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February 2002
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News Analysis

2001: A Wild Ride

A bumpy journey but the destination still looks promising.

By Ashby Jones

2001: A Wild Ride IN 2001, some legal technology outfits crashed and burned, like Roberta Katz's Flywheel Communications Inc. and Extranet-provider Legal Anywhere Inc. But a handful of others, such as time-and-billing vendor Elite Information Group Inc., ignored the sagging economy and managed to keep sales humming right along.

But the past year in legal technology will be remembered neither for its spectacular disappearing acts nor its modest successes. Rather, 2001 was a year of consolidation -- for example, West Group and LexisNexis grew even bigger than before.

At the end of 2000, LexisNexis unveiled lexisONE, a free online research service. West President Michael Wilens countered early last year by snapping up FindLaw Inc., which, at that time, was the leading Web-based legal portal. Now both companies offer something they would have laughed at 10 years ago: no-cost access to case law and statutes.

But the duo struck their biggest deals later in the year. At the end of August, West bought Provolution Corp. -- more widely known as ProLaw Software -- the Albuquerque-based maker of a well-regarded set of practice tools for lawyers at small and medium-sized law firms.

Then, in November, LexisNexis bought Bellevue, Wash.'s CourtLink Corp., an electronic-filing and docket-retrieval vendor. For years, e-filing has been long on promise and short on payoff. But, at the time of LexisNexis's purchase, CourtLink was progressing nicely with a handful of statewide e-filing ventures.

Development Next

In 2002, West and LexisNexis must figure out how to develop their newest toys. West hopes the ProLaw purchase will help erase memories of WestWorks, last year's less-than-fruitful attempt to provide the small law market with its own Web-based set of practice tools. West and ProLaw just announced their initial plans (see page 3), so it will be interesting to watch their first steps as a combined entity.

The LexisNexis/CourtLink deal is particularly intriguing, given e-filing's rocky history. It's been the paperless office of the legal world -- a nice idea never much practiced.

If e-filing has a future, it's probably in the right hands. LexisNexis has the money to launch larger e-filing initiatives and, more importantly, to maintain them if they don't prove immediately profitable.

Don't be surprised if the consolidation trend continues. Among recent announcements, ASA Legal Systems Inc. and Computrac Inc. just merged to create RainMaker Software Inc. (See page 1.)

Indeed, 2002 might be a make-or-break year for enterprises like Serengeti Inc. (formerly ELF Technologies Inc.), VersusLaw Inc. and bid-for-work Web sites like eLawForum Corp., among countless others. Selling to the right bidder at the right price wouldn't mean defeat for the likes of Serengeti's Don Murray and eLawForum's John Henry II. A good sale would validate their ideas and give their ventures sturdier legs.

Bloomberg Courts Lawyers

The second most surprising announcement to come out of Mike Bloomberg last year was that his company was going to start courting lawyers.

The first prong of the company's plan -- to sell Bloomberg terminals to attorneys -- was just launched. And the second -- to compete with Westlaw and Lexis by selling legal research material online -- is still in its nascent stages.

But Bloomberg L.P. has exactly what it takes to turn wacky ideas into successes -- lots of money. So it might pay at least to walk past the Bloomberg booth at upcoming tech shows. And even if Bloomberg's own legal products fail to pan out, keep in mind that the company is only a deal or two away from becoming a major player in the industry.

On the wireless front, RIM Ltd.'s Blackberry device continues to be popular at big firms. While few vendors tried to capitalize on the Sept. 11 tragedies, it did not go unnoticed that at the height of the disaster in New York City, Blackberrys worked just about flawlessly when many cell phones failed.

But Blackberry may not own the lead for too long. Other big players, including Handspring, Motorola Inc. and Palm Inc., are slated to come out with their own wireless e-mail units. Lawyers tend to be creatures of habit, so don't expect them to ditch their Blackberrys immediately, unless one of the new products offers a compelling feature ("May I beam you my brief, Your Honor?")

Orrick Leads the Pack

In 2001, technology projects at Orrick, Herrington & Sutcliffe made headlines not once but twice. First Orrick unveiled a firmwide portal that linked a host of applications -- e-mail, word processing, the firm's document-management system -- into one centralized Intranet page. So far, the portal has garnered good reviews from Orrick's lawyers.

Later in the year, Orrick announced it was moving all of its back office technology operations to Wheeling, W.Va. The move was made to save money on pricey San Francisco real estate and to reduce employee turnover. Initially, a few Bay Area firms scoffed at the idea. But nationwide, a handful of firms took careful note.

Don't be surprised if this year a few others follow Orrick's lead and move the bulk of their technology equipment and staff to centralized locations away from their home offices. If that happens, it will give the phrase "technology consolidation" a whole new meaning.

LTN contributing editor Ashby Jones is a technology reporter for American Lawyer Media Inc.

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