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On a dreary Tuesday in December of 1998, over 100 lawyers and law firm IT directors filed into a conference room on Microsoft Corporation’s campus in Redmond, Wash. They were greeted there by a young Microsoft staffer named Cory Linton. Linton had invited the lawyers to Redmond to talk about Word, Microsoft’s word processing program. At the time, many big law firms were switching from the Corel Corporation’s WordPerfect to Word. But it annoyed Microsoft that so many lawyers, including its own antitrust counsel — New York’s Sullivan & Cromwell — still used WordPerfect. The company figured that a quick, two-day conference would allow it to answer lawyers’ questions about Word, introduce some new Word features, and generally spread good vibes about the program. But things got off to a rocky start. Linton began the day by trumpeting a bunch of new tools that the lawyers found useless, including one that made it easy to publish Word documents on the Web. The spiel left the audience uncharacteristically speechless. “It was amazing,” recalls one lawyer in attendance. “They were more interested in showing us how to pull stock quotes from Antarctica than they were in addressing Word’s core problems.” From there, the tension grew. The lawyers began shouting complaints about Word. “Styles,” Word’s collection of formatting templates, were counterintuitive. It was hard to incorporate multiple changes into a single Word document. Numbering paragraphs in Word was nearly impossible. And Word documents became corrupted too often. Linton and his team did what they could to quiet the room, but they were outmatched. “It was a difficult situation,” says Linton. “We figured out that it was best just to learn as much as we could and try to do a better job on Day Two.” During the night, Linton met with Microsoft designers and higher-ups; he greeted the crowd in the morning with some answers and a reformed attitude. “We did a lot more listening the second day,” he says. After the conference, Linton delivered a report to his bosses. They listened, too. In short order, Microsoft hired consultants, put together a team of outside advisers, and went to work on the lawyers’ problems. A year later, the company unveiled the results. “Word 2000 was a great step,” says Tim Armstrong, director of information systems at Houston’s Vinson & Elkins, a recent Word convert. “It’s more stable, it’s easier to customize, and a lot of its bugs are gone.” V&E isn’t the only one switching over. Since 1995, 62 of the nation’s 100 biggest law firms have left WordPerfect for Microsoft Word, according to AmLaw Tech surveys. And this year, only 12 reported using WordPerfect as their primary word processing application. So, Microsoft’s improvements to Word don’t bode well for WordPerfect. “In all likelihood, WordPerfect will be off the map [at large law firms] within five years,” predicts Armstrong. Getting lawyers to switch to Word was no small achievement. To the extent that lawyers can be said to love a piece of software, it was WordPerfect that they loved. It was often their first flirtation with computers, and the memory lingers. WordPerfect was a snap to use. With WordPerfect, users formatted documents by typing simple keyboard commands as they created a document. WordPerfect’s Reveal Codes function made the formatting transparent. By contrast, in a lot of minds, Word’s Styles were clunky and poorly designed. So how did Word win the battle? Through a three-pronged strategy. Long before Microsoft zeroed in on the biggest firms, the company leveraged Word’s dominance in other markets and began exploiting big mistakes made by WordPerfect’s various owners. Word processing software programs were first developed about 20 years ago, back in the dark ages of DOS, monochrome screens, and floppy disks that were really floppy. The Provo, Utah-based Satellite Software International Inc., brought WordPerfect out in 1980 (Satellite Software changed its name to WordPerfect Corporation a couple of years later). Microsoft followed with Word in 1983. By the mid-1980s, a lot of software companies were writing word processor programs. In addition to WordPerfect and Word, there were WordStar, MultiMate, XyWrite, Volkswriter, Ami Pro, and IBM’s DisplayWrite. Some diligent solo practitioners and small firms took the time to master the early programs. But at the time, they were clunky, slow, and expensive — as much as $500 per seat. And secretaries at large firms weren’t even using personal computers. They were still typing briefs mostly on either the Wang Corporation’s word processing terminals or IBM’s Selectric typewriters. But in the mid-to-late 1980s, two things changed. First, Novell Inc. upgraded its office networking software. That innovation allowed lawyers to send electronic text messages back and forth within their firms. Lawyers loved the idea. So they bought up bunches of desktop computers and hard-wired their offices. And, in 1986, WordPerfect brought out version 4.2, the first to feature the now-famed Reveal Codes function. With one keystroke, a user could view small, on-screen codes showing how portions of the document were set up. For instance, small arrows would pop up for tabs and indentations. Reveal Codes took the mystery out of word processing — and made it easy to uncover mistakes. “WordPerfect 4.2 was the first word processor that lawyers could really wrap their heads around,” says John Tredennick, a partner at Denver’s Holland & Hart and president of CaseShare Inc., a legal technology vendor. “You didn’t have to know computer code to work 4.2.” WordPerfect 5.1, which followed in 1989, improved Reveal Codes and let lawyers put tables and charts directly into the texts of documents. And it came with a toll-free, around-the-clock, customer service hotline. It was a smash hit at the biggest firms. Only the stubborn and cash-strapped clung to their typewriters and old Wang systems. Meanwhile, WordPerfect executives were busily preparing to make a huge strategic blunder. At the time, DOS, Microsoft’s original operating system, was on its last legs, soon to be replaced by either IBM’s OS/2 or Microsoft’s Windows. Rather than hedge its bets, WordPerfect mostly ignored Windows and focused on OS/2. It did not bring out a Windows-compatible version of WordPerfect until 1991, and, when it finally appeared, it was buggy. In 1994, Novell bought the WordPerfect Corp., but, after struggling with it for two years, sold it to Corel. Corel scrambled valiantly to clean up WordPerfect’s bugs. It packaged WordPerfect with Quattro Pro, a spreadsheet program, and CorelCENTRAL, an e-mail and calendaring program. The company launched an expensive marketing campaign and slashed the price of its Office suite to around $90, less than half that of Microsoft’s Office suite, which included the popular programs Excel and Outlook. These moves helped; in 1997, WordPerfect still had a very healthy share of the legal market. Unfortunately for Corel, that was about the time Microsoft dug in its heels. Initially, Microsoft’s decision to conquer the legal market was puzzling. The legal industry only represents between 2 and 5 percent of the total word processing market, according to Microsoft’s Linton. And Word was doing well in legal anyway. It had been seamlessly compatible with Windows since 1989. Many clients — especially the savvy few who were sending documents via e-mail — were asking their law firms to draft documents in Word. Lawyers were loud and vocal in their complaints about Word. They had good access to the Microsoft top dogs. Bill Gates Sr., formerly a name partner at Seattle’s Preston, Gates & Ellis, was well connected in the Northwest’s legal scene. The antitrust case was bringing hordes of lawyers to Microsoft’s door. So the murmurs of the legal industry’s problems with Word were making their way to Bill Jr.’s ears. Microsoft went to work. In 1997, Gates gave a speech to the Association of Legal Administrators and hired Linton to spearhead the mission to win legal. A few months later, Linton began brainstorming about the meeting in Redmond. David Jaffe, the current project manager for Office, says that the company viewed the legal project as a welcome challenge. “Lawyers tend to use Word on a higher, more sophisticated level than do other professionals,” he says. “We figured that if we could make it work well for them, then it would work well for pretty much everybody.” After the conference, the Word designers got busy. Allison Walsh, the current vice president of San Francisco-based Workshare Technology, worked on the Microsoft team devoted to addressing the lawyers’ issues. “The company dug in — you could tell it was really serious about the lawyer situation,” she says. Walsh says that several Microsoft executives, including Microsoft’s current chief executive, Steve Ballmer, often “made points of asking me how [the legal project] was going.” Microsoft issued a patch for Word 97 that fixed a word-counting glitch. And an upgraded Word 2000 straightened out the page numbering issues. Word designers even added a Reveal Codes equivalent for Word 2000. The feature hasn’t gotten great reviews, but, according to V&E’s Armstrong, the feature “makes it easier for a lot of people to make the switch.” New versions of Word haven’t always worked seamlessly with previous versions. For example, when Microsoft rolled out Word 97, Word 95 users couldn’t open e-mail attachments sent in the newer version. But Word 2000 works well with older versions. “We felt it was finally safe to move to Word,” says Karl Roberts, a litigation partner at Philadelphia’s Ballard Spahr Andrews & Ingersoll. Last year the firm moved from WordPerfect 8 to Word 2000. “Earlier on, there was always a worry that a switch to Word would only complicate the conversion issues it set out to defeat. With Word 2000, that fear has gone away.” Just last year, Corel bowed to Word’s 94 percent worldwide market share and adopted a niche strategy. It stopped marketing WordPerfect to everyone but lawyers and small segments of the change-resistant U.S. government, one of the earliest wide-scale users of WordPerfect. Marketing solely to core customers makes intuitive sense. But the strategy neglects a fundamental truth about law firms — they do what their clients ask them to do. And more than ever, clients want their lawyers to use Word. “Law firms are service organizations,” says Ballard Spahr’s Roberts, “and we have to communicate with our clients in a language they feel comfortable in. That’s Word.” If it were just a matter of sending finished documents to clients for quick review, compatibility wouldn’t be much of an issue. For years, outside counsel have converted briefs and lease agreements from WordPerfect to Word through simple software applications, called conversion engines. And these days lawyers can send documents along in Adobe Acrobat PDFfiles. But Allan Van Fleet, a litigation partner at V&E, says that as clients take more active roles in creating documents, the conversions make less sense. “There’s a lot more document-shuttling than there used to be,” he says. The extra “shuttling” was a big factor in V&E’s recent decision to ditch WordPerfect. “You can’t edit PDF files, and [the conversion engines] weren’t fluid enough to enable us to work in WordPerfect and deal with clients who were permanently based in Word,” Van Fleet says. Word may be dominating, but Corel isn’t calling it quits. “We recognize the reality of the situation, and it’s unfortunate,” says David Ludwick, a director of product and program management at Corel. “But we’re addressing it by pursuing a niche strategy and making sure we’re totally compatible with Microsoft’s Office.” So far, the niche strategy hasn’t turned the tide. Nearly every AmLaw 100 firm supports Word, even those like New York’s Kaye Scholer, where 60 percent of the lawyers still prefer to work with WordPerfect. “I would love to drop Word,” says John Pelofsky, the firm’s director of technology services, “but we can’t because of the client issues.” Still, it will likely be years — if not decades — before the feisty WordPerfect disappears entirely from the legal scene. WordPerfect is still popular at many small and midsize firms. These firms typically have fewer clients that want to collaborate than do big firms, so conversion issues are easier to deal with. Al Knapp, the paralegal supervisor at New York’s Kornstein, Viesz & Wexler, a 25-attorney litigation firm, upgraded to Windows in 1998 and kept using WordPerfect. “The partners didn’t see any huge reasons to change,” says Knapp. And there’s a subculture of WordPerfect-forever types, like Ross Kodner, the president of MicroLaw Inc., a technology consulting firm. “WordPerfect lives in both Styles and codes,” he says, referring to WordPerfect’s Macros, Styles-like templates. “Word lives only in Styles.” “Practically anyone who understands both Word and WordPerfect,” Kodner continues, “will acknowledge that WordPerfect is a superior place to create complex documents.” MicroLaw works mostly with small and midsize firms. Kodner says he advises many of them to support both applications. But CaseShare’s Tredennick doesn’t think that that strategy works for big firms. “Trying to be totally fluent in both programs really just means you’ll wind up being fluent in neither,” he says. “I have great respect for Ross, but I just don’t get the obsession with WordPerfect.” Microsoft isn’t resting on its Word. In May, the company unveiled a new version of Office, Microsoft Office XP, which includes Word 2002. Word 2002 has a device that fixes corrupt documents. The company has beefed up Track Changes and other features designed to make document collaboration easier. Most of the buzz, however, surrounds “smart tags,” a little piece of programming that turns text into hyperlinks. Say a user types a client’s name into a Word document. If the user drags the cursor over the name, Word 2002 can tell the user whether the name resides in an address book on Outlook. It can also link the user directly to Web sites containing that name. West Group and Lexis Nexis have teamed up with Microsoft, so that case names typed into Word become hyperlinks to cases in West’s and Lexis Nexis’ databases. Gates has used this example when he has presented the new Word at computer shows. Curiously, if Corel, WordPerfect’s parent, survives, it will have Microsoft to thank. Last fall, Microsoft made a $135 million nonvoting investment in the struggling Corel. Microsoft says that the investment was made to further its .Net initiative, which promises to let customers rent software over the Web. The Corel-Microsoft deal also settled patent disputes between the companies. And that caught the attention of U.S. antitrust regulators, although, so far, neither the Federal Trade Commission nor the Justice Department has taken any action. Word may not be perfect, but it appears to be the future.

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