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Kmart corp.’s request for a proposal (RFP) for a new national labor counsel was just a little different from anything Foley & Lardner’s chief information officer, Douglas Caddell, had seen before. Only four major requirements were listed in the RFP, Caddell said; three of them consisted of standard boilerplate language, requiring quality legal services and cooperation. But the single most important item on the labor counsel shopping list for Troy, Mich.-based Kmart was that its new national counsel be able to provide matter management through an extranet. “They said that you could provide any and all of items two, three and four, but you must-and they used the word ‘must’-you must provide number one above,” Caddell said. The members of Caddell’s team got to work; when they went to proposal, they didn’t just talk about the possible extranet. Instead, they showed up with a production version, with document sharing, calendaring and other functions in place, capable of being used the next day. The final stage of the beauty contest involved Caddell talking with the general counsel for an hour about Foley & Lardner’s technological capabilities. Foley & Lardner won, and now represents Kmart in labor matters nationwide. That was two years ago, and Caddell was surprised that technology concerns played such a big role, but he wouldn’t be now: “We’ve seen that in another half-dozen or more proposals since that time.” Once again, fewer purchases Today, technology services are entwined with legal services, which makes this year’s technology survey published by AmLaw Tech-a sister publication of The National Law Journal-more relevant than ever. The magazine surveyed the AmLaw 200 firms; 137 firms responded, revealing which technologies they’re investing in, what software they prefer, how technology concerns are handled within the firm and how much technology professionals get paid. This year, much like last year, law firms struggling in the shaky economy didn’t purchase every new product or application. But firms can’t afford to forgo the applications and tools that clients need and request. “I’ve actually sat in on at least one pitch where the client said, ‘The ability to access information from you via the Web is an essential part of this deal,’ ” said Warren Jones, director of information technology at Pillsbury Winthrop. Part of the reason clients are becoming more demanding of law firms is that in-house departments often lack the resources to develop technology tools on their own. That was the central finding of the In-House Tech Survey conducted by another sister publication, Corporate Counsel, in June. So what is it that clients are asking for? Which technology advances promise to drive client relationships forward-and which applications are already driving information technology directors up the wall? This year’s survey gave readers a chance to supply some of the answers. Extranets aren’t new, but expectations for them are already changing: Clients often require an extranet as part of the package of services. “Three or four years ago, you might find [technology requests in an RFP],” said Peter Durr, director of information technology at Katten Muchin Zavis Rosenman, who remembers such early requests as being sporadic and nonspecific. “Now they want to know: Can you do extranets? What is your e-mail capability? Do you have PDAs [personal digital assistants] for client-to-attorney information?” Although basic functions such as document sharing are easy enough to create, there are still traps for the unwary. Jones said that when Pillsbury began setting up extranets, the firm originally tried to adapt its document-management software from iManage. The problem? It only worked under one browser, Internet Explorer. “We thought that we were doing a great service for one of our clients . . . but it turned out the client had a diverse browser set,” he said. (Laura Heisman, a spokeswoman for iManage, said that its product should work with both Internet Explorer and Netscape.) Fortunately, more vendors are stepping up with better products to handle the extranet job. Chief Information Officer Sherry Lalonde of Palo Alto, Calif.’s Cooley Godward said, “We’re seeing much more sophisticated choices; not just one or two vendors, but six or seven vendors.” Pillsbury works with Hubbard One. Its FirmConnect product is easy to set up and customize, Jones said. Other up-and-comers in the field include Documentum Inc.’s eRoom (which can be configured to provide document sharing, calendaring and real-time communication specific to an individual matter’s needs) and iConect (which is designed to facilitate large-scale litigation). Fully 29% of responding firms are running more than 20 extranets (up from 21% last year), and the number of firms that run fewer than five extranets continues to drop steadily. Instant headache When Am Law 200 firms were asked whether they let their lawyers use instant messaging (IM), the response was a statistical dead heat: 67 firms allow it, 69 don’t. At the responding firms that did not allow instant messaging, the overriding concern was security: Instant messages blow a hole through a firewall big enough for a virtual Mack truck. Instant messaging also hasn’t been fully tested in courts; how binding are promises made or advice given in an instant message? There are no standardized methods of logging IMs and no consensus on whether they constitute “material communication” that should be kept as part of a client file. Many top firm technology executives said that until a more standardized and secure system was available, instant messages remain an unacceptable legal and security risk. Also, instant messages (and the ads that accompany them) gobble up bandwidth. “When we review our logs and we look at the users at the top of the [bandwidth-usage] list, it’s the people using instant messaging,” said Gerald Reid, chief information officer at New York’s Milbank, Tweed, Hadley & McCloy. “Before we got to them, of course.” The top user at the firm was a partner who spent maybe 10 minutes a day on the Web, but sent frequent messages to his secretary. Nonetheless, firms, particularly those with clients in the technology industry, are finding that their clients want or even require instant messaging access to their attorneys. Caddell said, “If [instant messaging] becomes a viable business tool-that’s why we’re here, to provide business tools. But at the same time, do you put the entire firm at risk for one or two clients?” Some attorneys have tried to strike a balance. Chief Information Officer Stova Wong said that Paul, Hastings, Janofsky & Walker prefers to offer alternatives to clients who request instant messaging; instead, the law firm works to collaborate very quickly via e-mail or through its chat rooms, which, he said, are more secure and can be logged. Preparation kahuna The trend toward investing in disaster recovery remains strong. However, fewer firms are concentrating all their energy on planning for what Chief Information Officer James Dobrzeniecki at Richmond, Va.’s McGuireWoods calls the “big kahuna, level five disaster,” and are instead thinking in terms of business continuity. They want to be ready when an earthquake strikes (no small concern for Southern California firms), but it’s the day-to-day disruptions that are gaining higher priority. Dobrzeniecki said that he spent most of his energy this year preparing for those kinds of day-to-day business interruptions. “We looked at the things that would break the most, and resolved those the first,” he said. “What components are more unreliable? We threw our money, time and effort into fixing those.” So McGuireWoods tweaked its servers and communication lines, making them fault-tolerant and capable of assuming extra traffic. Most regional or nationwide firms are using one or more of their offices as hot sites, capable of storing the data of another office. But some firms, such as Washington’s Wiley, Rein & Fielding, still need to build separate hot sites. With 95% of its 176 lawyers in Washington, and a handful more in nearby McLean, Va., Wiley has the data needs of any large firm, but not the reach. Chief Information Officer Brett Don said that his firm is concentrating on enhancing internal storage, but will create a faraway hot site soon. Katten Muchin’s Durr said that his firm will use its New York and Chicago offices as backup sites for the rest of the firm. But those cities are vulnerable. “It would be much nicer if you had a large office in Nowhere, Montana, but that’s not the reality,” Durr said. Fayetteville, Ark., isn’t far from nowhere, but it offered up proof that a major calamity can happen anywhere, as Kenneth Kroeger, chief information officer of Omaha, Neb.’s Kutak Rock found out. Only 60 days after the firm opened a new branch office in Fayetteville, it burned to the ground. Thanks to solid disaster-recovery efforts by his staff, the small office was up and running in new space within 24 hours. Firms are still holding off on optional purchases; lawyers longing for flat-screen monitors at the office will probably just have to keep waiting. The same goes for software; some chief information officers are tired of buying every update. Although the number of firms using Windows XP as their desktop operating system rose sharply this year, from 11% to 30%, many others are in no hurry to switch. When a Microsoft representative tried to sell XP to Milbank, Reid said, “I said to him, ‘Well, name your features on Office XP that are so superior to what you have in Office 2000 that when I tell my offices I want to do a conversion of 1,000 desktops, they’ll put their hands up.’ And he couldn’t.” Similarly, Chief Information Officer Steven Agnoli’s long-term plan at Kirkpatrick & Lockhart called for replacing its personal-computer infrastructure this year, but he decided to hold off for another couple of years. A few firms reported that equipping offices with high-speed copier/scanner machines turned out to have a sharp effect on productivity, particularly for quickly scanning evidence for electronic filing. Another change that made a big payoff: Milbank’s Reid invested in an AltaVista search engine to work with the firm’s DocsOpen document-management system. “Now anyone in any office around the world can do full-text searches [of stored documents],” Reid said. “As fast as AltaVista works on the Web, that’s how fast we can do searches.” Handheld PDAs increased in popularity last year, with the number of firms supplying them to attorneys rising from 51% to 73%. The reliable BlackBerry remains the top banana, used by 88% of firms that supply handhelds, although newcomer GoodTechnology has made early inroads, scooping up 10% in its first year. Welcoming WiFi AmLaw Tech asked about wireless networks (WiFi) for the first time this year; 47% of responding firms have established wireless e-mail networks at their home offices, and virtually everyone interviewed expected this percentage to increase quickly. Durr reported that Katten Muchin is on the verge of piloting its wireless network in Chicago, and when the firm purchases new laptops in the first quarter of 2004, they’ll all be equipped with wireless access. But a few firms are holding back, including Kirkpatrick & Lockhart. “There is very little standardization at this time,” said Agnoli. “Investments now could be throwaways later.” Although Kirkpatrick supports lawyers’ BlackBerrys and integrates them with e-mail, Agnoli said that the firm will wait to create wireless access within its offices until a secure, standard solution is in place. Chief Information Officer Robert Meadows of Heller Ehrman White & McAuliffe said he is searching for the best unified messaging solution, something that would synthesize the firm’s voice and text messages. “Whether it’s messaging, e-mail, fax or voice, these are key client-source technologies,” he said. “We want to make it easy for our personnel to be responsive.” Because, in the end, it all comes back to the clients.

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