Law Technology Product News Law Journal EXTRA!
Law Technology Product News
December 1996

Microsoft Looks Back on the Year That Was

Law Technology Product News (p. 113, col. 1)
December 1996

Clearly, practicing law and managing the practice of law continued to grow more complex during the past year.

By Gary R. Cooke

"In my practice, there is no such thing as 'in a couple of weeks' anymore."

The legal profession is as complex and competitive as any industry today-an environment very different from the collegial atmosphere of 15 years ago. Certainly a host of factors has contributed to this change, but most legal professionals and legal market vendors would agree on three: the rise of cost-conscious clients, a generous supply of lawyers competing for work and the growing intricacies of practicing law and running a practice.

Most knowledgeable industry observers see no reason why this situation will change. Consequently, the past year saw proactive legal professionals accelerate their search for ways to operate more efficiently: to maintain or enhance work product quality, firm marketing activities and profitability, all while cutting costs. They recognized the potential of computer technology to help them meet these contradictory goals. Or, in the words of a litigation partner at a 250-lawyer firm, "We realized if we used technology... it would help us get a leg up on the other competition that was still back in the yellow pad and pencil days."

The Changing Client

"We wanted to become more client-focused through the utilization of technology."

Today, law firms' clients also are working in a business environment far more competitive than that of a decade ago, driving them to cut internal costs and seek price reductions from their vendors, including outside counsel. These clients are more demanding, less loyal, more willing to shop for legal services. Using well-developed financial analysis skills, they keep their eyes fixed firmly on the bottom line. What's more, these clients have a growing expectation, sometimes even a requirement, that their law firms will use technology productively.

Law firms report competing on RFPs that specify information system configurations or require them to demonstrate the compatibility of their software applications with those of their prospective clients.

Today's clients are also demanding that firms accomplish more work, not less, for the same money--or less. And firms must manage that work across more time zones and area codes, more branch offices and an ever-increasing number of document archives and information sources. They must track more forms, filings, requests and responses than ever before. Clearly, practicing law and managing the practice continued to grow more complex last year.

Perhaps the cruelest paradox firms now face is this: more work does not necessarily mean more billings. Last year, feeling the same competitive pressures as their clients, firms increasingly competed for work based on fixed-fee or task-based revenue models, rather than on billable hours-much like healthcare providers charging for medical procedures.

The Changing Desktop

"There's no doubt that our new system played an important role in our being chosen to lead the defense."

Lawyers are conservative, perhaps by nature, but certainly by training. And nowhere is this trait more manifest than in the adoption of new technologies. "It does the job--leave it alone," was probably the official technology-acquisition policy for many firms in years past, even if such intransigence meant holding onto 286- and 386-vintage personal computers and standalone software applications with character-based interfaces.

Competitive conditions, an aging installed base of PCs, and the continuing drop in prices for ever-more-powerful hardware facilitated some change in this attitude last year. These factors also supported the continuing rise in popularity of graphical user interfaces (GUIs) and integrated software suites.

A clear majority of the general business community had already moved, or was moving, to GUIs by the second half of last year. More than 70 percent of all PCs sold came with GUIs pre-installed, according to the research firm, Dataquest. Law firms, while moving more deliberately than their corporate counterparts, nevertheless had installed GUIs on 40 to 50 percent of their desktops in the same time frame. One experience illustrates why.

In January of last year, a West Coast firm with more than 300 lawyers began an overhaul of its information systems. That effort included replacement of DOS-based 386 machines with new Pentium-class personal computers featuring pre-installed GUI software. Staff members, unaccustomed to having so much functionality on their desktops and unfamiliar with the graphical interface, offered some initial resistance.

But the firm's employees grew comfortable with their new computers and became more productive. A key reason: the GUI became the common thread that unified all software applications, making them easier to use and more intuitive.

Firms also found last year that GUIs enabled them to introduce new software more easily, while keeping training costs down, because the basic commands for using these graphically-based applications were widely recognized and understood.

A uniform GUI does more than boost user productivity. It also frees developers from reinventing standard application functions, thus accelerating the development of value-added software. All of this is good news for today's law firms because the popularity of GUIs among users and developers ensures their long-term presence, which in turn makes buying and deploying them a sound strategic decision.

Last year also marked the ascendancy of software suites over standalone applications: word-processing programs bundled with spreadsheet, database, scheduling, and presentation software. Or time-and-billing applications packaged with management reporting and general ledger programs--or with marketing, docket, and conflict-of-interest packages.

Software suites reflected the legal market's need for seamless products--applications that worked together to leverage the richness of their individual features, simplifying learning and use, and accelerating productivity. Legal professionals began to see, for example, that it wasn't enough to compose a simple financial chart with a spreadsheet program. They needed to be able to extract financial information from an existing database, insert it into a spreadsheet, create a chart, then drop the chart into a word processing document, e-mail the resulting work product to an associate, or import it into an overhead presentation for a client, judge, or jury. This kind of synergy was increasingly recognized as a means to enhance work product quality while managing costs.

Back Office Servers

"Technology is more important to the small firm. Larger firms can marshal human resources for a major case, but not us."

Historically, legal professionals have viewed servers primarily as a technological resource available only to large firms who can afford them, support enough desktops to cost-justify them, use applications large enough to require their additional horsepower and employ enough technical personnel to install and maintain them.

During the past year, however, the server market continued to expand "downward," as smaller firms grew more interested in this technology. Today, firms of 10 to 15 attorneys--or less--deploy server technology. Two factors spurring this migration are price and ease-of-use. The costs for server hardware and software continue to drop, while their installation and maintenance--aided by the familiar graphical interface--have become easier.

The growing importance of applications requiring servers is another reason for their broader popularity. Technically literate law firms of all sizes now deploy server-based applications that transcend the abilities of desktop products. Such applications offer sophisticated database queries, Internet publishing, document management, billing, network management and litigation support.

The growing adoption of servers is the logical outcome--and further evidence--of the realization that technology offers a path to higher-caliber legal work, reduced costs, greater responsiveness to clients and the ability to differentiate an organization from its competition. Consider the experiences of these three law firms.

The first firm had an international practice employing more than 250 lawyers. It managed over 500,000 documents worldwide. With more paper coming in every day, the firm understood the risks of losing documents and missing critical filings, and took action to reduce those risks. To manage its work flow--and protect the integrity of its work-it installed a server-based document management system integrated with its desktop software. The move enabled the firm to process 50 percent more documents every week. As important, it brought document searches down to the desktop--and search time down to seconds. Today, it enjoys a reputation for providing a higher level of legal services due, in part, to the capabilities of its server software.

The second firm, a California-based organization, had 100 attorneys and 150 support personnel in several offices around the state. Before its adoption of a robust server solution, each of its offices ran up to three different software platforms. System linkages between offices were minimal and the firm met with continued support difficulties. By installing a client-server network that linked all its offices, the firm brought consistency and continuity to its operations. This common core technology also smoothed over many support problems--so much so that the firm's four-person information technology staff can now manage its network online. It now provides more user support, at a lower cost per seat, without additional IT staff.

Finally, consider the third firm, an established East Coast legal services provider with more than 300 attorneys experiencing the pain of using outdated computer technology to manage its billing and case information. Lawyers would sometimes have to wait weeks for COBOL programmers to design programs that could extract critical client data from an old, customized mainframe database. But by adopting a high-performance database server, the firm put that information at its lawyers' fingertips. And when their clients called, they had instant, desktop access to their billing histories--and, more important, their accounts receivables.

Internet Technologies

"Our use of technology and the Internet allow us to communicate with clients and potential clients better than ever before. That not only improves client relations, but also allows us to easily and inexpensively access the enormous amounts of information available on the information superhighway directly from the attorneys' desktops."

During the past year, the Internet has moved from being an interesting but somewhat exotic technology to a mainstream legal practice tool. Twelve to 15 months ago, law firms with sites on the Internet's World Wide Web probably numbered in the hundreds. Today, the legal community comprises thousands of sites. A year ago, firms saw the Internet largely as a marketing tool, imagining that prospective clients would somehow discover their Web sites and retain them on the basis of what they found. Expectations for the Internet have matured, as legal professionals acknowledge it as a communications and research tool as well as a marketing resource.

Firms today view the Internet as a fast and cost-effective complement to traditional marketing tools such as newsletters, proposals, and mailed responses to telephone inquiries--not as a replacement for them. Legal professionals are learning to exploit the Internet more fully, posting online attorney resumes, sample briefs, articles written by their lawyers and case summaries. A presence on the Web once indicated a familiarity with technology; today it's an opportunity to showcase an expertise.

Yet the Web as marketing tool is only one facet of the Internet's full capabilities. Last year, law firms made more use of one of its most basic functions: worldwide communication. Attorneys now use electronic mail to participate in practice-specific forums and CLE exercises and to communicate with colleagues, clients and support staff.

And when they're not communicating electronically, legal professionals are using the Internet increasingly for research. That's because its sources of information are growing. More courts are posting decisions electronically, and more publications carry those decisions on their Web sites. City, state, and federal agencies are putting their regulations online. The libraries of major colleges and universities continue to make their research available on the Internet. And there are user groups covering an immense range of topics that can be of use to an attorney either for a specific case or on an ongoing basis. While firms may not yet be ready to do their research exclusively on the Web, they can view the Internet as an increasingly rich source of primary and secondary content, and as a cost-effective tool for conducting some preliminary research.

What is driving this use of the Internet? Certainly the need to maintain or enhance work product quality. Finding that extra piece of information, locating an expert witness or reviewing decisions or briefs filed in cases similar to those they are litigating can help lawyers to do so. Meanwhile, fully exploiting Web technologies lets firms actively market their services to prospective clients without taking time away from other practice activities. And a Web presence continues to project the image of technological competence and leadership for which these clients may be searching. In short, the Internet is seeing wider use within the legal community for the most fundamental business reasons: its abilities to help reduce costs and maintain or improve productivity.

Looking Ahead

The legal market's adoption of technology will only accelerate and spread in the coming year. Law firms can expect a "democratization of technology" to take place, as high-capability tools become available to organizations of all sizes, allowing them to enhance their work product quality and productivity--and their competitiveness.

Technology will continue to proliferate in part because of its cost. The firm-size threshold for servers will drop next year as price-performance and ease-of-installation continue to improve. Servers will increasingly support core law firm processes: document and database management, security, billing and reporting, research, system management, litigation support and cost and profitability analyses.

On the desktop, robust software suites will become the norm, enabling the smallest firms to bring sophisticated documents and presentations to boardrooms and courtrooms. These packages will offer document collaboration: two lawyers in different locations, for example, will be able to share control of a keyboard and collaborate on drafting, revising and finalizing a brief. Software suites will also offer features that make legal professionals more productive, including enhanced revision marking and document version management.

Firms can also expect a blurring of the line between the desktop and the Internet. It will become less obvious and less important whether a user is working on a local hard drive or a remote Web site. The easiest-to-use protocols from local networking will merge with those from the Internet. Wrapped around them will be powerful, intuitive search engines that will help legal professionals find relevant information quickly. And as quality Web publishing tools come into greater use, firms will not only publish more of their materials on the Web, but should expect a proliferation of primary and secondary research materials to be available online. Not surprisingly, they can also expect the online marketing efforts of their competitors to grow more sophisticated as well.

Indeed, electronic communications will explode over the next 12 months. Virtual meetings, in which parties at two or more locations "meet" electronically to discuss issues, map case strategy, or create and edit documents in real time, will become more commonplace. So will virtual offices that allow lawyers to be closer to their clients without opening new branches, and that keep them productive when traveling--or when stranded at home by bad weather. Instead of rushing documents to a courthouse, impending advances in data security will allow attorneys to file them electronically, streamlining their work flow and trimming costs further.

And just as last year saw the advent of the Internet, next year will herald the arrival of the intranet--the application of Internet technologies to in-house legal resources. Law librarians will be able to put a firm's archives online, including depositions-transcribed and videotaped-pleadings, motions, briefs and filings. Custom browsers will provide lawyers and their staffs desktop access to these repositories as well as firm-wide distribution capabilities; built-in security will keep all resources safe. No more document copying. No more tracking down files removed from an archive. Lawyers will stay focused--and the firm's bottom line will benefit.

Conclusion

Last year saw significant advances in the application of technology as legal professionals recognized its value as a strategic tool. The World Wide Web gave law firms a focused, cost-effective means of marketing their services and provided access to a new-and expanding-base of resources. The ease-of-use of graphical interfaces and the power of software suites helped boost work productivity while improving its quality. Law firms increasingly recognized the usefulness of technology in differentiating themselves from other firms, and in being more responsive to their clients.

During the next 12 months, proactive law firms will broaden their view of technology to acknowledge it as a strategic investment with clear returns. The critical nature of this investment will fuel discussions about open versus proprietary solutions, how best to use corporate training budgets, maximizing existing hardware and software and divining the best possible migration paths for each. This strategic view of technology will open the door for legal professionals to more fully realize its benefits in their practices.

Gary R. Cooke is the legal marketing manager for Microsoft Corp.






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