Journal: March 2003 Issue 51

Roar Louder Please

by Brett P Farrell, Deacons

Brett Farrell, a law student who has worked in the legal and information technology fields for many years, has written an interesting article, "ROAR Louder Please", examining the convergence of legal services and information technology. Brett looks at the paradigm shifts that have already occurred in bringing the two fields together and discusses the concept of the "The Grid", developed by the commentator Richard Susskind. Brett explains how The Grid assists in understanding the difference between using information technology within a legal organisation and developing it for external use. Brett discusses how, while many legal service providers have gone some way along the first path, there is considerable resistance to moving along the second. Brett explains some of the reasons for this resistance, noting views that a fundamental shift from service/advisory to product supplier requires careful thought and planning. Brett concludes that with the greater use of technology, if lawyers can be persuaded that it is a beneficial tool, there are rewards to reap.

Brett Farrell is a law student, working as a paralegal at Deacons. He has worked in the legal field for 9 years including 2 years in the Global and Asia Pacific region IT department of an international law firm. He is completing his LLB at the University of New England.

1 Introduction

Law and technology is a topic that is written about, spoken of and debated within the legal sector by lawyers and academics. Richard Susskind is a key participant in this debate and writes strong arguments that the legal practice as it is known today will dramatically shift in the way the service is delivered and even what type of service is provided. Susskind is by no means the only commentator with theories on the topic, however he has developed a unique perspective on technology and the law. In his 1996 book, The Future of Law[1] , Richard Susskind suggested that over the next 20 years that there would be major paradigm shifts in:

• Legal service (practice); and
• Legal process.

Susskind's next book, Transforming the Law[2] , published in 2000, reported that two of these paradigm shifts[3] had already come to pass. Law firms were now communicating en masse via email and most firms had adopted intranet and internet technology for all fee earners.[4]

By his own admission his claims were met with a mix of enthusiasm, disbelief and scepticism.[5] The law, and its lawyers, were immune to technological change particularly on the scale Susskind suggests.

To explain his concepts in Transforming the Law, Susskind uses a model he calls The Grid. The Grid helps Susskind explain relationships between IT, information and knowledge and the difference between using IT and knowledge within the organisation and developing IT for external use to enhance the business and delivery of legal services.

He also uses The Grid as a tool to help legal managers strategically plan to use IT to assist the firm.[6] The Grid also helps Susskind develop eight suggestions to deal with his brave new world of legal IT. Two methods of interest are the way in which Susskind uses The Grid to explain the technological relationships and plan competitive strategy.

Law firms are alert to technology and the some of the opportunities that it presents (Allen & Overy's 'newchange', Linklaters' 'BlueFlag' (discussed below) and Baker & McKenzie's 'BakerMAKS'[7] ), but do not fully appreciate the challenges that arise. The most poignant is the change to the business model of the firm. Lawyers have traditionally rejected or downplayed technology in their work as noted by Susskind.

This paper will place some examples of a leading international law firm[8] implementing technology for business and strategic use onto The Grid. It will address the phenomena seen in the law firm (and noted by Susskind) that is the Resistance of Applying Richard('s principles): ROAR.

2 The Grid

2.1 The Legal Grid

Susskind's legal Grid has horizontal and vertical axis and is divided into four quadrants. The four quadrants are:

• Bottom left: back office technology;
• Top left: client relationship systems;
• Bottom right: internal knowledge systems; and
• Top right: online legal services.[9]

Everything above the horizontal axis is what clients have access to and below are internal systems used by the firm. This aspect of The Grid illustrates the legal firm business as it relates to technology; each quadrant is an aspect.

2.2 The Competition Grid

The Competition Grid is the same structure as the Legal Grid but each quadrant represents how technology has affected the types of legal systems in each quadrant of the Legal Grid. For the purposes of planning strategy the Competition Grid's quadrants are explained:

• Bottom left: keep basic systems running, risk management and providing infrastructure;
• Top left: new & improved ways of delivering legal services;
• Bottom right: efficiency, productivity & leveraging knowledge; and
• Top right: new service opportunities, new business models and turning knowledge into value.[10]

This aspect of The Grid shows a firm where its focus is in relation to technology and what areas it may need to expand in the future.

Resistance to adapting and innovating in the top left and right quadrants is the strongest. Firms accept that there is a cost of doing business and not being left behind, which is why the bottom left quadrant is well maintained in most, if not all firms.

The challenge lies in shifting the focus towards the two top quadrants, and help lawyers understand the market pressures and directions. The lawyers must also be assisted with planning and adopting new business models to successfully compete and offer the online services of the top right quadrant.

3 The Basis

For the large part, lawyers have not been affected by the technology revolution to the extent of other sectors. Technology in the law firm has changed the life of the support staff more than the fee earners. Most lawyers are waiting for the impact to hit, yet remain confidently assured that it will not alter their methods of work.

New lawyers are graduating in record numbers and bring advanced computer literacy to the law firms. They are a class of lawyers dubbed by Richard Granat, "Digital Lawyers".[11] In his paper Granat's ideas of the digital lawyer are supported by Professor Ethan Katsch who is a leading researcher in legal technology. Professor Katsch's attributes of a digital lawyer are:

"Sensitivity to the value, qualities, and capabilities of information in electronic form is probably the distinguishing characteristic of the digital lawyer. Such lawyers will understand that supplying the right information quickly is more important than ever before and that both the ability to access information and expectations about response times are changing... The core change in the digital lawyer is an understanding of the value of information in an environment where new tools for processing and communicating information make adding value to information and using information to develop new relationships the central concern of the economic system."[12]

At the very least, lawyers generally need three sets of skills to work with the new technology:

• Electronic Information Retrival Skills;
• Electronic Communications Skills; and
• Electronic Publishing Skills.

Susskind says that lawyers must become "legal engineers" and create new ways of delivering legal services that are based on information technology in order to service and reach an unmet market for legal services.

4 What are the British courts doing?

The Lord Chancellor's department published a report called "civil.justice.2000" in June 2000[13] . The report helps come to terms with the reality of technological change. It also illustrates the real need to embrace technology and implement it. I note the following from the report:

• The initiatives [set out in the report] cannot be successful unless they are pursued with the close involvement of all key stakeholders.
• The following topics need priority attention:
  - Electronic case files (which is best achieved through a mix of investigation of best practices and piloting).
  - Developing websites to include online help on how to use the courts - building on existing materials.

  Internet and e-commerce require all organisations to sustain an IT R&D capability because success and survival will require new ways of delivering conventional services and products. It is likely that failure to innovate and keep up with the times will simply not be tolerated.

  This is a growing recognition that the internet will bring massive changes in the way lawyers work and are taught - not merely cosmetic or peripheral but will bring about a systemic change to legal service.

  Implementation should be phased and modular and an incremental approach adopted. Over ambitious scope and "big-bang" implementations are key causes of failure to implement technological change properly.[14] Pilot schemes should be used to adapt and refine new methods before wide scale adoption.

5 What is Australia doing?

Recent history shows that the United Kingdom is adopting a number of Australian legal initiatives eg: the Woolf Report and adoption of www.austlii.edu.au internet site, known in the United Kingdom as www.bailii.org.

The New South Wales Attorney General wrote an article in the New South Wales Law Society Journal[15] and set out some proposals for the coming year for the legal system:

• Electronic document lodgement;
• Electronic documents and records management;
• Online access for court users; and
• Integrated statistical/workflow information.

On the topic of New South Wales Supreme Court's high technology court rooms:

"The use of technology in courtrooms assists in reducing the delay in locating and handling paper documents during hearings as well as reducing the use of paper. It also significantly reduces the costs of multiple copying of documents currently imposed on parties."[16]

It is the Attorney General's point that I want to expand on: reducing the cost of photocopying and the use of paper.

6 What are we doing: Reducing the amount of paper in a lawyers office

Documents of any kind used in a law firm are primarily used for two purposes:

1. Reviewing; and
2. Referencing.

6.1 Reviewing

Reviewing documents includes such things as reading, drafting and editing. Lawyers generally require a hard copy as it is difficult to review documents on a computer screen. There is an increase in, particularly younger lawyers, who edit documents on the computer rather than by hand and submitting it for typing.

6.2 Referencing

Referencing documents are documents referred to for a key fact or piece of information. It is possible to isolate what documents are reference documents in a transaction (ie don't require drafting but a regularly used) and can be easily accessed through the computer rather than a hard copy in a lawyers office.

7 The light bulb must want to change

With so much technology available to lawyers to help with practising law, the questions must be asked: why are law firms resistant to using technology? Why do law firms see themselves as immune from technological change? Why are law firms following and not leading with technology to improve their client relationships and service?

8 Good Bad & No Ugly

These are some examples of the advantages and disadvantages of technological change:

8.1 Good

8.2 Bad

A law firm COO[17] see the issues from lawyers as three fold: 1. "It's not applicable to my area of law"; 2. "I already make enough money"; and 3. "I don't want to spend any more money on IT". [18]

The COO also suggests that for a law firm to shift its focus from a service provider to a product supplier (moving from the top left to the top right quadrant in Susskind's Grid) is irresponsible without proper business planning and advice.[19] I will address the first three arguments in turn and explain why they are irrational, shortsighted or misinformed and incorporate the COO's comments about the legal business model.

8.3 It's not applicable to my area of law

This is often heard from the lawyer who specialises in an area of law that is highly specialised and requires years of knowledge to understand. The confidence built up over the years in themselves and the practice area is hard to shake. However the notion of immunity is irrational. At a simple level the "specialist" practitioner is using email; technology has begun to invade the legal fortress.

This view is stuck in the bottom left quadrant and relies on existing infrastructure to help sustain the business but not innovate or respond to changes in technology.

The COO suggests that the real inhibitor to advance on this level is basic fear of the complex. Some days lawyers find security in the mundane, perhaps not being mentally able to face that complex opinion letter. The fear is that the technology could take away this comfort zone leaving continual complex thinking.

Technology may not commoditise the specialist practice area but it can serve to automate documents, search legislation with intelligent agents and streamline workflow. This will not necessarily provide direct benefits to clients but can assist in timesavings and economies of scale to the firm. Ultimately this impacts on the firm bottom line and profit per partner.

This shift initially takes place in the bottom left quadrant of The Grid and moves into the upper right via the upper left. Internally the law firm could implement some streamlining technology to improve processes and then extend this to online legal services to clients. IT may not always be applicable but it can provide assistance.

8.4 I already make enough money

This is not a statement that one would usually associate being made by a lawyer, let alone a partner but the second excuse heard most often by the COO is that the partner already makes enough money.

This response closes the door on technological innovation, leaving the law firm at best to catch up with visionaries or at worst wallow in the bottom left of The Grid. This view is shortsighted towards the firm's well being within the already tight margined, highly competitive legal market. It does not leave a good legacy for those younger lawyers about to be or whom one day will be partners.

As Susskind suggests[20] the market is moving towards a time where firms are expected to provide basic technological services. If this happens the competitive opportunity is lost and the way to increase revenues from technology is to move to the right of The Grid and offer new legal services and products online to the client.

As noted, the COO says that in the long term it would be an irresponsible law firm who simply begins to deliver some form of service via the internet without careful planning. The COO said that this is a fundamental shift not only in delivery but the type of product on offer. It is a move from service/advisory to product supplier.

The law firm infrastructure and business models are not geared towards this. For example, the accounting system collects and bills hours and does not record inventory and sales which is what would be required if certain aspects of the legal system were commoditised. IT is not about more money but maximising profit before innovation becomes the cost of doing business. Early IT innovation can give a firm a competitive edge before the innovation is embraced by other firms.

These future lawyers will have difficulty in competing with other advisory firms who embrace technology, if the firm ignores innovation on the basis that the partners do not need any more money.

8.5 I don't want to spend any more money on IT

No doubt it is difficult for an IT manager to keep asking partners to pay for IT expenditure. In the short term, there is no tangible return on investment (even though most theoretical return on investment calculations later prove unrealistic). To keep competitive in the current legal market the firm must expend money on IT. It is irrelevant whether or not a partner "doesn't want to". The COO notes that partners spend money for the bottom left quadrant but very little on the remaining quadrants.

Susskind explains that market pressures will drive law firms to expend money for IT to either provide clients with basic expected services or enhanced online services. He also suggests that until IT systems reach from the bottom left quadrant it is hard to quantify or justify any further expenditure.[21]

One exception to this problem was implementing electronic time recording systems at the COO's law firm. For the first time, it was possible to show a direct increase in revenue from the introduction of an IT system that sits in the bottom left quadrant. It is unfortunate that it did not sustain enough interest to ask the next question of "how else could technology increase the revenue?" Also note the contradiction between not wanting to make more money yet demanding IT justify the expense with increased revenues.

The expenditure and continued investment in IT will reap rewards in the long term; an example is word processing systems. Through the use of this technology lawyers are able to generate more work and respond quickly to documentary amendments and changes. If in the current market a firm were to survive on typewriters, simple amendments would require an entire retype. This would not be an efficient use of resources.

This view is visionary and partners must be encouraged to take this approach when expending money for IT purposes. This rightly requires a justifiable business case with more substance than "everyone else is doing it". There is truth in the cliché that if the firm resists doing what everyone else is doing, they will fall behind competitively and never be able to maximise their return on investment in IT.

Susskind's idea that the law firm will have to invest in IT and offer new services to maintain competitive advantage is valid but he needs to address the underlying business model as a legitimate problem to overcome.

It becomes a chicken and egg argument. Partners will want to see benefits before spending money to expand into the areas that will produce tangible benefits.

9 Time to Learn and Adapt

In the legal practice technological change is often forced on lawyers quickly without any time to learn and review the new legal technology. A lawyer under pressure will become frustrated with any attempt to make life easier and revert to a manual system of getting the job done because of the security in the old habit.

This is particularly rampant in the litigation practices where every case has its own set deadlines advised by the court. The theory is that a litigation support software package would assist the lawyer in reviewing and locating documents, as well as producing various lists and bundles for trial.

Unless the lawyer has had time to use the system well before the deadlines and is comfortable with technological limitations[22] as well as advances, it is probable that any embrace of technology will fail.

10 Resistance is futile

There is debate as to what is a paradigm shift and has the legal sector experienced it in the past few years. Some suggest not and that the law will continue to grow incrementally. Greenebaum[23] suggests the use of email is not a paradigm shift but merely another incarnation of the fax machine and the COO agrees. "All it [email] has done is require lawyers be available at all hours of the day and respond immediately to queries".[24]

The COO believes that the changes will not be dramatic paradigm shifts but incremental steps, and further, that the legal practice has been largely unchanged in what it offers for the past 30-40 years and will be slow to change again. The COO's notion that careful planning is required to make the shifts outlined by Susskind suggest no immediate change to the delivery of legal advice, in the top left quadrant, or new innovation, in the top right quadrant.

The law firm, which can harness technology to allow its clients, access to legal services on a more cost and time effective basis will profit. Two notable international law firms have begun the effort. Allen & Overy offer a product called newchange and Linklaters, Blue Flag.

Each of the offerings from these two English firms allows clients to access legal services online. A client may complete an input form for a legal document and submit it to the firm for completion and sign off for accuracy. There is no real use of the computer to generate the document as the client's electronic input is given to a lawyer who will prepare the document in a conventional manner and either email it or post it to the web site.[25]

The real reason behind these online services cannot be to increase revenues as there are still lawyers doing the back end work in a traditional manner. Susskind suggests that the changes will be driven by market pressures, and in his experiences, clients demanding certain levels of service from law firms.[26] The COO finds this difficult to reconcile.

The COO maintains that if clients were indeed driving such advances the lawyers would be responding immediately. In fact, the COO has seen lawyers taking an extranet service to clients who have embraced it. On one view, it is the IT department who provided the tool really driving the changes in the market. Until that changes and technology does the work traditionally done by lawyers, they can only be seen as marketing attempts to show the firms as innovators.

11 Summary

Cultural change prepares people for technology and causes them to ask "how else can technology help my work?". It breaks through the barrier of active choice not forced resistance.

Susskind's Grid is a useful tool to assist a lawyer understand the impact of technology on the practice and strategically plan for the future. There are some practical obstacles to overcome when applying his model, however, if lawyers can be persuaded that technology is a beneficial tool (regardless of whether or not it will revolutionise their practice) there are rewards to reap.

Footnotes

1. Richard Susskind, The Future of Law, Oxford University Press (1st ed 1996)
2. Richard Susskind, Transforming the Law, Oxford University Press (1st ed 2000)
3. He defines a paradigm shift as when fundamentally accepted assumptions are changed and the discipline is seen in a new light. Ibid 80
4. Ibid 4
5. Ibid 3
6. Ibid 5
7. BakerMAKS is Baker & McKenzie's web-based knowledge management system. http://www.bakernet.com/BakerNet/Resources/Client+Sites/BakerMAKS+-+About.htm
8. That declined to be named for this article however the assistance provided has been invaluable.
9. Above 8-9
10. Ibid 12
11. Richard S. Granat: Retraining lawyers for a digital age. http://www.digital-lawyer.com/digital-lawyer/retrain.html
12. Ethan Katsh, Digital Lawyers: Orienting The Legal Profession to Cyberspace and Law in a Digital World (Oxford University Press, 1995).
13. http://www.lcd.gov.uk/cj2000/cj2000.htm
14. Public Accounts Committee Report. http://www.publications.parliament.uk/pa/cm199900/cmselect/cmpubacc/331/33102.htm
15. Information Technology: Technology in the Courts, March 2001, page 67
16. Above
17. Chief Operating Officer, of a leading international law firm based in London and Former European Director of Information Technology at this firm (who declined to be named but was kind enough to provide valuable information for this article)
18. Conversation with the COO on 30 August 2001
19. Conversation with the COO on 21 September 2001
20. Above 14
21. Above 15-16
22. I know of one colleague who was frustrated with litigation support because she expected a database to manipulate and structure text like a word processor.
23. Edwin H. Greenebaum '"The Future of Law" Debate: Greenebaum on Susskind and Susskind's Reply Is the medium the message? A discussion of Susskind's The Future of Law' (1999) 6 International Journal of the Legal Profession 197
24. Conversation with the COO on 21 September 2001
25. Conversation with the Director of Know-How for an international law firm. Formerly of Allen & Overy on 4 September 2001
26. Above 10

March 2003 contents