Feature article

FOR IMMEDIATE RELEASE
The Changing Face of the Legal Industry


Team Capital talk to former President and CEO of Wolters Kluwer, Corporate Legal Services, Gene Landoe on the legal industry and how technology is driving change. Under Landoe’s direction, CT Corporation and Wolters Kluwer Corporate Legal Services built on its renowned service foundation to transform into a legal technology and a web-enabled service leader.

Long implicated for slow adoption of technology, the legal services industry might be deserving of a new reputation. Innovation and workflow changes are having a significant influence across the profession. This article presents personal observations and top-level findings by industry experts on technology trends affecting corporate law departments and law firms.

Corporate Law Departments are Changing

The recent global financial crisis affected all segments of the legal profession.  As corporations and law firms responded to tightening economic times, including widespread staff reductions throughout 2008 and 2009, new technologies emerged. However, consistent with their history, corporations – rather than private law firms – are playing a leading role in embracing these new solutions.

Several automated solutions have a strong adoption history and continue to gain traction across large corporations globally. At the highest level, these automated solutions center on the capability to manage documents electronically.  There is significant utility and cost-saving potential when corporate law departments implement technology solutions to codify, store, manage and retrieve electronic documents.  This article highlights two specific areas of relevance: 1) establishing an automated system to measure and manage legal costs; 2) improving the ability to manage and respond to risk by implementing electronic workflow solutions.

Litigation expenses outpace other costs in most large corporate legal department budgets. Over the past several years, many companies in the UK and the US have implemented sophisticated applications that improved management of outside legal expenses.  These software and service offerings link law firm time and billing software to the corporation via the Internet. Law firms submit bills electronically, enabling an automated approval and payment process.  By capturing itemized billing detail, the corporation can generate sophisticated reports on legal expenses at a granular level: total cost of litigation, results by law firm, case type and geography. This revolutionary advancement provides corporate law departments with a real-time view and running history of litigation costs.  Better financial information improves decisions and can help drive both costs and inefficiency out of the litigation process in a structured and controlled manner.

Two other litigation-centric applications that are having an impact are matter management and electronic document collection and review (ediscovery) software. 
Large corporations face ongoing exposure from legal issues.  Whether it is a formal lawsuit or a complaint letter, it is critical that law departments track and respond with precision and effectiveness.  Matter management systems are automated workflow tools that record and track each risk incident and the subsequent events of the litigation process. Matter management and spend management solutions (presented above) are tightly integrated and together manage case level budgets and provide law departments with the assurance of command and control of complex litigation events and costs.  These management tools are valuable introductions to the industry in recent years.

One of the hottest buzzwords in corporate law department strategic planning discussions today is "ediscovery." This term refers to the rapidly increasing volumes of electronic documents that are now part of the litigation review process.  Both legal regulations and the sheer mass of documents produced in the electronic age are creating this tidal wave of electronic document handling.  Technological advances are creating alternative means to manage the process.

Insightful and progressive corporations are implementing the capability to selectively extract and review electronic documents, using inside lawyers for early case assessment.  Organizations that curtail risk and settle with opposing parties early, avoid sizable down stream legal expenses. While this description dramatically oversimplifies the complexity involved in the work steps, it does present one of the greatest opportunities to reduce costs and minimize ongoing risk exposure.

Shifting Influence

An interesting dynamic shift is taking place between corporations and the outside law firms that serve them.  Corporations install solutions that drive revenue production or reduce costs. Systems that manage legal spending, matter tracking and control, and new technology employed by corporate law departments for early case assessment, all reduce costs to the corporation by substituting internal capability for services provided by law firms.  In short, many benefits of automation, which are realized by a corporation, reduce income opportunity previously realized by outside law firms. 

Not surprisingly, law firms are changing too, becoming more cognizant of the benefits of automation and technology.  Whether this is being driven by the shifting landscape with their corporate clients, or the fundamental adoption of more efficient ways of doing business, there is a change in the way law is practiced that serves to improve bottom-line performance and competitive positioning.

Law Firms are Changing

Most law firms today embrace technology that helps them conduct business. The Internet, email, handheld devices, and high quality video cameras are available and used in a lawyer’s daily routine. Additionally, the advancement of communication tools, such as social networks, sophisticated online legal libraries and online jurisdictional systems, provides easy access to comprehensive information virtually and globally.  These high-tech advantages now enable lawyers to think creatively about new service and infrastructure designs.

Lawyers communicate both within and across firms by these means. In today’s global economy with increasing levels of multi-jurisdictional casework, this includes the added necessity of unbundling and distributing work to third-party law firms and vendors in countries around the globe.  Most services that lawyers provide can be transacted through virtual client interactions.  Conveniently, most clients are tech savvy and appreciate the greater value and convenience of email, electronic work documents, telephone calls or video conferencing.

A virtual work design is cost effective.  Law firm associates can balance their time by working at home or in an office “hotel station.” The cost drops for real estate, commuting time and travel costs, and revenue increases for the professional’s billable time.  Historically, partners held a strong bias in favor of physical presence, but the advantages and essentials of conducting business differently are now recognized and adopted.
       
More recently, there is new motivation in support of “going virtual,” and that is “going green.”  Large law firms in the UK and the US are deeply committed to environmental leadership and have launched firm-wide sustainability programs. Top priority changes from these programs include: increased reliance on electronic documents; reduced paper consumption; increased recycling; purchasing energy efficient office equipment; and reducing the carbon footprint by allowing a wide range of alternatives, which lessen the requirement to work in physical offices.

Summary

Some industries have experienced technology transformations that have literally required a total redesign of organizations and the products and services they provide. In the current economy, which may well be the future economy, both corporations and law firms will continue to adjust their work design and their cost structures to remain competitive and maintain profit stability.

With each new year, automated processes continue to reshape the way legal professionals – both at private firms and inside corporations – conduct business.

+ End Notes
  • Beard, Jeff. “2008 Corporate Legal Technology Trends." Inside Counsel, February 2008.
  • Friedmann, Ron. “The Future Law Office: Going Virtual.” Prism Legal Consulting Inc, January 2004.
  • Friedman, Ron. “Knowledge Management Trends." Prism Legal Consulting Inc., June 2005.
  • Homann, Mathew, Kevin O'Keefe, Denise Howell and Esq. Nina Goldberg. “What is Twitter and How Can I use it?” Legal Tech West Conference, June 2009.
  • Kaplan, Ari. “Marketing Online Today is About Engagement." Law.com’s Legal Technology Blog, June 8, 2009.
  • Kennedy, Dennis. “Changing The Way Law is Practiced." The Greatest American Lawyer,  April, 2009.
  • Kennedy, Dennis. “Eight Legal Technology Trends for 2008 – Good Times, Bad Times or Hard Times in Legal Tech."  LLRX.com,  February 2008.
  • Munn, David A. “Technology Tools For Small Law Departments."  American Corporate Counsel Association ACCA AM 2000, July 2000.
  • Nelson, Sharon,  John Simek and Michael Mashke. “Top Trends
    in Legal Technology (Book Excerpt)." AMA Book Briefs Blog,
    March 2009.
  • Ross, Frank. “Bay Area Law Firms Going Green."
    allbusiness.com, April 2008.
  • Sachdev, Ameet. “Law Firms Can’t Argue Recession." Chicago Tribune. April 30, 2009.
  • Toutant, Charles. “Law Firms Going Green to get Green.” New Jersey Law Journal. December 2008.
  • Williams, Tony. “Ten trends that will shape the legal market." Business.timesonline.co.uk.  October, 2007.
  • “Global law firm promotes green office supplies." paperstone.co.uk/news. October 2008.
  • “Go Green Initiative." Paulhastings.com. June 2009.
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