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Kmart Corp.’s request for a proposal for a new national labor counsel was just a little different from anything Foley & Lardner’s chief information officer, Douglas Caddell, had seen before. Only four major requirements were listed in the RFP, Caddell says; three of them consisted of standard boilerplate language, requiring quality legal services and cooperation. But the single most important item on the labor counsel shopping list for Troy, Mich.-based Kmart was that its new national counsel be able to provide matter management through an extranet. “They said that you could provide any and all of items two, three and four, but you must — and they used the word “must” — you must provide No. 1, above,” Caddell says. The members of Caddell’s team got to work; when they went to proposal, they didn’t just talk about the possible extranet. Instead, they showed up with a production version, with document sharing, calendaring and other functions in place, capable of being used the next day. The final stage of the beauty contest involved Caddell talking with the general counsel for an hour about Milwaukee-based Foley & Lardner’s technological capabilities. Foley & Lardner won, and now represents Kmart in labor matters nationwide. That was two years ago, and Caddell was surprised that technology concerns played such a big role, but he wouldn’t be now: “We’ve seen that in another half-dozen or more proposals since that time.” Today, technology services are entwined with legal services, which makes this year’s AmLaw Tech Survey more relevant than ever. We surveyed the Am Law 200 firms; 137 firms responded, telling us which technologies they’re investing in, what software they prefer, how technology concerns are handled within the firm, and how much technology professionals get paid. This year, much like last year, law firms struggling in the shaky economy didn’t purchase every new product or application. But firms can’t afford to forgo the applications and tools that clients need and request. “I’ve actually sat in on at least one pitch where the client said, ‘The ability to access information from you via the Web is an essential part of this deal,’” says Warren Jones, director of information technology at Pillsbury Winthrop. Part of the reason clients are becoming more demanding of law firms is that in-house departments often lack the resources to develop technology tools on their own. That was the central finding of the In-House Tech Survey conducted by sibling publication Corporate Counsel [June]. So what is it that clients are asking for? Which technology advances promise to drive client relationships forward — and which applications are already driving IT directors up the wall? This year’s survey gave our readers a chance to supply some of the answers. REACH OUT Extranets aren’t new, but expectations for them are already changing: Clients often require an extranet as part of the package of services. “Three or four years ago, you might find [technology requests in an RFP],” says Peter Durr, director of information technology at Katten Muchin Zavis Rosenman, who remembers such early requests as being sporadic and nonspecific. “Now they want to know: Can you do extranets? What is your e-mail capability? Do you have PDAs for client-to-attorney information?” Although basic functions such as document sharing are easy enough to create, there are still traps for the unwary. Jones says that, when Pillsbury began setting up extranets, the firm originally tried to adapt its document management software from iManage. The problem? It only worked under one browser, Internet Explorer. “We thought that we were doing a great service for one of our clients … but it turned out the client had a diverse browser set,” he says. Instead of shared documents, the clients were seeing red. (Laura Heisman, a spokeswoman for iManage, says that its product should work with both Internet Explorer and Netscape.) Fortunately, more vendors are stepping up with better products to handle the extranet job. Chief information officer Sherry Lalonde of Cooley Godward says, “We’re seeing much more sophisticated choices; not just one or two vendors, but six or seven vendors.” Pillsbury works with Hubbard One. Its FirmConnect product is easy to set up and customize, Lalonde says. Other up-and-comers in the field include Documentum Inc.’s eRoom (which can be configured to provide document sharing, calendaring and real-time communication specific to an individual matter’s needs) and iConect (which is designed to facilitate large-scale litigation). The tools have arrived just in time. Fully 29 percent of responding firms are running more than 20 extranets (up from 21 percent last year), and the number of firms that run fewer than five extranets continues to steadily drop. INSTANT HEADACHE When we asked whether Am Law 200 firms let their lawyers use instant messaging, we discovered a statistical dead heat: 67 firms allow it, 69 don’t. But when we asked some information technology people about the issue, we didn’t get such an ambivalent response. Instant messaging is, alternately, loved, hated and feared, and the one element everyone agreed on is that it’s not going away. At the responding firms that did not allow instant messaging, the overriding concern was security: Instant messages blow a hole through a firewall big enough for a virtual Mack truck. Instant messaging also hasn’t been fully tested in courts; how binding are promises made or advice given in an instant message? There are no standardized methods of logging IMs, and no consensus on whether they constitute “material communication” that should be kept as part of a client file. Many top firm technology executives said that until a more standardized and secure system was available, instant messages remain an unacceptable legal and security risk. Also, instant messages (and the ads that accompany them) gobble up bandwidth. “When we review our logs and we look at the users at the top of the [bandwidth usage] list, it’s the people using instant messaging,” says Gerald Reid, chief information officer at Milbank, Tweed, Hadley & McCloy. “Before we got to them, of course.” The No. 1 user at the firm was a partner who spent maybe 10 minutes a day on the Web, but sent frequent messages to his secretary. Nonetheless, firms, particularly those with clients in the technology industry, are finding that their clients want or even require instant messaging access to their attorneys. Caddell says, “If [instant messaging] becomes a viable business tool — that’s why we’re here, to provide business tools. But at the same time, do you put the entire firm at risk for one or two clients?” Some attorneys have tried to strike a balance. Chief information officer Stova Wong says that Paul, Hastings, Janofsky & Walker prefers to offer alternatives to clients who request instant messaging; instead, the law firm works to collaborate very quickly via e-mail or through its chat rooms, which, he says, are more secure and can be logged. PREPARATION KAHUNA As we reported last year, the trend toward investing in disaster recovery remains strong. However, fewer firms are concentrating all their energy on planning for what chief information officer James Dobrzeniecki at McGuireWoods calls the “big kahuna, level five disaster,” and are instead thinking in terms of business continuity. They want to be ready when an earthquake strikes (no small concern for Southern California firms), but it’s the day-to-day disruptions that are gaining higher priority. Dobrzeniecki says that he spent most of his energy this year preparing for those kinds of day-to-day business interruptions. “We looked at the things that would break the most, and resolved those the first,” he says. “What components are more unreliable? We threw our money, time, and effort into fixing those.” So McGuireWoods tweaked its servers and communication lines, making them fault-tolerant and capable of assuming extra traffic. Most regional or nationwide firms are using one or more of their offices as hot sites, capable of storing the data of another office. But some firms, such as Wiley Rein & Fielding, still need to build separate hot sites. With 95 percent of its 176 lawyers in Washington, D.C., and a handful more in nearby McLean, Va., Wiley has the data needs of any large firm, but not the reach. Chief information officer Brett Don says that his firm is concentrating on enhancing internal storage, but will create a faraway hot site in the near future. Katten Muchin’s Durr says that his firm will use its New York and Chicago offices as backup sites for the rest of the firm. But those cities are vulnerable. “It would be much nicer if you had a large office in Nowhere, Montana, but that’s not the reality,” Durr says. Fayetteville, Ark., isn’t far from nowhere, but it offered up proof that a major calamity can happen anywhere, as Kutak Rock’s chief information officer, Kenneth Kroeger, found out. Only 60 days after the firm opened a new branch office in Fayetteville, it burned to the ground. Thanks to solid disaster recovery efforts by his staff, the small office was up and running in new space within 24 hours. SHINY, HAPPY THINGS Firms are still holding off on optional purchases; lawyers longing for flat-screen monitors at the office will probably just have to keep waiting. The same goes for software, where some chief information officers are tired of purchasing every update. Although the number of firms using Windows XP as their desktop operating system rose sharply this year, from 11 percent to 30 percent, many others are in no hurry to switch. When a Microsoft representative tried to sell XP to Milbank, Reid says, “I said to him, ‘Well, name your features on Office XP that are so superior to what you have in Office 2000 that when I tell my offices I want to do a conversion of 1,000 desktops, they’ll put their hands up.’ And he couldn’t.” Similarly, chief information officer Steven Agnoli’s long-term plan at Kirkpatrick & Lockhart called for replacing its PC infrastructure this year, but he decided to hold off for another couple of years. A few firms reported that equipping offices with high-speed copier/scanner machines turned out to have a sharp effect on productivity, particularly for quickly scanning evidence for electronic filing. Another change that made a big payoff: Milbank’s Reid invested in an AltaVista search engine to work with the firm’s DocsOpen document management system. “Now anyone in any office around the world can do full-text searches [of stored documents],” Reid says. “As fast as AltaVista works on the Web, that’s how fast we can do searches.” MESSAGING Handheld PCs (personal digital assistants) increased in popularity last year, with the number of firms supplying them to attorneys rising from 51 percent to 73 percent. The reliable BlackBerry remains the top banana, used by 88 percent of firms that supply handhelds, although newcomer GoodTechnology has made early inroads, scooping up 10 percent in its first year. We asked about wireless networks (WiFi) for the first time this year; 47 percent of responding firms have established wireless e-mail networks at their home offices, and virtually everyone we spoke to expects this percentage to increase quickly. Durr reports that Katten Muchin is on the verge of piloting its wireless network in Chicago, and when the firm purchases new laptops in the first quarter of 2004, they’ll all be equipped with wireless access. But a few firms are holding back, including Kirkpatrick & Lockhart. “There is very little standardization at this time,” says Agnoli. “Investments now could be throwaways later.” Although Kirkpatrick supports lawyers’ BlackBerrys and integrates them with e-mail, Agnoli says that the firm will wait to create wireless access within its offices until a secure, standard solution is in place. Chief information officer Robert Meadows of Heller Ehrman White & McAuliffe says he is searching for the best unified messaging solution, something that would synthesize the firm’s voice and text messages. “Whether it’s messaging, e-mail, fax or voice, these are key client-source technologies,” he says. “We want to make it easy for our personnel to be responsive.” Because, in the end, it all comes back to the clients. See related charts: The Eighth Annual AmLaw Tech Survey The Basics Editor’s Note: For more information on LegalTech shows, see: LegalTech

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