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Saturday, June 28, 2003

Blogs Create Potential KM Challenges

As my blog grows, I wonder about some of the KM implications of blogging. Of course, I am still relatively new (one month) to blogging and have yet to explore the various software options. But it strikes me that blogs are yet another source of potentially useful knowledge to capture and re-use. As with collections of documents, some blog postings are worth keeping and others not (yes, even some of mine are not worth keeping!). So the question is how to capture and re-use the good postings.

As someone who’s pretty disciplined, I would value a feature that lets me add fielded meta-data to my blog postings. I’d use these to assign a taxonomical classification and a measure of “half-life,” that is, an indicator of whether a posting might still be interesting in 3, 6, 12, or 24 months. Without some type of meta-data like this, capturing postings will rely either on manual review or advanced semantic analysis. The former is expensive and the latter not necessarily reliable.

I would love to hear from any experienced bloggers if I'm overlooking an issue or if there is an easy software solution.

I will leave my blog readers to ponder this for about 10 days as I will be on vacation starting June 29th for about one week

Thursday, June 26, 2003

New Ways to Reach Out to Clients

Yesterday I noticed an ad in the Wall Street Journal for a new service that deliver news and quotes via instant messaging (IM). I tried it just now and it seems pretty useful and unobtrusive, at least so far.

A few years ago, most law firms would have scoffed at the idea that they would regularly send e-mail updates to clients or allow their clients to sign up for subscription alert services from the firms' web sites. Yet many firms do this today. So, is IM the next wave? Will law firms begin to emulate the WSJ and deliver legal news via IM?

Arguably legal news and analysis requires some thought and reflection and therefore is not appropriate for IM. I suspect those same arguments were made about e-mail years back. The point is not necessarily just speed - it's operating in the medium clients find most congenial. I now have a WSJ "buddy" name on my AOL IM list. I can send a message ("main") to receive a menu of options or a message containing my menu selection to get headlines ("1") or quotes ("2").

Firms that want to occupy a high share of mind of their clients should consider a service that emulates what the WSJ is doing. For clients who use IM, having the firm name right there on the buddy list (or equivalent) can be a powerful awareness builder. And if that client has a legal question.... well, I'll let you fill in the rest.

Wednesday, June 25, 2003

The Limitations of Full Text Searching

Full text retrieval and semantic analysis software are useful software applications in the legal market. Software developers are making available increasingly sophisticated techniques to work with in very large document collections to identify potentially relevant ones and classify or otherwise automatically analyze them. These tools are very useful in knowledge management and litigation support applications, but law firms using them or considering doing so must keep in mind the need for human intervention and review.

Yesterday, the Wall Street Journal carried an article on page B1 titled "Online Job Hunting Is Tough. Just Ask Vinnie." The article is about how large companies use software to screen resumes for job applications submitted on their Web sites (and that for some companies, the majority of their hiring is via the Web). A consulting firm tested the Web-based job application process by inventing a fictional job applicant named Vinnie Boombotz and sent the resume to 400 big companies. The resume was "patently ridiculous," containing many misnomers but with some "plausible" work experience as well. To make a long - and very amusing - story short, the made-up resume made it through quite a few automated screens, whereupon a human rejected it.

I claim no expertise on how automated resume screening software works, but the challenge with screening thousands of resumes is similar to the challenges of identifying useful work product or discovery documents among thousands or more. The article ribs the companies where the resumes passed the screen. I agree, however, with a quoted spokesman of one company. He argues the technology is doing its job and that the humans did theirs, saying that's the way the system is supposed to work. I think the same is true for the application of technology in KM or litigation support. It is helpful, arguably essential, to screen documents and automatically do a first-pass analysis, but that does not eliminate the need for review by people who know what's going on.

Tuesday, June 24, 2003

Law Firms Get in on the Action (that is, online compliance)

In my prior two postings, I discuss two companies offering products designed to help prevent litigation by assisting with compliance issues. I observed that this is a space that law firms generally do not occupy. That is not entirely true. Law firm Bryan Cave is a technology innovator, having introduced its eCave suite of services some time ago. I first became aware of eCave when the firm introduced online interactive legal services a few years ago.

A recent article in CFO.com titled Learn Ethics in Your Spare , reports that "[t]he rising concern about insider training has led at least one law firm to take the unusual step of creating a Web-based ethics course to help companies train, test, and track training efforts. This do-it-yourself program, developed and sold by the law firm of Bryan Cave LLP, takes about 20 minutes to complete, and creates a paper trail." The article also reports that Bryan Cave is talking to insurers about offering a discount on D&O policies at corporations that use the product. Furthermore, it gives the product a very favorable review, reporting that the online training is short, very well written, and easy to use. The reviewer was also impressed by links in the training to more in-depth materials.

It will be interesting to see if other firms offer online services or if the space will be left primarily to players outside the legal market or non-law firm players such as The Legal Research Center or LRN (The Legal Knowledge Company), both of which offer compliance training services.

In thinking about entering the world of online services, law firms face many challenges. One is that online services are a very different business than selling hours. Another is that the margin on selling hours is very high compared to almost any other business. What many firms may not realize, however, is the potential relationship benefits of online services and the potential ability to generate traditional legal matters.

Monday, June 23, 2003

Preventive Litigation Support?

Picking up on the theme of my last posting concerning compliance and Sarbanes-Oxley, I've been struck over the last few weeks by the number of vendors offering "compliance solutions." More interestingly, I wonder if this suggests a trend toward "preventive litigation support."

One announcement that strikes me particularly is the launch of Aungate by Autonomy. Autonomy came to the attention of many law firm knowledge management, litigation support, and technology professionals for its sophisticated full-text searching capabilities. A June 16th press release by Autonomy announces the launch of Aungate, "a division of Autonomy offering the world's first automated, solution for enterprise compliance and litigation support."

Aungate offers real-time monitoring of employee communications, including e-mail, instant messaging, voice, and even SMS (cell phone short messages - bigger in overseas than in the US). One of the web pages shows some very interesting visual displays to help analyze communications.

The release also states that "Aungate provides an integrated solution to automate the analysis of these unstructured information sources in real time, enabling executives to spot trends in communications and easily pinpoint potential information misuse." It is interesting that vendors - and perhaps their customers - are moving in the direction of "preventive litigation support," that is systems that analyze vast volumes of data prior to litigation in an effort to prevent litigation in the first instance.

Sunday, June 22, 2003

Online Compliance System Offered by J.P. Morgan Chase

A short piece in the June 16th Information Week titled Get A Handle On Risk reports on new Web-based self-assessment software offered by J.P. Morgan Chase to help companies comply with the regulatory requirements of Sarbanes-Oxley. I was intrigued by this since it sounded like the bank was offering an online service that has elements of legal advice.

A J.P. Morgan Chase press release dated June 10th states that "Horizon helps management document the controls established to mitigate risk, evaluate the effectiveness of business units' compliance with defined controls, identify areas of risk which lack control procedures, and establish and monitor control action plans. By understanding the organization's risk profile, management can make more informed strategic and expenditure decisions."

It would be interesting to learn how much "legal" content Horizon offers. Perhaps the route to online legal services will not be through law firms, but through companies such as J.P. Morgan Chase where managing legal issues is just part of the ordinary course of business. I wonder if there is still an opportunity for law firms to offer clients an interactive, web-based service to help them comply with Sarbanes-Oxley.

Friday, June 20, 2003

Wall St. IM Records Requirement and Future E-Discovery Issues

Yesterday both the New York Times and the Wall Street Journal reported that NASD will now require its members to save instant messages for at least three years (just as they must e-mail messages). The same articles mention that NYSE had imposed the same requirements on its members earlier in the week (which, if it was reported, I missed).

If saved IM records ever become subject to discovery, they will just add to the already large volume of digital data that lawyers must review. I suspect that e-discovery vendors are happy about this! I'm not sure that IM e-discovery raises unique issues. But if Wall Street IM usage is typical, abbreviations and shorthand is rampant. Moreover, since IM interactions may follow a phone call, e-mail exchange, or hallway encounter, they may reference events or things that, standing alone, are not all that clear. I suspect that therefore applying automatic analysis and screening techniques in e-discovery to IM will be even more challenging than it is to other digital data. There are specialized vendors that say they can help. For example, Cataphora says it can help put this type of information into context (meaning relating it to other documents and records) and H5 says it can help give meaning by pre-filtering based on issue definitions.

I was also surprised that both papers did not give this more press. The NYT devoted four column-inches in a corner tucked away on page C6; the WSJ about eight on page C4. I suppose that reflects my limited perspective on what's important!

Thursday, June 19, 2003

Large UK Law Departments to Work Together on Tech Delivery Standards for Law Firms

In the current issue of Legal Technology Insider, Charles Christian reports that "guru Richard Susskind has revealed the existence of a new legal technology initiative by nine major investment banking groups, including Deutsche Bank and Barclays Capital. The objective is to agree [on] IT standards for the electronic delivery of legal services, so their inhouse legal departments will eventually only have access [to] one system, rather than the present situation where one bank may face separate login and operating requirements for as many as 200 different law firm extranets and virtual deal rooms." Susskind's article appears in the June 17, 2003 online edition of the Times Online (London).

In his article, Susskind reports that nine leading global investment banks in London "[l]ed by Deutsche Bank and Barclays Capital...have called upon five leading City law firms to work with them. The five are Allen & Overy, Clifford Chance, Freshfields, Linklaters and Simmons & Simmons." He suggests that it would be best for a third party such as a legal publisher to deliver the common hub.

This announcement does not surprise me. I have thought for some time now that if law firm extranets do succed, they will sow the seeds of their own destruction. In a presentation I gave, The Future of Technology in Law Practice to an ABA section in May 2002, I argued that clients that actively use law firm extranets (1) tend to use more than 1 firm, (2) it's too hard to use multiple extranets, (3) there needs to be a single, uniform system, (4) law firms will need to upload data to a common place, and (5) data transfer standards will develop.

I agree with Susskind that it may be difficult to achieve this goal with multiple law firms. Two years ago, LawCommerce.com announced an initiative to create a common deal room standard. A press release appeared on Yahoo about this June 18, 2001 and a similar one is still available at LawCommerce. As far as I know, the "major technology initiative to create a world wide standard for Online Deal Rooms" did not develop much traction.

My last comment is that the potential third party providers extend beyond legal publishers. For example, IntraLinks provides a common extranet platform.

Wednesday, June 18, 2003

Technology Outsourcing Example - Document Management

My prior posts on outsourcing focused on cost. But not all outsourcing is driven only by cost - functionality can be the key factor. Yesterday I had occasion to be in touch with Curt Meltzer, CIO of Dorsey & Whitney, which reminded me that his firm is in the process of outsourcing their document management software. Instead of installing Hummingbird DM (aka PC DOCS) or iManage, D&W has chosen NetDocuments, a hosted DMS.

I've heard Curt speak twice about the firm's decision. While I suspect they considered cost, the decision was driven by functionality. Three factors stand out in my mind. First, NetDocuments offers a single repository for the entire firm, which means lawyers only need to search a single database for documents. This facilitates lawyers working together across offices and practices. In contrast, most large law firms I know have set up their DMS as multiple "libraries" or "databases," each covering an office or a practice. This makes it relatively difficult for lawyers to find documents outside their office or practice.

Second, setting up client access to documents with a single repository and a hosted solution is easier than with the traditional, on-site solution.

And third, with NetDocuments business continuity is assured. The company has two separate facilities, one of which is built inside a mountain and both of which are operated with extreme security and back-up measures.

The decision to outsource is not simple, of course. D&W had to re-engineer its network and upgrade it to assure that each office has high-speed and redundant access to the Internet so that documents are always available. Also, the firm had to work hard to integrate NetDocuments into the various desktop applications (e.g., Word and Excel).

I think this decision illustrates that it is possible - even with seemingly basic elements of tech infrastructure - to think creatively and gain potential strategic and practice advantages.

Monday, June 16, 2003

Lawyers and the Use of Technology

Today I had lunch with a friend who is in-house counsel at a large company; he was formerly an associate at a large law firm. He is tech savvy and we spoke about how lawyers use technology. My friend made an interesting observation, which I attempt to summarize here.

People who are interested in how computers work tend to be more interested in "how things work" than they are in "how relationships work." While the two are not mutually exclusive, his observation is that personalities and skills tend toward one of these two opposite poles. And he notes that the most successful lawyers - both in law firms and departments - tend to be those who are most interested in relationships.

Perhaps this helps explain why the legal market has been slow, in many respects, to adopt technology to become more effective and efficient. To get to a leadership position requires skills that tend to diminish the importance of understanding "how things work." Comments anyone?

Saturday, June 14, 2003

More on Off-Shore Outsourcing

In my May 30th posting, I discussed Orrick's centralization of its back office in W. Va. and raised the possibility of law firms and departments sending legal work offshore. An article titled Down and Out in White-Collar America in the June 23, 2003 issue of Fortune describes the high rate of unemployment among professionals. It explains that the "triple threat of computerization, tech-led productivity gains, and the relocation of [jobs] offshore" now effects professionals as much as it does blue-collar workers. For professionals, the offshore move is becoming the biggest factor. In the last couple of years, companies have turned to India and the Philipines for financial analysis, software design, and tax preparation. Ernst & Young has 200 accountants in India who process US tax returns. Even medicine is not immune. One Indian company has established a team of 15 radiologists in Bangalore (all US-trained and licenesed) to interpret chest x-rays and CT scans from US hospitals (at one-half the cost). Can legal services be far behind?

Thursday, June 12, 2003

Online Legal Services for Consumers

Online legal services for consumers are useful and continue to abound, yet may pose serious problems. That's the conclusion of two separate and perhaps contradictory articles: Plunging Into Paperwork - Online services can help you draft a will -- if you're careful from the June 9, 2003 Wall Street Journal (in a special section on retirement) and Law & Disorder from July 2003 SmartMoney magazine. Note that both publications are from Dow Jones (though SmartMoney is published jointly with Hearst).

The WSJ article describes several web sites that help consumers draft wills. "Depending on the site, consumers can find everything from simple, blank forms to interactive questionnaires that help tailor documents to individual needs." The article discusses the risks of using these web sites and points out that they typically are not offering legal advice. While pointing out the many risks of drafting a will without a lawyer, the tone of the article overall suggests that it's not a bad idea.

In contrast, the SmartMoney article is quite negative on self-help legal web sites. The sub-title is a good summary: "[T]he trail of bungled lawsuits, mangled bankruptcies and amicable divorces turned acrimonious shows just how much chaos can ensue when people take the law into their own hands."

Are there implications here for large law firms that provide (or hope to provide) online assistance to their corporate clients? I don't think so. The consumer space is very different. A large law firm would typically deliver an online service via in-house counsel. Use of the system would be monitored and employees would typically either be quite sophisticated users or have the option to talk to counsel or both.

Tuesday, June 10, 2003

E-Learning in the Legal Market

Also from LegalIT, referenced in my prior post: Chrissy Burns of Blake Dawson Waldron in Sydney writes an interesting article about the role of e-learning in LegalIT. Her article, E-learning: Say goodbye to the classroom, describes a booming market in e-learning and potential opportunities this creates for law firm to provide online services to clients. “In many cases large clients are approaching their external law firms for computerised training systems.” But law firms face competition, difficult questions concerning platform selection, selling challenges, and content creation issues.

Since this is my second posting in a row about online legal services, let me mention that I maintain a list of online legal services at Prism Legal Consulting, Inc.. If anyone knows of large law firms that offer online services that is not on my list, please let me know (by clicking e-mail comments link to the right).

Monday, June 09, 2003

Online Legal Services Update - New Allen & Overy Offerings

The UK publication LegalIT in a June article titled Online legal services: Exploiting expertise, reports on new online legal services by Allen & Overy. For anyone interested in online legal services, this is a useful article.

The article notes that little has happened with online legal services of late (a disappointment to me, given my work with Jnana Technologies and efforts there to develop this market). The article interviewed Marc-Henri Chamay, who leads the firms online services. "Chamay argues that the only sure-fire way for law firms to sell web content is to embed this content thoroughly in their own internal processes and, initially at least, in the regular services that they sell to clients."

It goes on to describe three new online services. One is a derivatives netting product. More information about it is available from a PDF file from the Netalytics website. The second product, CSAnalytics, also relates to derivatives. The third, Global ShareWeb , "is a knowledge repository marked up in XML and designed to feed into a bank’s risk management system or netting engines."

Saturday, June 07, 2003

Re-engineering knowledge work?

Cindy Thurston, Director of Knowledge Development, at Shaw Pittman LLP, alerted me to an interesting column by Tom Davenport, A Measurable Proposal in the June issue of CIO magazine.

In the column, Prof. Davenport explores the idea that one can apply process improvement methods to improve the effectiveness of knowledge workers. In his own words: "I believe that the next big process change initiative should involve knowledge work. Let's examine how we do strategy, marketing campaigns, mergers and acquisitions, and R&D programs. Maybe we could even take on the process of management. This time—unlike in days gone by with reengineering—we should involve those who do the work. I see no reason why participative, creative efforts can't improve knowledge processes just as they improved the more structured, less knowledge-intensive type."

I see a positive spin when I read his column. He appears to suggest that knowledge workers need more help than they now receive in the effective use of technology plus facilities and an organization that support their work. Furthermore, one can potentially identify best practices and share them. I certainly believe this is true for lawyers. Some of the comments appended to the article, however, seem to take a dystopian view of his suggestions.

Thursday, June 05, 2003

KM Succeeds in the Not For Profit World

Earlier this week I read an interesting article in the McKinsey Quarterly called Knowledge management comes to philanthropy that appears in 2003 Number 2 (for the full-text, you will need to register). I was planning to post a summary when I received a very nice one by e-mail from Shy Alter, the CEO of ii3, a Toronto-based consultancy that focuses on KM. The company also sells a KM product called AdvanceKnowledge.

The article focuses on Baltimore-based Casey Foundation, which "has for over 50 years been a leader in improving the lives and opportunities of disadvantaged children and their families by financing programs, conducting research, and promoting the reform of public-service systems." Here is Shy's summary of the article:
  • Philanthropic foundations are knowledge-intensive bodies

  • Casey's new staff members had a limited understanding of the history of the foundation

  • Senior associates were now working in areas beyond their expertise, they needed more information from colleagues to do their work successfully

  • What they needed to know wasn't written down; it had remained in people's heads

  • Casey soon realized that if it was failing to share its expertise adequately with its own staff, it must be failing to do so with the recipients of grants and with external policy makers

  • Casey began to develop processes that would help senior associates set down their knowledge quickly and efficiently

  • Developing a comprehensive knowledge strategy and thinking through knowledge management in detail are essential

  • Casey's program defined the entire process: what knowledge should be harnessed, who should codify it, how it should be maintained and disseminated, and who should receive it it had started to build the institutional memory that would support its future works

  • Tuesday, June 03, 2003

    Survey of Australian Law Firms: KM and Legal Tech Findings

    Legal Technology Insider alerted me to a survey of Australian law firms sponsored by PA Consulting Group and CCH. The survey results are based on responses of one-third of the managing partners or CEOs of Australia's largest firms. The survey also offers comparisons to a similar survey PA conducted in the UK.

    On knowledge management, the survey found that only 38% of Australian and 32% of UK firms have been successful in managing their knowledge. The report identified problems with both knowledge capture and access, noting that fewer than one-half of firms provide easy access to the information and in fewer than one-half is knowledge capture a formal part of everyone's job. PA comments that "it is processes, not the information repositories on their own, that deliver value." These findings are especially interesting given that most KM professionals acknowledge that Australian and UK firms are ahead of US firms on KM.

    On IT investment generally, the survey found that 85% of respondents believe that they could get more value from IT investments. This result is consistent with the finding that fewer than one-quarter of respondents think that existing IT investments have reduced costs and fewer than one-half think client satisfaction has improved as a result of IT spending.

    Monday, June 02, 2003

    Law Firm Reaches Out to Clients (plus more evidence of the need for tech among corporate counsel)

    Kirkpatrick & Lockhart has taken an interesting step to reach out to clients and prospects. Alerted by a "centerfold" advertisement in the current issue of Corporate Legal Times, I saw that KL commissioned an independent survey of corporate counsel. The firm positions the survey as the beginning of a dialog with in-house lawyers. The survey is available from the KL Home Page.

    On the technology front, the survey asked about how law firms use technology to service clients. The specific question was "What outstanding use of technology helped you?" The survey found that 53% of Fortune 500 law departments answered "none." The numbers trail off from there, with 16% answering e-mail, 11% document exchange/secure networks, 4% electronic file documentation, and 2% internet research. Zero percent selected Extranets - a surprising result in my opinion.

    There have been two other recent corporate counsel surveys, both focused on technology. One by Corporate Legal Times (see my May 28th posting) and another by Corporate Counsel magazine called The High Cost of Staying Low Tech. Both found the level and sophistication of in-house technology lacking.

    Taking the three surveys together, it appears there is a big opportunity to do more with technology for in-house counsel, both internally and with outside counsel.

    Sunday, June 01, 2003

    More on Offices: Downtown v. Suburban

    On Friday I posted a note regarding Orrick's move to a central back office in W. Va. and the possibility of offshore outsourcing of back office functions. This caused me consider a related question: does it make sense for large law firms to rent a single, high cost office in each city?

    I am shaped by my experiences in NYC, Washington (DC), and Boston, where downtown rents are very high and where many lawyers live in suburbs from which the commute time to downtown is quite long. Would it make sense in these and other cities for firms to rent less downtown space and, instead, open a couple of suburban locations? I have talked to partners at some firms about this and the idea has been poorly received. But it might be worth considering.

    Here are some factors to consider in thinking about this:
  • 1. The rental cost per square foot in suburbs is significantly less than downtown.

  • 2. Many lawyers have reasonably long and only partially productive commutes. Shorter commutes might result in more billable hours and/or more personal time.

  • 3. Running a separate office entails extra overhead. Is that extra overhead more or less than the rental cost savings?

  • 4. How important is it that all lawyers in a single city actually work in the same building?

  • The first three items go to quantifiable economics. It would be interesting to learn if any firm has done the analysis.

    The fourth item is perhaps the most difficult one to address. Clearly, being able to meet in person has tremendous value. And clearly, downtown meeting space is required to serve client needs. But modern technology allows working effectively from remote locations. And as more and more large firms attempt to become truly national, it means lawyers from multiple offices should be working together. If lawyers across cities, states, and countries can work together effectively, then surely lawyers located in the same metro area can.

    Lawyers in suburban offices would undoubtedly have to go downtown (or vice versa) for meetings. And this would add to overhead in the form of offices for visiting lawyers.

    As technology improves - especially tools for online collaboration and video conferencing - it will be interesting to see if the economics and culture of law firms support multiple offices in a single metro area.

    If anyone has thought this question through more rigorously, I would be interested to hear about the analysis.

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