The Future Is Now:
ABA TECHSHOW Chairs' Legal Technology Pointers and Predictions
A provocative group of legal technologists—all past or present chairs of ABA TECHSHOW®—survey the legal tech landscape. Telling what's new and next is David Bilinsky, James Calloway, Simon Chester, Jeff Flax, Sharon Nelson, Dan Pinnington and Mark Tamminga.
Each year for the past two decades, one perfectly normal person (okay, some years there are two people) volunteers to take the helm of the juggernaut that is ABA TECHSHOW®, devoting a year or more to creating the best legal technology conference on the planet. Through sheer force of exposure, this front row seat to the latest news and brightest experts in technology tends to turn these people into experts in their own right. Apparently, once you've held the title of TECHSHOW Chair, you can never stop learning and watching and wondering what's next on the legal tech horizon! Having observed this phenomenon, Law Practice was intrigued when it heard that a group of ABA TECHSHOW Chairs was gathering to speak at the Pacific Legal Technology Conference last fall. We anxiously awaited their appearance, listened in with fascination, and then asked them to distill their latest predictions into a roundtable for our readers. — THE EDITORS
Let's begin with the bottom-line issues. How should law firms plan for future legal tech budgets? And how much of a bite can they expect technology to take out of the firm's total budget?
Jeff Flax: Technology continues to get cheaper, but lawyers must still focus on what is truly necessary to their practices. Firms often purchase products without a full analysis of how the given application fits the firm's specific needs. Budgeting for testing, migration and training are critical for successful use of any new system.
Mark Tamminga: The average cost of the PC has collapsed, and PCs are lasting longer as well. The fraudulent notion that you need to replace a computer every three years is, mercifully, dead. PCs purchased after the recent release of Microsoft Vista can be expected to last—in the absence of an unpredictable disruption—for five years or longer. If you're running XP now, though, you won't likely be thinking of moving to a new operating system until at least 2008. That means you can spend your money on other stuff, like VoIP, faster servers and capacity, capacity, capacity, because it ain't just about text anymore.
I read somewhere that it took 10 years of computer advances to properly run a graphical user interface, and that the next 10 years of technology advancement will be soaked up by retrofitting IT with the security that they didn't think about in the first go-round. That's likely too optimistic. Defensive spending on security will take a growing toll on technology budgets for the rest of our working lives.
Dave Bilinsky: Technology spending is determined by needs. Maintaining your current systems and simply migrating them to newer technologies is more of an ongoing expense than a big-ticket item for firms. The true investment in technology, and hence a bigger bite of the budget, will be incurred by those firms willing to stretch in new directions and go beyond their current comfort zones in seeking to apply technologies to leverage the firm's knowledge and assets.
Jim Calloway: Legal technology budgets will continue to be significant, but good budgeting and planning is a matter of getting good information about all the alternatives and then setting priorities. After all, few of us ever have an unlimited budget for anything. This is certainly true for law office technology.
Dan Pinnington: IT costs will be especially significant for the firms that have some catching up to do. Firms should spend far more on training their staff and lawyers to make greater use of technology. Most people in most law offices are just scratching the surface of the capabilities of what is already on their desktops.
Simon Chester: One of the implications of Moore's Law is that the basic setup continues to get cheaper. Software is still priced in a seller's market, but open source developments will drive costs down. This will be more of a comfort to small and midsize firms than to large firms, whose needs for robust enterprise-wide applications will leave them hostage to high-budget items. A full portal and document management system for a major firm can cost in the seven digits. But in terms of percentage of firm revenues, there won't be marked growth in the budget that will go to tech purchases. Of course, this prediction is worthless when the next killer app arrives.
Sharon Nelson: Annual technology costs will be approximately 25 to 30 percent of the budget. Each year, a firm needs to look at its budget for the current year and then look three years out, making adjustments as it goes along. Whining about how technology never used to take such a chunk of the budget each year is immaterial and shortsighted. Rather than moaning at the pain, we need to make sure we're spending our dollars wisely, instead of lurching from crisis to crisis because we don't have a strategic technology plan.
How will these developments affect law firms' billing practices?
Flax: Overall we may see some savings in use of legal assistants and IT staff. However, regulatory and ethical requirements to protect data will have a different impact on the costs of practice, although presumably these costs can be passed along to clients.
Tamminga: The pressure to quote on legal work will grow. But the big money will still come from selling time. That means those who continue to flog their hours will have an incentive to use the types of technologies that permit the "simulation of presence" so they can bill more time. The fact that there are only 24 hours in a day will present a vexing ceiling to income growth for those who have really lost perspective.
Calloway: I agree. Many law firms have so firmly entrenched the billable hour in their practices, their cultures, their internal reporting and their compensation systems that it will be difficult to disengage. But one of the benefits of technology is being able to do things automatically and quickly. That has the potential to put real pressure on the firm that insists on billing by hours instead of by tasks or projects.
Pinnington: Lawyers don't look much beyond billable hours, billings and receipts. These standard billings stats don't really tell you everything you need to know. Most law office accounting packages can parse a firm's financial numbers in all sorts of ways that shed more light on how a firm and its lawyers are truly doing financially.
Chester : Billable hours are too entrenched—not only on the law firm side but also (perhaps surprisingly) on the client side, too. The impact of technology on billing is still quite speculative in all but a handful of firms—mainly plaintiff side.
Bilinsky: Sure, but fixed-fee and value-billing arrangements offer a more open-ended revenue model that is not tied to time. Increasingly, financial systems being implemented in law offices will be able to determine the true costs of rendering a legal service. Technology will then be tapped to render services either at a lower cost or to reuse that knowledge to service other clients with little increase in marginal costs.
Nelson: I definitely think that value-based billing will become the norm. Electronic billing will become the norm. Electronic payment will become the norm. And automated billing systems will travel with us, be simple to use, and be helpful in making sure that time isn't "dropped."
What impact do you see technology having on the lawyer-client relationship?
Flax: Trust is the bottom line in all lawyer-client relationships. Implementing technology is valuable, but only if that trust is maintained. Accordingly, privacy issues must be addressed at all stages. In addition, clients want to see that their lawyer is using technology wisely and in a cost-effective manner—not as a "toy."
Tamminga: The line between the law firm and client will continue to blur. Ad hoc, problem-focused teams from both sides will gather through collaborative tools to beat on an issue until it's defeated or it passes. Clients will also have unprecedented access to work-in-progress by way of secure extranets as we go forward. This will reduce the pressure to report and help focus communications more on strategy.
Bilinsky: Clients will increasingly look to us to apply technology that adds real value in solving their problems—and not just resell something that exists on the lawyer's hard drive (perhaps with metadata showing its prior use). But it's also important not to let the technology get in the way. Personal relationships are how law practices are built, and tech tools will be best applied where they can facilitate this. But in some cases, technology can become a barrier to personal relationship building. I believe lawyers still need one-to-one face time with their clients and that won't ever change.
Calloway: To the extent the use of impersonal technology distances us from our clients, it is not a good thing. For example, while e-mail is a great tool, it's not as personal as a phone call. On the other hand, timesaving technology can free us from mundane drudgery and allow us to focus better on nurturing the lawyer-client relationship. One hopes technology will allow us to respond quickly to clients' needs, but will also give us more time to develop good relationships with clients.
Pinnington: I'm thinking of the looming shortage of lawyers, especially those with general practices in suburban and rural settings whose practices aren't being replaced. People in those settings are still going to require legal services, and technology will step up to the plate to allow lawyers to service them remotely, through things like online collaboration, instant messaging, VoIP or videoconferencing.
Chester : Technology has diminished distance and truncated time, and it has already transformed the relationship by enabling much closer collaboration. Online deal rooms, shared workspaces and extranets are simply examples of this in concrete form.
Nelson: Another aspect is that even lawyers need a break now and then. With clients getting more demanding about having instant access and instant responses, gone are the days when you could say, "I didn't get your letter in the mail yet" and buy yourself a few days to respond. We are going to have to reset client expectations.
How will future developments in legal tech likely affect the way lawyers work?
Flax: New privacy requirements will have a big impact. Already in the U.S. federal courts, lawyers are required to redact certain personal information in all pleadings, briefs and applications filed electronically with the court. And security will be an ever-growing concern. The use of technology helps a lawyer's day greatly—until the laptop gets stolen.
Tamminga: Lawyers will be expected to have—and indeed will have—a much greater sense of "currency." The status of matters will be updated constantly and communicated to the responsible professionals in real-time or as needed. Intelligent alerts and natural language searching will give lawyers unprecedented command over their practices. This will, however, have the unfortunate consequence of blocking many practitioners from ever being able to "turn it off." The line between professional life and private life will blur, and for some it will disappear altogether.
Bilinsky: Professional administration in firms and the continued adoption of a true business model will focus attention on financial reporting and monitoring systems. This, in turn, will lead to a greater understanding of the alliance between rendering legal work and the associated costs (and profits)—which means firms can move more strategically into markets that offer high returns for effort expended and leave higher-cost markets to their competition.
Calloway: The biggest change may relate to how technology changes society overall and how those changes influence legal practice. There will be more trademark and copyright infringement cases relating to postings on the Web, a lot of divorcing couples blogging about their divorce to the chagrin of their lawyers, a lot more complicated questions about who owns shared data, and a staggering increase in e-discovery issues.
Pinnington: Universal access to matter information will facilitate great online and virtual collaboration between lawyers and clients. The current rules and attitudes toward cross-jurisdictional mobility will have to change.
Chester : I would hope that they will improve client service by strengthening teamwork and enabling much deeper knowledge sharing and wisdom transfer.
Nelson: Integrated solutions will be the norm. Efficiencies through automation (such as document assembly) will allow for more flat-fee-based billing. Entry of duplicate information will be significantly reduced, too. And more and more lawyers are likely to work remotely. It will be standard practice for the "office" to travel with us.
What important developments are on the near-term horizon?
Flax: Once lawyers begin to see massive amounts of electronic discovery, they will be faced with what to do next. The advent and use of Web-based discovery databases will be essential. Litigators who continue to read through page after page of discovery without the benefit of document organization and management programs are in trouble. At some point, one can no longer be effective in evaluating a case without reviewing the massive volume of discovery generated in our electronic world.
Also, over and under the horizon is user training on existing and new technologies. Law firms spend substantial amounts of money on technology and do not come close to adequately training their staff to use the features of the systems.
Tamminga: I see the increasing demand for constant service enabled by devices like the BlackBerry. Clients want to have a sense that their lawyers are at their desks working on their specific files at all times. Devices that allow lawyers to simulate this level of "presence" will proliferate. Also, lawyers will soon be able to keep abreast of a much broader range of files and file issues as more of the data is liberated from the dead paper of the correspondence brad and moved into the highly organized logical environments of relational and other types of databases. The flip side: It will be a struggle to manage the "high touch" aspirations of a quality legal practice with the practical needs of actually wanting to have a life.
Bilinsky: The complete integration of the different systems used by lawyers into one desktop application is looming. We are seeing glimpses of this in products such as ProLaw—where the legal requirements (limitation, calendaring, bring-forward systems, conflicts checking and so forth) back-office systems (time and billing, appointments, phone messages and notes of calls, e-mails and correspondence) and knowledge tools (document precedents, research, enterprise searching and document management) are combined in one simple interface. These systems will "push" information to us—such as real-time financial feedback on the firm's performance—allowing a lawyer or managing partner to really monitor both the legal systems and the financial systems of the office.
Calloway: Document assembly is still underutilized in law firms. Maybe it's the fear of reducing billable hours or the investment in time and resources needed to develop the system that hinders progress. True, there will always be a place for the custom-drafted document reflecting the lawyer's experience, skill and the unique aspects of her particular situation. But a lot of routine documents like transmittal letters should be automated with data from the client's digital file.
Pinnington: A big development that has just unfolded is Microsoft Windows Vista. Not everyone needs it or wants it. But for those that do, it provides a new and better interface, more features and (allegedly) greater security. From a hardware requirements point of view, you likely need a new computer to run it.
Chester : Well, why should 2007 be different from any year in the past 15? The perfect speech recognition software is coming, and it will be cheap and reliable and will revolutionize the practice of law. And if you believe that, I have a lovely bridge with carved lions at the entrance that I'd love to sell you.
Nelson: Widespread use of GPS is just over the horizon. What better way to get to your clients, co-counsel, courts and even accident sites in the most efficient way? Portable GPS units are now very affordable and you can even get devices for your phone. Don't leave home without it.
Final question: What do you see 10 years down the road?
Flax: Retirement! But for those left standing, I see search engines that interpret queries with useful and accurate results. This will include concept-based systems that interpret the queries for the meaning rather than the exact language used in the search terms.
Tamminga: I don't really see major disruptions. (Which are, by their very nature, inherently unpredictable anyway, so why bother trying?) I think the mill practices (wills, real estate, collections, lower-end litigation) will be further automated and in many cases taken over by dedicated service providers that may or may not be part of conventional legal practice. Also, videoconferencing will be ubiquitous and voice recognition will be well on the way to supplanting the keyboard. And it will be harder to lie. Planet-wide wireless access will make verification of the most trivial details effortless and immediate. This will have a profound effect on litigation, business and politics. Oh, and law firms will be running Windows Vista Service Pack 7 despite the release of Windows Panorama 3-D four years earlier.
Bilinsky: A big disruptive force will be the migration of legal work from North America to lower-cost jurisdictions such as India. This will put downward pressure on legal fees and hourly rates, especially as offshore law firms come to a better understanding of the North American legal market.
Calloway: I see more mobile technology and miniaturization. It's easy to see the day when a personal computer will be the size of an iPod or perhaps a credit card. The device could project a virtual infrared keyboard onto any flat surface for data entry. In the same manner, a "screen" could be created by projecting an image onto any wall or horizontal surface, or perhaps a holographic screen could be created to your specifications on demand.
Pinnington: Online storage availability and capacity will grow over the next several years, as will the bandwidth needed to access it. At the same time, the cost of online storage will plummet. The net result will be many law firms (and clients) moving most, if not all, of their data to online storage. All sorts of benefits here: 24-7 access to all your data from anywhere, reduced or eliminated need for dedicated IT people (so even solos and small firms can have and afford the latest in technology), better security, and more redundancy for disaster planning purposes. As a bonus, having everything online will help solve many of the nightmares of records management, e-discovery and production. Document retention policies will be easier to execute and enforce, and preservation and production obligations will be easier to meet. You will have easy and universally available wireless access to all your data, all the time and from anywhere. It will also give clients constant access to you.
Nelson: We'll have better document management and control of electronic evidence—we may actually approach a truly paperless environment. Document retention and destruction policies will be common among all businesses and firms. While this massive collection of electronic information will require very controlled destruction methods, it will be largely automated and easy to work with. If you sit on the fence with these new technologies, it's an invitation to become a dinosaur. Bad move.Chester : I predict smarter search engines that learn from context and prompt us to discover information of whose existence, both inside and outside the firm, we were simply unaware. Serendipity is coming, everyone.