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About four years ago, Winston-Salem, N.C.’s Womble Carlyle Sandridge & Rice placed itself on the bleeding edge of the legal technology world when it spawned a separate business unit called ClientPlus. ClientPlus sold comprehensive legal technology support and advice to Womble Carlyle’s clients. And it grew quickly. The service failed to cover its expenses in 1997, but last year it grossed nearly $23 million. Earlier this year, the parent decided that the child was ready to try life on its own. So on Nov. 1, Womble Carlyle spun ClientPlus off into its own entity, FirmLogic. FirmLogic will continue to perform the same types of “ancillary legal services” once offered to Womble’s clients through ClientPlus. LONG LIST OF SERVICES The list of these services is long. It includes everything from custom software and Web development to litigation support and settlement administration. For instance, FirmLogic can quickly set up a database to house a company’s employment records. Or it can create a document assembly program for drafting contracts. And it’s administering the $440 million refund resulting from the successful challenge of North Carolina’s intangibles tax. Womble Carlyle represented a class of 278,000 plaintiffs that had been illegally charged a tax on out-of-state stocks in the early 1990s. As a stand-alone entity, FirmLogic initially will be working on expanding its client base rather than offering new products and services. “We’ve put ourselves in a great position to target small and medium-sized law firms,” says FirmLogic’s public relations director, Marvin Chavis. Before the move, Chavis was Womble Carlyle’s director of technology. Chavis explains that working out of a large law firm made it hard to persuade other law firms to work with them. “We hope that will start changing now,” he says. To get the ball rolling, FirmLogic recently teamed up with two entities familiar with the way law firms use technology. In April, it acquired Atlanta-based Holland Shipes Vann Legal Consulting Services. Then, in October, FirmLogic acquired Houston-based Enhanced Systems & Solutions, which specializes in back-end systems implementation at law firms. Most of FirmLogic’s employees, however, are in Winston-Salem, N.C. So far, more than 250 former Womble Carlyle employees have been dispatched to FirmLogic’s new office, including Chavis and Hassel L. Parker, the firm’s former executive director. Parker is now FirmLogic’s president and chief executive. Womble Carlyle has always maintained separate staffs for ClientPlus and for the firm’s internal technology needs. So the transfer of employees should not affect the lawyers. The firm holds a 90 percent stake in FirmLogic, with HSV and Enhanced Systems splitting the remaining 10 percent. “Ultimately, the thinking is that we might have a chance to sell the company or take it public,” says Womble Carlyle’s managing partner, John Garrou. “We really thought that separating the company from the firm was the most effective way to maximize its value.” Garrou also hopes that spinning the company off will help attract top-flight management personnel. Ethical rules prohibit law firms from granting ownership interests to nonlawyers, but equity shares can be freely doled out at a private corporation. And FirmLogic will likely avoid the conflict-of-interest problems that kept ClientPlus from associating with certain companies and law firms. Will it work? Perhaps. Earlier this year, John Tredennick spun off CaseShare Systems from his firm, Denver’s Holland & Hart. And so far, he’s managed to bring in a handful of clients and make a name for himself in the legal-technology world. SOME SKEPTICISM But not everyone thinks it’s a foolproof notion. John Hokkanen, an Austin, Texas-based legal technology consultant, wonders whether Womble Carlyle gives up its “strategic advantage” by allowing all comers to use FirmLogic’s services. “Womble Carlyle used to offer a unique set of services to its clients, which gave it a leg up on its competitors,” he says. “The firm might be giving up its ability to leverage its technology to bring in more clients.” Womble Carlyle’s Garrou admits that the issue “isn’t trivial.” And it’s one the partnership had to consider before making a final decision. But he says that as FirmLogic grows, it’ll pick up clients that have no relation to Womble Carlyle. Says Garrou, “We’ll send clients to them, and they’ll naturally start sending us business. We look at this as a win-win situation.” Of course, when have you ever heard a business manager refer to an alliance as a win-lose situation? For more on Womble Carlyle and FirmLogic, the firm’s technology spinoff, go to www.wcsr.comand www.firmlogic.net, respectively.

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