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The uneventful passing of the Y2K crisis was bad news for law firms hoping to litigate computer crashes, sewage treatment plant failures, and midair crashes until the last dog dies. But it’s been a blessing for those firms that had put off technology projects while they fixed their internal Y2K bugs. This is the year that firms can finally get serious about serving clients by building Web-based projects. The accompanying fifth annual AmLaw Tech Survey of large law firms captures the early steps in the migration of legal services and even the practice of law itself to the Web. Four out of five firms have created extranets — secure, private Web sites — for clients, up from only slightly more than 50 percent the year before. Nearly one firm in five supplies lawyers with the Blackberry, a wireless e-mail device that had no presence in the legal market last year at this time. The number of firms that won’t send confidential documents across the Net, even in encrypted form, has fallen in half, from one in five to one in ten. Even if they are not yet learning to love the Net, lawyers have become much less paranoid about it. And in a profession that is paid to be paranoid, that’s progress. The AmLaw Tech Survey looks at the technology in use at the 100 largest firms in the U.S. This year 94 of those firms responded, our best turnout yet. Among the traditional product categories, there was little movement. The market-leading products last year — Word, Hummingbird/PC DOCS, Elite, and Summation, to name a few — maintained their leads. What’s fascinating about the survey is not so much market share statistics as what firms tell us in their own words about their technology initiatives. New York’s Wachtell, Lipton, Rosen & Katz is so well regarded that its lawyers could probably write memos with quill pens and communicate via telegraph, and their clients wouldn’t mind. But the lawyers would. So the firm is giving all its lawyers high-speed Internet access at home so that they can practice law at the speed of commerce. Los Angeles’s Latham & Watkins created an extranet last year to help close a $750 million project financing involving 24 banks in the Far East, Middle East, Europe, and North America. It also has another extranet to help its health care clients manage the myriad laws and regulations they live under. Without the extranet, says partner Daniel Settelmayer, the firm would lose some of this work to firms with lower billing rates. St. Louis’s Bryan Cave has set up e-commerce sites to help clients navigate foreign trade regulations and sexual harassment compliance. Holland & Knight, a Tampa-based firm with 21 offices, is using the Web as the platform for lawyers on the road to retrieve voice mail and faxes, documents within the firm’s document management system, and e-mail. (These Web services are provided by Lucent Technologies Inc., Hummingbird Communications Ltd., and Microsoft Corporation, respectively.) Technology and the Web are the “glue and grease to facilitate day-to-day operations and our tremendous growth and expansion,” says Ralph Barber, Holland & Knight’s chief information officer. The firm has acquired new outposts in Boston, Chicago, and New York the past three years. It’s much easier to train, support, and manage the lawyers in the new offices using Web-based applications, according to Barber. As this issue was going to press, San Francisco’s Morrison & Foerster was about to start routing phone calls out of its Hong Kong office across the Internet through a virtual private network. Lawyers won’t notice the difference in quality, says Jo Haraf, the firm’s chief technology officer. “A packet is a packet is a packet,” she says, referring to the method of sending data via Internet Protocol. But the firm ought to save up to 70 percent of its monthly connection costs by moving the office off frame relay and onto the virtual private network. Most of these firms are using the Net to improve communications, not to radically alter the way lawyers practice law. Duncan Sutherland, the chief technology officer at Washington, D.C.’s Wilmer, Cutler & Pickering, says that in most cases that’s where the Web and technology will work best for lawyers. “Technology does not give you the same leverage as in manufacturing,” he says. Web-based applications haven’t exactly taken over the world: Plenty of plain-old desktop applications remain at firms (along with plenty of lawyers who wish that they could return to facsimiles and Filofaxes). Except for e-mail, most of the tasks that lawyers do daily are still on applications stored on their hard drive. They write memos on Word, a traditional piece of software, or its fading rival, WordPerfect. They retrieve documents with iManage or PC DOCS, two desktop products. (Both products have Web components, but it’s still not the way most lawyers use them.) And lawyers find and review discovery documents with Summation and Concordance and a slew of other desktop applications. These core markets — word processing, document management, and litigation support — are all duopolies and don’t show much signs are changing. The other major segment, time and billing, is a duopoly that almost became a monopoly. Last year Sydney, Australia’s Solution 6 Holdings Limited acquired CMS/Data Corporation, the number two time-and-billing vendor for U.S. law firms. CMS’s main competitor, Elite Information Group, Inc., also accepted an offer from Solution 6. But the Federal Trade Commission’s staff opposed the merger, which would have led to Solution 6 controlling about three-quarters of the large firm accounting market. At press time, the companies called off the deal. Elite has not been resting, waiting for the merger to happen. In early May the vendor announced it was creating an application service provider, e-Connect. Application service providers, or ASPs, are Web sites that rent software and services. E-Connect will let firms handle their time-and-billing needs on the Web without the need to install, troubleshoot, and upgrade software. Elite has also created Timesolv, an ASP for solos and small professional service firms. Seventeen of the 94 surveyed firms say that they have used an ASP in the past year, but that’s an inflated number. Most of the times a firm mentioned an ASP the vendor was actually doing something else, like building or managing an extranet. The most recognizable legal-specific ASP is casecentral.com, a litigation support service that has made a big marketing push. Two members of The Am Law 100, Kansas City, Missouri’s Shook Hardy & Bacon and Washington, D.C.’s Howrey Simon Arnold & White, say they are using casecentral.com to store and retrieve litigation documents. D.C.’s Shaw Pittman is using Interliant, Inc., (www.interliant.com), another ASP. In a world moving to the Web, is there room for a new traditional piece of software? CaseMap is proof that there is. In the survey, CaseMap grabbed a 17 percent share of the big-firm litigation support market — not bad for a first-time entrant. Other relatively new legal software products, like InterAction and iManage, did not do so well in the first year that each appeared on the survey. Unlike most other litigation support software, which helps lawyers retrieve documents, CaseMap helps them organize facts. It improves upon the word processing documents that lawyers often use to create case chronologies, says Greg Krehel, chief executive of CaseSoft, the publisher of CaseMap. Selling a product that didn’t fit neatly into an already established category was not easy, says Krehel. But it’s working. CaseMap now has a blue-chip list of clients, including New York’s Davis Polk & Wardwell and San Francisco’s Heller Ehrman White & McAuliffe. Don’t expect CaseMap to stay on the desktop forever. CaseSoft is already working on porting the product, or at least portions of it, to the Web. Related Chart: The Am Law Tech Survey Related Chart: The Big Picture

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