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Legal Services Delivery Platforms - The Next E-Wave?

The mantra now chanted by technology advocates is "return on investment." Justifying technology investments - especially on specialty applications - is a constant challenge, as these "investments" are often viewed as expenses -- expenses that cut into partner profits. Most agree that such productivity tools save time and can often increase the quality of work product. Yet increases in productivity may not always easily translate into increases in profitability; indeed, there are cases where increasing productivity/decreasing time spent on a matter can negatively impact profitability.

Consider a new paradigm: what if the use of a technology system could actually be incorporated into the delivery of legal services? And billed for accordingly?

And better yet, what if it could be used to standardize the lifecycle of routine transactions - thereby increasing the profitability of traditionally low-margin activities?

Sound too good to be true? Such a technology may be closer than you think.

For many, extranets were the first step toward an electronic workspace where attorneys from different locales, different firms, and client representatives could collaborate on transactional or litigation matters. Extranets enable users to make commonly requested files accessible through virtual filing cabinets; exchange documents and track version control (if integrated with a document management system); and discuss a case or matter in a secure environment with "threaded discussions". The extranet's owners can control the extent of outsiders' participation (read-only access versus edit access, for example) through a permission structure.

While they are a great improvement over e-mail as a collaboration tool, extranets are a somewhat static entity. "Extranets have been disappointing," said Guy Maisnik, a partner in commercial and finance real estate at Paul, Hastings, Janofsky & Walker, and a director of the Firm's Technology Committee. "While they have some useful functionality, their scope is very limited. As a law firm, our goal is to facilitate the highest quality transactions as quickly as needed by the clients. Extra-nets were supposed to improve the collaborative process but have fallen short of the goal."

The new paradigm will bring greater structure to the electronic collaborative platform and increase functionality. The category - which has been dubbed "legal services delivery platform" -- takes the permission structure of an extranet and combines it with legal content (such as forms and contract templates) and workflow-based processes and management tools. The workflow - which can be customized from firm to firm - will enable organizations to standardize processes, and hence recycle successful models (what a business school professor might like to call "productizing intellectual capital"). Hypothetically, this will reduce the cost of providing legal services - and increase margins on traditionally low-margin transactions.

Benefits of such a "legal services delivery platform" are not limited to law firms. Corporate legal department clients will appreciate such a process management system, as it will provide them with a realtime accounting of transaction status and billing and will complement the profession's general trend toward fixed fee and value-based billing

Built for delivery over the Internet, the ideal legal services platform would consist of the following components:
  • Deal Manager: Lets users choose from a set of "deal templates" to standardize the creation and delivery of routine transactions, with built-in processes and workflow rules that facilitate real time collaboration and feedback.
  • Resource Manager: Fosters the creation of virtual teams and facilitates staffing needs for new engagements as they arise. The re-source manager module provides a systematic process for maximizing utilization of people & resources; that is, for making sure that the right people are working on the right transactions at the right time, at the proper billing rate.
  • Knowledge Manager: Provides a structured means of archiving and accessing intellectual capital associated with conducting transactions and delivering legal services. This facilitates the "productizing" of conducting transactions -- the more content the system captures, the greater its value.
  • Time and Billing Manager: One can assume that if adopted, a "legal services delivery platform" would be integrated into the day-to-day activities of legal professionals. Thus, it must be capable of capturing attorney time on a daily or transactional basis. It would be ideal for the platform to integrate with established time and billing systems. This will serve a two-tiered purpose: it will enable law firms to smoothly "pass through" the charges of utilizing the system, and will provide corporate legal departments with a realtime approximation of status and ongoing budgets for a given matter.

"The legal services delivery platform could be extremely useful, if it comes to fruition," added Maisnik of Paul Hastings. "Its success will depend on its flexibility and how well it can integrate with other technologies and management systems. As our costs are rising, there is a greater need to leverage technology. Such a system could add improved structure to the collaborative process and allow lawyers to increase returns on their intellectual capital."

About our author...

Peter J. Ozolin is President and Chief Executive Officer of Achieve1, a technology company that will provide Internet-based legal services delivery platforms. E-mail him at pozolin@achieve-1.com.

 


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