The Insider Colour Supplement

Content Moving to The Orange Rag

Charles Christian — Wed, 19 Dec 2007 15:38:28 +0000

From January 2008, new guest opinion and feature articles will cease appearing on this blog and will instead be published on The Orange Rag blog - see www.theorangerag.com

Redirection - go to the Orange Rag

Charles Christian — Mon, 26 Nov 2007 10:24:08 +0000

For the immediate future, please visit our Orange Rag blog - at www.theorangerag.com - for both breaking news and guest feature articles. Thanks

Insider Colour Supplement #3 - October issue out now

Charles Christian — Mon, 29 Oct 2007 17:55:58 +0000

The October issue of the Insider Colour Supplement is out now. The stories include:

• Cracking the acorn theory - do large clients grow out of small clients?
• How Norton Rose transformed its knowledge management infrastructure
• Different approaches to law firm workflow strategies
• Workshare reports on its latest global security threat report
• Money laundering compliance – manual versus online methods

The next issue will be published on Monday 26th November

Issue #3... Cracking the Acorn Theory – do small clients grow up to be big clients

Charles Christian — Mon, 29 Oct 2007 17:48:07 +0000

Ron Paquette writes... Many law firms have a theory. Winning a small amount of work from a desirable client can be a good way to bring that client into the firm’s fold and begin a new relationship. Over time, the theory goes, if this client is nurtured properly, it can be coaxed to provide increasing amounts of work and eventually become a major client.

It’s called the acorn theory – from a tiny seed of work in one legal area can grow a mature oak of a client, which provides work across many practices. Nice theory. But how often does it happen in practice?

At our organization, we thought this theory was largely a myth. Our professionals have long assisted leading law and other professional services firms in undergoing sophisticated business analysis. We’ve observed that regardless of the firm involved, most large clients appeared to have retained the firm for significant matters from the start of the relationship.

Planting the Acorn at One Firm
While we had observed this trend on an anecdotal basis, we wondered whether the acorn theory would be supported by a quantitative study. Our researchers decided to conduct analysis on one firm to see what they’d find, and spark wider conversation on the topic.

Because we wanted to look at how client relationships developed over time, we needed a firm that was able – and willing – to provide statistics on clients for several decades. Because many firms have changed internal platforms and merged with other firms several times in recent years, this was no easy task.

We identified an AmLaw 100 firm that could provide us with information concerning clients that stemmed back 23 years. The firm is an international law firm with multiple offices and approximately 700 lawyers. We have decided not to name the firm to protect client relationships, since the study involved tracking these relationships.

We focused on the top 5 percent of the firm’s current clients, based on billable hours provided. We then eliminated the clients from that group that had a relationship with the firm that dated back further than 23 years, because this was the longest period of time for which the firm could provide detail. We also eliminated clients for which there had been a two-year gap or more in the work they provided the firm, because it would be hard to judge whether to treat them as new or old clients when they resumed retaining the firm.

Hence, we began with a universe of 183 clients, eliminated 24 clients for which there were gaps in work and 10 more because their relationships with the firm were longer than 23 years. This left 149 clients to analyze.

Even given our hypothesis, we were stunned with the analytic results. More than 50 percent of the clients that currently ranked in the top 5 percent of the firm’s clients started out in the top 5 percent in the year when they initially retained the firm. And more than 90 percent of these clients started their relationship with the firm in the top 20 percent of clients.

Planting the Acorn at a Smaller Firm
While we’d demonstrated that the oak trees of a large firm had not started at that firm as acorns, we wondered if this would hold up for a smaller firm. We decided to look at the current clients of a firm outside of the AmLaw 200. That firm has one primary office, and more than half its work is concentrated in one practice area.

In that firm there were 76 clients contributing to the top 5 percent of the firm’s billable hours that met our criteria of having their complete history available in the firm’s billing system and of not having significant gaps in work provided to the firm. Of these 76 clients, 84 percent started their relationship with the firm in the top 20 percent of clients. Same answer.

All of this reinforces that firms should be highly selective with regard to small clients. It is commonly held that small clients are on average less profitable than large clients. If your firm’s growth strategy depends at all on growing small clients into larger and more profitable clients, think hard about the likelihood that this will happen. More importantly, our analysis emphasizes the importance of protecting large client relationships, whether they were large to begin with or were grown successfully from a smaller relationship.

The Flip Side
An important take-away from this analysis is that firms should reexamine their approach to bringing in small clients. While the percentage is low, some small clients do grow to become major firm clients. So firms need not avoid the intake of small clients altogether.

Competitive intelligence can help identify which clients have the best chance of becoming major clients, as well as improve the likelihood that such clients will be retained in the crucial, early years of the client relationship. (According to our research on client attrition, attrition rates fall by 50 percent for clients that stick with a firm for more than three years.) Client intake should begin with a careful analysis of the potential relationship presented by a new client. Those that map well into firm strategy and appear promising should be treated with care. For example, a detailed conflict analysis should be conducted to ensure the firm is not conflicted out of major areas of work. And other relationships should be carefully overseen to provide the client with the maximum potential to take advantage of the firm’s services.

Once clients are in the door, the work to grow them from an acorn to an oak has only begun. Firms need to track their progress. Most acorns will not grow to become mighty oaks, but careful relationship management can provide the fertile ground that will maximize the chances that promising small clients will have the best chances to become major clients.

• Ron Paquette is an analyst with Redwood Think Tank. A version of this article first appeared in Strategies - The Journal of Law Firm Marketing, published by the Legal Marketing Association.

Issue #3... Norton Rose takes FAST approach to KM

Charles Christian — Mon, 29 Oct 2007 17:39:09 +0000

In an organisation of high-earning individuals, time spent searching for information is time wasted. Four years ago, Norton Rose realised that its existing search facilities could be improved. Practitioners had to use many different search systems to find the information they needed, either from within the firm or from external subscription databases.

“Each of the search systems we used had a different interface and a different way of working, which made it hard work looking for information,” says Ann Halpern, director of practice and organisational management at Norton Rose. “We wanted to move to a one-stop shop where a single enquiry could bring back search results from all sources. Our users told us they wanted something that was really simple and intuitive to operate.”

Norton Rose received written proposals from seven search engine providers and had live demonstrations from four of them. Ann Halpern preferred to ignore the canned demonstrations that some suppliers offered and invited them to work in the Norton Rose environment. “We wanted to be sure that any solution could do what it claimed to do when it came to testing with our material and in our environment. We were concerned that the demos at the beauty parade might have been orchestrated beyond their real capability,” she says.

The live presentations confirmed that most products were unable to fulfill two key criteria - the integration of external sources and the highlighting of keyword fields in search results. The Enterprise Search Platform from FAST performed well in the tests and was selected for its speed of operation, flexibility, ability to work with multiple sources, and its ability to return the most relevant results.

Solution
The Norton Rose team worked closely with FAST from the start in building the search facility that would be called NavigatoR. They began by doing a proof of concept system that gave them the chance to try out their ideas and build confidence to move forward to a full working system. The proof of concept was then presented to a test group of users throughout the organisation for comment and the full working system was launched in February 2007.

One of the main aims was to ensure the system would deliver relevant search results rather than flood the user with useless information. “Our old search engine could only sort the results by date or relevance and it was very poor. Sometimes the results had no obvious relevance at all to the search criteria,” says Ann Halpern. Using the FAST technology, they were able to run searches, examine the results and fine-tune the system to improve the relevance of the results. “It was like turning the dials to get a clear signal on the radio,” says Ann Halpern. “Our users tend to want the most recent information so date has a heavy influence on relevance for our searches. We were able to quickly and easily tune the systems until we were satisfied with the way the results were produced each time.”

The Norton Rose team built the graphical user interface (GUI) for the new system and included a number of filters to allow users to refine their searches. They include: Practice groups, Precedents, Legal updates, Industry, Templates, and Organisations (including clients and organisations that Norton Rose has worked with).

In addition, they designed a feature to help people drill down to the exact information they need once they locate a relevant document. When the search brings back a document that fits the search criteria, the GUI displays a single-column summary of the document down the right-hand side of the screen, with every occurrence of each search term shown in a different colour. Most importantly, the system trawls though several sources to perform a single search. These include: Norton Rose’s internally-generated know-how, best practice guidelines and website; Europa (EU website), the Financial Services Authority and PLC web services.

Benefits and Results

• Saving in time spent searching
While the three previous systems were slow and cumbersome to use, NavigatoR is intuitive and fast. Michael Grenfell, a partner with Norton Rose, sums up his experience: “NavigatoR's a really marvellous new research tool. It's been designed in response to the wishes and needs of the lawyers here at Norton Rose. It enables us, at the touch of a button, to access legal know-how that's up to date and relevant very quickly indeed, and that helps us to provide a more effective, up to date and efficient service to our clients.”

• More relevant search results
The FAST technology has allowed Norton Rose to fine-tune the systems to ensure results are ranked by relevance to the user, while filters allow the search to be further refined.

• One-stop search across multiple sources and languages
Instead of having to use multiple search engines, users now have one intuitive search tool. Caroline Riddy, an associate with Norton Rose, gives a concrete example: “I found it fantastic when I needed to know about the rules on financial promotions. I was looking for a specific memo that I knew had been produced internally, as well as a PLC article - and found both really easily. It's just so helpful to be able to get your hands on both internal and external know-how with just one search.” The solution also allows staff to search in a range of languages including traditional and simple Chinese where previously they were limited to English.

• Document map guides user to information
Finding the relevant document is only part of the search, users need to find the relevant reference within the document. The NavigatoR GUI provides a graphic summary alongside the document itself, guiding the user to every occurrence of each of the search terms. Each term is highlighted in a different colour, providing even more assistance.

• Little or no training required
There has been very little need to provide formal training on how to use the system. The Norton Rose team organised some briefings and distributed a basic two-page guide, but the main tool is the e-learning system accessible from the NavigatoR homepage, which talks users through how it works. The guides have also been translated into various other languages for the firm’s overseas offices.

• More know-how to share
NavigatoR has also streamlined the collection of information for the Norton Rose system. Because it is simpler and more consistent to use, it has encouraged people to submit more information than before, according Fiona Evans, the firm’s head of knowledge management. “There has been a rush to use and to contribute,” she says. “Certainly the statistics suggest that someone is using it every minute of every day.”

• Return on investment - £500,000 annual saving
The savings in time spent on searching for information are expected to make significant cost savings for Norton Rose. Amber Rennie, the firm’s Knowledge Manager Development Manager says: “Most of our junior lawyers are engaged in research using both internal and external resources - an average of an hour and a half each day. The introduction of an integrated and intuitive search of both internal and external resources was expected to save time; at least one third of the time previously spent, and thereby save costs to our clients and enable our lawyers to be more productive and efficient. We valued these savings at about half a million annually.”

FAST can be found at www.fastsearch.com

Issue #3... Contemporary Law Firm Workflow: Similar Objectives, Diverging Approaches

Charles Christian — Mon, 29 Oct 2007 17:31:45 +0000

Bryan Roberts writes... Business process management (BPM), also commonly referred to as workflow, has become increasingly vital to law firms. Seeking operational efficiency and responsiveness, firms have begun to automate a variety of business processes – everything from simple tasks, like approvals, to more complicated multi-step, multi-system workflows like file opening.

Like other business management software providers, ADERANT has worked to ensure that law firms could access workflow from within our applications, primarily accomplished by integrating ADERANT Expert with standalone workflow systems. Over the years, however, we have come to the conclusion that process management should be an inherent, seamless part of any enterprise-wide software system for law firms. ADERANT is taking a different approach to workflow, one that provides law firms with an industry standard workflow tool, not a proprietary technology.

Different Approaches to Workflow
There are significant differences in how workflow application suppliers and practice management software (PMS) companies are approaching BPM in the legal industry. Which approach is better: stand-alone or embedded?

Stand-alone BPM applications were introduced at a time when there were few other choices for law firms. Besides having a limited functional scope, PMS solutions could support only simplistic workflows and required extensive integrations to share information with other applications. If a law firm needed to manage a complex workflow or automate a process involving multiple systems, their only real choice was a dedicated, stand-alone workflow product. Unfortunately, these applications used proprietary workflow engines and cumbersome customisation tools, which made them costly and difficult to implement.

Today, BPM has gained in popularity and acceptance, and the need for stand-alone workflow solutions has decreased. One reason is that PMS suppliers are embedding workflow directly within their applications in response to client demand, and to increase the velocity at which matters and other information is managed internally and externally.

Software Developer versus Tool Provider
Upon re-examining our workflow strategy more than two years ago, we identified two basic options; develop our own proprietary workflow engine (following in the footsteps of the stand-alone workflow and other PMS suppliers) or leverage standard, open technologies.

First and foremost, ADERANT is a developer of business software, not a technology tools company. It did not make sense for us – either technically or financially – to reinvent the wheel when it came to workflow. Instead, we looked at how leading technology companies like Microsoft have been addressing workflow. Microsoft, building on more than a decade of BPM experience gained with BizTalk, created a consistent workflow technology base it could use in all of its products, as well as make available to its 600,000 partners worldwide; thus the introduction of the Windows Workflow Foundation. http://msdn2.microsoft.com/en-us/netframework/aa663328.aspx

Windows Workflow Foundation
Windows Workflow Foundation (WF) is a development technology that is part of .NET Framework 3.0, Microsoft’s managed code component of Windows. Consisting of an activity model, workflow designer, workflow runtime, and a rules engine, WF allows developers to easily embed workflow functionality into any Windows application.

WF fundamentally changes how software developers can incorporate workflow functionality into their applications. It transforms workflow from a highly specialised, expensive, and proprietary technology into a standard tool set that can be added to any application, much like radio-button controls or database connectivity.

Expert Workflow
ADERANT is making workflow part of the core technology architecture of ADERANT Expert, its business management application suite, utilising Windows Workflow Foundation. The beta program for ADERANT’s first WF-enabled application, Expert Workflow, focused on file opening, is currently under way with general availability scheduled for the first half of 2008. Leveraging WF frees us from focusing on the technical aspects of workflow and enables us to concentrate on how the technology can be best used to manage people and processes, which is what business process management, is all about.

WF will deliver a variety of benefits to ADERANT clients, including:

•    Low cost – Since WF is a development technology, not a product, there’s no associated Microsoft server or client licenses to purchase. This will allow ADERANT to deliver workflow capabilities at a far lower price point than other suppliers.

•    Easy integration – As a core Microsoft technology, WF will be used by other Microsoft applications, such as Microsoft Office, SharePoint, Active Directory, and much more. Since it is part of .NET Framework 3.0, WF will also be exceptionally easy to integrate with other applications.

•    Easy development – WF workflows can be created or modified through Visual Studio 2005, eliminating the need for expensive resources and making customisations a snap.

•    Flexibility – WF will give ADERANT clients the flexibility to change ADERANT Expert as their business needs change. WF provides a model where a set of activities can be built in ADERANT Expert, but each law firm can determine the properties of those activities and how they are executed. WF with ADERANT allows law firms to dynamically change and customise their business processes as their needs change and evolve. The end result; law firms are supported by software that can be easily changed to support new business strategies, without costly reimplementation or customisation.

Conclusion
Law firms now have several distinct choices when it comes to automating workflow via third party means; choose stand-alone products that require extensive integration and customisation to work properly, go with embedded workflow capabilities that use a proprietary workflow engine and development environment, or choose to embed standard workflow capabilities using tools created and backed by Microsoft. ADERANT, based on its experience with how law firms operate, and its extensive partnership with Microsoft, is following the latter approach based on Windows Workflow Foundation, and its promise to deliver the most capabilities and best overall value for law firms.

• Bryan Roberts is Vice President, International Sales, for ADERANT, a global provider of business and financial management software for law firms. He is based in the company’s London office and can be reached at bryan.roberts@aderant.com

Issue #3... Workshare Global Security Threat - what you need to know

Charles Christian — Mon, 29 Oct 2007 17:17:13 +0000

Brian Spector, the general manager for content protection group Workshare, talks about the company's new Global Security Threat Report...

Data breaches, identity fraud, theft of intellectual property – to hear of these is now commonplace in the media and in conversations between organisations worldwide. Yet firms in every sector are continuing to breach security and allowing their most sensitive and confidential information to be exposed to accidental or malicious damage. Law firms in particular need to protect a wealth of sensitive data – from confidential case files and information on clients, to corporate data and intellectual property.

Our Workshare Global Security Threat Report takes into account the key events and industry news within the areas of privacy, intellectual property, mobile working and corporate compliance. These stories and developments corroborate an emerging trend in the sphere of information security – that businesses and organisations tend to fall into two camps when it comes to data protection. On one side of the fence, many still have a worryingly archaic approach to security. Businesses are still allowing employees to leave laptops in cars which contain unencrypted and unprotected information. Banks are throwing away confidential customer data in bins. Employees still think that PDFs are a secure file format. Solicitors can inadvertently send out emails containing information about clients. These firms need to break the mould and educate employees about the risks involved with the information they are handling. Deploy simple security solutions which will make sure that all data within your business is safe and not at risk of being leaked. Businesses are becoming increasingly ‘perimeterless’. Organisations need to safeguard information within the whole network and at every end point before they suffer an embarrassing and damaging breach.

The other group contains companies who have noted the wave of security breaches and are taking action by writing stringent security policies to protect their data. Unfortunately, as our Global Security Threat report shows, these policies are still being breached and reputations are still being tarnished. Essentially, policies are not worth the paper they’re printed on unless properly enforced. Organisations need to look at ways to better enforce policy if they want to avoid hefty fines and serious damage to reputation and loss of clients, who are more willing than ever to vote with their feet.

Examining the Workshare report in a little more depth, what is the current status within each of the four areas defined as crucial in the information security sector?

Privacy
Privacy is still a hotly debated area; security breaches which hit the headlines last quarter are now being fully quantified. The well publicised breach suffered by global retailer TJX calculated that losses – which were originally estimated to be around the $25 million mark – have spiralled to $256 million in just three months. The costs include fixing the company's computer system and dealing with lawsuits, investigations, and other claims stemming from the breach, which went on for more than a year before the company discovered the problem in December 2006. Other companies such as Fidelity National Information Services (FIS) that were affected by privacy breaches have also seen the advent of serious lawsuits which could cost millions to settle. In developments to watch, Google is planning to further personalise its service by collecting and storing more information than ever on its online user base. The information will be held in Google's vast network of massive server farms. Concerns have already been raised by the Information Commissioners Office (ICO) and legal experts regarding data protection and information leaks.

Intellectual Property
Intellectual Property is arguably one of the worst kinds of data a company can lose. As the data protection market matures, individuals and businesses are facing increasing amounts of litigation for breaches suffered in this area. In addition, recent surveys have shown that many employees are happy to take Intellectual Property with them when they leave a firm, and that IT systems are not viewed as obstacles to taking this data. One of the worst IP cases in Europe this year was suffered by a huge German manufacturing company in July, when it discovered that a competitor had copied one of its products. A foreman had sent detailed information about a component to an external design department without telling his IT department or encrypting this information, thus allowing the competitor to get hold of it. In today’s highly competitive environment, companies should keep a close eye on how their Intellectual Property is being edited, distributed and archived.

Mobile workforce
Businesses and organisations in every sector continue to neglect the end-point when it comes to data security. Accidental loss of laptops and mobile devices cannot be stopped, but companies can encrypt and protect information to limit damage. In addition, when data is lost there is now a need to display ‘data breach best practice’. Recently, the HMRC was applauded for coming clean, apologising and assuring customers that it had efficient security measures in place, as soon as a laptop theft came to light in September. Conversely, pharmaceutical giant Pfizer was criticised for suffering its third data breach in as many months, putting personal information relating to both current and former employees at risk. The three thefts meant that personal information relating to tens of thousands of people was stolen, following the theft of laptops from a car in Boston, and leaked emails. Although the stolen laptops were password-protected, information included employee names and Social Security numbers. It is rumoured that the third breach involved information being leaked by an ‘insider’.

Corporate compliance
The area of corporate compliance is perhaps of most interest to legal firms, as the regulatory climate continues to change apace. Worldwide, North America still leads the way in data breach legislation. It has been estimated that more than 160 data breaches have been suffered in the US in the last two years. As a result, laws have been passed in 35 states forcing private and public sector organisations to notify their customers if their personal information is lost or compromised. Now, a variety of organisations including the Cyber Security Industry Alliance are pushing for a national standard for data breach notification. It is hoped that such legislation would provide better protection for consumers, and ensure consistency in the law. In the UK, a variety of experts including members of the House of Lords, the media and the ICO have called for a review of current laws relating to data breaches and information loss. The government is being pressured to ensure that businesses improve notification of data breaches and are held accountable for putting at risk any sensitive data they hold.

Increasing amounts of legislation mean that individuals and businesses will find themselves at the centre of lengthy and expensive law suits if breaches are not controlled. Customers are increasingly threatening to boycott companies which do not take adequate care of information held on them. This Threat Report proves the potential reach and cost of damage caused by data breaches and shows that organisations of all kinds need to take action before they really get hurt.

For a copy of the full Workshare report please visit www.workshare.com/go2/threat1

Issue #3... Money Laundering - Manual v. Online

Charles Christian — Mon, 29 Oct 2007 17:09:45 +0000

Tony Klejnow writes... Much has been written in the legal press lately about the linked issues of Money Laundering and Client Identity Verification, and the role of the practicing solicitor in the identification and reporting of suspicious individuals and financial transactions.

Whilst legislation (Money Laundering Regulations Act, Proceeds Of Crime ACT) is in place and the Joint Money Laundering Steering Group (JMLSG) have issued several directives on the subject there are still several grey areas and pitfalls that could trap the unwary and innocent solicitor.

Getting it wrong is no longer an option as several solicitors have found out recently. As ever ignorance of the Regulations is no excuse - as at least two members so the profession have found out to their cost (and liberty).

The Money Laundering Regulations 2003 stipulates:

(3) A must maintain identification procedures which -

(a) Require that as soon as is reasonably practicable after contact is first made between A and B:
(i) B must produce satisfactory evidence of his identity; or
(ii) Such measures specified in the procedures must be taken in order to produce satisfactory evidence of B’s identity;

For the purposes of the Regulations ‘satisfactory evidence of identity’ is evidence which is reasonably capable of establishing (and does in fact establish to the satisfaction of the person who obtains it) that the applicant for business is the person he/she claims to be.

Solicitors have an obligation to obtain and record ‘satisfactory’ evidence of the identity of the client and to report ‘suspicious circumstances’ but the grey areas arise as neither of these terms is defined accurately and completely within either the legislation or the regulations.

In response practices appear to be taking one of two approaches:

Traditional Manual Method
The photocopying of relevant client documentation, usually a passport and utility bill. Whilst this ‘bare bones’ approach is simple to implement and administer it is labour intensive and does have limitations. It is not particularly convenient for clients (how many of us carry our passports and utility bills with us) and some clients (e.g. those without passports, people working overseas or in the services, clients living or working some distance away) are not well served by this method.

Solicitors should remember that it is an offence to carry out work prior to obtaining and recording satisfactory proof of ID, and that submitting an offer of work constitutes carrying out work.

Online Identity Verification
There are a number of systems available which provide enhanced assistance in the areas of money laundering and client verification. These work best when integrated with the practices in-house practice management system as the process can be completed (in seconds) before accepting the client or the transaction.

These online systems search a wide range of databases using base data obtained during the initial client meeting (title, forename, surname, house number and postcode, date of birth, driving licence number, NI number, and passport number).

The system checks this data against a wide range of (positive and negative) data sources, including Full Electoral Roll, Royal Mail Postcode Address File, UK Investors, Adverse Public Data and Share financial records.

The returned search result contains additional information that, if required, could be used by the solicitor to further verify that the potential client is genuine. Search results are automatically stored against the client record as an audit trail and proof that the solicitor acting has met his/her obligations.

In Conclusion
With increasing pressure upon solicitors to ‘get it right or face the consequences’ online identity verification must be worth examining.

It is quick, simple to use and greatly de-risks the take on of new client business. It is also extremely client-friendly and particularly useful in ideal potential high-risk ‘new client not present’ situations. Online verification is much less time consuming and accordingly less costly than the manual method.

Another fact supporting the move to online verification is that compliance and reporting requirements are extremely unlikely to diminish in the future. Indeed the converse seems to be the case.

The new Money Laundering Regulations, effective December 15th 2007, contain a requirement to check all prospective clients identified as high risk against the Politically Exposed Persons register. This search is only available online, from a limited number of sources.

There is also a new requirement for MLRO’s to report transactions where they suspect funds may include sums of unpaid tax – even if the business producing the profits is legitimately trading (see Court of Appeal judgment in R v. I K (2007) EWCA Crim 491).

Whichever route is taken (manual, online or a combination thereof) the logging and auditing of returned results within the practice management system is vital. It ensures the practices ‘beleaguered’ MLRO can speedily and easily monitor regulatory compliance across the whole practice, and report accordingly.

Pro-active monitoring and control is essential to ensure practices acting in good faith do not unwittingly fall foul of changing regulations.

• Tony Klejnow, Managing Director, Linetime Limited

Insider Colour Supplement #2 - September issue out now

Charles Christian — Mon, 24 Sep 2007 15:24:41 +0100

The September issue of the Insider Colour Supplement is out now. The stories include

• the results of the latest ILTA survey on North American law firm IT spending trends
• the Trek China charity hike raises £100k
• are you ready for Instant Messaging
• a new portable printer for road warriors
• what is meant by EPE - the electronic presentation of evidence
• Stuart Holden of Axxia on why a modern PMS can meet all your needs
• Speech recognition 10 years on
• Bindmans go with Sharepoint portal

Enjoy - the next issue will be published on 22nd October

Insider Colour Supplement #2 - latest ILTA technology purchasing survey

Charles Christian — Mon, 24 Sep 2007 15:16:30 +0100

JoAnna Forshee, the CEO of Envision, summarises the results of the latest ILTA Technology Purchasing Survey and finds they provide a snapshot of North American law firm IT spending patterns – and who influences them...

In late August, the International Legal Technology Association (ILTA), in cooperation with Envision Agency, released ILTA’s Annual IT Purchasing Survey representing all ILTA member law firms with 100 attorneys or more. While the overwhelming majority of the 126 firm responses originated from the US, information from Canadian, UK and Australian firms was also included. What always amazes is the level of participation and cooperation among the ILTA crowd, especially when it comes time to complete yet another survey. Between periodic ILTA surveys, American Bar Association polls and numerous American Lawyer (AmLaw) rankings and scorecards, law firm IT leaders are constantly on the survey circuit. With that said, a 27% response rate for the ILTA IT survey represents an impressive sampling. The 2007 survey revealed notable findings relating to IT purchasing patterns, budgets, decision making and influences, as well as future technology trends.

The bottom line
Survey responses indicate that budgets are way up, but only among law firms with under 200 attorneys (we called them Small Firms), firms with more than 200 attorneys (Large Firms), on the other hand, are in budget conservation mode. Small Firms are implementing and planning major software purchases, Large Firms are focused on infrastructure, hardware upgrades, and innovative mobility solutions. Small Firm users are dissatisfied with recent technology implementations, perhaps linked to training cuts, while Large Firm user satisfaction more than doubled. Finally, in addition to tackling the e-Discovery boom, IT decision makers are challenged daily with staffing issues, managing firm growth, increasing volumes of data and storage shortages, as well as user education.

Budgets
IT budgets are still increasing, but not for all firms. 52% of Small Firms noted a more than 5% increase of IT budgets compared to 2006 (up 14% from 2006 survey results). 15% of Large Firms reported an overall budget decrease (up 4% from last year’s survey). This “flip flop” trend from 2006 is something worth monitoring in subsequent surveys. Part of the 2007 increased budget trend in Small Firms is attributed to an upswing in more general purchasing plans (15% in 2007 versus 3% in 2006). In contrast, only 37% of all respondents cited specific technology purchasing plans (versus 48% in 2006), and 10% (4% upswing compared to 2006 survey results) cited other reasons such as future firm growth, mergers and acquisitions-related expenses, and business continuity planning. Budget decreases are primarily tied to firms’ expense control and conservative budgeting policies, particularly in Large Firms which accounted for all survey expense-tightening answers. This indicates a notable difference from last year when purse strings at Large Firms seemed considerably looser.

Technology purchases
Small Firms indicated higher implementation rates for case management, courtroom technology, docketing software, imaging/scanning/OCR, patch management, and records management software. Large Firms dominated in the implementation of OS upgrades, remote access technology, voicemail upgrades, workflow automation, and wireless devices. In the planned purchase category, the biggest percentage increases during 2006 occurred in the desktop hardware and laptop/notebook categories (both up 10% from 2006), and in dictation software and hardware (up 9% from combined hardware/software category last year). The biggest declines in the planned purchase category include disaster recovery, workflow automation, records management, cost recovery, and VoIP.

IT & user satisfaction
98% of all respondents (IT staff) were very satisfied (10% higher than in 2006) or at least satisfied with new technologies they implemented in 2006. Comparatively, user satisfaction rates with new technologies fluctuated between Small and Large Firms (Large Firms were 20% more satisfied than Small Firms). In fact, Small Firms indicated a 14% somewhat unsatisfied rate, the only such dissatisfaction among any respondents.

Purchase influences
Less than 50% of survey respondents cited their clients as being key influencers in the IT purchasing process. In fact, only 39% of Large Firms look to clients for IT purchases, a very interesting development.

IT challenges
The most pressing challenges facing the surveyed IT decision makers include managing firm growth from an IT perspective, data volume and data storage limitations, user education and training, and e-discovery readiness/preparedness.

This concludes the summary of the findings, and you can download a free copy of the complete survey. In addition, ILTA will be hosting the 3rd Annual ILTA Insight Event in the UK. in April of 2008. If you are interested in attending, please contact Peggy Wechsler at peggy@iltanet.org or Nigel Blackwood at nigel_blackwood@wragge.com

• JoAnna Forshee is CEO of Envision Agency, a legal technology marketing and strategy company representing clients in the US and UK. She can be reached at jf@envisionagency.com

Insider Colour Supplement #2 - China Trek raises nearly £100k

Charles Christian — Mon, 24 Sep 2007 14:47:55 +0100

The Trek China charity fundraising hike along part of the Great Wall of China – which was set up by Kevin Connell and saw some of the members of the UK legal IT community (well at least some of the physically fit ones) take part in the venture earlier this month – is now back in the UK and has raised nearly £100,000 in sponsorship. The project was designed to raise money for both Newick House School (a UK school for children with special needs) and The National Autistic Society. Among those participating, along with Kevin and his daughter Lyndsey, were the consultant Neil Cameron and two of his daughters (Siobhan and Kirsty), a sizeable contingent of Kevin's colleagues at BP, the consultant Andrew Haslam (who apparently left his stock of exotic neck-ties back in the UK) and everyone's favourite e-learning expert Ann Hemming.

The Trek China team would still like to raise more money, so if you haven't done so already, help now. You can find out more about the event, see the route the followed, look at some of the pictures they took, and read the participants' blogs by visiting www.trekchina0907.org.uk/

Insider Colour Supplement #2 - Realtime communication has arrived - were you ready ?

Charles Christian — Mon, 24 Sep 2007 14:25:09 +0100

In this article Ken Agnew of Agnew Associates – a law firm IT director turned consultant – looks at the impact of instant messaging on the legal world...

Those of us who are old enough to remember the technology of late nineties will be able to recall the arguments we witnessed over whether to allow secretaries to have email access and how the communications made by anyone at or under associate level were going to be checked by a partner.

Today the arguments over which lawyers toiled and sweated seem fatuous in the extreme. The very concept that it is possible for almost anyone in a legal organisation to work without email is impossible to fathom. That superiors should vet all mails is an equally idiotic notion. We discussed the relative merits of sending documents as attachments with some saying that it would be dangerous to send important contracts over “the ether” because anyone might get their hands on them until it was pointed out to them that they were perfectly happy to hand them over to leather-clad bikers they’d never met before and that, somehow, they seemed to think that was safer. I even overheard a partner in one firm dictating a letter beginning “I refer to your electronic communication of the 17th inst”. Today we face the same kind of dilemmas over what is termed “Real-Time Communication” or Instant Messaging to you and me. Hopefully, we are better prepared and educated.

When I ask legal IT directors what they know or think about IM, they invariably reply “That’s what my kids use” and go on to lament the fact that, after spending a whole day in school with their peers, their darling offspring return and spend the evening on MSN or Google-Talk exchanging new and exiting information with precisely the same people and only occasionally surface to eat, moan about broadband speeds or ask for money.

My own children who are only 9 and 6 at the moment take great pleasure in sitting in separate rooms exchanging messages with each other while playing bizarre games involving penguins – all of which is anathema to me but keeps them happy and, mercifully, quiet. These children and the adolescents who precede them are growing up in a culture where IM and other real-time communication tools are taken for granted and the oldest of these have begun to enter the workplace. One law firm I spoke to about IM recently confessed to having had to provide training on Outlook because one of their recent graduate intake had never seen an email client before. Indeed, they had no idea what email was having never used it and had to have the word “attachment” defined for them.

All of this makes me feel very old although I am becoming a proficient Skype user and have even logged on to “Club Penguin” from my laptop in the kitchen to tell my kids their tea is ready! I felt quite proud until it was pointed out to me that I had spent ten minutes managing to emulate the technical achievements of a year 2 child. My kids love the Internet and have no fear or hesitation in exploiting it for whatever reason. They both have mail accounts and an awareness but not experience of pure and open IM. They take all of this for granted.

This is the same generation who take 300 digital TV channels for granted whereas we grew up with two – in black and white to boot! They don’t know what a floppy disk or an audio cassette or, for that matter, a video cassette is and they’ve never seen a vinyl record. They have never heard of a telegram (do they still read those out at weddings or do they read the instant messages?). These kids have never hurt their fingers in a telephone dial and think all phones are mobile – indeed, they expect to be provided with one at an extraordinarily early age

A recent survey among IT users and Managers (undertaken by New Diligence Market Research on behalf of FaceTime Inc) revealed that 41% of users in a variety of organisations had IM or other Peer-to-Peer applications on their work PC. In the same group 53% agreed with the statement “I tend to disregard company policies on IM and Peer-to-Peer usage” and 39% with the statement “I should be able to install the applications I need on my computer”. Instant Messaging was installed already in 76% of organisations with or without the sanction of the IT department. Clearly, pressure from users will become a key element in your decision to sanction IM use and to make it safe and manageable.

Legal is necessarily and understandably a risk-averse industry but it is surrounded by clients and third party organisations which are less so and ready to embrace new technology and working practices more quickly. It is only a matter of time before major clients and suppliers are asking you to adopt a “presence based” working model and communicate in real time. The lack of standards within the discipline makes this difficult and will drive you towards adoption of an enterprise system such as Live Communication Server from Microsoft who continue to weave messaging and Peer-to-Peer functionality into the fabric of their Office and OS products.

As far as I can tell, IT departments fall into three categories within legal. Firstly, those who have already provided or are planning to roll out IM to their users in the knowledge that dealing with this inevitability is better than ignoring it. This group is still a small coterie of a few top 100 firms. Secondly, those who know it goes on but ignore it on the assumption that it can’t be being used for client related work – which accounts for the majority. And, thirdly, those who actively seek to ban it and put provisions in place to ensure the ban is respected. There’s only one of the third group as far as I have seen and even they are resigned to the task ahead of them but have taken these steps because, uncommonly, they are aware of the dangers IM and other Peer-to-Peer applications pose.

So what are these dangers? Well, you may have noticed, as I have, that it’s been quite a while since we had a LoveBug or similar virus threat hitting the news. Viruses used to be written by geeks in black-painted bedrooms with the intention of causing as much disruption as possible either for fun or to protest against global capitalism or the arms race or some such other thing that preoccupies the minds of disaffected youth. Nowadays, the same kinds of people who would and could do that are writing spyware and adware (or Malware) to get into your corporate networks and they are doing so for profit. These are no longer pasty faced, bearded individuals, they are tanned and well dressed and have very pleasant lifestyles because they can afford it. Details of your browsing habits, your personal details like your address and age, gender, economic grouping, buying habits and, most worryingly, your credit card details are being bought and sold internationally. This is not going through email any more. They’re using IM and P2P networks as a vector to infect your corporate PC’s. Indeed, in the eighteen months following March 2005, the number of infections spread by P2P rose by 2200% – No, that’s not a misprint. It’s Two Thousand, Two Hundred Percent! That’s lots by anyone’s standards to put it mildly.

You still need services like Messagelabs or Mimecast and AV controls on your desktops and at the firewall but none of these products can adequately protect you from these new threats in isolation or together. Most of the products being used within legal are only looking at either HTML or port 80 traffic. Your average spyware writer knows this and develops his material to bypass these routes just as the IM providers use evasive techniques to avoid detection. This makes them perfect partners. For instance, did you know that Skype change the encryption methodology and algorithms in their product every time they release a new version and that almost all P2P products actively seek random open ports to pass through. There are no standards in IM. This means that public IM providers all use different methods and protocols to communicate and are all equally evasive. Each have both web-based and PC-based clients which can be used with the same buddy names so that a user can use the full client at home and, if need be, the web version at work transparently.

Anonymisers such as Tor and Hopster can disguise IM use and internet abuse by sending misinformation to the proxy. So, unless your desktops are locked down to a draconian degree, users can still send and receive IM and therefore send and receive malware infections. Most law firms I’ve seen have infection levels which have surpassed their IT management’s expectations both in volume and severity of infection. In all but one firm, IT directors have had reactions ranging from surprised to appalled at the volume of IM and, particularly, Skype traffic emanating from their network. All have had a degree of spyware infection which may or may not be prevented from phoning home through their various protection systems, indeed, in most cases, it has successfully bypassed the firewall.

There are also compliance issues. For instance, since February this year, IM messages have been treated in exactly the same way as e-mail under the Sarbanes-Oxley act. This means that any communication made through IM is subjected to the same rigorous requirements for retention and substantiation. UK and European legislation is bound to follow suit sooner or later. If, like the 26% of people in the FaceTime survey, your users are employing IM as an alternative to mail because it affords “private, unmonitored communications”, then you need to know why, what they’re saying and to whom.

To illustrate this, here’s a short, alarmist story. In late 2006 Congressman Mark A Foley was forced to resign from Congress when details of an explicit Instant Messaging conversation he had with a sixteen year old were leaked to the press. He had taken the precaution of deleting the conversation but the boy in question had not been so careful and probably got a fortune for it when he went public. The conversation in question had occurred in 2003, since when, Senator Foley had been campaigning for legislation to protect minors from the dangers of the internet. You don’t want to know what was in the conversation. It took an investigative journalist two days to topple him from power. He put a piece of innuendo about the congressman in a blog one day and the next day, despite threats of libel actions, after being contacted by the victim, was able to expose the whole sordid story. Congress itself had no record of the conversation going through its infrastructure. I’m not accusing anyone in the legal industry of being a predatory paedophile but do you have a record of the IM conversations your users are having? You probably should.

The chairman of IBM once said "I think there is a world market for maybe five computers." The manager of The Beatles said that he could do the job in a couple of afternoons a week and Bill Clinton apparently didn’t inhale cannabis or have sexual relations with that woman. All of these things were said with misplaced confidence, all would jump up and bite their authors back in the future and they were all wrong. Your users, your clients and Microsoft are going to force you eventually to employ, sanction and roll out IM, just as they did with e-mail all those years ago and anyone who says otherwise is in danger of joining that illustrious pantheon. If you’re not making provision to protect yourselves from malware in the meantime, you are inviting trouble. IM is coming, in fact, for the majority of us, it’s already arrived whether we like it or know about it and, chances are, the threats it brings with it are already on your network.

Insider Colour Supplement #2 - Portable printers for road warriors

Charles Christian — Mon, 24 Sep 2007 13:17:42 +0100

At a recent Gartner event, analyst Nick Jones predicted a few tendencies towards increased mobility in everyday business life. According to Jones, mobile email will be a commodity in most businesses by 2010, with the breakthrough of the smart phones facilitating this process, so anyone will be able to work anytime, anyplace. As a result, says Jones “the road warrior requires a compact portable printer that does not only come with a convenient carrier bag, but that can also guarantee an optimal print quality in a variety of harsh circumstances.”

Pentax Technologies Europe believe they have the answer with their PocketJet mobile printer – a compact, shockproof and reliable that prints on to water and temperature resistant Pentax Quality thermal paper, which is available as single sheets on a roll or as fanfold.

Our picture shows the PocketJet 3/3Plus, the latest 'top of the line' 200/300-dpi high quality and ultra-portable direct thermal printer. It combines a robust functionality and reliability with the functionality for working with all print-enabled portable computing, handheld and PDA devices. The PocketJet 3 has a compact size: 25.5 centimeters (10.04”) in length and weighing just under 500g (1.12 lb with battery). This mobile printer supports both the graphical GDI emulation (raster) and EPSON ESC/P emulation standards, enabling users to print what is on the screen, without any buffering or spooling. It is compatible with the main OS Windows, Win CE, Symbian, Mac and Linux. Built-in USB and IrDA replace the requirement for external cables. Enhanced user defined configuration options offer maximum versatility for setting up the printer, monitoring the power supply, responding to error messages, etc. Multiple power sources are available as well as a trickle charge NiMH battery.

The PocketJet 3/3Plus can also be combined with the Thinprint Content Beamer solution, enabling mobile users to print emails and attachments as well as locally stored information from Bluetooth-capable BlackBerry handhelds, Symbian smartphones or Windows Mobile-based devices to the PocketJet 3 BT/ 3Plus BT printers. PocketJet printer kits RRP at about £280 to £400 + VAT depending on the configuration – there are 4 models. Pentax Technologies' distributor in the UK is RGIMS, contactable at mike@rgims.fsnet.co.uk

Insider Colour Supplement #2 - What is meant by Electronic Presentation of Evidence ?

Charles Christian — Mon, 24 Sep 2007 12:52:10 +0100

In this article Lisa Burton, a director of litigation support and e-discovery specialists Legal Inc, explains what is meant by EPE – or electrontic presentation of evidence – the latest TLA (three letter acronym) to hit the legal world...

In essence, EPE is an IT-driven alternative to paper-based presentation in a room being used for any type of legal hearing (usually a court or arbitration room). Most commonly it will consist of scanned pages of documents being stored on a computer which are made available to the participants of the hearing via presentation on screens dotted around the courtroom, but the term EPE also embraces sophisticated complementary technologies such as video links, 3D graphics and virtual reconstructions – anything that will aid the clarity of the case being presented or is required for the smooth running of a hearing.

Now the law can be an old fashioned industry and the idea of all this often provokes sharp intakes of breath, but the whole point of technology is that it should help, support and underpin a process rather than take over from a tried and tested methodology. Counsel should not be aware that as he or she is presenting their case, an operator is quietly illustrating the points being made using highlights, arrows, zooms and stamps.

In its crudest form, EPE has been around since the 80s. There are some (now) humorous stories still echoing around the Advocates’ Dining Rooms of sheets attached to the wall as a screen for a projector, but we have moved on a little since then. Being the mother of invention, necessity has spurred the development of the technology, and these days there is an extensive choice of basic, reliable technology as well as an even longer list of whistles and bells for clever tricks (if required, though not always recommended).

In what type of cases is it typically used?

EPE was first used for heavy-duty fraud cases, the sheer volume of documents and the complexity of legal argument lent themselves to an EPE solution. Members of the Bar are rightly proud of their advocacy skills but a picture can paint a thousand words. Encapsulate the movements of a money laundering chain in an animated PowerPoint presentation, and you make your point much more clearly than using words alone.

In recent years, EPE has also been used in large disputes in the Technology and Construction Court, where complexity and volume often conspire against paper. Multiple formats of ‘document’ often form the evidence in such cases, and the facility to show a publicity film, technical reports, emails and site plan diagrams on the same equipment is invaluable.

There is currently a huge growth area in Dispute Resolution and arbitration: the increased use of EPE will radically speed presentation, aid understanding and promote fair judgment – and with an estimated 300 arbitrations per year, that’s a very substantial cumulative gain.

What are the benefits of using EPE?

The principal benefits are two-fold: EPE saves time and money and makes case presentation much easier to follow. It is also worth noting that the benefits of EPE increase the earlier in the legal process it is taken into consideration.

It’s widely accepted that EPE can save approximately one third of court time and costs in criminal trials: it takes an average of 3.5 minutes for everyone to locate the specified paragraph within the specified document within the specified folder, where it takes 2-3 seconds per call out to bring up that same paragraph on screen - the more documents shown, the more time saved. Knowing that everyone is on the same page is more than helpful. While there is no Jury to factor into the calculations in a civil trial or arbitration, the time savings are still important. Add to that the fact that some of these cases are well in excess of 100,000 pages of evidence, a room equipped with the shelf space of a respectable sized library would be required to accommodate them, not to mention the logistics of ‘moving in’ for the start of the hearing. And they do say that moving is one of the most stressful activities in life…

The use of specific EPE software also makes for an extremely focused argument. No longer do you have to worry that someone is getting carried away with reading paragraph seven of the page when you wish them to look at paragraph four, even if paragraph seven is more interesting. Zooming in on the appropriate section of any given page will mean that paragraph seven is only addressed if and when Counsel wants it to be.

What are the essential ingredients of successful EPE delivery?

There are two aspects: legal and technical.

From a legal perspective, litigators and counsel must ensure that they have total confidence in the quality of their data. It is also absolutely vital that the preparation of the evidence is the best it can be. An ordered, organised case with referencing formats agreed in advance bring smiles from all EPE suppliers. It seems an obvious thing to say but there’s a misconception that EPE, with all its clever visuals and technical wizardry, can be used to make a weak case strong. In fact, quite the opposite is true – EPE will merely show up a weak case even more sharply.

From a technical perspective, it’s all about using specialists who really understand how an eCourt has to function. There is no point in using a provider who offers an all you can eat price when 80% of the capability is unused. The technology should also be ‘silent’ and users should be almost unaware of its existence. Like the processor in the PC itself, it should thrum quietly away in the background, never drawing attention to itself. However, there’s a huge gulf in capabilities in the supply market, particularly with regard to the actual courtroom operator. A skilled, experienced eCourt manager can be the difference between success and failure.

How is EPE best deployed for effective case presentation?

Those who use EPE to maximum effect understand the limitations of technology and the psychology of those in the courtroom.

As anyone who has ever fallen asleep in a film will attest to, it is possible to get switched off by the visual performance in front of you, particularly when you are asked to do nothing but sit back and watch. It’s the same with EPE. On many occasions, counsel rely totally on electronic visuals, whose soporific, relentless slickness just switches off people’s attention. Those who are on the ball will mix things up a bit, deliberately making jurors pick up their paper bundles so as to keep them alert and physically involved. Air conditioning will not be enough!

We also have to acknowledge the fact that while there is – quite rightly, much excitement about the capabilities of EPE, it is not perfect for everything. Yet there are specific cases when it is useful, and many where it is essential, but for the daily grind, the old ways are sometimes the best.

Is there any resistance to the use of EPE within the legal profession and judiciary?

Naturally, there are sceptics, but the list of converts grows with each case. And as I’ve touched on earlier, there are those who know that their best hope of winning their week case lies in bamboozling the court with a detailed paper-based argument.

However, it is great to see many of the senior members of the law community championing the cause of EPE. It might be expected that they would be the most resistant, or at least the least interested, but it is by no means always left to ‘Junior’ to work the equipment.

EPE and eCourt solutions are the exception rather than the norm at the moment. Will this change?

Absolutely. Usage will rise, not just because of familiarity but because of the rapidly increasing volume of electronic evidence: evidence which is digital at source and thus should be brought into court in that format.

Interestingly too, judges are increasingly aware of EPE’s ability to save time and costs and sometimes insist on the parties using it, and the Judiciary, spurred on by a government eager to push through efficiencies wherever they can, are keen as a whole to use EPE, and this is no bad thing.

There will be issues to overcome, obviously. Data exchange formats need to be agreed, and more equipment installed as standard. It is quite possible that the future lies in the parties bringing their own data on their own computers and connecting into the existing infrastructure of a court or arbitration room. With the costs of these systems reducing daily as the technology moves forward, we cannot be too far away from all courts being permanently equipped for Counsel to plug into. But with new technologies being used in our private and business lives all the time – SMS, instant messaging, video conferencing, there will be no lack of digital content to present via an EPE solution.