Wednesday, August 26, 2009

ILTA 09 Panel--Technologies That Will Disrupt Traditional Legal Practice

This was an excellent session that provided a good list with lightly described examples of disruptive technologies and three more in-depth case studies from two of the more technologically sophisticated firms.

I am putting up these notes with fairly minimal review as I am presenting on matter management in an hour.

What is disruption?

Susskind recommends "The Innovator's Dilemma"; Christianson. Technologies that come and challenge the way that business works. What are the implications of disruption for market leaders? Often they dismiss these technologies when they first appear. Sometimes the innovators end up challenging the market leaders. For instance, Kodak ignored digital cameras and for a while were able to argue that film was better. They lost market but now are invested in digitial photography as well.

For Whom is it Disruptive?

For innovators, disruptive technology can lead to competitive advantage. Most law firms are far more afraid of being left behind than they are of leading the pack.

It's hard to motivate lawyers. It's more persuasive to say that other firms are doing this.

He's surprised by the persistance of the billable hour. He offered to pay his 12-year old daughter by the hour for a chore and she smiled and said "Well I'll take my time then." (You really have to say this out loud with a Scottish accent to get the full effect).

About 50% of general counsel are still comfortable with it.

Ten Disruptive Technologies

The legal world does change slowly. It will take 5-10 years.

1. Automated document assembly.

A lot of work is still hand-crafted. There us a fair amount in small shops with commoditized work. Automation has changed only a few sophisticated practices (European bond market).

Making them available on-line changes the ball game. You can go from a production level of several hundred to several thousand.

The automatic assembly of documents is disruptive because it takes the lawyers out of the business of producing documents.

2. Relentless Connectivity

We'll never be less connected than we are today. 24/7 availability is scary for senior lawyers. You need to put in place systems to have someone be responsive or accessible. Email is not going anywhere. "The calls on our time electronically are increasing."

3. The Electronic Legal Marketplace

We know we can auction services on-line. Clients can more quickly find out what services are available at what price. The idea that clients can find out about the availability of resources outside those of the law firm is fundamentally disruptive. Can a corporation find out that a law firm in Ohio has a week's worth of resources to throw at a due diligence project.

4. e-Learning

The romantic vision of bespoke services draws people to the law but does not reflect the current practice of law. How should we be training them?

There are simulation and learning techniques that afford a far more realistic view of legal practice. A lawsuit simulation might include a large filing the night before a scheduled oral argument that attempts to totally change the argument (which happens in practice but not moot court).

5. Online Legal Guidance

Current websites are fairly crude but still provide some information. There's great potential to provide legal services to a much broader pool of people, cheaply.

6. Legal Open-Sourcing

This will be more directed at citizens than at corporations. If people are networked together they can offer each other much in a community spirit. We'll start to see people coming together who have similar problems.

7. Closed Legal Communities

By and large there aren't many truly new problems. Big London banks collaborated to force law firms to deliver their legal know-how in a portal. Clients are also starting to come together.

8. Workflow and Project Management

We need to systematize and organize our project better. Rigorously apply well-tested techniques to project management. It is laughable to think that a lawyer can become a project manager by at most attending a 3-day training course.

Project management in principle and practice reduces the time and cost in providing legal services.

Project management becomes more necessary with multi-sourcing. Chunking up projects is a separate type of challenging task and needs to be managed.

Global tax compliance efforts are underway at large accounting firms. It's worth hundreds of millions. Accenture won it by saying that it was a complex project that needed a strong management instead of tax expertise (that was subcontracted out).

Are law firms ready to implement and train on project management? No, not currently.

9. Embedded Legal Knowledge

Rules are embedded in systems like computer Solitaire.

Self-monitoring and self-assessing legal systems will reduce need for lawyerly attention.

10. Online Dispute Resolution

He asks, "are courts a service or a place?" Cybersettle uses "double-blind bidding system." to resolve dispute. Over 30 days you negotiate until you're within 10%. The State of New York (?) has resolved hundreds of personal injury suits through such a system. Moneyclaimonline is a UK based dispute resolution.


You know there are other ways to deliver legal services. The economy has catalyzed the uptake of new ways. There are radical new ways of delivering legal services that will be enabled by technology.


John Alber of Bryan Cave then addressed an online service his firm provides in the trade/export restrictions area.

Automating Low End Legal Advice

A good opportunity has:
  • a recurring legal problem (import/export restrictions),
  • perceived value/cost disconnect where paying for solving the same type of problem every day
  • high-energy practice group accustomed to tight publishing deadlines
The goal is to solve common problems and answer the "easy" questions. Clarifications provided at no additional cost. Typical pricing is an hourly fee.

Legal Advice for Clients: Import/Export Tool

They set up a client-facing decision tree tool for a client who needed information about import/export restrictions. Clients like it. They obtained all of the trade business for the first client. The service was completely repriced. They use it as a training toool.

Workflow for Due Diligence

They also applied technology to wireless spectrum sales. Radio station sales are very expensive, especially the due diligence.

They developed an automated workflow that walked 50 contract lawyers through a set of review steps and captures the information at issue. It has a significant reporting feature to track work. You can use Sharepoint workflow (it is not technically complicated). They put the people in large rooms and ran the paper flow through them.

The result is that the cost per unit of due diligence roughly by 2/3 and deal turn time is measured in months not weeks. Client's deal process is changed and they can do deals they could not have before. It's a real competitive advantage.


Gerard Neiditsch of Australia addressed "Mallesons Connect."

Mallesons did not want to provide "black box" services where what is happening with the matter teams is hidden from their clients. They are trying to provide greater client access to information about the work.

Clients most wanted financial information, project progress, and alerts.

They were also interested in current awareness and client training.

The security model is quite challenging. Making correspondence securely available to the client is critical.

They'll be introducing these "Dashboards" later this year.

At the top it lists the total and active matters (a number) and the number of unpaid invoices. Sometimes bills aren't paid because the general counsel doesn't know they are paid.

All links are active. Hovering over matter gives matter summary of financials. A person's availability (live!) is shown next to their name. Drill-downs also available.

a Search page provides access to drill down into projects through guided / faceted navigation (number of projects by category, location, partner responsible, etc.)

Financial information is shown in friendly form including "Aged debtors", 10 most recent invoices with a link to unpaid invoices, project estimates and which are over/under/near/ or no estimate. Making this visible makes project management start to happen inside the firm.

This was a very sophisticated approach to exposing client information, focusing on the information they expressed they wanted.

The project has seen pretty good adoption by clients. Using web 2.0 tool sets that are very rapid to fix makes it possible to change the technology.

In the questions session, Susskind makes the point that you shouldn't base your decisions on having one reluctant client. If even half or three-quarters of clients want one of these then it is still probably worth it.

Rachelle Rennegal asked how Bryan Cave established pricing for the export tool. They now have sophisticated pricing tools. At first they took a guess at the economics and left the pricing flexible. The initial goal was to generate more high-end premium counseling business and break even on the software tool.

Susskind said that the skill and talent in chunking up the projects and planning outsourcing is significant.

No comments: