Law Firms Finding Business Gains in Migration to Cloud

When the very notion of accessing software applications on the cloud hit the legal profession — let alone cloud-based data storage and retrieval — most law firms reacted in a predictably risk-averse manner: That’s interesting, but what is the data security exposure to the firm, the confidentiality risks to clients, the liability insurance coverage implications?

All of those important questions continue to be asked, of course, but it’s noteworthy that many early-adopter firms are now sharing their experiences with migration to the cloud for software delivery . . . and the good news is they’re finding significant business advantages.

“Four out of five cloud adopters report significant process improvements within six months of moving to the cloud, while 82% indicate substantial cost savings,” according to Law Technology Today.

One of the key reasons for these business gains, according to legal tech experts, is that migrating to cloud-based delivery of software applications requires minimal IT expenditures from the firm and can be totally seamless from the perspective of the user.

Kevin Harrang, co-founder of MetaJure, developer of an automated document management system for the legal industry, emphasizes that there is a need to focus on users’ experiences.

“I try to take advantage of past lessons learned and one of these is this: any improvement that leverages the way people already work is vastly superior to one that depends on getting people to adopt a new and different way of working,” said Harrang, who served as deputy general counsel for legal operations at Microsoft prior to starting MetaJure with noted IP attorney Marty Smith. “This may seem obvious, but it’s a persistent problem, especially with technology.”

Earlier this year, MetaJure teamed up with LexisNexis Managed Technology Services to offer its automated document management system to clients in a secure cloud-based environment. LexisNexis has more than 35 years of experience managing large amounts of legal industry data at nine global data centers around the world, providing full service data center operations, managed hosting, cloud and disaster recovery services.

Some of the business advantages cited by law firms who have migrated to the cloud include the following:

  • Cost savings (no servers needed to host software)
  • Minimal IT involvement (software maintenance performed by cloud provider)
  • Scalable (cloud services sold on demand and can be ramped up or down as needed)

The bottom line: law firms that have engaged LexisNexis to provide hosting solutions reported to us that the cloud provides scalable access to powerful technology tools that can help a law firm manage its profitability and sets it up for future efficiencies as the firm grows.

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This post is by Daryn Teague, who provides support to the litigation software product line based in the LexisNexis Raleigh Technology Center.

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Law Firms Finding Business Gains in Migration to Cloud

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Legal Department Metrics Reports and Analysis: A CounselLink / CLOC Discussion Part 1

I just returned from San Francisco where I was fortunate enough to be invited to facilitate a discussion with the Corporate Legal Operations Consortium (CLOC) on legal department metrics. My colleague, Kris Satkunas, Director of Analytics Consulting for CounselLink, and I shared our views on best practices in establishing a corporate legal metrics program.

Elaborating on we’ve learned about best practices, processes and results through partnering with hundreds of corporate legal department clients over the years made for an engaging discussion with the CLOC audience. Although taking advantage of data and analytics is key to better outcomes and more strategic decision making, it’s clear that the questions many legal departments have include — what are the best KPIs for a legal department to measure and how should it go about measuring them?

Over the next few weeks, Kris and I will share highlights of our CLOC presentation as well as results from a revealing survey we conducted with CLOC members. Topics we’ll cover here in the Business of Law Blog will include:

  • 7 keys to a successful metrics program
  • Common metric pitfalls to avoid
  • Recommended KPIs
  • Additional metrics you should be measuring but probably aren’t
  • Tools to implement a successful metric program
  • Creating the right dashboard to meet your objectives

I’m thankful to the CLOC group for inviting me to speak at their meeting and I’m looking forward to sharing the content of the presentation with LexisNexis Business of Law Blog readers. For its part, the rest of the CounselLink team looks forward to continuing to partner with corporate legal departments as they implement processes, legal management systems and analytics to deliver legal services to their companies better, faster and more economically than ever before.

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This is a post by Justin Silverman, who serves as Vice President of Product Management for the LexisNexis CounselLink business.

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Legal Department Metrics, Reports, and Analysis: A CounselLink / CLOC Discussion — Part 1

10 Donts of eDiscovery

Electronic discovery is about technology, it’s about workflows, it’s about costs and it’s certainly about the professionals who do the work. But it’s important to remember that, at its core, eDiscovery is a serious component of the litigation process, fraught with all of the compliance responsibilities and risks that entails.

To help litigation professionals gain a tighter grip on the most important things in the universe of eDiscovery, LexisNexis hosted a recent webinar to highlight 10 Don’ts of eDiscovery.

“There are obviously a number of things that litigators and their staff members need to navigate in eDiscovery, but these are 10 things that you really shouldn’t do,” said Michael W. Mallory, an eDiscovery technology consultant. “If you avoid these common errors, you’ll be on your way to effectively managing risks throughout the eDiscovery process.”

Mallory identified the following 10 “don’ts”:

  1. Don’t Ignore eDiscovery
    The challenge of dealing with huge volumes of documents in eDiscovery is obvious, but so is the importance placed on the professional treatment of eDiscovery by the courts. American judges are no longer tolerant of litigants who are behind the learning curve when it comes to eDiscovery and the risk of sanctions is real.
  2. Don’t Go It Alone
    There is no need to feel like a lone wolf when it comes to carrying out eDiscovery responsibilities. The in-house legal team should work closely with its outside law firms, many of whom now have dedicated eDiscovery practices of their own, and with appropriate outside service providers who can assist with delivering the software tools and specialty counsel necessary.
  3. Don’t Neglect Litigation Hold
    Courts have found “gross negligence” and imposed sanctions on litigants for failing to issue written litigation holds (e.g., Pension Committee of the University of Montreal Pension Plan v. Banc of America Securities, LLC). Make sure you conduct pro-active compliance by identifying key personnel impacted by the hold, instruct them to preserve in writing, review document retention policies on occasion and document all actions.
  4. Don’t Rely on Clients or Vendors
    Lawyers in private practice take note: three in 10 organizations don’t have a formal legal hold program and barely one in 10 are confident they could demonstrate, if challenged, that their management of electronic information is accurate, accessible, complete and trustworthy, according to an ARMA survey. Outside counsel can’t afford to take a “hands off” approach to the collection and relevance determination phases of eDiscovery.
  5. Don’t Rely on Custodians
    The U.S. District Court in New York (National Day Laborer v. US Immigration and Customs Enforcement Agency) has established that most custodians cannot be “trusted” to run effective searches because designing legally sufficient electronic searches in the discovery context is not part of their daily responsibilities. Still, 74 percent of in-house counsel continue to rely on self-preservation in eDiscovery, according to the 2015 Norton Rose Fulbright Litigation Study.
  6. Don’t Neglect the Meet & Confer
    This crucial element of the process has become even more important under the new Federal Rules of Civil Procedure (FRCP) guidelines. Make sure to bring representatives of each team — in-house counsel, outside law firm, litigation support provider — and be prepared to get very granular on the scope of eDiscovery, production formats and timetables. The Meet & Confer should be a productive first step that leads to a collaborative ongoing discussion.
  7. Don’t Forget the Local Rules
    Each local court is likely to have its own unique preferences and interpretations of how eDiscovery should be conducted within the rules of civil procedure. For example, some judges may choose to place time limits for searching and reviewing documents for responsiveness, confidentiality, work privilege, etc.
  8. Don’t Forget a Claw Back Agreement
    The new FRCP rules also create a “claw back” process whereby the producing party may inform the other side that privileged material has inadvertently been produced and it must be promptly returned or destroyed. However, the amended rules also stipulate that the Discovery Plan “must include whether the parties agree to a claw back and if they want the court to include the agreement in an order under Rule 502” of the federal rule of evidence.
  9. Don’t Forget Hosting and Culling
    Today, even small cases involve thousands of documents, spreadsheets, printouts and vast quantities of digital information on CDs, DVDs, USBs and hard drives. Technology must be a key part of the eDiscovery workflow in order to achieve maximum efficiency and accuracy, such as using affordable software solutions to filter documents before review.
  10. Don’t Forget About Social Media
    Social media communications are no longer a quirky fringe element in eDiscovery. They are now a mainstream source of electronic information that is pertinent to virtually any case. Indeed, the advisory notes to the new FRCP guidelines stresses the importance of litigation teams becoming familiar with their clients’ information systems, including social media. Beware of the social media risks in eDiscovery and make sure to incorporate an approach to collecting social media communications in your discovery plan.

To review any of the materials presented by Mallory in the “10 Don’ts of eDiscovery” webinar, please click here.

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This post is by Daryn Teague, who provides support to the litigation software product line based in the LexisNexis Raleigh Technology Center.

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10 Don’ts of eDiscovery

CounselLink Release 6.4 Preview Webinar Today Theres Still Time to Register

CounselLink v 6.4 is scheduled for release this Sunday, August 21. We encourage CounselLink customers to register for today’s webinar now to preview the latest enhancements.

If you’re curious about the new features and improvements to the user interface, navigation, dashboards, and reporting in the CounselLink 6.4 release scheduled for this coming Sunday, today’s webinar is your chance to find out. Register now and plan to join two of our product experts, Thomas Moore and Bill Bordogna as they review how the new enhancements will help improve your user experience. Product enhancements they’ll cover include:

  • Increased ease-of-use with redesigned matter overview page and navigation bar
  • New configuration and editing options that provide more control
  • Additional functionality and improvements for reviewing invoices
  • Added DIY ability to edit billing guidelines
  • Added email notification when user is assigned a matter
  • And many more

Webinar: Preview of CounselLink version 6.4 Release

Thursday, August 18, 2016 11:00am to 12:00 pm Eastern Daylight Time

Presented by Thomas Moore and Bill Bordogna, CounselLink Business Analysts

REGISTER

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CounselLink Release 6.4 Preview Webinar Today — There’s Still Time to Register

GSK AFAs and the Continuing Evolution of Legal Billing

In an article, published last Wednesday on Law.com, author Jennifer Williams-Alvarez relates how the pharmaceutical giant, GlaxoSmithKline, has virtually eliminated hourly billing across its outside counsel panel, worldwide.

With 84 percent of the work performed by outside counsel for GSK in 2015 billed under alternative fee arrangements, the company has reportedly reduced its legal spend without sacrificing the quality of its legal representation. According to the article, GSK’s AFA usage has grown from just 3 percent in 2008.

In the context of our 2015 Year-End Enterprise Legal Management Trends Report, which reported that overall, AFAs were used in 9.4% of matters and accounted for 7% of billings, GSKs success in implementing AFAs across the board is beyond impressive.

The article reveals that GSK’s goal regarding AFAs is to make them a “win-win.” GSK’s strategy for helping to ensure that the flat fees it negotiates with its outside law firms are mutually beneficial includes a number of tactics that mirror some of the tips we recommended in a past Business of Law Blog post on implementing AFAs.

Although our tips addressed AFA’s primarily from the law firm’s point of view, they’re equally relevant to inside counsel, as GSK’s implementation success proves. We’ve included the complete list of tips from the previous post below.

10 Authentic Tips for implementing AFAs in Legal Billing

  1. Break litigation matters down by phases
    With 330 attorneys in the corporate legal department, that’s what United Technologies did and today 70% of the company’s legal fees are paid by a means other than the billable hour model. “United Technologies and its outside law firms break down each litigation matter into phases, and the company pays a flat fee per phase: investigation, followed by discovery, trial preparation and trial, and an appeal, if it reaches that point,” according to an article by Catherine Ho in The Washington Post: Is this the death of hourly rates at law firms?
  2. Consider a truly strategic partner
    Tyco International published an RFP in 2004 looking for alternative fee arrangements to enhance budget predictability. At stake was the company’s single largest piece of legal work — the “entire product liability docket.” Twenty law firms responded — and one law firm was selected: Shook Hardy & Bacon. “Today Shook Hardy is Tyco’s sole legal services provider for product liability, automobile and general liability matters. When local counsel is needed, the law firm determines who to bring on board and manages the entire legal team for each case rather than the company’s legal department,” reported Rachel Zahorsky in an ABA Journal article titled: Facing the Alternative: How Does a Flat Fee System Really Work?
  3. Share the risk between inside and outside counsel.
    Legal work often centers on mitigating risk and though alternative fees have earned lots of headlines, actually implementing them is still new for many law firms and legal departments alike. In other words, there’s risk on both sides. “It’s worth pointing out that GCs assume risk with AFAs as well. It’s a different way of thinking about buying decisions — get an agreement wrong and they wind up spending more than anticipated. Overwhelmingly, GCs have a strong desire to reserve AFA experiments for firms they trust. Every agreement counted as a win from both an inside and outside counsel perspective improves the chances of a greater share of the business,” wrote Russ Haskin in a Law Practice Today article titled, Six Alternative Views on Alternative Fees.
  4. Present a unique value proposition.
    For law firms offering AFAs, some financial advisors recommend finding a way to differentiate a firm’s services from the rest. The best way to do this is often posing the question to clients. “Start by asking your clients what they value most. Many law firms are afraid to ask this question, as they feel the value of their services is worth less than the price they’re charging. But asking about what they value most, as well as their strategic goals, adds value to your services by showing the client that you really want to be a strategic partner. Once you know your client’s goals, you can organize your legal services to best meet his or her long-term needs,” said Colin Cameron in Law Practice Magazine article titled Win-Win Alternative Fee Arrangements.
  5. Change the AFAs perspective
    AFAs might better describe “appropriate fee arrangement” rather than alternative fee arrangement. It’s this sort of thinking that changes the perspective of AFAs from a law firm discount, to the right price, for the right work, and at the right value. This concept flows from a presentation by law firm pricing strategist Toby Brown and summarized in a blog post: 7 Takeaways from a Geek’s Presentation on Law Firm Pricing.
  6. Right-sizing law firm staffing
    What do clients really want? The same level of service at a lower cost, said Barbara Hendrickson in an article in Canadian Lawyer Magazine titled: Do clients really hate billable hours? Her article offers a half a dozen solid tips for implementing AFAs, which among them is adjusting the staffing model to provide clients with that level of service at a lower cost. She wrote, “Having access to legal service providers who are expert or experienced in the areas of the legal services to be provided is essential. The fixed retainer model is, for the most part, inconsistent with a training model (i.e. articling students or junior associates).”
  7. Focus on value rather than cost cutting
    In a “cheat sheet” on AFAs, Inside Counsel contributing writers Alanna Byrne and Ashley Post say experts believe AFAs shouldn’t only be about costs. “Instead, companies should target areas of their company with high spend and tailor their AFA usage to the case at hand–for example, using fixed fee arrangements for matters that are more predictable, such as labor and employment or IP work.”
  8. AFAs can still be billed monthly
    Law firms need to keep the lights on too and cash flow counts. This idea nests well with the concept of shared risk. Writing in Legal Week, in a post titled, The great fixed fee debate — the lawyer’s argument, law firm partner Barry Goss said, “If clients agree to a fixed fee then they should be prepared to pay that fee on, say, a monthly basis during the transaction, not merely at completion…Fundamentally a law firm’s biggest risk is its ability to manage its cash flow (in recent history this has been the biggest cause of law firm failures).”
  9. Use data to drive pricing, predictability
    What’s a matter going to cost the corporate legal department? That is in essence the driving force behind AFAs — its economics. “When properly analyzed, data about past legal matters and data from across the legal industry as a whole can arm GCs with the information they need to more accurately predict their legal spend and build trust and respect with their CFOs,” writes Kris Satkunas in an Inside Counsel article titled How to use analytics for greater credibility at the business table. “The key is not only estimating the cost of a matter but assessing the potential range of costs along with the drivers of that variability. This information brings real value to the company.”
  10. Collaboration via knowledge management is key
    “More legal work has also been moving to law firms in the 201–500 attorney size category, which are more likely to offer alternative fee arrangements (AFAs). When a firm uses an AFA, such as a fixed fee arrangement or blended rates, efficiency and collaboration become paramount for profitability,” said Alison Nina Bernard of Fried, Frank, Harris, Shriver & Jacobson and Niki Kopsidas of Blank Rome. This observation was included in a New York Law Journal titled Building ‘Collaborative Intelligence’ in a Challenging Legal Market and cites data from the LexisNexis CounselLink Enterprise Legal Management Trends report. “Knowledge management is a key component to effective collaboration within an organization. Knowledge management involves the use of technology to codify a firm’s accumulated knowledge and makes that information available to its attorneys.”

Is GSK’s success in moving its law firms from billing by the hour to alternative fee arrangements a harbinger of similarly comprehensive adoption of AFA’s across the legal industry? Maybe. As we noted in our most recent Property & Casualty Claims and Litigation AFA Usage Survey, the use of AFAs among U.S. P&C insurance companies grew from 69 percent in August 2015, to a healthy 76.9 percent in 2016 — another sign that the continued dominance of the hourly fee is no longer a given.

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GSK, AFAs and the Continuing Evolution of Legal Billing

EDA vs. ECA: In Search of a New Approach

In the U.S., 96 percent of all civil cases are resolved short of a jury trial. Along the way, however, costs associated with litigation discovery (e.g., preservation, collection, review, production) are financially burdensome to both the plaintiff and the defendant. In many instances, the opposing party will even strategize on how to make it as difficult as possible to comply with the eDiscovery process, including time and cost to respond to discovery requests. How do you know what your risk is? Should you settle? Do you have a sound legal strategy?

These are the kinds of questions that litigators must ask themselves during the very first phase of the eDiscovery process. They have a crucial need to determine their risks/benefits of taking a case to trial versus entering into what is often a series of protracted settlement discussions. The most pressing issue at hand — developing a winning litigation strategy — should not get lost in a discussion about data management.

This is the second post in a two-part series regarding the evolution in the way that the litigation technology industry has been searching for consensus over distinctions between a pair of key concepts in eDiscovery: Early Data Analysis (EDA) and Early Case Assessment (ECA).

In our previous blog post on this subject, we reviewed how the proliferation of eDiscovery software tools has transformed ECA into more of a data management exercise. These tools — many of which were developed in response to rising concern from in-house counsel about the soaring expenses of preservation, collection and review — gradually shifted the focus from case assessment to data assessment.

But a growing number of industry experts are observing that a new generation of technology has arrived to make the EDA/ECA distinction meaningful at last. Specifically, we now have software tools available that can empower litigators to make better decisions about their cases by having more useful insights at earlier stages in the development of litigation strategy.

“A new approach to eDiscovery technology development should give a litigation team the tools to identify clear litigation objectives and then build a plan that is focused on achieving those goals,” said Steve Ashbacher, vice president of litigation solutions with the LexisNexis software and technology business. “It should provide a way to analyze the case by seeing the full story so you can more clearly see what your case is trying to tell you.”

This new approach would basically revolve around the idea that eDiscovery should not be conducted based on a linear review continuum, but rather through the lens of early case assessment, according to Ashbacher.

“Remember, the primary purpose of EDA is not to learn every fact or review all documents, but rather to gain enough information about the stakes in front of you in order for the litigators to decide how to proceed,” he said. “The more that your eDiscovery software tools can help you obtain that knowledge, the less money and time you will need to spend on setting your case strategy.”

Advanced search engines power the new generation of eDiscovery software tools, which feature visual analytics that are designed specifically for the rigors of eDiscovery. This new technology disrupts the traditional linear review model, from PreDiscovery to production, by rethinking the role of ECA and providing powerful analytics throughout the eDiscovery process.

One example is Lexis DiscoveryIQ, a fully integrated enterprise eDiscovery software platform developed by LexisNexis and enhanced by Brainspace Corp.

“With Lexis DiscoveryIQ, LexisNexis and Brainspace are challenging the status quo,” said Ryan Bilbrey, managing director of OmniVere, LLC, and a member of panel of advisers for the development of the new platform. “Disruption is a term that’s tossed around almost callously in legal technology circles these days, but in this case, here is a team that has reimagined the eDiscovery process to help litigation teams achieve vastly better results.”

The result is a comprehensive platform, focused on ECA, which brings to bear the most advanced eDiscovery technology and analytics tools available. This and other new eDiscovery software tools are shattering the myth that visual analytics and other sophisticated tools can only be used on “bet the company” matters by making them cost-effective for any size of case.

The “EDA vs. ECA” conversation is not new in our industry; thought leaders in eDiscovery have been surfacing this confusion in terminology for a few years now. But here’s what is new: this conversation is no longer just a deep dive into IT minutiae for data scientists.

“Advanced technology solutions have now been commercialized in a way that makes the distinction between these two things crucial for litigators to understand,” said Ashbacher. “Litigation teams — both in-house and outside counsel — can now put these software tools to work in a way that provides them with earlier insights into their cases, resulting in better litigation strategy at reduced costs to their clients.”

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This post is by Daryn Teague, who provides support to the litigation software product line based in the LexisNexis Raleigh Technology Center.

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EDA vs. ECA: In Search of a New Approach