Case study: Tech Trends in Practice

Large law firms face several key technology challenges in 2006, but Allen & Overy is keen to lead the way with a broad focus including compliance, mobility, e-business and matter centricity.

By Dave Burwell, chief information officer at Allen & Overy LLP

Allen & Overy (A&O) has tackled a broad range of technology issues in the recent past, and has further plans for 2006 and beyond. The following provides an overview of the firm’s strategies to tackle compliance, introduce matter-centric systems and other key issues facing large law firms.

Compliance

As an international legal practice, Allen & Overy has for some time been putting particular focus on compliance and risk management, from a number of points of view. These include conformance with regulations such as Sarbanes-Oxley, the Market Abuse Directive and money-laundering regulations; avoidance of conflicts; and meeting clients’ expectations, in terms of confidentiality and proper handling of market-sensitive data.

Compliance is currently on the agenda for most of the major firms, some of whom are grappling with the issue of open-access systems. Such systems can make compliance with legislation a challenge, to put it mildly. (For practical purposes, compliance requires price-sensitive information to be restricted to those involved in the matter.)

The reason why some major firms may be struggling to implement change is partly partner drag but also that they are not sure how to put the processes in place that will enable them to lock down access to information and make this stick. We have both the working practices in place and the required systems, such as workflow-based matter inception, matter maintenance and matter closing.

This is not a sexy area but one that is vital if we are to meet our clients’ expectations and comply with the burgeoning array of regulations in the post-Enron/WorldCom world. The booby prize for failing to recognise this – which could be to follow Andersen into extinction – may be awarded to a law firm in the not too distant future.

Matter-centric systems

A&O has probably been the lead exponent of matter-centric virtual files for the past three years and we have now truly realised our intent through our latest version of Omnia. This allows us not only to make all documentation (e-mails, documents, scanned documents, faxes, PDFs, and so on) available to those people who need to see them (and unavailable to those who do not), but also ensures we meet the requirements of compliance and risk management outlined above. Omnia’s key role is to be the electronic tool that supports a highly developed set of working practices. These, in turn, help us to be consistent, conformant and informed, and to handle clients’ information securely. In recognition of the security of our document-management capability, A&O has just been awarded BS7799 accreditation, the first major international law firm to be so recognised.

E-business

We now have a number of fee-based products in our Derivative Services LLP venture, which are returning on our investment. They extract data from both the ISDA netting and collateral opinions, and provide guidance on the enforceability of close-out netting and collateral arrangements. These are just two of a number of cross-border advice systems that are greatly valued by clients. So, although there was a flurry of e-business activity at the beginning of the decade and then the market went fairly quiet, we are beginning to see a resurgence of cross-jurisdictional advice and risk-management systems that help clients make informed decisions about the risks they are likely to face in various jurisdictions.

Know-how

This is an area that has perhaps gone rather quiet in the legal industry. In systems terms, we have focused on two aspects: integrating and codifying all our know-how and making it easy to access through a simplified, unified interface. We are also making it much simpler for fee earners to submit know-how during, or at the end of, a matter, and we are investigating some of the newer web developments such as blogs and wikis to find ways of better sharing mainly tacit knowledge.

Mobility

There is an ever increasing demand for lawyers to be able to work wherever they are. The BlackBerry is now pretty much ubiquitous in law firms and provides access to e-mails in many parts of the world. However, I find, from talking to fellow IT directors, that relatively few firms are paying attention to other ways of keeping in touch.

Thanks to the application of Citrix technology in A&O worldwide, our staff are now able to work on all our core applications on a standard PC when they are away from the office. Thus, from their home, or while in a hotel, or in a client’s offices, or an airline lounge, they can securely access documents held in the office and work on them as if they were in the office. Staff who work in more remote parts of the world, without access to the internet for periods of time, can readily make extracts of their matter information and take it securely with them on their laptops while travelling.

We have equipped our laptop users with all manner of connectivity aids – wired and wireless broadband access, 3G access, dial-up access, and hot-spot access – so they can be connected pretty much wherever they are. We have also made sure that clients visiting our offices can connect to their systems through wired or wireless services.

Under the covers

The demand for continuous, high-quality service 24 hours a day, seven days a week, seems to increase year-on-year and this has implications for staffing and for the types of technologies we use. Most law firms are investing heavily in storage-area networks, which provide high levels of resilience. There is an increasing move towards clustered (active-active and active-passive) environments to increase availability. Furthermore, the introduction of multi-level, load-balanced server architecture has increased resilience but has also increased the complexity of managing this type of environment.

It is fine when it works as intended but can be problematical to trouble-shoot and fix when things go wrong. A number of firms (ourselves and Linklaters for example) are moving to very high specification (tier III/IV) data centres to meet the need for very high availability. It is not acceptable to have long downtime windows now, given the demands of deals that can close at any time.

Trends for 2006 and beyond

Although we are not investing heavily in either ERP-style solutions or CRM technologies at the moment, they are likely to be major areas of focus in the future, not just for A&O but for many, if not most, major law firms.

ERP systems

Few firms can justify the level of investment needed to put in place a full-blown ERP system such as SAP. I think a key demand from ERP systems in the future is likely to be increasingly sophisticated management information, so firms can understand where the profit is really being made and adjust their approach to clients accordingly.

Compared with corporates, law firms take a relatively simple approach to financial-data analysis. This will change as margins become thinner and the competition from international (especially US-based) firms hots up.

CRM

Generally, law firms do not make nearly as much, nor as effective, use of customer-relationship-management data and systems as their larger cousins in the consultancy sector. Partly this is a lack of discipline in capturing data, partly it is a lack of clarity on who – business development, fee-earners or both – is responsible for all this. All firms are now talking avidly about being client-facing but many have a long way to go to develop the right approaches to clients. I feel that when they do, the systems side will fall into place. Any approach that is principally systems-led is likely to fail.

Dave Burwell is chief information officer at Allen & Overy LLP.