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_ 24.April. 2014
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APRIL 30 2014
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LEGAL
EFFICIENCY
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OUTSIDERS ARE
ON THE INSIDE
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DESIGN, ILLUSTRATION, INFOGRAPHICS
The Surgery
CONTRIBUTORS
JONATHAN AMES
Former editor of The Law Society Gazette, he is now a
contributor to The Times and a special reports writer for
The Lawyer magazine.z
PETER ARCHER
Author, specialist writer and editor, he was formerly on
the staff of the Press Association national news agency
and adviser to the American TV network NBC.
MICHAEL CROSS
News editor at The Law Society Gazette, he specialises in
IT issues within the legal sector, and has contributed to
The Guardian, The Independent and The Observer.
JAMES DEAN
Business correspondent at The Times, he covers fraud,
corruption, and the legal and accountancy professions.
EDWARD FENNELL
Award-winning specialist writer on business law and the
legal industry, he is a regular contributor to The Times.
CHARLES ORTON-JONES
Former Professional Publishers Association
Business Journalist of the Year, he was editor-atlarge of LondonlovesBusiness.com and editor of
EuroBusiness magazine.
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REUTERS/Neil Hall
Freelance journalist and former solicitor, he is
a consulting editor with Commercial Dispute
Resolution magazine.
NEIL ROSE
Editor and founder of Legal Futures and Litigation Futures,
he focuses on the evolving shape of the legal market.
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Science fiction, depicting the seemingly unstoppable
advance of technology, has a habit of becoming
science fact – and no one is beyond its orbit, not
even practitioners of the law, writes James Dean
Actor Joaquin Phoenix
glimpses a future when
technology is seductive
in the film Her
OVERVIEW
ȖȖ Theodore Twombley has just
met Samantha. “You read a whole
book in the second that I asked
what your name was?” he asks. “In
two one hundredths of a second
actually,” she replies.
“Wow,” says Theodore (Joaquin
Phoenix). How do you work?”
“Well,” says Samantha (Scarlett
Johansson), “the DNA of who I am
is based on the millions of personalities of all the programmers who
wrote me.”
Theodore: “That’s really weird.
You seem like a person, but
you’re just a voice in a computer.”
Samantha: “I can understand
how the limited perspective
of an un-artificial mind would
perceive it that way. You’ll get
used to it.”
Her, Spike Jonze’s new film, is an
equally fascinating and unsettling
glimpse into the very near future.
Theodore falls in love with Samantha, an artificially intelligent computer programme who is cleverer
than him in every way.
While the concept is nothing
new – Hollywood has long been
fascinated with the rule of robots
– the disturbing thing about Her
is that the film is so utterly believable, even though it is set just 11
years hence.
As the capacity of computing
grows exponentially, we humans
can only struggle to keep up.
The changes are affecting every
corner of our lives – even the
perhaps dusty old profession that
is the law.
When he wrote The End of Lawyers? Richard Susskind, a legal
academic and market sage, envisaged a future where computers do
all of the low-level legal work currently done by humans. Lawyers
were overly expensive, he argued,
because they had not explored the
means by which they could use
technology to make legal services
cheaper. The book was published
in 2008.
If 2008 seems like the recent
past, here’s some context. For
the whole of that year, Twitter
users posted 400 million tweets
and Facebook was four years old.
Today, Twitter handles more than
400 million tweets in an average
day and Facebook is a $150-billion Fortune 500 company.
Professor Susskind’s latest book,
Tomorrow’s Lawyers, published
last year, carries his ideas further.
He sees “a world of virtual courts,
internet-based global legal businesses, online document production, commoditised service, legal
We will see more change in the
legal profession in the coming
decade than we have seen in the
past century
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process outsourcing and webbased simulated practice”.
Given the changes we have seen
in the legal services market in the
last decade, it is hard to disagree.
Each one of the six phenomena
listed by Professor Susskind is
already part of legal life, albeit
at a different stage of experimentation. Nonetheless, law
firms are, he believes, embracing
change too slowly and many are
in denial.
And as for the future: “We will
see more change in the legal profession in the coming decade than
we have seen in the past century,”
he says. “Law firms will take a succession of major steps that will
render many of these organisations barely recognisable by the
mid-2020s.”
already shown a card or two in
their hands.
EY, the “big four” professional
services firm, is rapidly growing
its legal services practice across
the world and has hinted that it
will apply for a licence to operate
legal services in the UK. Helphire,
a listed company that provides
courtesy cars for motor accident
victims, recently raised £40 million from its shareholders to buy
personal injury law firms.
Slater & Gordon, the Australian
personal injury law firm which
was the first to list on a stock market, has expanded rapidly since it
arrived in the UK a few years ago,
buying up dozens of local firms.
It has stated quite openly that it
wants to be the UK’s biggest firm
in its field.
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Professor Susskind envisages a
breed of elite law firms providing
bespoke services to clients with
the biggest deals and disputes, but
with low-end work outsourced to
low-cost “process plants” comprising ranks of paralegals. Online
legal services, meanwhile, will
provide practical, affordable legal
guidance and documents.
Not all of the changes will be born
of technology. The foundations for
sweeping structural changes to law
firms have already been laid by the
2007 Legal Services Act. The Act
has opened the door to myriad
challengers, including those who
have no prior experience in the
world of law, to compete on an
even footing with the old guard.
These challengers, known as alternative business structures, have
“By 2025, alternative business
structures or their successors will
be preferred to partnerships,” Professor Susskind says. “And many
traditional law firms will have had
to transform to survive.”
The law firm that survives
in tomorrow’s world is one
that embraces the opportunities provided by technology and
market liberalisation. Interestingly enough, the game-changer
for the legal world, Professor
Susskind suggests, will be artificial intelligence integrated with
social networking.
We may be a decade or so away
from meeting Samantha. But
when we do, today’s innovators
will already have pushed themselves far out in front of yesterday’s chasing pack.
03
LEGAL EFFICIENCY
LEGAL EFFICIENCY
OUTSIDERS ARE
COMING INSIDE…
CASE STUDY
CRADLE-TO-GRAVE
MERGER KO’S SILOS
New ways of working and alternative
business models are set to rock the legal
world, as Neil Rose reports
ALTERNATIVE BUSINESS STRUCTURES
SHAPE OF
THINGS
TO COME
Source: Addleshaw
Goddard
25%
FEWER
LAWYERS
BY 2020
ȖȖ It was not long ago that innovation in the law meant trying out a
daring new type of biscuit for client meetings. No longer, however.
The introduction of alternative
business structures (ABSs), and
the mood of innovation they have
created, means change is gripping
the £25-billion legal market like
never before.
ABSs allow non-lawyers to own
and manage law firms for the first
time and, though they are still
small in number – about 300 in
total, as against 11,000 “traditional”
law firms in England and Wales –
their influence is far greater.
teams. The Co-op, AA, Saga, Direct
Line, BT, Capita and the Stobart
Group are some of the brands that
own legal businesses.
Investors, such as ex-TV Dragon
James Caan, Betfair co-founder
Bert Black, Stagecoach chairman
Sir Brian Souter and Adrian Fawcett, chairman of Silentnight Group,
are also now players in the market.
And then, to highlight a few,
there’s the Country Gentlemen’s
Association, which has added legal
to the financial advice it already
offers its 15,000 well-off members;
Red Square London, a family office
for Russians relocating to the UK;
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20%
FEWER
LAW FIRMS
BY 2020
This is literally true in certain
sectors – Legal Services Board
research estimates that ABSs
have around 20 per cent of the
personal injury market, as several
large insurance companies have
launched legal businesses – and
metaphorically by acting as a
catalyst for new thinking around
delivering legal services.
In the two years since ABSs
started coming on-stream, the
variety has been eye-opening.
Firms have brought in nonlawyer partners, accepted private
equity investment, formed part
of multi-disciplinary practices or
been born out of in-house legal
Very few lawyers, if starting their
firms again from scratch, would
design what they have today
04
the Transport Salaried Staffs’
Association investing in Leeds
law firm Morrish Solicitors; a law
centre in Leicester setting up a
for-profit ABS to subsidise its notfor-profit activities; and specialist
immigration set Richmond Chambers, finding a new way of being a
barristers’ chambers.
All we have not yet seen is stock
market floatation. This is hardly
surprising, given that listings have
been tough generally even without
the added complication of being
the first law firm to undertake one,
but it has not been lost on many
observers that the spectacular
growth through acquisition of
consumer law firm Slater & Gordon – a listed Australian practice
that entered the UK two years
ago – has been fuelled by its access
to capital.
So far, most of the ABS activity
has been at the consumer end of
the market and they have not had
a direct impact on the largest commercial firms. A recent Thomson
Reuters survey of finance directors
at the top 100 law firms indicates
that they have become increasingly sceptical about listing on
the stock market or taking on
private equity investment, while
the attractiveness of bank lending
has surged.
As if to prove the point, ABS
enthusiast Irwin Mitchell
announced last month that it
had secured a £60-million, fouryear facility from three banks to
finance its growth plans, rather
than seeking more novel forms
of financing.
But there is an indirect impact,
as what top legal futurologist
Professor Richard Susskind calls
the “more for less” challenge takes
hold, and clients demand that
the lawyers they use work in new
and more efficient ways. So, an
increasing number of City firms
have set up lower-cost centres in
other parts of the UK, staffed by
paralegals to handle routine tasks
that do not need a City lawyer with
a City charge-out rate. They are
also putting together pools of freelance lawyers as a flexible, cheaper
resource for certain types of work.
This has also seen the rise of
businesses, such as Axiom Law, an
outsourcing operation employing
senior lawyers, and Riverview Law,
offering smaller business customers fixed-price annual contracts
and larger companies a new model
of outsourcing without the need for
panels of law firms, again at a fixed
fee; it already has FTSE 100 clients.
What marks out many of these
new ventures has been the ability to start with a blank sheet of
paper – no partners, no hourly
rates, putting IT at the heart
of what they do. Riverview has
created roles such as project
manager and data analyst. Very
few lawyers, if starting their firms
again from scratch, would design
what they have today.
Alongside this is a greater focus
on understanding and improving process. Global giant Clifford
Chance has announced firm-wide
training in Continuous Improvement methodologies, akin to Lean
Six Sigma.
A white paper published by the
firm says the key problem is that
lawyers have not been trained
to look at the work they do as a
process. “Trainee lawyers learn
by observing how more senior
lawyers operate; the focus is
on the acquisition of knowledge and expertise, rather than
understanding the ‘how’ or ‘why’
of service delivery. The result is
not a lack of process, but fewer
fully standardised processes,”
it says.
Some firms see what is on the
horizon, notably the likes of Berwin Leighton Paisner, Eversheds
and Addleshaw Goddard. The
latter has a Law Rethought programme predicting that the legal
market of 2020 will have 25 per
cent fewer lawyers and 20 per cent
fewer firms, with new business
models and disruptive legal technologies sitting at the core of the
provision of legal services.
And, as if all this was not
enough for the big firms to worry
about, now the accountants are
coming to get them too. PwC
recently gained an ABS licence
that allows it to own and invest
in what was previously the separate firm of PwC Legal, while EY
announced last month that it is
to build a “legal capability” in
the UK.
Bill Gates once said that less
happens in two years and more
happens in ten years than you
might think. Given what we have
seen since 2012, the legal world of
2022 is going to be a very different place.
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Triton Global is one of the first truly multidisciplinary alternative business structures (ABSs), bringing together three
previously separate businesses – claims
administrator DCS Global, specialist
insurance law firm Robin Simon and loss
adjuster Walsh PI+ – to provide a cradleto-grave claims resolution service.
The company has 120 staff across five
offices in the UK and a further 25 in five
offices overseas. And, now the law firm
is allowed to have non-lawyer owners, it
has just become one of the first legal businesses to introduce employee ownership.
Staff were told last month that they are
each to receive a free initial tranche
of 145 shares, worth about £500. The
employee share trust, which will hold
10 per cent of Triton’s issued share capital, will be able to nominate a director to
sit on Triton’s board.
Chairman David Simon says: “I have
always been an iconoclast and love
upsetting the applecart.” Becoming
an ABS has “knocked down the silos”
between the three businesses and
encouraged much greater collaboration; introducing employee ownership
“is a way of cementing that feeling that
we are one business”, he says.
It will also give retiring shareholders a
market in which to sell their shares, overcoming succession issues that plague
traditional firms, while research shows
that employee ownership makes businesses more productive and improves
staff retention.
In addition, Triton is adopting an innovative approach to charging in a move away
from hourly billing. “We are saying to
insurers: ‘Give us all your cases for X
years. We’ll handle them from cradle to
grave and charge you what it costs us plus
a percentage’,” says Mr Simon.
CASE STUDY
SMALL LAW FIRMS
IN STELLAR RISE?
According to research by LexisNexis,
small firms may turn out to be the stars of
the legal services revolution. It identified
a group of “dynamic independent lawyers
who are really shaking things up” and
who share characteristics such as having
previously worked in a large firm.
This well describes the founders of Radiant Law, who all previously worked at big
City firms. The firm combines high-level
legal advice and fixed fees with IT and
legal process outsourcing. It specialises
in technology, outsourcing and commercial contracts.
Chief executive Alex Hamilton says that,
while in high-value matters Radiant’s
main contribution is the experience of
its seven UK lawyers, for high-volume
commercial contract work, “the whole
process is where we add the value”.
Radiant works with clients to automate
contract creation – meaning the client
can do this and send out the first draft
– and it then works from “playbooks”
containing standard responses and
fall-back positions to speed up negotiations, providing partner-level support if
required. The aim is to reduce the length
and cost of the contract cycle.
The firm has just opened a five-lawyer
office in Cape Town, South Africa to
support this operation, having previously worked with an external legal
process outsourcer.
Radiant is also applying for an ABS
licence so that retailer Greg Tufnell, a
former managing director of Mothercare
and Burton, can become non-executive
chairman.
Mr Hamilton says: “Greg brings a way of
thinking that’s alien to the legal world –
and the legal world needs more of that.”
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05
LEGAL EFFICIENCY
LEGAL EFFICIENCY
The evolving role
of technology
CHANGING ROLE
OF IN-HOUSE
LAWYERS…
Latest technology can replace unreliable manual systems
to control billing and management of outsourced projects,
says Thomson Reuters
General counsel must deliver
efficiency as well as legal excellence in
an increasingly challenging corporate
climate, writes Ben Rigby
maintain current reports, all this
information must constantly be
updated manually, which generally falls behind during the press
of business. This is also time consuming and opens the door to
typographical errors, meaning
future reports could be based on
inaccurate information.
GENERAL COUNSEL
ȖȖ In-house lawyers are adapting to
meet internal demands for greater
efficiency, while also advising on
strategy – not to mention the law.
A 2013 survey undertaken by
City law firm RPC showed that 68
per cent of general counsel (GC)
respondents were involved in
formulating commercial strategy.
Mark Harvey, head of legal at
charity Age UK and chairman of
the Commerce & Industry Group,
says GCs should be “heard and
listened to”, and have “sufficient
involvement before commercial
decisions are made which may
have strong legal impact”.
How they do so is also changing.
Tim Bratton, practice development
director of Lawyers on Demand
and formerly an in-house lawyer at
the Financial Times, says there is a
trend for GCs to focus on “advisory
not execution”, spending their time
providing strategic advice to move
the business forward.
Mr Bratton says GCs are redeploying time-consuming tasks
to a combination of junior
resources, on-shore law firms or
alternative legal service providers
to promote efficiency.
While GCs used to focus on
keeping as much work as possible
in-house, now many are concentrating on “right-sourcing”, keeping the right work in-house, adding value at the boardroom table,
and so are not bogged down on
minutiae which can be resourced
elsewhere, he says.
Sara Scott, vice-chairman of
the Law Society of Scotland’s
In-House Lawyers Group, adds
that GCs in financial services are
“facing a huge volume of regulatory change, the bedding in of
new regulatory approaches and
continuing litigation challenges”.
Gordon Youngson, head of legal
services at UK Payments Administration, sees regulation as posing a
constant challenge in “keeping up
with changes and in turn ensuring
that colleagues are up to speed”.
Nina Barakzai, group head of data
06
protection at Sky, says the speed at
which in-house counsel needs to
move with business is no different
now than ever before, but “the depth
to which an in-house lawyer must
stretch to deliver sound commercial, risk-based advice has grown”.
Regulation also poses in-house IT
challenges. Given the sheer scale of
data to be managed in financial services cases, for example, in-house
lawyers are increasingly working
with external service providers.
This can be through near-shoring to lower-cost areas in the UK
or off-shoring overseas to more
cost-efficient jurisdictions to process the work.
Ms Scott says there are “innovative new law firm models encouraging flexible outsourcing of legal
services and depending on [their]
costs and expertise internally, the
balance of what to outsource and
what to keep in-house may change”.
Outsourcing
comes of age
Page 10
Businesses, meanwhile, are
responding to a recovery in
world markets to compete not
only effectively, but also with
renewed efficiency.
Some 70 per cent of respondents
to Hogan Lovells’ 2013 Evolution
report identified enhanced efficiency as a key investment driver.
Paul Gilbert, chief executive of
LBC Wise Counsel and an ex-GC,
says: “The key to everything is to
define the role so that it is proportionate to the resources available,
aligned to strategy and with credible value articulation.”
RPC’s The Changing Role of
General Counsel survey found that
23 per cent of respondents were
concerned about managing legal
expenditure. As Ms Scott says,
there is an “all-important need
68%
OF IN-HOUSE COUNSELS ARE MORE INVOLVED
IN FORMULATING COMMERCIAL STRATEGY IN
THEIR COMPANY THAN FIVE YEARS AGO
23%
ARE CONCERNED ABOUT MANAGING
LEGAL EXPENDITURE
70%
OF COMPANIES AIM TO ENHANCE
EFFICIENCY AS A MAIN DRIVER OF
INVESTMENT IN ORGANIC GROWTH
Source: RPC
Source: RPC
Source: Hogan Lovells
to demonstrate value for money
to the internal client, including
through reporting to management
on quantified results achieved”.
Anthony Kenny, UK chapter
representative for the Association of Corporate Counsel, says
UK and US colleagues “talk positively about how such tools capture metrics relating to spend,
tracking matters, and both
the internal and external legal
resources [allocated], which also
enhance project management,
collaboration and the sharing of
information”.
Using IT to track legal costs enables the GC to see cost fluctuations
or “where there is limited interaction and routine reports which
do not provide enough detail to
identify types of costs, and detail of
work carried out against each cost
heading”, says Ms Barakzai.
Where this information is available, online and in real time, management becomes smoother and
more efficient, she says.
Mr Gilbert agrees that “good
management information is
essential” as the pre-requisite of
any relationship.
However, while management
need not always require real-time
visibility, he advocates the use of
trends analysis that converts to
process improvement and better
risk-profiling.
Some 22 per cent of RPC
respondents said they aimed to
improve use of technology, in
adopting new solutions for data
retention, contract management
and in e-discovery, as well as enabling better business advice.
According to Mr Youngson: “Ease
of access to technology will fundamentally change how in-house
teams interact with colleagues.”
One aspect of this, says Ms
Barakzai, is the need for speed
in relevant data analysis, which
provides supporting evidence
for conclusions reached and legal
mitigation routes chosen for
critical matters.
IT infrastructure, she says, can
help senior management teams
reach collaborative decisions
where the systems deliver similar
information to a specific audience.
She gives a specific example of outsourced service providers delivering
more transaction-based activities,
adding: “Real-time, portal-based
information provides GCs with real
value as it is much easier to manage
tight budgets and critical issues with
up-to-date information.”
Mr Bratton, however, points out:
“While there is undoubtedly a role
for technology to play, it is always
likely to be a facilitator, rather than
a solution in itself.”
He says one area in-house
teams could improve is in the
management of information, both
internally and globally within the
wider company.
“The emergence of cloud-based
technology solutions is making it easier for GCs to focus on
improving information governance within their organisations,”
he says.
“The question every GC should
ask themselves, when considering
whether the company’s information is adequately organised, is
‘Could I quickly create a dataroom
if the company was sold?’”
If the answer is “no’, Mr Bratton concludes, then improvement is needed. The changing
role of the general counsel
demands no less.
General counsels are redeploying timeconsuming tasks to a combination of
junior resources, on-shore law firms or
alternative legal service providers to
promote efficiency
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Ros Innes, head of in-house law
Thomson Reuters
Legal UK & Ireland
For busy in-house legal teams,
managing legal spend can sometimes be a challenge. Companies
can have dozens or hundreds
of legal projects ongoing at the
same time, outsourced to a number of law firms across the country or worldwide.
With the hectic pace of activity
across multiple locations, general counsel commonly struggle
to see the complete legal landscape of their entire department.
It may be hard to track which lawyers are working on which job, at
what rate and what progress has
been made. And it is a constant
challenge for project teams of inhouse counsel to manage deadlines and budgets.
So how does a typical day look?
Invoices arrive on the client’s desk
without warning. Some are scrutinised. Others are merely approved
without a second thought, as it is
often too cumbersome to confirm
whether the hours, expenses and
billing rates are correct.
Also lost in the process is tracking expenses against the budget,
which more typically unfolds at the
end of a project, revealing costs
that were well in excess of what
was projected when it is too late to
address overspending.
All too often, general counsel
resort to improvised management
techniques, cobbling together
spreadsheets, e-mails, paper documents and other applications. To
An e-billing legal spend management system using the latest technology can replace the
patchwork of manual tools within
a single, purpose-built system.
An e-billing system allows legal
teams to instantaneously transfer
all of the information in bills from
law firm systems directly into the
client’s system for spending and
budget reports without any reentry of data.
Such systems allow legal
departments to route, audit and
approve bills online efficiently,
then deliver them to accounts
payable for payment, saving time
and costs, and improving accuracy of reporting.
Thomson Reuters Serengeti
legal department management
system gives general counsel an
overview of all legal matters going
on internally, as well as externally
with their law firms, meaning
they're always on the same page
as outside counsel.
Systems such as Serengeti can
offer a plethora of tools for gaining
an overview of legal activities. Preconfigured or customised reports
can be generated giving an instant
guide to all ongoing matters, including status updates, costs incurred
Corporate legal departments can
save from 5 to 15 per cent of their
legal spend in the first year on
Serengeti, simply by monitoring
what their law firms are doing
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and where legal spend is against
budget. General counsel can use
such a system to enforce the billing
guidelines which they set for their
law firms.
Ros Innes, head of in-house at
Thomson Reuters, Legal UK & Ireland, explains: “It is possible to
specify, for example, how many
lawyers are to work on a case. If you
have previously agreed to what type
of firm resources will be attached to
a specific project, Serengeti will flag
if a new person starts billing who
hasn’t billed before.
“You can also summarise time
by level or individual. On a complex
matter you might want to specify
that only lawyers with a certain
number of years’ experience are
allowed so that you are not paying
for junior staff to be trained. You can
then agree on rates, trusting the
system to catch any unauthorised
changes. You can also put limits on
expenses, such as photocopying
charges, for example.
“The system’s software is much
more efficient at catching these
issues, saving lawyer time for more
important work.”
Mrs Innes emphasises how hard
these things are to manage without
a dedicated tool. “Things just slip
through the net. Law firms will up
their rates and forget to tell a client. Or they are used to first-class
travel, and fail to follow your rules
and keep booking it,” she says.
Serengeti examines each invoice
and raises flags against potential
violations which the client can reject
at the push of a button. “From a cost
perspective alone, corporate legal
departments can save from 5 to 15
per cent of their legal spend in the
first year on the system, simply by
monitoring what their law firms are
doing,” says Mrs Innes.
A nd there are other advantages. By gaining a unified overview of legal activities, companies
can uncover trouble spots. For
example, if a branch is generating higher than average human
resources problems, such as
unfair dismissal cases, then a
training programme can be put
in place to reduce the number of
legal claims being generated.
There is also an evaluation process enabling companies to systematically track law firm perfor-
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THOMSON REUTERS SERENGETI LEGAL DEPARTMENT
MANAGEMENT SYSTEM
mance, so that over time they can
see which firms are delivering the
best results. Serengeti analytics
aggregate the data from more than
700 companies on the system –
more than twice their competitors
– enabling legal departments to
compare the management of their
legal work and fees with those of
their peers, and benchmark themselves against their competitors.
Currently, more than 100,000
law firms in 182 countries use
Serengeti to bill their clients, with
no cost to the firms for access. A
key benefit is their invoices are
processed faster, enabling them
to receive early payment. Companies who have negotiated early
payment discounts are able to
achieve the agreed-upon savings
as a result of the streamlined payment processing.
This expedited process, benefitting both firms and clients,
generates tangible savings which
make a compelling argument for
general counsel seeking approval
from the board for a system such
as Serengeti.
W hat about the installation
process? It’s simple, since it is a
web-based solution with nothing
to install and no IT-involvement
required from the user-side. Regular upgrades are installed for all
users automatically at no additional
cost and each customer benefits
from the best practices of legal
departments around the globe.
Built by lawyers for lawyers, queries are handled by Serengeti’s
team of former practitioners. And
from the autumn, data will be stored
on UK-based servers – an important consideration for organisations
concerned with data security.
The cost? For most companies,
the cost is less than 1 per cent of
outside legal spending, with no
charges to law firms. Mrs Innes
advises: “It makes sense if you are
spending more than £500,000 a
year or if you have a large number
of cases to manage. The cost-saving alone means Serengeti ought
to pay for itself quickly for companies meeting these requirements.
“However, many of our customers say that, though a great benefit, the cost-saving is not the main
attraction of Serengeti. What they
like most is the control and visibility it gives them over their portfolio
of matters and legal spend.”
With almost a decade of proven
performance, Serengeti is now
used by corporations and law firms
around the world. “There are no
teething problems,” says Mrs
Innes. “It’s a proven system with a
long track record worldwide.”
To hear more about Serengeti or to
arrange a demonstration of the
service:
Call 020 7393 7197
E-mail [email protected]
Visit serengetilaw.com/international/uk
07
LEGAL EFFICIENCY
LEGAL EFFICIENCY
$180bn
Cloud computing offers substantial benefits,
but the legal sector should be aware of
potential dangers, as Michael Cross reports
THE CLOUD
ȖȖ Drayson Law describes itself
as a new kind of law firm. The IT
contract law specialist’s Solihull
headquarters are in an innovation
centre managed by the University
of Warwick Science Park. “Most of
our clients are software firms,” says
founder Charles Drayson, who is
happy when his neighbours drop
by for advice on startups. “It works
the other way, too – when we have
a technical issue, I’m able to walk
up the corridor and find someone
to fix it.”
Not surprisingly, the firm
is at the leading edge of IT.
Its client files have been
paperless for seven years
and, when it upgraded
its practice management system, it
turned to a cloudbased system from
Canadian-based company Clio.
Cloud is a buzz-phrase for providing computing as a service over the
internet, rather than as boxes of
hardware and software. At its most
extreme, users have no idea where
their data is stored and processed.
This poses obvious compliance
problems for lawyers which, along
with the sector’s innate conservatism, explains why cloud services
such as Google Docs have not taken
off in the legal world.
However, despite ongoing reservations, including vulnerability to snooping by intelligence
agencies, regulators are giving a
cautious green light to working
in the cloud. Earlier this month,
the Law Society of England and
Wales issued a practice note on
the subject, following its Scottish
counterpart and the Solicitors
Regulation Authority.
For Mr Drayson, security and
flexibility are compelling advantages. “Cloud does away with the
need for you to have your own
secure server. In a small firm, it is
surprisingly difficult to keep it to
the level of security that is needed,”
he says. Flexibility
means not having to
pay for functions, such
as conveyancOF BUSINESSES SAY THE
ing and
CLOUD HAS CUT IT COSTS
personal
injury, neiSource: NSK Inc.
ther of which
is of interest to
his specialist firm.
But you do not have to be an IT
specialist to see the possibilities.
When high-profile QC Michael
Mansfield set up his new chambers,
based in serviced offices in Chancery Lane, his team did not want
to run its own IT infrastructure.
82%
Despite the worries, the use of cloudbased technology seems certain to
spread in this most technologically
conservative sector
1
exabyte
87%
Secure cloud collaboration for law firms.
Optimise legal processes and improve transactional efficiency.
Client extranets
Matter collaboration
Transaction management
Knowledge sharing
Virtual data rooms
Project management
Used by over 100 of the world’s leading law firms.
08
highq.com
raconteur.net
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CYBER SECURITY,
RISK MANAGEMENT
AND INNOVATION?
Cyber security can drive innovation in
legal services as well as protect professional
privilege, says Timothy Hill,
technology policy adviser
at The Law Society
of England and Wales
COMMERCIAL FEATURE
CLARITY IS REQUIRED
WHEN HEADING
INTO THE CLOUD
Instead, it picked a hosted champrohibit the processing of defamathe hook, you need to look at how
bers management system from UK
tory or obscene content – a probit is run.”
supplier Advanced Legal. It was
lem for law firms handling cases
Mr de Silva agrees.
implemented in eight days over the
in this area. “It’s a judgment call
“The only absolutely
Christmas break.
for law firms,” Mr de Silva
sure way
Martin Parker, consultant and
says. “But you need at
to stop
chief clerk at Mansfield Chambers,
least to review the
intersays the system enables “more
agreement and
ception
flexibility and access without havunderstand
ing wardrobes full of servers and
the risks.”
cabling”. Barristers log on remotely
Andrew
FORECAST GLOBAL SPENDING
to a hosted environment shared by
Joint,
ON CLOUD SERVICES IN 2015
two office-based clerks. “Michael’s
partner at
Source: Gartner
at the Hillsborough inquest, but he
London firm
can do exactly what he needs to do
Kemp Little,
without coming back to the office.”
says the very novelty of the
is not doing anything by electronic
While Mr Drayson and Mr
cloud poses difficulties. “There
means,” he says.
Mansfield are using aspects of
is still zero to very little relevant
Despite these worries, the use
cloud technology, this does not
case law and legislation,” he
of cloud-based technology seems
mean they are posting client data
says. One uncertainty is what
certain to spread in this most techinto the ether and hophappens when a relanologically conservative sector. Mr
ing for the best. This
tionship breaks down.
Drayson enthuses about the ease
perception has been
Could the
with which cloud-based systems
hanging over cloud
service
can be rolled out and the fact that
systems, espeprothey can be tried out without a big
cially since the
capital investment. He also says the
Snowden revelamarket has matured substantially.
tions of eaves“Suppliers are getting better at saydropping
ing we understand you have a data
OF DATA STORED IN THE CLOUD – EQUAL TO
by the US
protection concern,” he says.
1 BILLION BILLION BYTES OR ENOUGH TO
National
Of course, in our connected
RECORD 50,000 YEARS OF DVD-QUALITY VIDEO
Security
world, this advice is only as good
Source: Nasumi
Agency.
as the weakest link. The Law
The Law
Society’s practice note warns that
Society warned this month that,
vider exercise a lien – the right
the very ease and attractiveness of
when selecting a cloud service,
to retain possession – over digi“free” services could set another
lawyers should “have regard to
tal data in the same way it could
trap. The risk is that staff at any
the possibility of lawful access
over tangible property?
level may circumvent carefully
by a foreign law enforcement or
intelligence agency”.
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However, this is not the only
potential problem. In its practice
note the Law Society warns that
Mr Joint points out that in the
designed procurement policies by
the processing of sensitive data
recent decision in Your Response
signing up to “free” services which
on a third-party server or appliLimited v Datastream Business
generate income by processing
cation has implications for both
Media Limited, the Court of Appeal
data from users.
professional conduct and regulanoted that resolution may need the
“They can pose serious data
tory compliance. One ambiguity
intervention of Parliament. The Law
protection, client confidentiality
is whether the cloud provider is a
Society advises firms to conand information security
data processor or a data controller
sider removing contractual
risks. Everyone in your
under the Data Protection Act. Serprovisions permitting
practice
vice contracts also need to ensure
the provider the
should
access to data where required by
right to exerbe
legal regulators and what happens
cise lien.
alerted
to data at the end of the agreement.
As for
to
IT specialist Sam de Silva,
steps to
partner at law firm Penningtons
reduce
OF SMALL BUSINESSES HAVE
Manches and chairman of the
the risk of
EXPERIENCED AN IT SECURITY BREACH
Law Society’s technology and
what the
Source: Department for Business, Innovation & Skills
law reference group, says that
Law Society
suppliers have not always been
calls “lawful
transparent. He warns of “cloudaccess by a foreign law enforcethese risks and be made aware
washing” – the tendency to give
ment or intelligence agency”, the
of the need to follow your forunchecked assurances.
main advice is to ensure you know
mal approvals process,” the Law
Firms need to be especially wary
in which jurisdiction the system is
Society says.
of “click wrap” standard terms and
hosted. In Clio’s case this is in IreUsed properly, the cloud is a
conditions, which may well not
land, though Mr Drayson stresses:
liberating force for lawyers – but it
apply to the legal sector. For exam“Just because a server is in the EU
also turns everyone into a compliple, the terms and conditions may
does not get you completely off
ance officer.
An essential tool
in age of big data
Technology assisted review is providing a
critical advantage in the search and analysis
of large data volumes, says Martin Bonney,
director, international consulting services, at
Epiq Systems
OPINION
ȖȖ Legal technology is variously a
must-have, a source of competitive
advantage, and a driver of efficiency
and innovation. But what about
cyber security?
According to David Prince,
delivery director of cyber security
at Schillings, legal technology can
be all three. Schillings proved the
point by moving from being a law
firm to becoming an alternative
business structure or ABS which
combines risk consulting, law
and IT security to protect client reputation. Mr Prince even
argues that a cyber breach can be
an opportunity.
Most law firms will not seek to
emulate Schillings. Some, however, would agree with Cabinet
Office Minister Francis Maude’s
comments at the launch of the first
UK-wide Computer Emergency
Response Team (CERT-UK), that
“cyber security isn’t a necessary
evil: it’s both an essential feature of
, and a massive opportunity for, the
UK’s economic recovery”.
Mr Maude pointed out that historically it has always been places
where people come together to do
things – transport links, communication routes, marketplaces – that
have attracted criminals.
This was one reason the Law
Society worked with the Institute of Chartered Accountants,
the Cabinet Office and others to
produce a Cyber Security in Corporate Finance guide. Corporate
finance transactions are a “place”
where cyber criminals know that
potentially vulnerable professional
advisers of all kinds come together.
Indeed, lawyers routinely engage
in sensitive affairs that attract
prying eyes. It was the discretion
as well as the expertise of solicitors
that built their reputation in the
19th century.
Maintaining this reputation in a
21st century of pervasive electronic
networks and increasingly permeable boundaries between industries, professions and roles will be
challenging. To succeed, solicitors
2
must learn from and share with
each other and with other professions and disciplines.
The Law Society is promoting an
important component of CERTUK, the Cyber Security Information Sharing Partnership (CISP).
This allows members to exchange
cyber-threat information in real
time, to network, and receive support from expert government and
industry security analysts. Law
firms are signing up to CISP in
growing numbers. Lawyers also
want to be recognised as trustworthy in cyberspace.
The announcement of the
government’s Cyber Essentials
Scheme, identifying essential internet security controls for all types
of organisation, is therefore of
interest. It aims to reduce the risk
of opportunistic attacks, the most
common form of cyber attacks.
The scheme has five controls:
boundary protection, secure configuration, user access, malware
protection and patch management.
From summer 2014, bronze, silver
or gold-tier certification against
these controls can be awarded
and displayed. Most cyber attacks
known to the government “would
have been mitigated by full implementation of the controls”, it says.
Which leaves the attacks that do
succeed and Mr Prince’s intriguing assertion that a breach can be
an opportunity – but only if you’re
prepared to respond.
Does your law firm have a reputation management plan as well as a
business continuity plan? Is cyber
security factored into your reputation management and business
continuity plans? How quickly can
it be implemented? What advice
would you give to clients about
their own plans?
Questions like these are becoming increasingly relevant and demonstrate that cyber security can
be a driver of innovation in legal
services while helping to protect
legal professional privilege. It is not
just a back-office IT function.
raconteur.net
We now live in an age of “big data”,
where massive amounts of electronic
information are exchanged daily. Data
is erupting from e-mail accounts,
smartphones, tablets, social communities and search engines; it crosses
borders, takes new forms and is
housed in virtual clouds.
To respond to legal requests for disclosure in this digital age, new technologies for searching and analysing
large volumes of electronically stored
information (ESI) are necessary. Typically, teams of lawyers are utilised
to review documents for relevance,
privilege, confidentiality, fact development and early-case assessment.
Technology assisted review (TAR) is
the latest revolution in ESI technology
that is helping minimise the volume of
data and intelligently analyse content.
TAR is a type of machine-learning
technology that uses input from a
human reviewer and analytics to
help identify responsive or important
documents. Using this technology, a
case expert reviews a sample of documents and codes the documents as
Understanding the
technological tools
available for analysing
and reviewing large
volumes of data
is critical
twitter: @raconteur
either relevant or not relevant. The
software applies a principal known
as statistical learning theory to recognise complex patterns in the data
and actively learns from the reviewer’s coding decisions. Once the software is trained, it is able to identify
the relevance of the documents.
This new technology offers several advantages over traditional
approaches to document review. It
provides metrics about a document
population that a hit list from keyword-searching does not provide.
This can be extremely valuable for
early-case assessment, developing
case strategy, and designing a more
efficient and cost-effective review
workflow. TAR removes human bias
inherent in keyword searches as initial assumptions about the facts and
evidence often change throughout
the disclosure process. The software can also be used for reviewing document collections containing
multiple languages consistently.
One of the biggest myths about
TAR is that the technology is a threat
to legal practice because machines
are replacing lawyers. In fact, TAR
is about injecting augmented intelligence into the legal process, and
humans and machines working
together. With the volume of data
growing exponentially, human linear review of documents is difficult
in legal cases without extreme cost,
undue burden and lengthy timelines.
But machines alone are not the
answer. The use, and the value, of
the output are dependent on intelligent input and training from a
human expert.
In this age of big data, understanding the technological tools available
for analysing and reviewing large
volumes of data is critical. The sheer
volume of data, and the variety of
ways in which that data can now be
transferred and received, adds a
complexity to the review process that
challenges traditional practices.
While TAR may not be the appropriate tool in every case, knowing how
and when to use TAR can provide a
competitive advantage in this digital
age for forward-thinking lawyers.
TECHNOLOGY ASSISTED
REVIEW (TAR)
Using input from a human review to identify
important documents, a case expert reviews a
sample of documents and determines whether
they are relevant or not
The system learns from the reviewers’ coding
decisions and, once the system is trained, it is
able to estimate the relevance of documents
TAR enables a more consistent and nuanced
approach to measuring relevance than is
feasible with legacy keyword search
TAR software enables accurate measurement of
precision and recall in search results , which is key
to any rigorous culling process
For more for information
Tel +44 (0) 207 367 9101 or e-mail
[email protected]
09
LEGAL EFFICIENCY
LEGAL EFFICIENCY
Originally a cut-price option based on
off-shoring back-office functions to lowerpaid lawyers or paralegals, legal process
outsourcing has evolved from its traditional
business model, writes Peter Archer
UNDERSTANDING LEGAL PROCESS OUTSOURCING
TOP TEN COUNTRIES
WHERE LAW FIRMS
PREFER TO OUTSOURCE
LPO SERVICES
MARKET SIZE
Source: Deloitte
Low
CONTRACT
DRAFTING
Required technical legal skils
OUTSOURCING
THE LAW GETS
A NEW LOOK
44.6%
E-DISCOVERY
LEGAL
COUNSEL
PATENT
DRAFTING/
REVIEW
High
on-site or on-call and online.
A UK-based LPO company is
NewGalexy, which has offices in
Glasgow, London, Chicago and
Mumbai, and is financing expansion plans using the crowdfunding website Crowdcube to raise
more than £200,000. NewGalexy
started seven years ago with teams
of lawyers in India, but has since
added on-shore lawyers in the UK
to meet clients’ wishes.
Advances in computer software and technology, as well as
improved communications, have
further aided increased collaboration between firms, legal departments and outsource providers,
wherever they are in the world.
Greater focus on unbundling
legal services has enabled benefits
from economies of scale and some
clients now request or require
the use of external providers to
minimise the cost of routine legal
work. LPO providers taking on
this kind and quantity of work tend
to manage processes and apply
Low
Availability of specialised resources
NEGOTIATION
SUPPORT
LEGAL
OPTIONS
38.6%
SECRETARIAL
SERVICES
DATABASE
MANAGEMENT
38.1%
High
34.7%
s
kill
al s
leg
red
qui
Re
ȖȖ As with so many other things,
the “Great Recession” has proved
an engine of change in legal services. Along with governmentdriven market liberalisation, pressure on prices from clients has
caused many law firms and legal
departments to look again at outsourcing legal processes.
Traditionally a cost-saving initiative involving off-shoring basic
legal functions, such as large document review projects for litigation
disclosure or transactional due
diligence, to lower-paid providers,
legal process outsourcing (LPO)
has matured and diversified.
The global LPO market is currently estimated to be worth more
than £1.5 billion and is tipped to
continue growing. Providers based
in India lead the off-shore surge
with more than a million lawyers
and around 130 outsourcing law
firms. The Philippines, often considered the second largest LPO
off-shore destination, has some
40,000 lawyers.
40.1%
BILLING
SERVICES
AUSTRALIA & NEW ZEALAND
NORTHERN IRELAND
US
LPO
BUSINESS MODEL
SOUTH AFRICA
10.9%
IN-HOUSE LEGAL
DEPARTMENT
If legal process outsourcing
follows the same trajectory as
other forms of outsourcing, it is
set to move up the value chain
INDIA
21.8%
OUTSIDE COUNSEL
EASTERN EUROPE
8.9%
LPO SERVICE PROVIDERS
4.5%
Source: Deloitte
ASIA
PHILIPPINES
Source: LPO Handbook 2013-14
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10
LPO MARKET
2010-15
$1.42bn
$1.86bn
$2.42bn
Source: Thomson Reuters
$640m
$1.1bn
$850m
raconteur.net
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raconteur.net
2015
2014
2013
2012
PROJECTED
2011
technology efficiently. Pangea3,
for example, point out that they
help transform how work is done
in large law firms and legal departments by introducing and deploying contract management lifecycle
systems to boost efficiency.
Outsourcing routine or repetitive work allows in-house lawyers
to concentrate on high-value core
activities which, in turn, further
boosts a firm’s productivity and
profit margins or limits a legal
department’s costs.
However, LPO does present challenges which have further accelerated its evolution. Control has
become a critical consideration
and some UK firms wishing to enjoy
the advantages of outsourcing also
want to own the outsource provider.
Baker & McKenzie, one of the
world’s biggest law firms, claimed
to be the first to launch an offshore base when it opened its
Manila shared services centre in
2010
But as well as sub-contracting to
off-shore lawyers, there are other
ways of outsourcing legal work,
including to regional law firms
who take on routine work from
more expensive City firms at more
attractive rates.
Contract lawyers, such as Berwin Leighton Paisner’s Lawyers
on Demand and Eversheds Agile,
represent an additional and innovative alternative by offering temporary support services – sort of
locum lawyers – to law firms and
in-house teams that need to cope
with fluctuating workloads.
Obelisk Support, a legal outsourcing business that uses former
City solicitors to provide temporary services, hopes to have 1,000
lawyers on its books by 2015 and
last year grew by 400 per cent.
Such temporary external support
is a flexible way of extending a legal
team, usually on a project basis,
with locum lawyers either working
to earn an average £100,000 as a
salaried partner.
Less legally qualified and dealing
with more routine work, paralegals
in London earn between £30,000
and £44,000 a year compared to
£5,000 to £8,000 in the Philippines.
But LPO providers in India and
other relatively new frontiers are
increasingly using UK-based lawyers as part of their outsourcing
offering to ensure quality control
and instil greater confidence in
the ethical treatment of clientsensitive data, as well as further
expand into more sophisticated
business areas.
Integreon, widely regarded as
an LPO standard-bearer, with
major law firms and companies
in the pharmaceutical, technology, energy and financial services
industries among its primary
clients, opened an LPO delivery
centre in Bristol in 2012. The
leading LPO provider recognises
that, as the delivery of legal services evolves, most law firms and
corporate counsel require a mix
of on-shore and off-shore support.
According to Integreon client
Microsoft, its outsource provider
increased contract turnaround by
SCOTLAND
22.3%
Co
sts
OUTSOURCING
REPUBLIC OF IRELAND
the Philippines in 2000, which
now supports the firm’s 75 offices
globally on a 24-hour basis.
Gary Senior, a global board member and former London managing partner, says it’s in Baker &
McKenzie’s DNA as a worldwide
law firm to work with people in different countries as a team. “It’s not
just about cost,” he says. “There are
also issues about quality of service
and economies of scale.”
Cost was one benefit, but offshoring has also been a business
enabler allowing work to be serviced faster and more efficiently
by the appropriate person in the
appropriate jurisdiction.
Clifford Chance, one of the UK’s
“Magic Circle” or big-five law practices, established its own off-shore
centre in India in 2007.
Amanda Burton, Clifford Chance
global chief operating officer,
says: “The Global Shared Service
Centre provides research, analytics and administration services
to all Clifford Chance offices and
personnel, as well as supporting
the firm’s finance, IT and HR functions. Based in New Delhi, it is
part of the firm’s plan to provide a
more flexible cost model, increased
twitter: @raconteur
efficiency and a better business
continuity capability.”
Also in 2007, Clifford Chance
established a Knowledge Centre,
again based in New Delhi, where
consultants are trained to provide
support services specifically to
Clifford Chance lawyers outside
India on routine tasks, such as
research and analysis, and discovery of documents.
“It enhances the firm’s flexibility
and helps us to offer clients greater
value for money,” says Ms Burton.
“In the 2012-13 financial year,
our Knowledge Centre supported
Clifford Chance lawyers globally
on 1,300 client projects for 263
partners, across 26 offices, across
all practice areas.”
Other large firms may have shied
away from operating overseas
and have instead set up their own
near-shore regional centres, such
as Herbert Smith Freehills in
Belfast, CMS Cameron McKenna
in Bristol and Addleshaw Goddard
in Manchester, offering clients
better value for money because of
the marked regional variation in
salaries compared to London.
But the salary differential and
therefore potential for savings are
greatest off-shore. For example, a
fully qualified lawyer in India, with
a law degree from the respected
University of Delhi, can expect to
earn an average of £12,000 a year,
compared to a lawyer at a national
practice in the UK who would start
their career on £40,000 and aim
20 per cent and on-time delivery of
contracts to 99.5 per cent.
As with outsourcing in any
sector, success depends on establishing a good working partnership. So before entering into an
outsourcing deal, firms or legal
departments should ensure the
provider understands exactly what
is needed. They should never hire
an LPO provider without visiting
the site where their work will be
delivered and meeting the managers. Communication is key.
But what of the future? If LPO
follows the same trajectory as
other forms of outsourcing, it is
set to move up the value chain
to incorporate more complex,
high-value tasks. And as clients
and LPO providers build longterm relationships based on
trust, transparency and collaboration, clients are more likely to
engage providers for more endto-end projects.
Enterprise partnerships may
even become popular where the
client and provider create a jointly
owned enterprise that both services the client as well as seeks
external customers.
Looking at patterns in IT and
business process outsourcing, it
could also be expected that the
increased mergers and acquisitions activity within the LPO sector will gather pace. So, outsourcing may yet take over where many
previously thought it would never
catch on.
11
LEGAL EFFICIENCY
Time to bring
timekeeping into
the 21st century…
WAR ON PRICE AS
CLIENTS LOOK FOR VALUE
FEES
How lawyers charge clients is
changing, but the billable hour refuses
to die, as Edward Fennell reports
Latest software helps law firms take the pain out of time
management and lets lawyers get on with the job, says Intapp
Lawyers hate timekeeping. Not only
do they have to break off from concentrating on legal matters to make
notes of their activities during the
day, at some point they’ll need to
abandon their labours completely
to fill in formal time records. This
may happen at the end of the day,
when lawyers are tired and struggling to remember which actions
were undertaken, for whom, and for
how long.
Some lawyers wait until the weekend, by which time those memories
have blurred even further.
The rise of alternative fee arrangements (AFAs) promised to end
this burden. Since lawyers would
be working for a fixed price, the
requirement to record each minute
spent was gone. Alas, no. In order
to compose accurate bid prices, it
is essential that law firms understand how long their lawyers spend
on work. If anything, AFAs have only
added to the importance of accurate
and detailed time records.
Worse, the job is becoming more
onerous. Lawyers need to record
more than time. They need to break
activities down into phases and use
the right task codes. They need to
ensure their records are compliant
with e-billing platforms. And there is
a duty to keep records up to date and
close to real-time. Waiting until Sunday night to report a few days’ worth
of work is not acceptable.
The Jackson civil litigation reforms
mean lawyers are often working to
tight budgetary constraints. There
may be restrictions on which lawyers can do what. And as costs near
the ceiling, the legal team needs to
be aware of the financial situation as
it progresses.
So what’s the solution? The ideal
system would have four essential features. First, it would help
with timekeeping, by automatically
tracking activities undertaken by
the lawyer. Second, it would help
to translate that data into formal
time records. Third, it would simplify compliance. All the right codes
would be presented at the right
moment and records would be compliant with e-billing platforms. And
fourth, the system would be accessible from smartphones and tablets.
Lawyers need to be able to com-
12
EVOLUTION OF TIME ENTRY
Time-recording software has been virtually stagnant for a generation; facing a challenging business environment, law firms must now consider adoption of new technologies providing more accurate time data to clients
THE OLD WAY
THE NEW WAY
TIMECAPTURE
SOFTWARE
HANDWRITTEN
NOTES
Lawyer scribbles notes throughout
the day
At end of day, lawyer manually reviews
e-mails sent
Submits time sheets based on notes
and memos
For some lawyers, time entry still
involves paper and manual entry
plete the job on an iPad on their
commute home if that’s what suits
them. Oh, and the mobile app needs
to work even when there’s no signal
– the work can’t halt when a train
goes into a tunnel.
Intapp’s time management software, used by 63 per cent of the
world’s largest law firms, meets all
these needs.
It begins by passively recording
legal activities as they occur. If the
lawyer makes a phone call then
Intapp registers duration, who it is
made to and links the phone number
to the relevant case. When the call
ends, the lawyer is presented with
a pre-filled form, complete with relevant codes, which can be approved
with a single click or swipe.
This passive recording works for
e-mails, document review and drafting, phone calls, and any other digitally detectable activity.
Should the lawyer wish to work for
several hours uninterrupted by timekeeping obligations, it is no longer a
problem. Intapp will have recorded
every digital activity undertaken. The
lawyer can edit and approve that
activity knowing the information,
Lawyer practises law
Time-capture software records what
lawyer does throughout the day
Lawyer receives pre-populated
journal for review
Lawyer accepts relevant line
items, makes edits as needed and
submits time
MOBILE
TIME
RECORDING
Lawyer uses smartphone and tablet
on the go
Lawyer records and submits time
entries via a mobile app
Time-capture software also tracks
mobile activity
including the duration, is accurate.
Lewis Silkin adopted Intapp in 2011
after realising the shortcomings of
their old system. Jan Durant, Lewis
Silkin’s director of IT and operations,
says: “In talking to representatives
of our firm’s five departments, I had
anecdotal evidence that fee earners were starting early and working
late, but their recorded hours were
inconsistent with the time they were
putting in. We knew that time was
probably being lost through mental
write-off.”
Today, Lewis Silkin’s lawyers use
Intapp Time, alongside other timeentry software. Intapp Time runs in
the background, passively record-
Intapp’s time management
software is used by 63 per cent of
the world’s largest law firms
COMPLIANCE
WITH
E-BILLING
ANALYTICS
Lawyer records time
Lawyer records and submits time
System codes activity correctly from
point of capture
Time data is sent to project
management system
Non-compliant entries
flagged immediately
Law firm gains visibility into
progress and profitability of projects
Avoids automatic rejection by
clients’ e-billing systems
Clients gain more accurate picture
of work in progress
Reduces delays in payment and
potential write-downs
ing use of phones, desktop applications, such as Microsoft Office and
Outlook, and then presents this
information to the lawyer in a daily
report. The lawyer can edit and
amend this report in conjunction
with other information.
Ms Durant says: “All fee earners have their own preferred practice when it comes to tracking and
recording their time. We try not to
prescribe any particular timekeeping routines, but instead give them
tools to simplify what is usually an
onerous task. Intapp Time performs
this role admirably. Our lawyers
simply look down a list of recorded
activity and tick the time that they
want to be included against matters
in our billing system.”
Another plus is pre-integration
with e-billing systems, such as
Thomson Reuters’ eBillingHub.
Intapp vice-president Europe, the
Middle East and Africa, Kaye Sycamore, explains: “The last thing law
firms want is for their bills to be sent
back. Our system checks everything
is compliant with the right codes and
format from the outset. Compliance
is built into the system. This means
you can be sure of getting everything
right straightaway.”
Berwin Leighton Paisner director of
technology Janet Day says the compliance features are vital. “You can build a
model which says ‘Never bill for travel
outside the UK’ if that is what you have
agreed with clients,” she says. Intapp
ensures this cannot be violated. “The
client can be assured of an efficient
and robust deal,” Ms Day adds.
Law firms report adoption of Intapp
is pain-free. Osborne Clarke is currently piloting the product and has
approved a roll-out across its offices.
IT director Nathan Hayes says: “We
have found it remarkably intuitive.
There are no real barriers to using it.
Transitioning is not significant.”
There are many dividends from
using Intapp to record, classify
and disclose time accurately, from
improved fixed-fee bids to reduced
administration costs. Lawyers will be
big gainers too. As one commented:
“You’ve given me my Sundays back.”
raconteur.net
twitter: @raconteur
Further information on Intapp
Time software is available at
www.intapp.com/time
raconteur.net
ȖȖ For years the legal world has
debated the future of the hourlyrate as the controversial basis of
charging for legal services. And as
the war on price intensifies so does
pressure on the billable hour.
Tony Williams of consultancy
Jomati is emphatic: “I’d love the billable hour to die like a vampire with
a spike through its heart, but no one
has yet been able to kill it off.”
So billable hours survive, but
only perhaps as a convenient fiction. As Professor Laura Empson,
director at the Cass Business School centre for
professional service firms,
puts it: “There are three
forms of fudge around the
billable hour. First, what
the lawyer records – that
is rarely accurate. Second,
what the manager chooses to
bill – that is going to be a value
judgment on the work done.
And, third, how the client sees
it. They rarely believe the number of hours they’re told.”
In effect, the billable hour has
become a convenient way of
disguising complex legal pricing.
Simon Hodson, senior partner
of DAC Beachcroft, points out
that less than 50 per cent of his
firm’s revenue is now based on
charging by the billable hour.
“The debate is not really even
about price any more,” he says.
“It is about value. There must
be a correlation between what
lawyers charge and how the client benefits. Once you start thinking about value, then you start to
make sense of the way clients now
want to buy legal services.”
Lesley Wan, corporate real estate
counsel for Lloyds Banking Group,
sums it up well. “Price is only one
element of value,” she says. “Value
also includes elements such as
quality of advice, relationship,
approachability, willingness to
engage and commitment to supporting the business.”
So across all areas of the
legal market there is more
to pricing than billable hours. That is why
most progressive law
firms are now offering a flexible menu
of options to their
clients. Mark Shillito,
head of disputes, offers
a run-through of the
choice which he presents
to Herbert Smith Freehills’
clients. “We offer a choice of
hourly rates, discounts on hourly
rates, discounts for volume work,
fixed fee for some types of work as
well as conditional-fee agreements
twitter: @raconteur
and, the latest option, damagesbased agreements,” he says.
Flexibility combined with clarity is now the key. Mr Hodson
says: “Clients increasingly want
to unbundle work to see how it
can be done most cost effectively
and by whom.” Clients no longer
accept that simple, routine tasks,
which are done by a junior lawyer,
should be charged out at the same
rate as work which is much more
complicated.
A good solution has been developed by Balfour Beatty which has
a retained-services agreement
with Pinsent Masons. The firm is
guaranteed most of the company’s
work for a three-year period and
at an agreed total price. “We get
a variety of benefits including
predictability, discounts, in-house
secondees, training and a commitment to continuous improvement,” says Chris Vaughan, Balfour Beatty’s in-house counsel.
Across the
pond...
Page 18
Even so, there may be exceptional
pieces of work, such as particularly
complex or unusual litigation, where
Mr Vaughan decides to go elsewhere.
Trying to control the unpredictability of these mandates is not easy,
as Peter Stewart, partner at Field
Fisher Waterhouse, says: “Uncertainty and risk are an inherent and
unavoidable part of litigation.”
And if the risk is significant, it
may be that the billable hour will
be summoned back into action.
Not least, as Mr Shillito points out:
“Because when it goes to the tax
office, that is what they want to see
and understand to decide if the fee
is fair. If it’s a fixed fee, then they
have no way of measuring it.”
Nonetheless fixed fees are
increasingly popular where noncontentious work is concerned.
“Our transactions in the corporate
real estate business are generally
carried out on a fixed-fee basis in
the current market where borrowers are very cost conscious and
want fees to be agreed upfront,”
says Ms Wan.
David Howitt, head of legal and
compliance at Xoserve, uses the
Lawyers on Demand “On call” service because it gives him absolute
certainty on costs. “Since we buy
Lawyers on Demand’s services for
a pre-agreed monthly fee, we have
found a way to reduce our legal
costs while increasing efficiency,”
he says.
Often it is clients’ procurement
departments which put pressure
on in-house counsel to get a grip on
legal expenditure. That has led to
reverse e-auctions where lawyers
bid against each to offer the lowest
price for a piece of work. Clients
then go with the cheapest offer
without assessing whether the
“winner” has the skills or experience for the job.
“It’s based on the idea of standard
commodity work without taking
account of quality at all,” says
Richard Masters, head of client
operations at Pinsent Masons.
“You might get the cheapest price,
but it will cost you more if the work
is done badly.”
Increasingly a way of reassuring
clients about costs is by providing
billing information via an extranet.
“We have developed a bespoke
extranet solution for clients which
allows them to view information
on case tracking and billing in realtime,” says Natalie Griffin, chief
operating officer at business law
firm DWF, which recently won an
award for best managed firm. “It’s
proving very popular and is used by
over 100 clients,” she says.
Whatever approach is adopted,
however, key advice comes from
David Kerr, chief executive at
lawyers Bird & Bird. “We make a
big effort to clarify from the start
exactly what services are provided
and how they will be charged for,”
he says. “The big thing is that there
should be no surprises.”
I’d love the billable hour to die like a
vampire with a spike through its heart,
but no one has yet been able to kill it off
13
LEGAL EFFICIENCY
Get expert help when the
regulator comes knocking
MOVING WITH
CHANGES IN A
MOBILE WORLD
The financial services and other highly regulated
sectors are coming under increased scrutiny,
both from regulators and the wider public
Philip Algieri, QuisLex associate vice
president, legal services
Andrew Goodman, QuisLex executive
director, litigation services
Organisations such as the Financial Conduct Authority, Prudential
Regulation Authority and Serious
Fraud Office are increasing the
requirements to which companies must adhere. Meanwhile, the
tighter imposition and enforcement
of sanctions, along with the implications of the UK Bribery Act, mean
businesses have to be increasingly
aware of conduct at all levels, and
have a monitoring and compliance
framework in place.
This increase in scrutiny has
the potential to affect the reputation these institutions have
as trusted businesses and ultimately impact their standing with
the public.
“ The t y pes of issues being
investigated – even if they are
only allegations – carry a reputational risk,” says A ndrew
Goodman, executive director,
litigation services at legal support services provider QuisLex.
“If there is any evidence out
there of poor practice, it’s really
important for the corporate to
get ahead of that so they can get
a handle on the potential issue
or clear their name.”
But when corporates are asked
to provide information to regulators – or even if they want to conduct their own internal investigations into the robustness of their
processes or how well they have
been enforced over the years – it
can instigate a very cumbersome
and time-intensive process.
“Often you’ve got to review millions of documents and regulators can demand responses in
a very short timeframe, which
creates a lot of oppor tunities
for inefficiency and mistakes,”
warns Philip Algieri, associate
vice president, legal services at
QuisLex. “The issue is what you
can do about it and how you can
control the cost while ensuring
the quality of the process.”
The danger for organisations
is that the document review part
of the process takes on a significant amount of both time and
cost, and requires a sophistication of both process and technology not available with traditional approaches to large-scale
e-disclosure matters.
“The sheer size and scope of
today’s large-scale regulatory
investigations require an innovative solution,” says Mr Goodman. “Given the large volumes
of document s to rev iew, the
extremely tight deadlines and
the pressure organisations are
under to do this effectively, this
is of critical importance.”
For many organisations, using a
14
dedicated legal support services
business, such as a legal process outsourcing provider, will
make sense. “They tend to have
large, highly trained and motivated workforces of permanent
employees, and come with institutional knowledge gained on
similar types of matters,” says
Mr Algieri. “The advantage such
providers bring is their expertise
of both the process of e-disclosure and document review, the
ability to seamlessly work side
by side with the law firm or inhouse counsel that is instructing
them, and their experience with
the subject matter and industry.”
Mr Goodman adds: “Support
organisations tend to be a more
cost-effective option, especially
due to their ability to use sophisticated processes and technology
to streamline the review.” They
draw on the latest search techniques and technology-assisted
review capabilities, where appropriate, to identify important documents more quickly and reduce
the overall number of documents
requiring review.
“Their highly process-driven
use of technology is a way of
making sense of the documents
and cutting down on some of the
volume, with the ability to still
review what’s left in an efficient
and effective manner,” he says.
The ability of such organisations to take care of the legwork around investigations has
also led to law firms drawing on
them for support. “For a while
no w, many cor p or ate s hav e
insisted that law fir ms of fer
them a legal process outsourc-
Entrusting the largest and most arduous
portion of work to a scalable, well-trained
team using well-honed processes and
technology makes sense
ing option, especially in large
litigation or investigatory matters,” says Mr Goodman.
“More recently, some of the law
firms – especially the large ones
such as the ‘Magic Circle’ firms
– are also routinely instructing
support organisations of their
own volition because they realise
that doing so not only presents an
attractive option to their clients,
but also provides the law firm a
backbone of people who specialise in that particular task, so their
lawyers can focus on completing
the high value work their clients
have instructed them to do.
“When you’re entrusting the
largest and most arduous portion of the work that’s required
to a scalable, well-trained team
using well-honed processes and
technology, it makes sense for
ever ybody. This also typically
results in significant cost-savings
to clients.”
The pressure of such investigations continues to escalate in the
UK, which has created increased
need for support organisations
that can help corporates handle
these matters more efficiently.
Many of these organisations
have also been well established
in the United States for some
time, where a historically tough
regulatory environment means
such support organisations have
notched up several years of experience working on this type of
investigation. This includes coping
with broader issues, such as data
protection and privacy, including
the US-EU Safe Harbor initiative,
and coping with different regulations across jurisdictions.
“The first issue to consider is
how you wrap your arms around
it, and that starts with having
strong processes and knowing
from past experience how to integrate them into a wider strategy,”
Mr Algieri concludes. “Organisations tend to select their law
firms based on this type of expertise. It’s exactly the same with a
legal process outsourcer.”
Contact [email protected]
and [email protected].
For more information about QuisLex,
please visit www.quislex.com
raconteur.net
MANAGING A LARGE-SCALE INVESTIGATION
Mobile technology offers undeniable and
essential benefits for lawyers and their clients,
but there are challenges to overcome, says
Roger Jackson, chairman
of the Legal Software
Suppliers Association
Receive subpoena/
document request
OPINION
Collect, process and make
available for review large
volumes of electronically stored
information in tight timeframe
Receive instructions from counsel
Apply process and technology
Assign scalable, well-trained team
Isolate important documents
earlier in process
Review for legal professional
privilege/privacy concerns
?
Respond to regulator
twitter: @raconteur
ȖȖ With the development of communications and mobile technology, we
are living in a world where people
can, and more and more expect to be
able to, connect with providers of all
goods and services 24/7.
This is a challenge whatever
industry or market you operate
in, but when your service is based
on careful, considered advice,
backed up by solid procedures
and processes, tight security and
legal precedent, how do you operate successfully in this modern,
mobile world?
There are two main approaches
that law firms adopt to mobile
working. One is BYOD (bring your
own device) where an individual’s
smartphone or tablet is linked to
the firm’s system, or CYOD (choose
your own device) where the law
firm pays for the mobile phone
or tablet and lets the user choose
from an approved list.
Technology suppliers to law firms
are making mobile working more
secure by introducing more controls for remote working. For
example, if a user loses a phone, the
Share and discuss online at raconteur.net
Remember the days when you
could never get hold of your
solicitor? If you were lucky, you
would be able to get them on the
phone during working hours. And
this is probably exactly what you
expected. But now this has all
changed, partly due to increased
competition with new regulation,
but largely to do with the introduction of mobile devices which
enable “always on” information.
Mobile e-mail, driven by partner demand, began the mobile
revolution in the legal profession.
Now, regular, timely e-mail communication is the minimum that
is expected. A lawyer needs to have
access to filtered, important information and needs to have access
to it on the move. Whether it is
by using a smartphone or a tablet,
your lawyer should be able to keep
in touch with you at all times.
But how do lawyers manage
this and keep up their professional standards, integrity and
strict security? Key to this is
understanding both the rewards
and risks of working with
mobile technology.
IT department can remotely wipe
all the data from the phone. Data
can now be encrypted on the device.
Should data not be encrypted,
then that data is at risk. For a law
firm this is a big deal and there are
concerns over the security of client
information to be addressed.
The rewards of mobile technology are huge and immediately
appealing for the lawyer and the
client. The lawyer turns up at a
meeting with you and is fully prepared, having read the e-mail you
sent while on the train or waiting
in reception. Travelling time can
also be useful work time.
However, there are some
key challenges that need to be
addressed. A big challenge for
law firms in dealing with mobile
technology is software. If users
are downloading software, then
the law firm may never be certain
which version of the software a
user may have, making upgrades
difficult. And people using different versions of software may cause
further issues.
If a law firm wants to control this,
it has to install expensive mobile
raconteur.net
device management software,
which can be complex, especially if
users are connecting with different
devices and platforms. This brings
compatibility challenges.
For smaller law firms there is
an issue that they can no longer
control mobile applications
in the organisation. There is
more risk for the smaller firm
as they don’t necessarily have
the budgets to implement the
control systems, but if the right
precautions are taken, risks can
be minimised.
The answer lies in having policies and controls in place, and
educating staff on the dangers of
not protecting devices with PIN
codes, timed lock screens, reporting lost devices immediately, so
the remote wipe features can be
implemented, and finally making
people think carefully about where
they store sensitive information.
Mobile computing is a challenge
for all companies as the rate of
change can outpace the IT department’s ability to control and put
policies in place to secure devices
and the data contained within
them. Third-party solutions do
exist to assist with this, but these
will typically involve expense and
effort to implement correctly.
The alternative is to ban personal
devices, but this will inevitably
lead to employees feeling let
down and having to carry multiple
devices as there is likely to still be a
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the hottest topics facing the industry today. Additionally,
these seminars contribute towards fulfilling obligations for
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Legalex covers the entire gamut of issues and solutions facing
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If you want to attend Legalex 2014, book your free ticket now at
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need to access e-mail and information on the move.
The issue of mobile data doesn’t
stop at the mobile devices people
carry around though, as the need
to have instant access to information from wherever the user is also
Mobile computing is a challenge as the rate of
change can outpace the IT department’s ability
to control and put policies in place to secure
devices and the data contained within them
twitter: @raconteur
impacts the desktop environment.
Services such as Dropbox, Google
Drive and SkyDrive all provide
the ability to get instant access
to your documents from any of
your devices, but they store them
in the cloud on servers that could
be located anywhere in the world.
These all provide the opportunity
for sensitive information to leak out
of the control of the organisation.
The rewards from mobile computing are huge and mobile is certainly here to stay. Mobile devices
bring enormous benefits to clients
in terms of response times and
availability of legal support, and
enable better use of time and more
efficient preparation. Mobile will
prosper in the legal profession,
providing your law firm recognises
the risks – and sensible precautions
are taken to keep your data safe.
15
LEGAL EFFICIENCY
LEGAL EFFICIENCY
NO MORE PAPER
TRAILS TO TRIAL…
Better
together
Disclosure of electronically stored
information can be a time-consuming and
costly exercise unless technology is on your
side, writes Charles Orton-Jones
FUTURE OF E-DISCLOSURE
Umbria
for LPM
Price, Budget, Monitor
& Track Experience
ȖȖ Disclosure is a process which
many lawyers find difficult. It’s
understandable. The sheer proliferation of digital documents, the
rise social media and challenge of
getting to grips with cutting-edge
technology, such as predictive coding, leave many legal practitioners
pining for the days when everything was done on paper.
Just consider the smorgasbord
of places which need searching.
There’s WhatsApp. The Libor subterfuges took place via online chatrooms. And how about Snapchat,
where the messages are erased
after a few seconds – does that need
to be considered? Add in Facebook
messenger, recorded Skype conversations and loud storage, and
it’s a tough ask to cover everything.
Get it wrong and there is hell to
pay. In West Africa Gas Pipeline
v Willbros Global Holdings Inc.,
the respondent failed to identify
a complete set of relevant documents at the outset. An additional
47,197 documents were provided
two years after the start of the proceedings, resulting in an unamused
Mr Justice Ramsey ordering the
respondent to pay half the applicant’s costs incurred reviewing
these documents.
So what tips can disclosure
experts pass on to practitioners
who want to raise their game?
Theo Solley, partner at Davenport Lyons, says the initial conversation is vital. “The West Africa Gas
Pipeline problem occurred because
the lawyers failed to communicate
which documents were going to be
relevant. Disclosure begins with
picking up the phone and having
that conversation,” he says.
As well as discussing what constitutes a relevant document, it
will be necessary to confirm which
repositories will be searched. Not
easy. Craig Earnshaw, managing
director of FTI Consulting’s forensic disclosure
division, says there are
more than many lawyers realise.
“In addition to
e-mail and
corporate
archives,
there are
things
like
cloudbased
systems
such
as
means your forensic partner will
understand what systems are
relevant.” Bringing technology
partners into interviews with witnesses is increasingly common.
Then comes the narrowing down
of material. “When it
comes down to it,
you need surprisingly few
documents
in court,”
says Nick
Burkhill
of Dorsey
& Whitney. “I
recently
did a small
exercise
where
the
number of
documents
was
FALL I
600,000
N THE
CO
DATA
at the start.
STORA ST OF DIGI
Then, after
TAL
GE SIN
CE 200
the applica0
tion of search
Source
terms and de: Ivan
Morro
duplications, we
w et al
produced 15,000.
SalesThe other side
force.com, CRM
produced 1,000 and
systems, sales tracking prowe ended up with a
grammes, online finance systems
core of 3,000 docuand bespoke environments,” he
ments
in court. In fact, we
says, advocating bringing in a techused two lever arch files in court.”
nology specialist at this early stage.
Keywords and date restrictions
“Taking part in that conversation
are commonly used. But the real
99%
skill is using all techniques from
concept clustering, predictive
coding, and metadata searches and
tabulation. Incredibly, these techniques, which radically cut costs,
are not always employed.
Daniel Kavan, who leads the
electronic disclosure team at Kroll
Ontrack, says: “My biggest challenge is getting clients to pay for the
services. We still find clients who
don’t see the benefits of using technology in disclosure. They want
their lawyers to do everything. I
need to explain that by paying a
bit more for a third party offering
technical expertise they can save
significant sums in the long run.
You really don’t want lawyers wasting time fiddling with documents.”
Preserving document integrity
is vital during this disclosure. In
a recent case, an employee was
accused of downloading indecent
material on to his company mobile
phone. The images were visible,
but the employee denied responsibility. Grey Heron, a specialist
in recovering lost or deleted data,
used AccessData’s MPE+ mobile
phone extraction tool to identify
and extract metadata, thus proving
who downloaded what and when,
making a prosecution viable.
Disclosure will result in the compilation of hundreds or thousands
of sensitive documents, which
need handling correctly. Peter
Wright, managing director of DigitalLawUK, issues this warning:
“Lawyers need to understand the
important of secure document transition during disclosure. Attaching
465m
USERS OF WHATSAPP SEND
64BN MESSAGES A DAY
Source: CNET/WhatsApp
10
seconds
MAXIMUM LIFE OF A SNAPCHAT MESSAGE
USED BY FIRMS SUCH AS TACO BELL
Source: Mashable
Attaching documents to
an e-mail is not OK – that
is as secure as a postcard
documents to an e-mail is not OK –
that is as secure as a postcard.
“Law firms can use secure online
datarooms, but these are not
cheap; other law firms are still
exploring the technology and
getting up to speed. I’m afraid
it may be down to clients to ask
their law firm ‘Is our data being
looked after in a secure manner?’”
Data breaches can incur fines of
£500,000 or, under new EU law, a
percentage of turnover.
Mastering these skills means lawyers can both ensure a full complement of documents can be collected
and costs are kept as low as possible.
Will Richmond-Coggan, a partner
at Pitmans, says the way forward is
for lawyers to make the most of the
technology. “Before, some moron
would write ‘Killer document!’ with
indelible ink on a piece of paper. Try
explaining that in court. Now you
have an evidence trail, metadata,
the ability to tag a document with
your own comments and questions.
It really is far better,” he says.
In terms of cost alone, lawyers
need to embrace technology. “We
did a case recently with 60,000
documents,” Mr Richmond-Coggan
recalls. “Using keywords and filters,
we got that down to 10,000; then
reviewed manually, costing $25,000.
For $10,000 in technology costs we
saved maybe 75 per cent in time
costs. That’s a big overall saving.”
And the laggards who struggle?
“There will always be people who
find technology an anathema,” he
says. “But the tide is very much
against them.”
COMPUTERS DO THE CHECKING
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16
from a vetted sample, large
volumes of material can be
rapidly scanned.
Daniel Kavan of Kroll Ontrack
says it can be used to double
check even expert opinions: “It
is common for a senior reviewer
to look at 10 per cent of selected
documents. Using predictive coding, you can identify
documents which reviewers say
aren’t relevant, but computers
say are 80 per cent likely to be
relevant. It is an extra level of
checking,” he says.
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CASE STUDY
Keyword searches are at the
heart of current disclosure
processes. But keywords
are blunt. Euphemisms and
unexpected synonyms are
not caught. Nor are relevant
conservations for which no keyword is identified. So predictive
coding is now routine.
Predictive coding looks for patterns in relevant documents.
This might include a common
sender or recipient, a trend
in the metadata or cluster of
words. Using machine-learning
All the tools you need to manage your
The next stage will be natural
language processing. This will
allow lawyers to pose ordinary
questions, similar to the way
Apple’s Siri replies to users’
queries. For example, “Find
documents where Mr Smith
expressed displeasure at the
way he was treated”. Natural
language processing is already
used in social media, “reading” hundreds of thousands of
tweets and Facebook posts to
determine whether brands and
events are perceived as positive
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or negative. Brand managers
use dashboards to monitor their
brands in real-time.
But two problems prevent
this from being adopted for
disclosure. The first is accuracy. George K. Thiruvathukal,
professor of computer science
at Loyola University Chicago, is
a leading researcher in the field
and is broadly very confident of
its capabilities. But he advises:
“We get into trouble with context. We struggle with inferencing. We can deal with a sen-
tence, but a paragraph is much
harder.” So while positive or
negative sentiment analysis on
Twitter is achievable within 70
to 80 per cent accuracy, wider
application is much harder.
The second is the legal framework. Craig Earnshaw of FTI
Consulting says: “Processes
must be repeatable and
defensible. With keywords
both parties can agree on the
words, and the results are
repeatable and defensible.
With natural language pro-
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cessing, the situation is less
clear. The party on the receiving end needs to understand
how the results have been
achieved, otherwise they may
later challenge the disclosure
in court.”
Until natural language
processing is proven to be
sufficiently reliable and can
be explained in a way which
ensures the confidence of legal
practitioners, it will remain
only an “up-and-coming” technology in disclosure.
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LEGAL EFFICIENCY
LEGAL EFFICIENCY
COMPARISONS
WHERE ENGLISH
LAWYERS LEAD
COST BUDGETING
Under the Jackson reforms to the civil litigation costs system,
solicitors have had to get a much firmer grip on figures before
trial. Commercial claims of up to £10 million are soon to fall
under the regime, meaning software companies are producing
packages ranging from fairly complicated web-based tools to
enhanced use of Excel spreadsheets.
PROPORTIONALITY
Not so much a technology as an ethos – and a stark difference
between England and the US. Pre-trial disclosure rules in
England and Wales explicitly state that parties should use technology to speed processes. But the disclosure between sides is
limited to a tight definition of what is germane to the case.
SOCIAL MEDIA
Use by law firms is varied, but there are stellar examples.
Hertfordshire and London SA Law drums up attendance at
marketing seminars through LinkedIn. Julie Gingell, marketing director partner, says: “We did a mock employment law
tribunal recently that attracted 60 people, of whom only 15
were existing clients – the rest were prospects.” The firm also
targets, via demographically specified Facebook advertisements, high-net-worth middle-aged wives looking to divorce
their husbands.
WHERE THEY
LAG BEHIND
E-DISCOVERY
It may sound a subtle vernacular shift, but there is a world of
difference between English disclosure and US discovery. The
Americans attack litigation with a combine harvester, overturning every stone and rummaging through every hedge, no
matter how apparently unconnected to the matter at hand. That
has created a huge technology industry around e-discovery, in
which keyword searches are as outdated as the Model T. Think
“predictive coding”.
COURTROOM GADGETRY
Loiter for a few minutes outside the Rolls Building, the new
home to England’s Commercial Court, and a parade of flustered
clerks will still cart in boxes of paper files. The court may be
billed as bringing cutting-edge technology to London, but the
lawyers still like a lot of paper. In the US, on the other hand,
iPads are nearly yesterday’s technology, with individual trial
lawyers already talking about using Google Glass in courts.
SOCIAL MEDIA
As innovative as some English firms are in their marketing and
recruitment use of LinkedIn, Twitter and Facebook, more US
firms are in the game in an increasingly aggressive style.
18
THEY DO THINGS
DIFFERENTLY
ACROSS THE POND
Adoption of technology by law firms
differs significantly in England and
Wales compared with the United
States, as Jonathan Ames discovers
UK/US
ȖȖ Five years of economic turmoil
have forced the global legal profession to embrace technology, but
the giant UK and US law firms have
been forging different paths.
The move towards efficient internal systems has coincided with
another imperative with which
English (and Welsh) firms are especially struggling – marketing legal
services in the age of social media.
of London-based legal profession
consultancy Jomati, and former
managing partner of “Magic Circle” law firm Clifford Chance.
Large English commercial firms
are focusing technology tools on
the underlying profitability of
work so they can understand pricing models before walking into
corporate-panel pitches. Firms
are also using technology for case
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If anyone benefited from the
worst financial crisis in living memory, it is the general counsel heads
of major corporate legal departments. Provided their businesses
have survived, these top in-house
lawyers now hold the whip-hand
over their law firms regarding costs.
Pre-crisis, the senior partners
at major law firms presented faitaccompli annual fee increases to
their clients that would make the
eyes of mere mortals water, expecting nothing more from their corporate clients than cringing compliance. Today the watchwords are
efficiency, alternative billing structures, fee caps and transparency.
Law firms might not like it, but
they have to live with it – and they
are increasingly turning to technology to ease the squeeze on evernarrowing profit margins.
“When it comes to the use of IT
analytics, firms on both sides of
the Atlantic have got better at billing methods as well as monitoring
their work in progress and debtors,” says Tony Williams, principal
or deal post mortems. These assess
profit margins and dig deep into
working patterns by analysing staff
allocation on specific matters, all
of which is designed to determine
underlying profitability.
“These issues are becoming more
important with margins under pressure and with pressure to use alternative billing,” says Mr Williams.
“Firms must understand where
they are making and losing money.
It is as stark and simple as that.
“So we are seeing more analytics,
more work being done with project
and process managers, and much
more work being done with the aid
of computer-generated flow charts.”
While billing systems cover all
law-firm departments, certain
areas of practice have a greater
reliance on enhanced technology. For example, litigation is at
the cutting edge on both sides of
the Atlantic, but in different ways.
In England, recent government
reforms to civil justice procedure
have emphasised the concept of proportionality. That means pre-trial
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disclosure on this side of the pond
is much more focused and targeted.
But proportionality doesn’t get
much of a look in Stateside. There,
disclosure is called discovery, with
every possible jot of information up for grabs. And in a digital
world, that’s a lot of potential
data, meaning US law firms have
had to be at the forefront in use
of e-discovery technology tools,
with terms such as “predictive
coding” tripping off their tongues
while still catching in the throats
of their English counterparts.
“There is definitely a big difference between the UK and the US
when it comes to litigation systems
and systems used in investigations,”
says Ramin Tabatabai, a solicitor
and senior legal technology consultant at London-based professional
There is definitely a big
difference between the
UK and the US when it
comes to litigation systems
and systems used in
investigations
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services advisory company Control
Risks. “The US approach is very
wide – give us all the data without
considering cost implications. But
in the UK, proportionality is specifically mentioned in practice directions and the courts are meant to
insist on that.”
Mark Cordy, a director at San
Francisco e-discovery specialist
business Recommind, agrees that
cultural differences in litigation
have a significant impact on US and
English law firms’ use of technology. “US firms are confronted with
a vast amount of documents and
data that must be processed in litigation across many cases,” he says.
“They have been forced to solve
that problem through technology.
In the UK, the volumes are often
less, so the pressures around the
use of technology are not the same.”
However, there are other issues
affecting litigation lawyers in
England and Wales, which are
driving them into the arms of
techie geeks. Cost budgeting,
brought in by the 2013 Jackson
reforms to civil litigation funding
and costs, is soon to be extended
to commercial cases valued at less
than £10 million.
That means law firms will have
to produce far more detailed cost
projections prior to trial and they
face strict court sanctions if they
get the budgets wrong. That peril
has spurred software boffins into
designing programs to produce
litigation cost forecasts.
But, warns Andy Ellis, managing director of London’s Practico
Costs Lawyers, bolting on new
software is just part of the battle.
“The real challenge,” he says, “is
that, once you’ve got a budget in
place, how do you get existing
systems to monitor adherence to
the budget? You need early-warning systems to alert you to when
you are exceeding the budget at
various stages.”
Yet, the use of technology by law
firms is not all about internal systems and boosting the bottom line
through efficiency. Increasingly,
firms are actively generating work
through innovative use of websites
and social media. And in that realm
the Americans are considerably
farther advanced.
“New social networks and website technologies kicked off in the
US,” explains Leeds-based legal
sector social media consultant
Chrissie Lightfoot. “So the Americans have been a bit more cheeky
and in your face – bolder and
braver in their approach.
“The English are stereotypically
more reserved, certainly in terms
of letting loose – in other words,
letting their lawyers loose on social
media. It is still very much a case
of having one or two individuals
whose role it is to do social media
marketing on behalf of the firm.
The English legal profession needs
to get to the point where each and
every lawyer is doing it.”
Regardless of which side of the
Atlantic, many in the legal profession seem to remain averse to the
concept of new technology. However, those who are doing it right
are much more efficient, effective
and productive.
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