P R O B A T E   &   P R O P E R T Y
September/October 2002
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Technology - Property

Technology—Property provides information on current technology and microcomputer software of interest in the real property area. The editors of Probate & Property welcome information and suggestions from readers.

Technology and the Legal Practice: Lessons from September 11

The events of September 11, 2001, brought about a dramatic shift in the American psyche and many changes to the daily lives of the American public. Has it caused any impact in the world of technology as applied to the legal practice? Primarily, September 11 has highlighted the importance of technological advances in the legal profession, but those horrifying events have also placed a spotlight on the vulnerability of our technology assets and the importance of the human factor in the use of technology.

Consider the plight of lawyers who had offices in the World Trade Center and survived the tragedy. Besides their emotional distress, which surely must have reached extreme levels, what about the very practical aspects of their practices?

If the firm kept all of its records and case material on paper, then nothing survived except for those documents that were stored offsite, outside of the World Trade Center complex. Offsite storage of documents generally is limited, however, to completed matters or at least to those in which a significant segment of the matter has been completed. Backups of paper documents are not usually stored offsite on a nightly, weekly, or monthly basis for the purpose of preserving copies of paper documents. Those who were more technologically advanced may have fared better, but not necessarily. If a firm prepared all of its documents on a computer and stored them in electronic form would it have been any better off? Not if the location of the storage was in the same office or any place in the World Trade Center complex. Even if the documents were stored on a magnetic tape, hard drive, CD-ROM, or DVD, they would have been destroyed if that media were stored in the World Trade Center complex.

The Importance of Geography

Some offices have systems that duplicate a document on a separate hard drive every time it is saved. This is clearly a benefit if the primary hard drive crashes, but it would not have helped if the backup hard drive were anywhere within the World Trade Center complex. A network in which documents are stored on servers offsite could be a significant benefit. Of course, one might question whether that is a real solution, because what happens if the location of the server is destroyed? The best way to deal with the possibility of a disaster is to maintain duplicate sets in completely separate geographic locations. One location can be at the law office. For matters currently in process, a backup can also be stored on the user’s hard drive. Multiple geographic locations are absolutely critical.

Electronic Communication Is Vulnerable But the Best We Have

September 11 has taught us to be alert to the possibilities of terrorist attacks. What can be more devastating to a business, such as a commercial real estate practice, that relies on the use of e-mail and the Internet than eTerrorism, an attack on our networks that support our electronic communication? That is not to say that the vulnerability of our electronic networks should cause us to place any less reliance on them. The anthrax incidents following September 11 have shown that tampering with the conventional hard copy delivery systems of the Post Office, the United Parcel Service, or Federal Express can disrupt life, but all we should expect from eTerrorism should be a disruption in communications and the loss of or the inability to access documents and other data. Moreover, the tools that are available to detect computer viruses are generally more available, more effective, and can be more consistently applied than those available to protect us against anthrax, another disease, or a letter bomb.

Electronic communication and the digital storage of documents and other information are vital to our commercial real estate practices. We have come to rely on the almost instantaneous delivery and retrieval of documents and other information. To protect these media of communication we must maintain a robust virus protection system to minimize the possible contamination and loss of our data and protect it with firewalls to maintain the confidentiality of client information and lawyer work product. Products are available for these purposes, but a firm must adopt a process to keep these products up-to-date and used on a consistent basis. The mere installation of the products is not sufficient.

With offsite and redundant electronic backup of documents, a firm would be in a much better position to get back to business. Lawyers, paralegals, and secretaries equipped with computers at home that can access the firm’s network can become instant telecommuters. Lawyers who are highly computer literate can work effectively from home without secretarial assistance. Those who have refused to change from drafting by pen on a yellow pad will not be able to serve their clients as well. The e-mails can begin flying and significant documents retrieved as soon as the firm’s network is restored from the offsite backup servers.

The Human Element

I have talked about those surviving the disaster, but what about the many who perished at the World Trade Center? Not only did an immense human tragedy occur, but firms lost vast amounts of knowledge stored with those who died. Most likely the most significant loss of knowledge that occurred on September 11 was not in the paper documents or electronic records that were destroyed but in the knowledge of those whose lives were taken by the terrorist attacks. Is there any way to fully protect against the loss of such knowledge? I would say the answer is no. There are ways, however, to capture some of that very valuable knowledge and preserve it for the future.

Obviously the type of knowledge that is contained in documents, paper or electronic, can be saved by providing adequate backup. So why do we have anything to worry about? All knowledge is not contained in documents. The type of knowledge in documents is called explicit knowledge. That which is most often not reduced to writing in a law office environment is tacit knowledge. As an example, suppose an experienced lawyer who has handled a number of hotel deals passed away. The firm maintained an excellent disaster management plan and recovered all of the documents that were used on all of that lawyer’s hotel transactions throughout the years. Merely reviewing the documents will not transfer all of that legal expert’s knowledge to a successor. Why not? Because a reader of the documents will not necessarily know why certain representations and warranties were added or deleted in certain transactions and not in others or why the indemnification provisions or nonrecourse provisions were not the same in different deals. By working on many complicated transactions throughout the years, a lawyer gains a great deal of tacit knowledge, such as when to modify, add, create, or delete certain provisions. When drafting documents for a new transaction, the lawyer determines the content of the document in part by that stored, tacit knowledge.

While drafting, the lawyer’s mind might make rather complicated decisions to include or exclude certain clauses without ever consciously recognizing that a multi-step decision process has actually taken place. In particular, if the subject matter is known very well, the mind acts so quickly that the process is often never recognized. It is assumed that this type of tacit knowledge cannot be conveyed to those who are inexperienced. After all, it takes years of experience to gain the knowledge and the judgment that develops with that experience. Can we capture such tacit knowledge and avoid the loss of intellectual capital that will occur if an experienced lawyer dies? The good news is that the answer is yes. The bad news is that because it would take such a tremendous investment in time by the expert lawyer to transfer that tacit knowledge it is not efficient to capture all of it. On the other hand, a reasonable amount of such knowledge can be captured in an efficient manner. Not only will the knowledge capture help a law office in a death situation, but it can also be a great efficiency booster while the expert is alive and actively practicing.

Document automation software is one way to effectively capture tacit knowledge in drafting documents for specific types of transactions. This software permits a block of text to be included or excluded from a document based upon a simple or complex set of criteria. The block of text can be anywhere from one character to millions of words. The software is very flexible and powerful, but to get the most advantage from it the expert lawyer must be able to identify and articulate each step in the decision process used to determine whether to include or exclude a certain block of text. It is possible to do this, and I have experienced the process. It works, and it permits less experienced lawyers in the office to do more expert drafting in less time and allows the expert lawyer to spend more time on higher value tasks. If set up properly, these systems will also serve as excellent training tools for those with less experience.

Geographical dispersion can help preserve the intellectual capital of a law office in the same way it can preserve documents. Is it wise for a firm to house all of its top experts in one location? With hindsight we can clearly see it would not have been a good idea to have them all working at the World Trade Center on September 11. Do we have to worry about future events? Is our office in a location that is a potential target or near one? Are targets only tall trophy buildings? Might less impressive buildings be targeted because of a tenant (for example, the Justice Department or a company that might be hated by terrorist groups)? Is it too expensive to set up separate offices? Is it too valuable to have all of the firm’s top experts in one location so they can have better communication among themselves? These are some of the questions a firm will consider in determining whether it should locate its experts in separate geographical areas.

“Location, location, location” is a familiar phrase to those in the real estate industry. September 11 has taught that although location is critical to the value of real property, having multiple locations is critical to allowing our technology to preserve our documents and our knowledge.

Technology—Property Editor: Gerald J. Hoenig, 2400 Lakeview Parkway, Suite 400, Alpharetta, GA 30004, ghoenig@MetLife.com