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Michael Mills is the Bill Parcells of legal technology: an intelligent, creative and confident leader. So when Mills, the information technology director at New York’s Davis Polk & Wardwell, talks, people listen. These days, he is talking about what’s happening across the Atlantic. “The British firms are doing some things that a lot of American firms haven’t even dreamed of,” he says. “It’s very impressive.” Four of London’s “Magic Circle” firms — Linklaters, Clifford Chance, Allen & Overy, and Freshfields Bruckhaus Deringer — have recently made huge technological strides, especially with extranets. Extranets enable a firm’s lawyers to talk to, and exchange documents with, their clients over a secure Internet connection. Recently, these firms have taken the extranet idea one step further and launched online “deal rooms” where lawyers from both sides of a deal can join in and swap important documents. What’s noteworthy is how hands-on the London firms have been. Many large U.S. firms, such as Heller Ehrman White & McAuliffe and New York’s Cravath, Swaine & Moore, have outsourced their extranet platforms to vendors such as New York’s IntraLinks Inc. on a deal-by-deal basis. The London firms have built their own deal rooms. This is more labor-intensive, but the firms believe it gives them speed and flexibility and offers clients a greater sense of security. “IntraLinks might well be a good product,” says Hugh Crisp, Freshfields’ head of knowledge management, “but they probably can’t put something together for us as quickly as we can do it ourselves.” Timothy Poole, the managing partner of IntraLinks’ London office, disagrees. “We can quibble over the number of minutes it takes to get a deal room up and running,” he says, “but we can get a fairly big one going in a matter of hours.” Speed and flexibility can often be essential at the Magic Circle firms, where a high-stakes merger or structured-finance deal might hinge on 11th-hour talks involving a client in Frankfurt, opposing counsel in Paris and investment banks in New York and Hong Kong. Says Mills, “The global nature of Magic Circle practice makes extranets a must.” The Magic Circle firms compete intensely for the United Kingdom’s and Europe’s biggest and sexiest clients. Their extranets are one way the firms try to set themselves apart from the competition. Clifford Chance markets its deal room as “Fruit Net,” named after a multijurisdictional financing deal called Project Fruit (those witty Brits!). Linklaters calls its deal room “[email protected]” Allen & Overy’s extranet is part of a larger platform called “newchange.” The firms don’t routinely charge additional fees for their extranets, but they do brag about them. “The competition is fierce in the technological arena,” says Jonathan Brayne, a partner at Allen & Overy, “but I think all the one-upsmanship actually drives the progress and makes life that much better for everyone’s clients.” So far, U.S. firms don’t seem to have felt the same competitive need to develop extranet services. Davis Polk is one of the few American firms that has created an elaborate extranet system on par with those of the Magic Circle firms. And more are likely on the way. “Years from now, everyone will have advanced extranets,” says Mills, “and they’ll seem as vital to legal practice as the phone and Xerox machine.” But the British firms are doing more than just churning out extranets. A couple of the Magic Circle firms are making splashes with other Web-related platforms. Linklaters, for instance, has launched its Blue Flag “expert system.” On Blue Flag, clients can get answers to a whole range of basic legal questions. A client who needs to find out whether, say, a specific British banking regulation applies to a set of facts goes to the site and answers several questions about the deal’s regulatory status. The site functions like a decision tree: Each answer elicits a more specific question, until sufficient information has been taken in. Then the site provides links to pertinent information and even advice. Unlike its free extranets, Linklaters charges for these products. And buyers beware — they’re not cheap. Blue Flag subscribers pay a one-time initiation fee of around �125,000 (about $182,000) for the first year and an annual flat fee of around �40,000 (almost $58,000) for each subsequent year. But Mark Boggis, the commitment manager for Blue Flag, calls it a great value. Boggis maintains that before Blue Flag, a client could rack up a �125,000 lawyering charge for a single comprehensive survey of, say, all of the European Union nations’ derivatives laws and regulations. “Those are detailed, comprehensive platforms that have a tremendous amount of coverage,” says Mills. “Davis Polk certainly doesn’t have anything like that.” Coming from him, that’s saying something.

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