A Publication of WTVP

I had a metaphoric epiphany when I began this month’s article on research and development, which I wrote while attending an international legal technology conference in Chicago. After long days of attending seminars about the technologies necessary for law firms to compete in the future, I was admittedly fatigued and had no idea where to start. I wondered whether the concept of “research and development” even applies to a business law firm. So I looked it up on Wikipedia:

“The phrase research and development…refers to creative work undertaken on a systematic basis in order to increase the stock of knowledge, including knowledge of man, culture and society, and the use of this stock of knowledge to devise new applications.”

After reading this definition several times, it became clear that the very conference I was attending constituted “research and development” for a law firm. Indeed, the whole purpose of attending the conference was to increase my firm’s “stock knowledge” in order to “devise new applications” in our competitive environment. How ironic, I thought to myself. This article will be easier than I thought.

Better, Cheaper, Faster
As is the case whenever law firm managers convene, the 2012 American Bar Association Legal Technology Conference had no shortage of opinions regarding the future of business law. I heard many complaints this year about the evolution of products such as “LegalZoom” and online organizations that provide legal document packages for a variety of needs at a fraction of the price charged by any law firm. Typically, these documents are not prepared by lawyers, so these companies are not regulated and cannot be disciplined in the same manner as a licensed legal practitioner. Unfortunately for the complaining attorneys, these companies have been upheld as legal in enough jurisdictions that they are here to stay. Rather than protest their existence, business lawyers should direct their resources toward learning to compete with them. For example, our firm offers a full year of corporate compliance services included with the price of the formation of the corporation. Non-attorneys cannot offer this service.

Even more predominant than the LegalZooms of the world, this conference was saturated with discussions of the emerging corporate philosophy that law firms’ profit margins have been too high. Businesses want to see greater value delivered from their law firms as they correspondingly reduce their legal budgets. Firms that cannot subscribe to this ideology are being replaced with more forward-thinking lawyers. In short, the buzzword cliché of service industries has finally caught up to law firms: we must become better, cheaper and faster. Only through sound research and development and the utilization of technology can this be accomplished.

Going Paperless
One of the most discussed topics at the convention was the conversion to a paperless environment. My knee-jerk reaction was that this process is impossible for a business law firm—original documents are a way of life for us. The elimination of paper in our office would create huge hurdles with clients and insurmountable problems presenting evidence at trial. But then I remembered that federal court proceedings, for the most part, are already paperless; we have been dealing with electronic filing and digital documents just fine for several years.

The advocates who spoke in favor of a paperless office were very persuasive. Electronic tablets with note-taking software can virtually replace the need for yellow legal pads. Thousands of dollars a year can be saved in paper and postage by replacing copiers and stationery with scanners and digital imagery. Productivity can be increased exponentially when a digital copy of a document can be retrieved in seconds, as opposed to the minutes (or hours) it can sometimes take to scour and rummage throughout the entire firm for the paper file. Of course, since green is in, we should also mention that a paperless office is friendly toward the environment. The more I listened, the more going paperless seemed like a big step toward becoming better, cheaper and faster.

The pessimists in the crowd raised two very good points against going paperless. What happens when a client, or the client’s successor-in-interest, requests the return of the original documents? Beyond that, how do we address the situation at trial when opposing counsel challenges our digital copies as inaccurate and demands the original documents? The speakers’ responses to these questions were thought-provoking. First, they asked their critics how long they had been practicing law, and then, during that time, how many of these instances had arisen? For me, the answers were 22 years and zero, respectively. Others responded similarly. Maybe we should go paperless.

Cloud Computing
The second-most commonly discussed topic was cloud computing. Admittedly, the concept is attractive, and some of the products being displayed were mind-staggering. Just as our corporate clients are pressuring us to provide greater value for the legal dollars spent, third-party vendors are rushing to the rescue with products and technology to assist in the process. The concept is quite simple: to allow small law firms to compete through economies of scale, massive resource-sharing centers are created on the Internet. The advantage is the utilization of tools and resources previously available only to the largest, most profitable firms. The disadvantages are the risks associated with the lack of control and security when allowing critical data to be shared, stored and possessed by unknown third parties.

Critics have not yet developed an easy answer to the issues of control and security. In an era when Yahoo, Google and the Pentagon have all been infiltrated electronically, attorneys are hard-pressed to believe any cloud server could be impenetrable. Moreover, nothing is more sacred to a business lawyer than the attorney-client privilege and the unwavering protection of client-sensitive information. To trust these hallowed concepts in the hands of an anonymous entrepreneur on the web seems ludicrous. Nevertheless, the economic realities of the cloud cannot be ignored. It allows an entire law firm with all of its files and resources to be packaged up and transported in a laptop or smartphone.

While I cannot speak for all law firms, our plan involves a compromise. Most of our applications are being moved to a private server in a private cloud under the direct supervision of our own IT group. This allows our attorneys to work remotely as a virtual firm, but eliminates the risk of infiltration presented by a shared-server scenario. Moreover, all confidential and proprietary information of our clients remain on-site in our own encrypted server. This way, all data remains secured, while we can still experience the enhanced resources and reduction in overhead resulting from cloud computing. The end result is that savings can be passed through to our clients.

Sometimes things turn out easier than expected. I spent weeks struggling over how to write an article about research and development for business law firms. Little did I know, I would be sitting right in the middle of a wealth of information to facilitate the journey toward becoming better, cheaper and faster. iBi