The verdict on legal technology
Virginia law firms are using new tools to gain a competitive edge
On a trip to a LeClairRyan regional office a few years back, David C. Freinberg, the firm’s CEO, was surprised by the lack of activity he found in the law library.
“Nobody was in there, and I wondered, ‘Has our business slowed down and nobody wants to tell me?’” Freinberg recalls. “Fortunately, I was politely reminded that all of the resources that historically have been located in case books were now available online and that you don’t have to be sitting in the library to get work done.”
LeClairRyan is one of the most technology-savvy law firms in the country. Supported by a robust, in-house technology staff, Virginia’s fourth-largest firm is completely digital, using document management, practice management and other applications that help organize information, improve productivity and cut costs.
The system is highly mobile. LeClairRyan’s 350-plus attorneys can work at anytime and from anywhere — including home, other offices, client sites and the courtroom. They have total access to case files and applications, thanks to heavy investments in smartphones, tablet computers and laptops, and cloud-based data storage and computing services.
Beyond the basics
In October, LeClairRyan took legal technology to a new level when it entered an agreement with UnitedLex, a Kansas-based legal services outsourcing (LSO) company. UnitedLex will offer technology-powered early case assessment and e-discovery capabilities that are more comprehensive and less expensive than anything LeClairRyan could have provided internally.
The deal creates the LeClairRyan Legal Solutions Center, the biggest such arrangement to date between a law firm and an LSO. As part of the agreement, LeClairRyan spun off its existing Discovery Solutions Practice of more than 400 attorneys and litigation support specialists to UnitedLex. The company in turn will bring its personnel, technology platforms and security protocols to the mix. The new operation will be based in Richmond, and its services will be available to other law firms.
Gary LeClair, president and co-founder of LeClairRyan, notes that the discovery phase of large corporate litigation cases today often involves millions of documents, including not just correspondence but also texts, emails and social media posts.
Using UnitedLex’s technology capabilities, “we have systems that can sort, identify and eliminate irrelevant data much earlier in the process, so instead of having to review 10 million emails, we can immediately cut it to, say, one million,” LeClair explains. “All of that is offered as one bundled service at one price, so now we can go to our clients and say, ‘We’ve been providing this service to you before, but now we can provide it to you at an even lower cost.’ It’s a tremendous win for our clients and for us.”
Getting up to speed
Law firms typically have lagged behind other industries in the adoption of technology for two reasons: Long-held rules dictate that law firms must be owned by lawyers and thus cannot accept outside capital investment, and firms also have been largely immune to competition outside of their industry.
In recent years, though, U.S. law firms have been embracing technological innovations and working hard to catch up. This new paradigm is being driven by client demand for more cost-effective services, the explosive growth in digital document creation and competitive pressures from LSOs like UnitedLex. Law firms also face competition from foreign-based law firms that can seek outside venture capital to pay for new technology.
“We have seen more change to the practice of law in the past 10 years than in the previous 200 years,” says Sharon Nelson, president of the Virginia State Bar and president of Sensei Enterprises Inc., a Fairfax County digital forensics, information security and information technology company. “Attorneys who were active up until the early part of this century would not even recognize the practice of law today.”
In fact, the American Bar Association (ABA) in late 2012 added a resolution to its professional conduct code that encourages lawyers to keep abreast of “the benefits and risks associated with relevant technology” to ensure clients of competent representation.
For many firms, especially small ones, their technology investments involve automating daily tasks and workflow processes to become more efficient.
The most popular technologies used by law firms include productivity tools, such as document management and case management applications, practice management programs and online legal research tools.
Smaller firms are also taking advantage of the economies of scale gained through technology. According to the ABA’s 2013 Tech Survey, 91 percent of all lawyers own a smartphone. What’s more, 40 percent of solo lawyers (and 31 percent of all law firms) use cloud-based services like practice management software and document sharing, a jump of 11 percent from the previous year.
Mikhail Lopez, an attorney with Greenspun Shapiro PC, a five-attorney criminal defense and civil litigation firm in Fairfax, notes that this mix of tools saves time, allowing him to stay in closer contact with clients.
One of the most effective technologies for his work, for example, allows him to conduct online research using LexisNexis and Westlaw. Although these research tools have been around for a couple of decades, the most recent versions enable attorneys to sit at their desks and, “Google-like,” quickly search through state and federal case law, journal articles and other legal resources across all jurisdictions.
“As long as I phrase my search correctly, it will return all cases that are relevant to my issue,” Lopez explains. “So instead of spending time trying to find [a case] or worrying about the one case I might have missed, I can spend more time analyzing and figuring out how best to use this information to my advantage to convince the judge that I’m presenting the right result to reach in this case.”
Investing to compete
But technology is no panacea, Nelson warns. “Used well, it can certainly reduce the workload and enhance productivity, but used poorly, it can actually add to the workload and to the expense,” she says.
One reason is that lawyers are traditionalists and often resistant, “hidebound, really,” to change, says Nelson. Studies have shown that to be the case even among younger attorneys. Nelson cites the example of a computer skills test that Kia Motors’ in-house counsel gave earlier this year to law firms the company was considering hiring. None of the nine law firms taking the test passed it.
“You can make all the right investments, but it’s not going to do you any good if your people aren’t trained to use it optimally,” Nelson says.
Smaller law firms often are overwhelmed by the abundance of available technologies and don’t always choose well. Some tools simply don’t fit their budgets, especially the latest and flashiest offerings. Even the monthly subscriptions to LexisNexis and Westlaw are too pricey for some firms, which is why the state bar offers its members free subscriptions to Fastcase, an alternative search tool that provides online access to all case law (but no other reference materials).
When firms are smart about using technology, Nelson says, it can help level the playing field for smaller firms — but only to a point. “It’s tough to keep up with all the changes when you’re working all the time,” she says, noting that small practitioners flock to state bar seminars hoping to learn how to leverage technology in a way that doesn’t cost too much money.
Freinberg at LeClairRyan agrees, noting that once cutting-edge technology comes into the equation, small firms are at a decided disadvantage. “This type of technology is expensive and involves complicated relationships with solution providers,” he explains. “And so for those firms that don’t have the number of attorneys over which to spread that cost, their practice is going to be increasingly threatened by their inability to buy or hire the level of technological competency that the larger firms can.”