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January 2001
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Technology Trends

Law Firms Begin to Understand and to Embrace 'Peer-to-Peer' Technology

The world's biggest firm, Baker & McKenzie, uses NextPage to search and manage its network.

By Claire Barliant

Law Firms Begin to Understand and to Embrace 'Peer-to-Peer' Technology SHAWN FANNING achieved rock star status among teens and "Gen-Xers" as the inventor of Napster, software that allows people to swap songs over the Web. But Fanning also has an avid following among a select, savvy group of business executives, for popularizing a revolutionary form of technology, known as peer-to-peer.

Executives like P2P because it allows individual computer users to share content without storing that content in a central repository. Even law firms are beginning to latch onto it. Baker & McKenzie uses a peer-to-peer system developed by NextPage Inc., a content-networking company based in Utah. Because it eliminates the need for central control, P2P can help manage content in a sprawling organization like Baker & McKenzie. Scattered throughout 61 offices in 35 different countries, attorneys at Baker & McKenzie can use NextPage to search throughout the firm's network for a document containing a certain word or name. Ordinarily, to conduct this kind of search, all documents have to be stored in a centralized database. With peer-to-peer technology, computers can share information without going through a central repository.

For example, Napster provided users with a directory of songs. After selecting a song from the directory, the user downloads a musical computer file, known as an MP3, from another computer's hard drive into the recipients. Baker & McKenzie attorneys using NextPage will have access to all relevant documents residing on the firm's computers around the world, as well as those of select customers. Right now, Baker & McKenzie is limiting the use of NextPage to the mergers-and-acquisitions department, but it has plans to expand NextPage's use within the firm.

"Linking Baker & McKenzie offices and clients throughout the world is part of our strategic technology plan to further refine our state of the art content management system," says Terry Crum, the firm's chief information and technology officer.

It "will help us maintain our global standards, enhance our ability to interact and respond to our clients in a more integrated way, and further support our attorneys with their sophisticated technology requirements, " he said.

The firm has had trouble in the past with high-cost technology programs designed to link its widespread offices. Last year, Baker & McKenzie had hoped to incorporate a computerized time-and-billing and accounting system. Originally slated to cost $6 million to $9 million, the project later was calculated to cost closer to $30 million, causing the firm's profits per partner to drop 3.5 percent in 1999, according to the July 2000 issue of The American Lawyer. The firm hopes to have better luck with the peer-to-peer product.

It's not easy to accommodate the technology needs of lawyers in different time zones using different currencies. Crum says the firm expects significant gains in attorney productivity because of NextPage, particularly in the areas of efficiently searching and sharing information among each other.

The idea for NextPage came out of a desire for a more efficient way to get information. Between 1993 and 1995, Brad Pelo, NextPage's chief executive, headed business development at Lexis-Nexis. He says that during his tenure he noticed information had to be stored in centralized databases.

"I believed that new technologies would allow people to share information without centralizing it," Pelo says. Now his company's primary function is creating these decentralized content-sharing programs.

The idea seems to be catching on. NextPage has 160 employees, and recently finished closing its second round of funding. Although he wouldn't disclose exact numbers or who the investors are, Pelo exults, "These are believers."

Although Napster has given P2P a bad rep, Pelo has no doubt that will change. "In the early days of the Internet, businesses wouldn't have dreamed of letting employees have access to this rogue digital territory where people were sharing pornography and chatting. The Internet hasn't changed so much as we've learned to harness it."

Even Congress is starting to pay attention to the P2P phenomenon and learning how businesses can harness its power. This fall, Fanning testified at a Senate Judiciary hearing. Along with five other technology leaders from Utah -- the home of Orrin Hatch, the chairman of the committee -- Pelo also testified.

"Like most emerging technologies," Pelo said at the hearing, "what is once seen as a threat later emerges as an opportunity. While lawyers were busy filing suit against Napster's peer-to-peer offering, the world's largest law firm, Baker & McKenzie, was implementing NextPage's peer-to- peer technology."

Claire Barliant formerly was a technology reporter for American Lawyer Media Inc.

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