Revolutionary Integrations — #ILTACON #ILTA116

ILTACON 2015 LogoSession Summary: Attorneys need information about their matters from a variety of sources, and the days of having to jump from one tool or system to the next are over! See how firms are enabling collaboration, matter management and project management by strategically fitting together technologies to create a single platform where attorneys can create, collaborate, share and retrieve knowledge. They are simplifying the way attorneys access and interact with dozens of different technologies and creating next-generation systems designed to support and streamline attorney workflows. See firsthand how they are making it happen!

Speakers:

  • Meredith Williams, Baker Donelson
  • Jeffrey Rovner, O’Melveny & Myers
  • Ginevra Saylor, Dentons (moderator)

[These are my notes from the International Legal Technology Association’s 2015 Conference. Since I’m publishing them as soon as possible after the end of a session, they may contain the occasional typographical or grammatical error. Please excuse those. To the extent I’ve made any editorial comments, I’ve shown those in brackets.]

NOTES:

  • Audience Overview: There were about 90 attendees. When asked by the presenters, only about 5 attendees indicated that their firms had active matter pages.
  • O’Melveny’s Matter Pages. The firm introduced the concept of matter pages five years ago. They remembered the ease of having all matter materials within a single redweld. With digitization, however, the various materials related to a matter were scattered as far as the attorney was concerned: documents were in the document management system, correspondence in email inboxes or archive folders, financial information was in the time/billing system, etc.
    • The initial concept:
      • matter updates: news posted here for the benefit of the entire team, and also emailed to members of the team
      • financial information: amounts accrued/billed/realized, leverage, etc.
      • list of timekeepers
      • links to matter documents and practice support materials
      • ethical screen information
      • real-time information
      • interactive elements
    • The current approach: In addition to the original materials they have added
      • budgeting tools, including tools for alternative fee arrangements
      • key financial indicators (KPIs)
      • modules to support legal project management
    • The matter pages are a front-end to a wide range of data sitting in the data warehouse (in SQL tables in the original systems of record). They use stored procedures to avoid doing complex things on the fly.
    • They use Recommind to retrieve content from the document management system.
    • The visibility of matter pages is controlled by ethical screens and, in the absence of a mandatory screen, access can be limited to a defined group.
      • The matter pages are composed of modules. These modules have granular security so that the firm can restrict access to specific modules or to specific content within modules.
  • Baker Donelson’s Electronic Matter File.
    • “If you force them they will come.” They achieved this by consolidating all the relevant data into a single interface
    • Client/Matter Dashboards. These dashboards are created automatically in SharePoint 2010 as soon as a new matter is opened. The dashboards are designed for information consumption rather than collaboration.
      • They have almost 4000 dashboards.
      • The dashboards include basic information on how the client wants to be contacted.
      • They use Recommind to push the information into the dashboards.
    • Client Dashboards:
      • client profile details
      • documents
      • Interaction contact & event details
    • Matter dashboards:
      • critical content: financial data on the matter
      • matter budget
      • documents
      • correspondence
    • Extranets
      • Extranets enable collaboration by providing the ability to
        • see Information about the File
        • Manage the Client or File
        • Work the File more efficiently
      • Designed with mobility in mind
      • Client-facing extranets:
        • SharePoint team calendars — organized by matter
        • case assignment information — which Baker Donelson personnel are managing specific client matters
        • quarterly reports generated by Contract Express
        • wherever possible, they generate documents for each matter via Contract Express (document assembly)
        • discovery banks of related content
    • Next phase = BAKERPRACTICE
      • the KM team observed several lawyers as they worked — this revealed all the hassles of “dancing among the systems” in order to “work the file.”
        • behind this new effort is two years of due diligence plus four years spent clarifying their universe of matter types for the firm
      • they will have to create a new interface that allows lawyers to work a matter from a single place
        • a lawyer will see a list of files
        • then the lawyer the lawyer can drill down to the task that lawyer needs to accomplish
        • when the lawyer closes a document, the system will show the lawyer how time that lawyer spent drafting, show the likely client-matter number, and then ask the lawyer if she would like to report that time now.
        • when the lawyer closes an email, they will receive a similar billing prompt
      • they have retained an external UI/UX firm to make sure they get the user-facing elements right
      • they will be choosing participating vendors shortly
      • they estimate that BAKERPRACTICE will result in significantly more accurate time reporting (and billing)
  • Start with Why
    • Bring meaning to information
    • Matter management – matter centricity alone is not enough
    • Enhance collaboration
    • Simon Sinek:  “People don’t buy what you do, they buy why you do it.”
  • Lessons Learned.
    • Do not take the lawyer outside their process.  Learn their process and then build to that.
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Using Technology to Manage Costs

If you’ve read Alternative Billing Alternatives and Update on Alternative Billing, you now know that the panelists on ILTA’s Using Technology to Manage Costs, Increase Profitability and Support Billable Hour Alternatives session believe that bare discounts are going to have a negative effect on a law firm’s profitability unless that firm significantly trims its costs of delivering legal services. The key to this is knowing exactly what products and services a firm offers, how it produces them and what discrete components of those products and services could be provided more cost effectively.  While the panelists cautioned us that there was no single “killer technology” that could manage costs and increase profitability, there are several available tools that go a long way towards helping a firm realize that goal.

The first, and perhaps most important, category of tools will help a firm do the fundamental financial analysis that is necessary in order to understand exactly what it costs to deliver services and how to reduce those costs.  Here are some financial technologies mentioned by the panelists:

  • Fee estimation (Redwood Analytics, Satori)
    • Helps the firm realistically estimate its costs so that it can bid responsibly.
  • Profitability analysis reflecting new business model (Redwood, Satori, Elite 3e)
    • Helps ensure that proposed practice area or bid is consistent with the firm’s profit goals.
  • Resource Management (viEval, Redwood)
    • Helps allocate work to fee earners in a manner that maximizes overall utilization, efficiency, quality, training and professional goals.
  • Task-based billing (Redwood, Satori, Elite)
    • Helps measure the firm’s cost of completing defined tasks, rather than entire matters.  This is useful for bidding and tracking costs.
  • Matter Management (Redwood)
    • Helps track the firm’s actual matter costs against budget.

The panel then identified key practice and KM technologies.  While all of these tools provide useful functionality, one panelist opined that if he had to choose only one technology, his choice would be enterprise search since it allows you to reduce the cost of locating precedents, drafting documents, and identifying expertise.  The other high value category of tools is project management, which is critical when you’re trying to manage costs and client expectations.  That said, here is the long list of tools they identified :

  • Expertise System
    • Recommind
    • ContactNet
    • BranchIT
    • SharePoint Knowledge Network
  • Enterprise Search
    • Recommind
    • Autonomy/Universal Search
    • Microsoft FAST
    • Desktop Search (x1, Google, etc.)
  • Work Product Retrieval
    • Real Practice Technologies
    • WestKM
  • Project Management
    • Microsoft Project
    • Excel
    • Eclipse from Solution Q
    • Basecamp from 37signals
  • Practice Portal
    • LawPort
    • SharePoint
  • Document Assembly/Drafting Tools
    • HotDocs
    • DealBuilder
    • Exari
    • DealProof
    • KIIAC
    • Legal MacPac 10
    • Microsystems
  • Collaboration
    • Blogs
    • Wikis
    • Threaded Discussions/Discussion Boards
    • RSS
    • Email
    • Extranets
    • Webinars
  • Online Training
    • West Legal EdCenter
    • PLI Online

So there you have it — the experts’ guide to key technologies that can help you manage costs and enhance profitability.  Now, what are you going to do?

[Photo Credit:  pansonaut]

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Update on Alternative Billing (ILTA09)

Writing Alternative Billing Alternatives gave me an excuse to contact my friend, Jeff Rovner, for some background detail on the superb session he, Jeffrey Brandt,Thomas Gaines, and Eugene Stein presented at ILTA09. In our e-mail exchange today, he provided the following additional insights:

  • In his original example, he proposed a 10% discount in rates for discussion purposes.  However, in our conversation he told me that a 15% discount is becoming increasingly common in the market.  If that’s the case, the consequences are even more striking.  To prove this, let’s rerun his example using the new discount:
    • Assume a law firm profit margin of 40%
    • Apply a 15% discount on rates
    • This results in a 38% decline in profits
  • It’s ill-advised to view ad hoc discounts as a reasonable short-term fix.  Even if current economic conditions last for only a couple of years, the impact of a 38% decline in profits in each of those years could be very damaging to a firm unless competing firms are similarly affected.
  • While a firm may successfully reduce the fees it offers clients by implementing alternative billing arrangements, if that firm continues to perform its legal work exactly as it did in the days of the billable hour, it will not be able to off-set lower fees with lower expenses.  The result is a “disguised discount,” with the resulting hit to profits.
  • In the panel’s view, the best approach is for a firm to lower its internal costs of delivering client service, and then pass all or part of those savings on to its client through alternative billing arrangements.  By doing so, the client reduces its legal spend and the firm’s profitability is not impaired.

There’s clearly much more than should be discussed about these issues.  I do hope this ILTA session sparks further useful analysis and conversation.

[Photo Credit:  twenty questions]


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Alternative Billing Alternatives (ILTA09)

Thinking creatively about alternative billing structures is something increasing numbers of lawyers and law firms are grappling with. To help with this, Thomas Gaines, Jeffrey Brandt, Jeffrey Rovner and Eugene Stein gave a terrific presentation at ILTA09 regarding how technology might assist with alternative billing arrangements.  They started by exploding some common alternative billing myths, chief among which is that it is safe to defer consideration of new cost and billing structures by using discounts.  To illustrate the problem with discounts, Jeff Rovner offered the following numbers:

  • Assume that a law firm’s profit margin is 40%
  • Apply a 10% discount on rates
  • This results in a 25% decline in rates, which is a huge hit to Profits Per Partner

Jeff’s conclusion from these numbers was stark:  even though discounting is popular with clients and may seem like the simplest ad hoc solution to implement, it could well be disastrous for the financial health of the firm.  So, if you’re interested in the long-term viability of your firm, you’ve got to find another way to meet your client’s expectations about billing.

Next, a firm might consider offering “alternative billing” options such as fixed fee, blended fee or success fee arrangements.  However, since these simply shift the cost of legal services from clients to firm, they are in essence “disguised discounts.”  As such, they have a negative impact on Profits Per Partner.  Further, it was the panel’s view that these alternative billing options alone would be insufficient to meet client goals regarding cost reductions.

To find smarter alternatives to bare discounts, the panel took us back to the drawing board by pointing out that while clients are determined to reduce their legal spend  — in fact, they cited a press report that Pfizer intended to reduce its legal costs by 15-20% — clients don’t care how this reduction is achieved as long as the quality of legal services is not impaired.  However, law firms with reduced fees are going to need to find a way to off-set the substantial hit to Profits Per Partner that results from discounting.  The best way to do this is to reduce the costs of delivering legal services.    Put another way, the impact of an alternative billing arrangement is to place the burden of cost overruns on the shoulders of the firm.   If the firm can find a way to contain or reduce costs, the firm can avoid those cost overruns and their deleterious effect on profits.

How does this work in practice?  Eugene Stein discussed how his firm has approached alternative fee structures.  Having agreed to lower their price (but not their quality) of service, they then felt that they could ask the client to give them more work.  Their client, pleased with the service provided and the cost charged,  agreed.  So here we have reduced fees off-set by both lower costs of production and higher volume.  The net result is a better outcome for the firm’s profitability.

Key to all of this is reducing the costs of production.  I’ll dig into that issue more deeply in my next post.  Stay tuned.

**UPDATE (30 September 2009):

After I published this post, I had an opportunity to discuss its main points with Jeff Rovner.  I’ve published the gist of our conversation in a follow-up post, Update on Alternative Billing.

[Photo Credit:  deltaMike]

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