Feature

posted 9 Aug 2001 in Volume 4 Issue 4

The internet revolution

In this, the first of a two part series on developing a law firm internet strategy, Christopher Davis and Zaid Hamzah, discuss the opportunities and threats posed by the internet, the types of services that might be provided, and give suggestions as to how the strategy might be developed.

More businesses are moving online. The needs of clients are becoming increasingly internet-driven, with new business models emerging on a daily basis. IT integration continues apace, with many organisations integrating their IT systems to provide one single workflow platform for their personnel, suppliers and customers.

What are the requirements for law firms to service their clients in this changed and changing environment? Many lawyers, both within traditional and non-traditional law firm structures, are focusing on new models for delivering legal services in the internet economy. With new players entering the field, the ‘new economy’ poses both a threat and opportunity to lawyers the world over.

Approaching an internet strategy

Some key elements that the Internet provides to lawyers as a tool to service clients are:

* An advertising channel,

* An information channel,

* A sales channel / marketspace,

* A collaborative space for interfacing with clients e.g. dealrooms.

Initially, most law firms approached the internet as an advertising channel, primarily to post their brochures in order to drive traffic to their offline services (so-called ‘brochure-ware sites’). Second generation websites offer updates and substantive legal information at no cost to the reader, usually with the aim of generating offline work from new clients by impressing them with the firm’s knowledge of a practice area. The third generation of site is transactional, offering legal services online. These services can be divided into two types:-

* Online information services,

* Workflow platforms.

Online information services

These include the following online services:

* Diagnostic legal advice systems/expert systems,

* Legal methodologies/guidance,

* Compliance audits,

* Dynamic precedents,

* Online instructions,

* Static precedents,

* Use of law firm’s know-how systems,

* Alerts and updating services.

The foundation for many of these on-line services is a firm’s extrinsic knowledge, such as its precedents. This enables a firm to transform its knowledge into value as a commodity unit. The question being considered by many firms now is “are we prepared to sell our extrinsic knowledge on-line?”. However, content providers are now also offering law firms content that the practice can deliver to its clients on-line. In this way, a law firm leverages its client base to deliver a range of information, both internal and acquired.

As buyers of legal services become more attuned to this type of service, artificial intelligence will be deployed to deliver personalised knowledge to the user on a proactive basis in the context of their activities. This is where workflow platforms become so relevant.

Workflow platforms and client relationship systems

As businesses integrate their systems into a common workflow platform, legal issues can and should be built into the process to ensure consistent management of legal risks. Any legal documentation (eg employment contracts) can be prepared using document assembly systems that allow the accumulated knowledge and updates to be integrated seamlessly.

Specific platforms will be used for particular projects such as mergers and acquisitions, and registration of intellectual property systems. The so-called dealrooms for mergers and acquisitions that have become de rigeur for larger law firms, in many jurisdictions, over the last couple of years were a precursor of increasingly intelligent systems(1).

These platforms enable lawyers, their clients and other advisors to work under the same virtual roof - a place where they can collaborate regardless of time and space. The next generation of dealroom, now being developed by Globalhelm in association with Davis & Co, includes delivery of content to users within the context of their activities, and with relevance to their knowledge of the area.

We are now also seeing true dealrooms where opposing lawyers deal with one another, often by bidding on documents online, rather than in person.

Client and transaction portals

Both information services and workflow platforms can be bundled together by a law firm into a ‘client portal’.

Internet portals are comprehensive interactive websites that contain a range of web-based services in addition to providing information on any particular topic. In the context of practice management, a client portal is an element of the client relationship system set up by those law firms that use the internet as the main mode of communication with their clients. Through such portals clients can access legal information, obtain legal guidance and get documents drafted.

In more sophisticated client portals, one can create an integrated virtual workspace with the following features:

a. Case management, including tracking and status reporting,

b. Document management for specific transactions,

c. Online storage and retrieval of files or e-archives,

d. Internet-based legal document drafting,

e. Search facilities,

f. Online payment (whether directly or through third party escrow accounts).

When such features and functionalities are introduced in client portals, the law firm can be said to offer e-enabled services. Yet another type of portal that law firms can consider introducing are ‘transaction portals’. These focus on specific practice areas such as conveyancing, litigation, corporate secretarial matters and intellectual property rights management, but additionally also offer many of the same features as the client portals(2) .

The new era law firm

Many law firms will eventually deliver legal services through a combination of workflow platforms, information services and personal advice(3). With the high cost of personal advice, clients are increasingly seeking legal information first from information systems.

Developing an internet strategy

An internet strategy is a sub-set of the law firm’s business strategy. It should be rooted in the firm’s existing practice areas, playing to the firm’s market strengths.

The strategy should include a technology component, dealing with the business application of IT, particularly an awareness of how technology could be harnessed to benefit the legal practice as a whole The aim is to identify and exploit those elements of technology that bring business value to the practice by increasing the service value to clients.

Equally important is awareness of the technological aspects of providing web-based legal services. The legal practice needs to understand the limits of current technology, otherwise the design and implementation of the practice’s internet strategy is likely to be inherently flawed.

An effective internet strategy is about providing greater service value to the clients. It is not about good looking websites, but about providing a range of useful, secure and innovative internet-based services from which clients would benefit.

Elements of an internet strategy

An effective internet strategy for law firms should at least comprise some, if not all, of the following elements:

a. Clear identification of business and technology goals that would further the strategic objectives of the legal practice.

b. The identification and creation of features to differentiate the services of a particular law firm’s website or its client area (or client portal) aimed at helping to secure and maintain the practice’s competitive edge.

c. The achievement of service and financial goals that can be measured, and where the returns on investment can be understood clearly by both the management and personnel involved in the service delivery.

d. Effective implementation of the internet strategy by personnel assigned to see the project through from concept to fruition of revenue streams.

e. Maximisation of the use of the internet and its underlying technologies, but yet strengthening the lawyer-client bond.

Goals of an internet strategy

What should the goals of a law firm’s internet strategy be? We would suggest the following twin goals which should be pursued concurrently or at least in overlapping phases:

* External

Providing greater convenience and service value to the client by harnessing internet technologies to offer online legal services such as legal information, legal advice, and the drafting of legal documentation.

* Internal

Improving the efficiency and productivity of the law firms for its own internal management including document management, case management and content generation, such as the preparation of legal documents.

Law firms must decide how best they are going to exploit internet technologies for their practice. If internal efficiency and the need to raise productivity take priority over providing web-based services to their clients, then the design and implementation of the firm’s internet strategy must be focused on this. There is no such thing such as a ‘one size fits all’ internet strategy for law firms.

Considerations when developing an internet strategy

At the strategic level, the review of an internet strategy should provide answers to the following questions:

a. What is the strategic vision and mission for the practice as a whole?

b. Where is the firm now?

c. How does the firm get to its desired destination?

d. Which technology strategy is best suited for the practice?

At the operational level, the questions would in turn revolve around the following issues:

a. What sort of technology-driven services should the firm offer to its clients?

b. How does the firm ensure that the return on investment can be achieved?

c. Does the practice have the capability to design and implement its own internet strategy, and if not, who can help them?

d. How can the learning curve be shortened for the law firm, and how can immediate value be offered to the practice’s clients?

e. How should cost be managed effectively?

f. Would in-house development of the web-services be a better option than outsourcing?

Action points

Now that we have discussed the basics of designing an internet strategy and the features that can be built into client and transaction portals, let us consider some of the action points:

1. If you have the resources, employ someone from within the law firm to focus on the firm’s internet strategy. Nowadays, it is quite common to see lawyers working full time on technology issues in a law firm. If these lawyers have technical background, it would be advantageous. But, lawyers focusing on technology issues are still a minority, and only the big firms see some business logic in creating such posts. For the majority of firms engaging external consultants on a project basis is the most rational route.

2. Design a clear overall business strategy for the law firm where the internet strategy is one of the key features. For example, is the law firm’s strategy to focus on a niche market, but high value transactions? Or is the strategy more that of a generic practice, namely accepting a broad spectrum of work while the firm builds a strong clientele base in a particular area of practice?

The business strategy should be designed to take into account the needs of clients and the types of transactions that the clients would find useful if delivered over the internet. Clients have differing needs and more importantly different levels of ‘net-readiness’. So the law firm’s internet strategy must be pliable enough to accommodate the wide range of client's needs.

3. Sort out the types of services that the firm would like to offer its clients over the internet, and whether the firm would like to charge for these services. We would recommend that this be done in stages as follows:

i. Create a web presence and market to your existing and prospective clients taking into account prevailing publicity rules about advertisement.

ii. Internet-enable the basic services like provision of free legal information, downloading of legal memorandum (the so-called FAQ or frequently asked questions)

iii. When the firm’s basic internet service infrastructure is in place, law firms should then seriously think about ‘higher value’ services (that should be chargeable) such as the creation of dealrooms and unique client portals.

4. Have a clear technology roadmap. Know what technologies to use and more importantly know the limits of technology. Issues like ‘scalability’ and interoperability are commonplace in IT jargon and lawyers embarking on an internet strategy must fully understand such terminologies.

5. Security issues must be addressed. The challenge of providing legal services online brings with it a new set of problems for law firms intent on providing e-enabled services. Foremost among these are security concerns. There are technology solutions to meet concerns, including the use of technologies such as firewalls and encryption.

Law firm strategies in many larger firms now include an internet element, and this is spreading to medium, and even smaller firms, in the UK and other jurisdictions such as the US, Singapore and Australia.

Law firms of all sizes need to e-enable their practices to meet new demands from clients in this internet economy and they are advised to make their preparation now. The examples of such countries as India and Malaysia, where law firms are prevented from advertising on the internet are indicative of the sort of competitive disadvantages posed to an offline firm in a global legal services market.

The provision of electronic legal services is likely to be the norm in future. The only issue is estimating the pace of change or how hard the pressure will be before the clients of law firm begin to demand more and more services online.

In the second part of this series, Christopher and Zaid will discuss detailed tactical examples pertaining to e-enabled strategies.

Zaid Hamzah, an advocate & Solicitor of Singapore, is managing director of i-Knowledge Technologies Pte Ltd, an e-services solution provider catering primarily to the legal market. He is also a strategic consultant with Globalhelm in the UK. Zaid is contactable at zaid@myelaw.net or www.i-knowledge.com.sg.

Christopher Davis, is a solicitor in England and senior partner of Davis & Co, solicitors based in London, which operates on a virtual structure with market facing systems. He is also a strategic adviser with Globalhelm, an e-solutions provider focused on the legal sector in the UK and elsewhere. Christopher is contactable at cdavis@globalhelm.com, +44(0)20 7372 0757, or www.globalhelm.com

Footnotes

1. Davis & Co was among the first law firms to develop a dealroom, originally in 1994

2. Globalhelm and I-Knowledge are now developing the above-mentioned type of systems for law firms and other organisations around the world.

3. Martindale-Hubbell and Globalhelm are developing these sorts of systems for law firms, with Davis & Co being developed as a model of the new era law firm.