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Following yesterday's post on law firms that are starting to take an innovative approach to client service I received information about Morris, Manning & Martin's project management approach to the practice of law. You can read more about their project management philosophy here.

According to the firm's web site: "We believe that it simply isn’t enough for a transaction to be completed on favorable legal and business terms. If the transaction is not completed timely and within reasonable fee expectations, then the transaction cannot be considered a success. Project management, as a means to promoting completion of transactions on time and on budget, is an essential component to delivering value-added legal services."

It's great that we're starting to see some firms adopt practices like Six Sigma and disciplined project management that should result in better outcomes and better value for their clients.

I've tended to be somewhat critical of US law firms for not adopting practices that would allow them to serve their clients more efficiently and cost effectively. So I do try to take note when I learn of a law firm taking a different approach. Here's a short list of some interesting items I've run across recently.

Legal OnRamp "Legal OnRamp provides content, connectivity and execution services to help legal professionals deliver higher quality work in less time and lower cost. We’re working with leading professionals from major corporations and leading law firms to provide technology and services that will meet the business imperatives of the future."

You can read more about Legal OnRamp on the Adam Smith, Esq. blog.

Law Firms Adopting Six Sigma. There may be a reason this hasn't been getting a lot of attention. Larry Bodine wrote in 2004 on his LawMarketing Blog that "The law firms are keeping it secret that they’ve adopted Six Sigma, because it’s such a huge competitive advantage." However, you can find a presentation about how Morgan Lewis is using Six Sigma in its mortgage loan practice here. According to Richard Sabat, a Six Sigma Green Belt at Morgan Lewis, they have been able to reduce time charges by 25% while significantly increasing quality. I wouldn't be surprised to find that they have also made their clients more efficient by adopting this program.

Alternative Fee Arrangements. Finally there's this item from Law.com's Small Firm Business Site about Small Firms Turning to Flat Fees for Rising Profits. The article features the Ambrose Law Group of Portland, Ore., and their switch from the billable hour to a flat-fee model. According to the article, The results have been dramatic, with the five-attorney firm reporting a 90 percent increase in profits." "Technology is fueling the drive for firms to switch to flat fees, said David Ambrose, founder of the Ambrose Law Group." "In the past, something that would have taken two hours, we can now do it in 10 minutes," he said. "If we only bill for that 10 minutes, obviously, we lost that revenue."

It is good to see that there are firms that are starting to think in different ways.

I find it fascinating how certain themes sometimes come together in interesting ways all at once, and this is even more interesting to me now, as I'm just finishing reading Malcolm Gladwell's The Tipping Point.

A reader posted a comment yesterday asking about an item I had written more than a year ago called “A Glimpse of the Future?” In that post I referred to something I had seen that I thought had the potential to cause a revolution in the way corporate counsel practice. I hadn't thought about that in a while.

I still can’t talk about the specifics of what I was referring to, but the general theme is no longer terribly novel. It has to do with the convergence of two major trends. The first it that the web (Web 2.0 if you like) is giving us access to powerful technology that is much easier to use than previous generations of software. The second trend is the outsourcing of legal work.

I haven’t written about outsourcing for a while, but, starting with the outstanding IACCM/Americas conference in New Orleans last week, and continuing with several items that have crossed my desk this week, the inevitability of that trend is really hitting home.

Several of the speakers at the IACCM/Americas conference talked about how they are using offshore resources, including lawyers, for some of their contract functions. Then yesterday I saw Ken Adams’ interesting article on Sending Contracts Offshore. His article is definitely worth reading.

Adams discusses two companies that are offering offshore services for contracts, and notes “both companies don’t simply offer an India-based version of business as usual. Instead, they emphasize their process-based approach. Reed and Perla each described to me how his company has systems in place to ensure optimal workflow and has invested in proprietary systems to handle tasks such as contract monitoring. As a result, the economies they offer aren’t driven only by the lower salaries they pay their Indian lawyers.”

But here’s another reason why I think offshoring of legal work is ready to take off. Adams writes “Like Guarente of Oracle, Reed and Perla both note that the morale of a company’s contract personnel will improve if they are freed of lower-value, repetitive tasks.” It's not just cheap labor anymore. It's also systems that allow offshore teams to work more effectively.

Finally, this item on The Effects of a Flattening Legal World by David Galbenski came to my attention. The theme is similar. Galbenski writes about "legal architects" who "can act as a trusted advisor for in-house counsel to help them integrate labor outputs into their strategy."

As for the implications for law firms, Galbenski writes: "The downside for law firms is one word: change.  There will not be the opportunity to practice law in the same way since competition with legal outsourcers may take work that used to be very profitable.  Law firms will need to evolve how they deliver service to their clients.  They’ll need to discover how they can do it faster, better, and how to make it less expensive.  They’ll need to think like entrepreneurs.  It will constitute a dramatic cultural shift.  And, law firms will need to change with the times—or wait until the market forces them to change."

Many of us have been waiting for years for the technology revolution to really take hold in the legal profession. Besides the general tendency of lawyers to resist change, I believe there have been two primary impediments to greater use of technology in the legal profession: (i) software has been too hard to learn and too hard to use, and (ii) often the use of technology actually results in a greater workload, as lawyers have been forced to become administrative assistants. We now are seeing ways to address both of these issues emerge.

So, I think we may finally be on the verge of the long-promised technology revolution, which will result from a combination of better technology and lower-cost, but skilled resources using sophisticated dedicated systems who can free us from some of the drudgery that now prevents the legal profession from using technology to its full potential.

This change will probably take hold in corporate legal departments well before it makes significant inroads in private law firms, but it will eventually take hold there as well.

In addition to the disruption that will come to private law firms, these trends will inevitably result in the loss of some in-house jobs in the US, the UK, and other areas as well. But the lawyers who are able to take advantage of these trends will be doing more interesting and more valuable work much more efficiently, and at a lower cost—and as a result serving their clients better. With better and easier-to-use tools and routine and administrative work being done by overseas colleagues using sophisticated compatible and integrated tools, I wouldn't be surprised to see lawyers more satisfied with their careers as well.

From my point of view, all of this is very promising.

At the IACCM Americas Conference in New Orleans in April, one of the discussion topics will be The Future For Lawyers. Here's the program description:

"A golden profession, an expansive career path - or the final bastion of the old craft guilds, struggling to avoid extinction? There is plenty of debate and uncertainty right now over what exactly the role of lawyers will become."

Panel members include general counsel and former Cornell Law School lecturer Russ Stevenson, fellow GC Loretta Cecil, and Professor Tom Barton from California Western School of Law (and current head of the worldwide 'proactive law' movement) and representatives from major law firms.

I'm sure the panel will have a lot to talk about. They could easily devote the entire program to the issues raised by Cisco GC Mark Chandler in his recent speech at Northwestern School of Law's 34th Annual Securities Regulation Institute on the state of technology in the law, which has generated a huge amount of discussion, such as this on the law.com blog. Then there are the seemingly daily news stories about higher and higher first-year associate salaries at major law firms. Here's one example.

I know there are some brilliant lawyers at these major US firms, but I've also seen some very poor quality work from them. I recently had to spend quite a bit of time fixing the drafting of an associate at a very large firm (who undoubtedly makes more than I do). I'm sure we paid him to draft the agreement, paid some partner to review it, and then paid them again to incorporate my revisions and comments. What kind of value are we getting for the huge amounts we pay them, and what incentives do they have to improve in the current system? I could have spent even more time fixing the associate's drafting. It was obvious that this huge US firm doesn't do a very good job of training their associates in contract drafting. Why should they when they sometimes get paid more for doing poor quality work than if they'd done it right the first time?

The legal profession has been notoriously resistant to change. But how much longer can that continue? How much longer can the legal proession avoid the pressures that affect nearly every other industry to become more efficient and hold, or even lower, costs? From the point of view of a consumer of legal services, the industry clearly needs more competition.

Companies are already starting to move some of their work to India. I know results have been mixed, but I've also heard of companies that have been quite happy with the work product of experienced lawyers in India, who make much less than 10% of the salary of a first-year US associate at a major firm.

In The World is Flat, Thomas Friedman discusses how tax and accounting firms have created systems that allow workers in India to efficiently process US tax forms, and how these systems have allowed even small US tax preparation firms to outsource their routine work to India. There are a lot of smart lawyers in India who have been trained in a legal system very similar to that of the US. How long will it be before similar systems are applied to allow Indian lawyers to do some of the work that US lawyers currently do? Although there will undoubtedly be outcries about the unauthorized practice of law, the consumers of legal services, particularly US corporations, will eventually find ways to force the legal profession to become more efficient and cost-effective.

I'm sure the discussion at the IACCM conference will be interesting.

I’ve written before that the IACCM is one of the most valuable organizations I belong to. A recent IACCM Ask the Expert program titled “Do traditional approaches to contracting result in better management of risk?” in which in which IACCM Executive Director Tim Cummins interviewed Graeme Colquhoun, Head of Legal, and Steven Weatherley, Head of Audit & Compliance, of UK brewer Scottish & Newcastle (S&N) should provoke a serious discussion—particularly among in-house lawyers—of how lawyers approach commercial contracting.

The 4-person legal department at S&N has adopted what most lawyers would consider a radical approach to contracting. I can’t say it better than the IACCM:

“Within every industry or profession, there is a need to adapt and innovate in order to be competitive. Lawyers spend a huge amount of time drafting and negotiating detailed commercial contracts for their clients. Detailed contracts are supposed to give greater certainty to businesses about their rights and obligations, and therefore to avoid future disputes about what was intended. But do they deliver this in practice?

“The legal team at one of the UK's top companies concluded that, in many cases, detailed contract terms are unnecessary, and can be a waste of time and resources for their business. They went on to develop an alternative solution called Pathclearer.

“[T]hey embarked on a radical reengineering initiative that has resulted in transformation in the way many trading relationships are negotiated and managed. Not only have the contracts themselves been dramatically simplified and reduced in size, but other sacred cows have also been sacrificed. For example, many relationships now operate without fixed term; frequently there are no volume commitments; they have even dispensed with service level agreements and liquidated damages.

 “The results? With several billion dollars of spend and revenue now under their new forms of agreement, they have observed:

• Growing collaboration between trading partners, with focus on maximizing value and performance
• Reduced contention and disputes
• Shorter lead-times
• Legal viewed as a critical business partner and change-agent, involved early in strategic discussions and initiatives"

When lawyers need to create a contract, our first impulse is usually to find a precedent document that generally fits the deal. Then we modify the document to fit the current deal. Then we start to think about all the things that could go wrong in the relationship and start crafting a contract that addresses those real and imagined problems—in our client’s favor to the extent we think we can get away with it. The result is often a bloated contract that even the lawyers may have trouble understanding and interpreting—let alone the business people who usually have to deal with the relationship on a day-to-day basis.

The S&N approach is radically different. Their approach is to start with the assumption that they can use a short and simple contract. If they can’t find a good reason not to use this approach, they try to develop a contract that is stripped of as many legal terms as possible—and those that remain are as simple and short as possible.

And I mean really short and simple. The sample contracts they provided to IACCM, types of contracts that would typically run at least ten pages, if not 50, were no more than two pages--and not fine print either. While the S&N team admitted that Pathclearer isn’t appropriate for some types of contracts (e.g., software licensing), they have applied it to a variety of types of relationships, including supply agreements, trademark licenses, and international distribution agreements.

Here’s a link to a slide show that has more detail. Much more information about Pathclearer, including the sample contracts, is available online to IACCM members. Another reason I highly recommend IACCM membership.

I spend a fair amount of my time negotiating contracts -- primarily software license and services contracts on behalf of the seller -- and I'm constantly amazed at the amount of time contract negotiators spend (waste?) arguing over certain contract clauses. In more and more cases that I see, the buyers are taking extreme positions that make getting to a reasonable middle ground much harder. At the same time, sellers, driven by their own agendas (e.g., tougher revenue-recognition standards), are taking positions the buyers see as unreasonable.

That's why I'm excited about a Contract Negotiations Guide project the International Association for Contract and Commercial Management (IACCM) is taking on. In the words of Tim Cummins, Executive Director,

 "Our aim is

• to create a baseline that is broadly accepted as 'reasonable' for both buy side and sell side,
• to generate greater mutual understanding of the factors that cause variations from this position,
•  to outline the spectrum of negotiated terms that typically result.

We believe such a guide will assist in cutting lead-times and reducing the extent of confrontation when one side or the other is seen as 'unreasonable' in its position, relative to the value or risks perceived by the other side."

I see this as a valuable effort. At the very least we should end up with a thoughtful analysis of contract terms that we can use for reference and training. At best it could result in a set of best-practice contract terms that reasonable buyers and sellers can use to greatly reduce the amount of time spent on unproductive contract review, revision, and negotiation.

This is one of the reasons IACCM has become one of my favorite organizations. They understand what contract negotiators do and they want to help us all do it better and more efficiently. In addition to this project, they put on some excellent programs. I think anyone who negotiaties contracts could benefit from membership in this organization.

If you're interested in participating in the Contracts Negotiation Guide project I'd suggest contacting the IACCM at info@iaccm.com. 

A reader posted the following comment in response to my previous post on the Wisonsin State Bar Association's efforts to crack down on the unauthorized practice of law (UPL) (State Bar Column):

That wasn't my point. What I wrote was that more competition is likely to lead to better client service and that legal services need to be provided at a price the public is willing to pay. If lawyers price their services too high (which is often a result of inefficiencies in the way legal services are provided), fewer people are going to use the services -- or someone else is going to provide the services clients want at a better price. 

The legal profession in general has been slow to adopt changes needed to provide services more efficiently or in innovative ways that better meet the needs of the client. I believe that situation has to change. The lawyers and law firms (and alternative service providers in some cases) that can figure out how to provide the services clients want at prices that reflect the value of those services to the client are going to succeed in the future. In some cases that should mean that lawyers can actually charge more because they are providing better client service by adopting new ways of doing business.

But we need to realize that it's not always going to be lawyers and law firms that are going to deliver services that we traditionally have viewed as "legal" services. The Internet is going to empower clients looking for "legal" services just as it has in many other areas. Clients are going to vote with their dollars and decide who is best positioned to provide the services they want at a fair price. The primary point I was trying to make is that we need to figure out how to adapt to the changes that are going to come - and the Wisconsin State Bar Association's President's column did nothing to address this important issue.

To be clear, I have no problem with the bar association working to protect the public from harm, and clearly there are examples where UPL has harmed the public. My concern (apparently shared by the Wisconsin Supreme Court*) is that a crackdown on UPL not be used as a pretense to restrict competition that, if allowed to flourish, would actually be good for the public.

* From Inside the Bar, Feb. 2006: "In response to a 2003 State Bar petition, the supreme court asked the State Bar to collect evidence of instances in which the UPL harmed members of the public, thus demonstrating that the lack of a definition of the practice of law is detrimental to the public interest."

Ixio Corporation released version 1.8 of Qshift, its online document assembly and knowledge management system last Sunday. I had been eagerly awaiting 1.8 since I saw a demo of it at LegalTech in January. I could see that 1.8 was going to be a big step forward, and I haven't been disappointed.

I first saw the Qshift system in January '05 (see Ross Kodner's 2005 LegalTech presentation for more information), and I've been working with it since last fall. There was a lot I liked about it, but there were a few things that needed some work. I'm happy to report that the release of Qshift 1.8 addresses nearly all of what I saw as the previous version's shortcomings. 

Our law department is now beginning to roll Qshift out to 25 users as a replacement for our no-longer-supported Attenex Structure document assembly system, and the release of 1.8 should speed up that transition.

Once we complete our transition, since Qshift is a hosted system, our IT department will no longer have to maintain the Attenex system, which IT never liked and users in some of our locations were never able to acess anyway (for reasons we and the vendor were never able to determine). Qshift will allow our users in seven locations around the world (as well as anywhere they have an Internet connection) to share standard contract forms, preferred and alternate clauses, and associated knowledge.

Qshift users are either authors (the people who input the content and design the document models) or drafters (the people who use the system to create Word documents from the authors' models). Version 1.8 adds a number of useful features for both authors and drafters, many of which were the result of our requests.

Qshift is intuitive and easy to learn. Although Ixio offers a full day training session for authors and a shorter session for drafters, I was able to go through their training manual on my own and pick up most of what I needed to author documents in a couple of hours. Similarly, I was able to boil down the drafting instructions to a page and a half of step-by-step instructions for people who only need to know how to find the models and use them to create Word documents. It really is a pretty simple system, but it's powerful enough to allow us to create quite sophisticated model documents.

Some of the new features in version 1.8 include:

• Simplified, more intuitive drafting. The new version removes several steps from the drafting process and makes it a more foolproof process.
• Better support for tables. Our documents use a lot of tables, and Version 1.7 didn't always handle table formatting very well. The new version seems to have solved those problems. Authors can now control table formatting independently of the formatting of the rest of the document.
• Fields now support pick lists. The new pick list feature works well and allows us to either limit drafters' choices or assist them in making the right choices.
• Better Interview Process. Although Qshift is not what I would call an interview-driven document assembly system, there is an interview process to input variable field information. Version 1.7 required drafters to go through the each interview question individually. Version 1.8 allows drafters to see and input all field information on one screen, which means they can bypass the interview if they want to.
• Reusable answer files. Drafting multiple documents for a single transaction used to involve inputting the same information (e.g., customer name, address, etc.) multiple times. Version 1.8 allows the drafter to save an answer file that can be used to automatically populate field information in subsequent documents.

I've written before that the people at Ixio are great to work with. They have clearly listened to their customers, and the product just keeps getting better and better. Ixio offers a person edition free of charge if you want to try it. http://www.ixio.com/get_qshift.aspx.

If you've been thinking about trying document assembly, this may be the time to jump in.

Happy Qshifting,

David Munn

I was able to sit in on a demo of Office 12 and the next version of SharePoint (apparently to be called the 2007 Microsoft Office system) the other day. I can't comment on specifics, but it does look impressive. This will clearly be a major improvement over the current SharePoint system, and it does look like Microosoft intends to be a player in document management. Microsoft is talking about a release in late 2006.

Since this is technology most companies are eventually going to get, legal departments should be looking at this now. I believe there will be tremendous opportunities for legal departments to not only improve their management of documents, but also many of their processes. For example, this is causing me to completely rethink our plans for contract management. There are great advantages if legal departments can use the tools the rest of the company uses rather than trying to bring in products to address the specific needs of the legal department.

Deal Proof, from West KM, looks like great technology to automate a portion of the tedious document proofreading process. The product has been around for a while, and has been owned by Thomson West for a couple of years.

It looks like it would be incredibly useful for any transactional practice, but the cost of entry is way too high to make it practical for smaller legal departments. Although the product is installed on individual PCs, what I was told yesterday is that West only licenses it on an enterprise basis, and the minimum initial license cost is around $25,000, with 20% annual maintenance. They are apparently targeting practices with at least 15 attorneys.

I think this is a very useful product, and I'd like to see West offer it with a more flexible licensing scheme. For example, why couldn't it be made available as a web service with a per-use cost? That would certainly get more people to use it, and some would probably decide a full license would be a good investment.

Because my current practice is focused on technology contracting and my current challenge is to figure out how to make my company's contract processes much more efficient, I pretty much ignored the approximately 70% of LegalTech vendors who were pitching their e-discovery products. There are a lot of interesting things going on in that industry, but it doesn't have much application to what I do. Judging by the number of vendors, there are a lot of people who see a lot of money to be made in e-discovery (of course, it's mostly coming out of our employer's, and hence our, pockets), but I have a hard time believing there's a need for that many vendors. It will be interesting to see how the industry shakes out over the next few years. Corporations are going to be spending their dollars and energy on getting their records in order and reducing the volume of saved records so there could be much less of a need for all the e-discovery vendors as we get our acts together in that area.

Leaving out all the e-discovery technology, my vote for the most potentially useful technology that I saw goes to Litéra® Corp. I spent some time talking with founder Deepak Massand today, and I immediately saw how Litéra's Intelligent Document System (IDS) could solve a number of problems for my company, as well as any document-intensive practice. 

First some background: At a couple of the LegalTech programs a speaker from Baker Robbins mentioned that some lawyers in private practice are getting 500-800 emails per day. My suggestion that nobody could possibly deal with that many emails and that something needed to be done to fix the underlying processes that create so many emails was met with something like "lawyers like email and that's just the way it has to be. They all have Blackberries so they can handle all the email."

Well, something is wrong here. No one can possibly deal with anywhere near that many emails and get any real work done. I say we need to reengineer our processes to reduce the number of emails people get. Lawyers don't seem to get that -- yet. It may not apply to all practices, but certainly in a transactional practice, we can get creative and figure out better ways to do things that don't require massive amounts of email. One way is to get rid of all those Blackberries in favor of smartphones that can allow lawyers who are out of the office to interact with systems that, in the future will be designed specifically for mobile access.

So, back to Litéra. Litera creates a place to manage document collaboration in a way that could significantly reduce the need for the back-and-forth email exchanges. It looks like it could put an end to the problem of having to sort out revisions from multiple document reviewers, some of whom may have been working on different versions. Rather than sending a Word document to multiple reviewers, you send a link to the Litéra system, where people make their edits and comments in one place. All edits and comments are stored in the system, so you can easily view the history of the document. Much more efficient than sorting through a string of emails to find out what happened.

Litéra seems to be aimed at some of the same problems that Workshare Professional is, but Workshare is based on email, so it does nothing to reduce the volume of email.  

Litéra also provides workflow capabilities, which is another thing we need to improve productivity and potentially reduce the volume of email. I'm excited about the productivity possibilities Litéra offers and I'll try to provide more information as I learn more about it.

The most interesting LegalTech program I sat in on today was titled Current Trends in Managing Information in the Law Firm. However, the topic was just as applicable to corporate law departments as law firms.  

What was interesting about the presentation is that one of the three speakers predicted that the next version of Microsoft's SharePoint product, due out later this year, would "cause a disruption in the legal document management (DM) market," and two of the three (the other didn't weigh in on the topic) predicted that Interwoven and Hummingbird, which now control the legal DM market, may not be able to survive Microsoft entering the DM market in a serious way. To quote one of the speakers: "SharePoint will kill document management."  

Reportedly, SharePoint 2006 will feature:

Wikis (a possible way to share information in the legal department)

Blogs

Workflow capabilities

Project management

Much tighter integration with the the next version of Office 

Records management capabilities

A recycle bin

See http://www.sharepointblogs.com/dustin/archive/2005/09/14/3503.aspx for more info.

Not sure what this will mean for the SharPoint integration touted by Interwoven http://www.interwoven.com/news/press/2005/082205sharepoint.html. Will Interwoven still be able to offer additional value to SharePoint users when the new version of SharePoint comes out later this year?

E-discovery everywhere. Everywhere you turn at this show there are e-discovery vendors trying to sell you their systems or services. Is there really a market for that many vendors?

Matter management. There are a handful of vendors with matter management systems for corporate legal departments. At a presentation this morning, Microsoft reported that in a benchmarking survey they did of corporate legal departments, matter management was the number one least successful technology initiative. Although they feel a matter management system should be "the operating system of the legal department," we have a long way to go before that becomes reality.

Microsoft did a program on OneNote. There are a few law firms that are using it to organize and share information. Organizing notes electronically has some advantages over using paper, and Microsoft says about 91% of OneNote users are using regular PCs and not tablets. It might be worth a try, although as with most Microsoft products, you'll have spend the time to figure out how to make it work for what you need. You'll get the most value from this technology if an entire group adopts it and develops standard ways of using it. You can download a 60-day free trial at www.microsoft.com/TryOneNote/ and see tips at http://office.microsoft.com/en-us/assistance/HA011423061033.aspx.  

Document Assembly. I saw a demo of version 1.8 of Ixio Corporation's Qshift online document assembly and knowledge management product, which they expect to have available sometime in March. I like the current version 1.7, but 1.8 will add a number of useful features and make document drafting much quicker and easier. Document assembly has been around for years, but hasn't yet really taken hold in corporate legal departments. Qshift is easy to use and practical even for small departments with little or no IT support.  You can use a limited personal version for free. http://www.ixio.com/get_qshift.aspx 

Microsoft SharePoint. Judging from the standing-room-only crowd for the SharePoint presentation, there is a lot of interest in this technology. Three law firms showed how they are using SharePoint for intranets and extranets and how they integrate information from other applications to make it available through SharePoint. All of them seemed pleased with their decision to use SharePoint. Although SharePoint is not perfect, it is flexible and relatively easy to use. "Web parts" available from Microsoft and third parties extend the functionality of the software in innovative ways. Changes coming in the next version (due out later this year) will address a number of the current shortcomings, particularly in the document management area.