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As we welcome 2005, our corporate landscape is littered with the remnants of companies — including law firms — that failed to see the future and seize opportunities. It’s time to heed their warnings. Clients are already demanding changes from their law firms. Unless you want to join the other fossils, it’s time to change your ways. Here’s some advice for corporate counsel and their lawyers: � Commoditize routine legal transactions. If this were not possible, Nolo Press would not be in business. Companies are now using assembly tools to help their legal staff create standard nondisclosure agreements, employment offer letters, leases, etc. Couple that with an electronic signature to make the transaction paperless, add a contract management system that properly stores documents for record keeping — and you’ve eliminated 90 percent of a legal professional’s time to create the document. Any routine document or transaction can be generated this way. If the situation happens to be a little more complex than you originally thought, you can always call in a lawyer to review and finalize the document. Law firms should be developing these technologies for their clients’ use rather than selling the same “fill in the blank template” over and over again and charging attorneys fees to generate the document. With technology, your firm can reduce the cost of producing documents, improve profit margins through licensing fee structures and redirect human capital more effectively. � Create consortiums to share needed work. Acting alone, many companies’ legal departments have built reputations for driving change. What if companies combined their experience and creativity? Only imagination limits the new technologies that would evolve, delivering best practices better, faster, cheaper and deeper than ever before. In one example, five companies with global operations have joined together with a British-based law firm to develop e-learning programs for managers that are designed to provide training about employment laws in various countries. The content is provided by the law firm, which can then use the training module and application developed by the participating companies as a marketing tool to offer to other clients. The companies get the training. Win-win! It’s a fabulous partnership in which the companies save money for much-needed training and the law firm can market a 24/7 e-learning program via its Web site and earn money by licensing the training to other companies rather than sending in lawyers to do the training in person. � Move your legal work to lower cost firms in the Midwest, South or other regions away from high-cost centers. This may not sound like technology at work, but it is. Extranets provide ways for companies to work with firms across the country — not to mention other parts of the world. Web-based worksites are always open, always on. Workflow tools — putting the right person in the right order at the right time — can dramatically improve productivity and reduce costs. For example, patent prosecution works well for this model. And if the client uses an online patent application tool for its employees, connecting to the firms that do the work, clients improve the patent prosecution for the company and the firms make more money through an increase in patent filings. � Bundle work for greater leverage. A solid request-for-proposal process can achieve incredible results. Combining your buying power by bundling all of your legal work into one bid — such as all real estate work in the United States or all legal work in all practice areas for a particular country — your legal department can improve the quality of work it receives from outside counsel while decreasing its costs. Coupled with a consortium of legal departments, a combined approach to legal spending represents a ready-made set of customers that can motivate outside law firms to acquire the right technology to get the work done in a more efficient and price-conscious manner. With a volume of similar transactions over which to spread the work, firms can be more aggressive on pricing than if they bet the ranch on one transaction while looking to improve their profit margins. � Use technology, not lawyers, to perform legal work. Like e-learning and self-service document creation, technology can be deployed to process routine, commodity legal work for which firms charge clients on a time basis. Why don’t law firms license their templates to clients’ legal departments? Why don’t firms use document assembly tools to decrease the time it takes to create a separation agreement or an employment agreement? Better yet, let the company’s legal department use that tool to create the agreement in house. Licensing legal work is the future. It scales and it doesn’t involve the time of a lawyer to do the work. � Create competition by always bidding your legal work. Competition improves product quality and reduces prices. General counsel, when issuing RFPs, should require briefings on available law firm technology before awarding bids. Some firms and companies now use online “reverse auctions” as one way to leverage technology in the RFP process. Reed Smith, for example, recently created an online database for new privacy laws that affect medical providers. Members of the alliance that used an RFP to produce this site pay a fixed price per year to find quick answers to compliance questions. � Set milestones for law firms and give rewards for exceeding goals — and penalties for missing the mark. As firms move toward true partnerships with their clients, they must be prepared to share the risks and rewards. Just as companies give bonuses for high achievement, firms should also be rewarded for success — whether it involves a big win in the courtroom or helping a company avoid a lawsuit in the first place. Jump aboard the electronic data discovery bandwagon. EDD tools improve discovery and speed the judicial process. Effective extranets help clients and firms share documents and information, improving decision making. Savvy firms will push for standards for EDD and extranets so that clients could all run off the same application. � Move 80 percent of your fees to a non-billable hour basis. Hourly rates hinder progress. There’s simply no incentive for firms to improve productivity if they make more money by billing more hours. In-house counsel must demand fixed prices for work. And firms must learn that a fixed price is not based solely on time. Fixed prices encourage firms to use more technology to improve productivity while clients save in legal fees. � Be merciless in measuring the success of technology and process changes based on productivity and efficiency. None of any of this really matters if you can’t measure success. There are technology applications or process changes that don’t result in a win. Worse, these changes can lead to opposite results. As a result, measuring is key. Whether it involves surveying client satisfaction, evaluating results, comparing costs, make sure that whatever measuring you do is aimed at capturing the success that you are trying to achieve. Just like machinery did during the Industrial Revolution, technology has now revolutionized the way businesses work. But it’s not enough to have BlackBerrys and knowledge management systems. We all need to embrace these advances to change the way legal services are delivered. One partner I work with copies his assistant on all e-mails so that the assistant can print out and file hard copies of all that e-mail. I’m not sure there’s hope for this partner. But with clients demanding improved productivity and reduced costs, savvy lawyers will recognize the value in investing their time, energy and money when it comes to purchasing and using technology tools. You’ll be shocked and pleased at the return on investment. Laura Owen is director of worldwide legal services at Cisco Systems Inc. in San Jose.

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