[In addition to my annual tradition of publishing an article on legal technology trends for the year, I've also experimented with posting drafts of the article on my blog before I've completely finished it and it's actually published as an article. This year's edition is running a little late and it feels done enough tonight to go ahead and post it as a first draft and get some reactions and comments (and some editing suggestions - there's no doubt there are still typos and other problems in this draft). Let me know what you think.]
Nine Legal Technology Trends for 2009: The Year of Hunkering Down
It’s my annual tradition to take a look at trends in legal technology for the coming year and make some predictions about where we are headed. I’m running late this year because the current economic turmoil has made it difficult to assess what is likely to happen.
I decided to observe what transpired in the first few months of the year, gather some information at ABA TECHSHOW 2009 and then see if my crystal ball became a little clearer. I also felt that simply to say that the 2009 trends would be the same as my 2008 trends, but even more so, would be emotionally unsatisfying, even if it seemed accurate.
Unfortunately, it really hasn’t, but it is April already and I thought I’d jump into this year’s article with the idea that it will be a conversation-starter more so than a roadmap.
I’m actually quite pessimistic about what we’ll see in legal technology, but I’ve taken a more positive outlook on these trends. Keep in mind that the economy could dramatically and negatively affect these trends. Let’s face it, when firms are laying off lawyers and staff and fighting to keep the doors open, technology is going to be less of a priority that it might be in a normal year.
There’s no doubt that there are pockets of enormous opportunity using technology in 2009 (think collaboration tools and client-focused technology), but it will be the rare firms or organizations that will be able to decide to make those investments. As a result, it’s what happens OUTSIDE the legal profession with technology that will ultimately be the most important trends inside the legal profession over the long haul. With that in mind, the best legal technology investment to make this year is to buy (and read) – Richard Susskind’s book – The End of Lawyers? – which is a great all-in-one resource on the big trends changing the profession and the outside pressures that will change the way lawyers practice.
With that said, I now launch into my 2009 trends.
1. Technology Budgets Get Decimated. At many firms, technology spending has crept up to be a substantial line-item on the firm’s budget. If it comes to cutting the tech budget or laying off people, most of us would like to be at a place that puts people first.
I originally was going say that technology budgets stay flat, but I’ve changed my mind. And I use the word “decimate” deliberately. The word originally meant the killing of one of ten soldiers. It later had the sense of drastic losses. In many firms, a large portion of the tech budget is set in stone and can’t realistically be cut during the year. That’s why my initial thought was that we’d see freezes rather than cuts. Now I believe that we’ll see cost—cutting as the year progresses. For the average lawyer, don’t expect to see a new laptop this year. In fact, don’t expect to see much of anything new this year.
What to do: Technology audits to determine what you are doing and where you can make cuts. Reduce duplication and increase standardization. Look for volume discounts, renegotiate large contracts, and consider outsourcing as an option in many more instances. Require IT department to explain and justify budgets.
2. Making Do with What You Have or Doing More with Less. Sensing a theme here yet? We’ll be hunkering down as a profession in 2009. That new Mac laptop you wanted will become a netbook. I wouldn’t be surprised to see law firms go to low-priced netbooks rather than laptops for the average lawyer. Cost is an issue. Moving to a new software version? Not likely. You better learn how to do more with the features in the version you already have. Perhaps most interesting, we could see the majority of the legal profession essentially miss a whole generation of Microsoft software (Windows Vista and Office 2007).
I’m not completely negative on this point. Constraints often help lawyers be creative. I expect to see more use of Web 2.0 tools and Open Source software and making better use of what they already own. Remember those WestKM licenses you already own but haven’t used – maybe it’s time to take a closer look.
What to Do: Learn more about what you have. Talk to vendors about features you don’t use and training opportunities. Look for better pricing and Internet deals when you do buy something.
3. The Mobile Phone as Platform. This trend actually relates to the previous one. The love affair between lawyers and the BlackBerry is well-known. Lawyers are also using the iPhone and other smartphones. If you aren’t likely to get a new laptop and your smartphone can do more and more, what is likely to happen? Yes, the phone is likely to become a mobile working platform that gives you access to data, documents, people and other things you need when you need them. The Apple Apps store for the iPhone and iPod Touch is looking to be a game-changer, and Blackberry and others are opening similar stores. These applications make smartphones even more useful than they already are. Don’t overlook the growing role that texting and instant messaging will play for lawyers, which work very well on a mobile phone..
What to Do: Umm, haven’t I just given you the business reason you were looking for to justify getting an iPhone? Look for ways other than email to use your phone to access your office and data. Experiment with applications for your phone. Drop your request for that new laptop and ask for an upgraded phone instead. For firms, consider ways to enable access through phones as a way to delay or avoid hardware purchases.
4. Get Your head into the Cloud. You will hear even more talk about “cloud computing” and “software as a service” (SaaS) in 2009. In simplest terms, I’m referring to ways both programs and data can be hosted and managed on the Internet through a third-party provider. Google Apps and other online SaaS options have gotten a lot of attention in the past year or so. SaaS options for existing legal software and new legal-specific SaaS services have become increasingly available to lawyers.
The benefits: manageable monthly costs, lack of need for infrastructure and personnel investments, access from anywhere, provider handles patches, upgrades, security and the like. The concerns: data hosted elsewhere, business prospects of providers, unique legal concerns like ethics and confidentiality.
Law firms, especially start-up firms, have been testing this water. Budget constraints will also make this a more compelling option in many cases. There will definitely be more attention to this area, and probably increased usage.
What to Do: Please, please, please do your homework and due diligence on this option, especially in this economic. Take a hard-headed realistic approach and make sure you compare SaaS options with what you are currently doing now rather than against some ideal of perfection that you aren’t close to achieving. Pick some areas to experiment with this approach rather than jumping all the way into the water at once.
5. Using Tech to Get the Word Out and the Money In. My approach to technology planning is really quite simple: does it save money or does it make money? I’m shocked when firms launch new tech initiatives without having a clear, quantifiable answer to this question.
In 2009, firms will be focused on bringing in new work, retaining existing clients and getting paid for the work they do. If your technology initiatives don’t directly address these concerns, you are missing the boat. It’s definitely not the most exciting area of legal tech, but investment in back office technology to get better bills out faster, improve collections and evaluate the profitability of clients and projects would be something I’d recommend for every lawyer and every practice. Boring is good in 2009.
On the exciting end of this trend is using technology to get the word out to market yourself, your practice and your firm. There is so much happening in this area that it is difficult to keep up with it all. The one thing I can guarantee is that by the end of 2009 lawyers will be using an Internet marketing vehicle that no one expected today (actually, my guess would be something in the SMS/instant messaging family).
Had you even heard of Twitter a year ago? Now you can’t turn around without seeing something about using Twitter, Facebook and social media tools for marketing. You can put video up on YouTube, publish PowerPoint slides on Slideshare, create your profile and groups on LinkedIn, have a blog, create a podcast and do many, many more things to get your message out and create a brand. The financial cost of most of these tools is next to nothing. Think about how your clients (and potential clients) get their information today. Create a channel to reach them that way.
What to Do: Look at the ways to use back office tools to streamline and standardize billings, improve collections and truly analyze the financial aspects of your business. Take better advantage of reporting functionality to give you reports that help you cut costs and improve profits. Evaluate your current Internet presence (hint: Google your name). Pick one or two of the Internet and social media channels to try. Don’t be over-influenced by what “everybody else” is doing – one or more of these approaches will suit you best – go with that one.
6. Focus on Client-focused Technology. OK. I pick this every year, but it’s a trend that’s clearly happening and it’s one that Susskind’s book also highlights. If you are looking for a simple approach to technology, this is what I recommend. Are your technology plans driven by what your clients want or by their needs?
Technology in this category includes simple extranets, collaboration tools, 24×7 access to documents, providing documents in preferred formats, and electronic billing. I’ve written extensively on this topic and posted some slides on SlideShare. so I won’t add a lot here, other than to say that this economy dictates that you find better ways to work with your best clients. The best way to start: just ask them.
What to Do: Simple client technology surveys. Identify pain points clients have with your technology, such as document compatibility or preferred formats. Focus on simple, practical extranet functionality (e.g., access to copies of documents) rather than gold-plated, all-inclusive extranet platforms. In general, keep it simple. And find ways to make it easy for clients to stay with you.
7. E-Discovery in Still Waters. No area of legal technology receives more attention than e-discovery, and deservedly so. 2009 will be a deceptive year in e-discovery. At the surface, it will appear that not much is happening. Some contradictory decisions, some industry consolidation, some talk of reform and a concern about costs. There will definitely be discussion of cooperation and collaboration. But you won’t see game-changing new technologies, magic bullets or tectonic movements.
As I’ve said before, lawyers have won the first round of EDD battles and successfully resisted wide-scale changes to business as usual litigation.
But that’s just the surface view. Still waters run deep and, like the Internet, we overestimate the impact of EDD in the short term and we underestimate the impact of EDD over the long term. Under the surface, the changes are huge and will transform the practice of law. Those involved in this area need to keep their eyes and ears open and monitor developments.
There are a few trends I’ll highlight. First, the growing emphasis on cooperation and collaboration, just one aspect of the growing role judges have been forced to play because of slow-moving lawyers. Second, technologies and techniques to produce usable and workable datasets out of enormous amounts of data. Third, an increasing amount of focus on high costs of EDD, with the parallel trend of treating some EDD procedures as commodities, with commodity types of pricing.
The main trend you will want to take notice of is one that started a few years ago and has continued to grow. It’s the movement of the lawyers who know the most and who are the best at EDD out of law firms and into the employ of EDD service providers. This really is a tectonic shift with the probable long-term result of EDD service providers largely taking this work away from law firms and EDD, perhaps, no longer even considered part of the ordinary practice of law, leaving litigation lawyers to redefine what they actually do as clients route around them to the EDD service providers who have all of the talent. I invite you to give that some serious thought.
What to Do: Watch the developments. Keep up with industry developments by reading some of the excellent EDD blogs. Watch the flow of talent out of law firms. There are still plenty of opportunities for lawyers in EDD, but I suggest looking for niche areas of EDD that you can do well or new roles, like project management. If I were a litigator involved in EDD, I’d look for one EDD niche to become very good at in 2009.
8. The Perfect Storm for Collaboration Tools. Tom Mighell and I recently released a 2009 CD update of our book, The Lawyer’s Guide to Collaboration Tools and Technologies: Smart Ways to Work Together. One of the features on the CD is our take on top trends in collaboration tools. Among the trends we note include cultural issues caused by mergers, layoffs and other economic turmoil, reduced travel budgets driving adoption of conferencing tools, the ability to find their own collaboration tools when you don’t provide them, the growth of instant messaging and Web 2.0 tools, and the growing role service level agreements play in collaboration tools.
If you go back and look at articles making predictions about legal technology at the end of 2008 and the beginning of 2009, you’ll notice that most, if not all, of them made one or more references to collaboration technologies. Since the beginning of 2009, the changes brought about by our economic situation have accelerated the move to collaboration technologies. The most obvious example at most organizations is the reduction in travel budgets and how that has renewed interest in all forms of conferencing. As I write this, we wonder about swine flu and pandemics. There is no question that this, too, will place more emphasis on online collaboration. New features added to programs almost invariably involve collaboration and interest in Microsoft SharePoint among both large and small firms continues to be high. Perhaps most important, however, is the growing sense that email may be broken as a tool or platform to use when working together.
What to Do: I always recommend starting with a simple “audit” of how you are collaborating now and determine how you might better collaborate with others by using collaboration features of programs you already have or free collaboration tools. Look at alternatives to email, especially for simple tasks like sending large files. Experiment with some of the web 2.0 tools – Google Apps is an easy place to start. And, of course, ask your clients how you can make it easier for them to work together with you.
9. A Potpourri of Predictions. In “down” technology years, I have always argued that innovative lawyers and firms can greatly widen the gap between themselves and those who stand still. Similarly, firms feeling that they have fallen behind can catch up to or even leapfrog today’s leaders by making a concerted effort in down years. In 2009, the retrenchment will be so great that I don’t expect to see a lot of innovation or investment. But the opportunity is there.
Here are a few predictions/trends that don’t really fall into specific categories, but I didn’t want to leave out of this article.
I’m intrigued by interaction of encryption and confidentiality, the way encryption might offer a technological solution to confidentiality obligations.
I’m quite concerned that a lack of understanding of, or an unwillingness to understand, how technology works by ethics regulators, especially in the area of web 2.0, social media, Twitter, cloud computing and metadata could result in rulings and regulation that negatively affects legal innovation at exactly the time innovation should be encouraged. I expect to see several important examples of that by year-end.
For innovation, I’m looking to the newest generation of lawyers and, equally important, those involved in provided services to lawyers. You’ll find them out there in blogs, on Twitter and Facebook, and other places on the Internet. I’m impressed by their energy and creativity. I learn a lot about new uses of technology from them and, as a profession, we’ll find them a source of innovation.
At ABA TECHSHOW 2009, I had a great conversation with Marc Lauritsen, Jordan Furlong and Ariel Jatib about where the next game-changing development in legal technology would appear. It arose out of a discussion about Twitter, which, interestingly, we all seemed to think was a bridge technology that was taking us to something else.
My contention was that audio and video was the easiest and most obvious answer. I had also just listened to a fascinating podcast of a presentation by Rajesh Jain in which he discussed innovative uses of SMS (simply put, instant messaging) in India. This also relates to the idea of mobile phones as a platform. We actually spent quite a bit of time on this possibility, which I believe holds a lot of promise. Finally, we talked about one of Marc’s favorite ideas of combining artificial intelligence concepts, decision trees and related technologies into tools that assist lawyers or take the place of routine aspects of the practice. The conversation we had around that topic and related topics like crowd-sourcing and recommendation engines was quite energizing and, as Jordan noted later, what makes a visit to a conference like TECHSHOW so worth the trip. My conclusion: while others hunker down, this is the year to take some time and think some bigger thoughts.
Concluding Thoughts. My best recommendation for 2009 is to read Richard Susskind’s new book “The End of Lawyers?” and familiarize yourself with the two biggest influences on the legal profession he mentions – commoditisation and information technology – and the way they will disrupt and change the profession, probably faster than we expect. Then engage in the conversation about where technology is taking us. It might not seem like much will be happening in 2009, but big changes will be taking place under the surface. Hunker down, but keep your eyes and ears, and your mind, open.
[Originally posted on DennisKennedy.Blog (http://www.denniskennedy.com/blog/)]
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Now Available! The Lawyer’s Guide to Collaboration Tools and Technologies: Smart Ways to Work Together, by Dennis Kennedy and Tom Mighell. Visit the companion website for the book at LawyersGuidetoCollaboration.com. Twitter: @collabtools
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