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For legal technology, 2002 began on Sept. 11. After the disaster struck, law firms realized technology could keep their work from perishing in even the worst of circumstances. Large law firms learned that they needed disaster recovery plans. Lawyers needed to be able to access their electronic files all the time, from any place. Small firms had somewhat smaller epiphanies. They realized they had to start backing up their data to begin with. For example, New York’s Rosner, Nocera & Ragone, a seven-attorney firm, was shut out of its downtown offices at 90 West St. for more than two weeks after the disaster. It had no access to electronic or paper files. It could not get into its building, which was next to the wreckage, and it had no backup copies of its electronic files off site. When the attorneys returned to the crumbling building to recover their belongings, they found paper, glass and an airplane cooling unit strewn across the floor. Their computers, filled with glass and soot, were inoperable. The firm was able to extract the hard drives from five out of six of the office’s Dell computers. Eventually, it recovered much of its data, says partner Peter Ragone. Now safely lodged in new downtown offices at 40 Wall St., the firm is more active about storing and saving. The attorneys take backup disks off site once a week. Rosner Nocera also bought TimeSlips, a time and billing program that provides remote access to financial records. The firm has seized the opportunity for other long-overdue upgrades, too. Each attorney now has an individual e-mail address, rather than one for the whole firm. Post-Sept. 11, larger firms are preparing for a world without guaranteed access to the office building. They want to dump all of their information — from documents to contact lists — to secure Web sites available around-the-clock, even if the office isn’t. “In light of Sept. 11, we are moving more applications to the Internet,” says Greta Ostrovitz, the IT director at New York’s Cadwalader, Wickersham & Taft, which is located in downtown Manhattan, just blocks from the World Trade Center. The firm has purchased Interface Software Inc.’s Web-based version of InterAction, the contact management tool, as well as Elite Information System’s Web-based time and billing software. (They had been Elite and InterAction users.) Ostrovitz encourages Cadwalader lawyers to download their InterAction contacts to their Palm Pilots everyday, in case remote access becomes a problem. At New York’s Hughes Hubbard & Reed, another downtown Manhattan firm, Steven Sommer, the IT director, has moved more documents and databases to the firm’s iManage server, so they could be accessed in case of a disaster. (The firm evacuated its building Sept. 11, but returned to the office the next week.) Both firms have other projects in the works. They are getting ready to roll out Windows XP this year or next. But many firms are perched to squeeze the most out of what they already have. “There’s nothing like a downturn in the economy to get people interested in efficiency,” says David Craig, a partner at Baker Robbins & Company, a technology consulting group. A way to do this is knowledge management, capturing the knowledge that lawyers acquire and, too often, lose, or simply don’t spread to others. Powerful search engines, brief banks and databases are all knowledge management tools. So are lawyers. They must determine what needs to be saved and what should go in the proverbial circular file. Some firms are committing more nonbillable lawyer hours to this task during the slowdown. Some firms are increasingly turning to portals, which basically organize and link all of the diverse tools on the desktop onto one central page. Portals only make sense, Craig cautions, if a firm has a plan about how to implement one. It’s best to start small. Big and midsize firms alike are catching on to this. “I’m hoping to start to plant the seeds of interest [in knowledge management] here,” says Karen Maucher, IT director at New York’s 100-lawyer Davis & Gilbert. For legal tech vendors, 2002 is also a year for reinvention, after a year of consolidation. Last year saw the end of some much-touted legal tech outfits, like Flywheel Communications Inc. and extranet provider Legal Anywhere Inc. Others folded into much larger enterprises. Last year, legal information provider West Group bought FindLaw Inc., a legal Web site and portal, and ProLaw, an Albuquerque, N.M.-based maker of practice tools for lawyers, for an undisclosed sum. West must show the world that buying ProLaw was a good choice. West’s biggest rival, Lexis Nexis, also did some holiday shopping last year. In late November, it bought Bellevue, Wash.-based Courtlink Corp., an electronic filing and docket-retrieval vendor. Electronic court filing shows promise, but it has yet to take off. Look for Lexis Nexis to leverage its power — and cash — in the legal market to jump-start e-filing. Meanwhile, Lexis Nexis has been eyeing more than software. It recently announced an alliance with Congressional Quarterly, which publishes legislative news and records. Another information maven has made an appearance in the legal market. Late last year, financial tycoon Michael Bloomberg dropped jaws when he came out of nowhere to win the New York mayoral race. His company, Bloomberg LP, may do the same in the legal tech world. For years, Bloomberg, the mayor’s eponymous company, has sold information to stock traders and financial service companies through its propietary computer terminals. In an effort to sell these pricey Bloomberg terminals to lawyers, it launched a legal menu on the terminal last year. Bloomberg may have something else in the works. Its foray into the legal market could mean the introduction of new databases, with case law or legal research material. Bloomberg won’t go into details, but Sara McDonough, a sales specialist at Bloomberg, says it has long-term plans for another product aimed at lawyers. Stay tuned — but don’t expect to see anything at legal trade shows this year. Although Bloomberg set up stands last year at the American Bar Association in Chicago, and at the September LegalTech show in New York, it won’t be making repeat performances. Like others, Bloomberg is watching costs, says McDonough. From the usual suspects, expect some unusual things. Elite Information Systems, one of the dominant providers of time-and-billing software, is set to unveil an online document management system, called Encompass, at the ongoing LegalTech trade show. (LegalTech is owned by American Lawyer Media, which is affilated with law.com.) There are already two titans in the document management world, San Mateo, Calif.-based iManage, Inc., and Ontario, Canada-based Hummingbird Ltd. Not surprisingly, Encompass will tie into Elite’s time and billing powers. A lawyer working on a client memo could simultaneously pull up the related matter’s billing report while tinkering with the document, explains Tom Bartley, Elite’s vice president of strategy. Lawyers can also work collaboratively on an online deal room component of Encompass. Six firms are currently testing Encompass. It is slated to be released this month for common consumption. Elite already has some potential clients on its pitch list: About one-third of the AmLaw 100 firms used Elite last year, according to AmLaw Tech, a sister publication. Document management is a way to grab new customers, too, and ultimately, to diversify into other spheres, like professional services. That’s not going to be easy. About 80 percent to 90 percent of Elite’s revenue comes from legal, according to Matthew Devoll, the company’s top marketing officer. By breaking into the document management market, Elite is following in the footsteps of iManage. In the late 1990s, iManage Inc. decided to nip at Hummingbird, then the main document management provider. IManage made a steady upward climb, convincing some Hummingbird customers to drop their allegiances. Last year iManage was on somewhat shaky ground: Its stock price hit bottom at less than $2 a share. It is making a turnaround. IManage’s stock is up to about $8 — not big money, but better than some ex- Fortune 500 companies these days. Revenue shot up about 40 percent last quarter. This is mostly thanks to a new iManage prouct called WorkSite, says Dan Carmel, iManage’s vice president of marketing. WorkSite is a collaborative tool that combines the document management system with other features like a deal room and a portal. New York’s Cleary, Gottlieb, Steen & Hamilton and Rosenman & Colin are set to roll it out this year. WorkSite is also making inroads with banks and financial services.

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