to expend scarce resources on tools that are more psychological salve than client solution. Rather, I urge firms to consider engaging clients in ways that most benefit the client. It is in this way that firms can truly demonstrate their willingness and aptitude with respect to the financial and budgetary discipline expected of their clients -- and corporate law departments can derive the benefits of aggregated data to help drive results.


  1. Your point is well-taken, but there is an important gloss. The wireless spectrum approach referred to in the article was least of all an extranet. Rather, it was a way of reconfiguring how work is done. The application we created provided contract and other junior lawyers an automated workflow and database management application. That application enabled them to accomplish a high volume of due diligence in a fraction of the time such work usually takes. It also enabled more senior lawyers to easily monitor that process and insure quality. That is a very different work model from that traditionally applied to due diligence and it precicely and directly answers the clarion call of the ACC's Value Challenge.

    Such workflows are beyond the scope of anything now in or even contemplated by e-billing systems, matter management systems and the like.

    You may well ask how e-billing and mattrer management systems can interface with workflw systems used by law firms and that is an excellent question. I think the answer is to develop a set of standards that would apply to communicating project status and that would be uniform across all platforms. That would be an excellent task for tha ACC to undertake.

    John Alber

  2. The idea of developing standards for integrations within the legal community is 100% the right thing to do. If we are realistic with ourselves no system will dominate the landscape, nor should it Google would tell us, but there is a great need for people and system to work together to streamline practices, drive better outcomes and let's face it reduce costs.

    Even as sophisticated systems emerge that offer complex workflow management, business intelligence, predictive modeling, etc…, the reality will still exist that each stakeholder in the transactions will have systems they are comfortable with and to gain the greatest adoption of new capabilities will require us to allow them to work in their comfort zone and behind the scenes connect or link the systems together.

    I agree this needs to be an industry wide conversation, one that the ACC, LOC or other bodies could and should facilitate, but politics and competition will need to be set aside for the growth of the industry. The good news is I believe many people feel this way and the timing is right.

    Craig Raeburn Jr (VP, Product Management - CT TyMetrix)

  3. Thanks (extremely belatedly) for your post John Albers. Your point is very well taken. As you point out above, there will always be a need for innovative law firm point solutions. At the same time, there is an equally critical need to create a platform or hub for these points solutions to inter-operate to the mutual benefit of firm and client alike. It seems to me more likely that this platform will ultimately come from the corporate side of the equation (for the reasons stated above).

    Thanks again for your comment.