Down here in Durham, NC, we have artisanal everything: bread, cheese, pizza, peanut butter, and of course coffee, coffee, and more coffee. It’s great—fantastic food and coffee, that is, and there is no doubt some psychological kick from knowing that it’s been made carefully by skilled craftspeople for my enjoyment. The old ways are better, at least until they’re co-opted by major multinational corporations.
Aside from making you either hungry or jealous, or perhaps both, why am I talking about fancy foodstuffs on a blog about legal information? It’s because I’d like to argue that algorithms are not computerized, unknowable, mysterious things—they are produced by people, often painstakingly, with a great deal of care. Food metaphors abound, helpfully I think. Algorithms are the “special sauce” of many online research services. They are sets of instructions to be followed and completed, leading to a final product, just like a recipe. Above all, they are the stuff of life for the research systems of the near future.
Human Mediation Never Went Away
When we talk about algorithms in the research community, we are generally talking about search or information retrieval (IR) algorithms. A recent and fascinating VoxPopuLII post by Qiang Lu and Jack Conrad, “Next Generation Legal Search – It’s Already Here,” discusses how these algorithms have become more complicated by considering factors beyond document-based, topical relevance. But I’d like to step back for a moment and head into the past for a bit to talk about the beginnings of search, and the framework that we have viewed it within for the past half-century.
Many early information-retrieval systems worked like this: a researcher would come to you, the information professional, with an information need, that vague and negotiable idea which you would try to reduce to a single question or set of questions. With your understanding of Boolean search techniques and your knowledge of how the document corpus you were searching was indexed, you would then craft a search for the computer to run. Several hours later, when the search was finished, you would be presented with a list of results, sometimes ranked in order of relevance and limited in size because of a lack of computing power. Presumably you would then share these results with the researcher, or perhaps just turn over the relevant documents and send him on his way. In the academic literature, this was called “delegated search,” and it formed the background for the most influential information retrieval studies and research projects for many years—the Cranfield Experiments. See also “On the History of Evaluation in IR” by Stephen Robertson (2008).
In this system, literally everything—the document corpus, the index, the query, and the results—were mediated. There was a medium, a middle-man. The dream was to some day dis-intermediate, which does not mean to exhume the body of the dead news industry. (I feel entitled to this terrible joke as a former journalist… please forgive me.) When the World Wide Web and its ever-expanding document corpus came on the scene, many thought that search engines—huge algorithms, basically—would remove any barrier between the searcher and the information she sought. This is “end-user” search, and as algorithms improved, so too would the system, without requiring the searcher to possess any special skills. The searcher would plug a query, any query, into the search box, and the algorithm would present a ranked list of results, high on both recall and precision. Now, the lack of human attention, evidenced by the fact that few people ever look below result 3 on the list, became the limiting factor, instead of the lack of computing power.
The only problem with this is that search engines did not remove the middle-man—they became the middle-man. Why? Because everything, whether we like it or not, is editorial, especially in reference or information retrieval. Everything, every decision, every step in the algorithm, everything everywhere, involves choice. Search engines, then, are never neutral. They embody the priorities of the people who created them and, as search logs are analyzed and incorporated, of the people who use them. It is in these senses that algorithms are inherently human.
Empowering the Searcher by Failing Consistently
In the context of legal research, then, it makes sense to consider algorithms as secondary sources. Law librarians and legal research instructors can explain the advantages of controlled vocabularies like the Topic and Key Number System®, of annotated statutes, and of citators. In several legal research textbooks, full-text keyword searching is anathema because, I suppose, no one knows what happens directly after you type the words into the box and click search. It seems frightening. We are leaping without looking, trusting our searches to some kind of computer voodoo magic.
This makes sense—search algorithms are often highly guarded secrets, even if what they select for (timeliness, popularity, and dwell time, to name a few) is made known. They are opaque. They apparently do not behave reliably, at least in some cases. But can’t the same be said for non-algorithmic information tools, too? Do we really know which types of factors figure in to the highly vaunted editorial judgment of professionals?
To take the examples listed above—yes, we know what the Topics and Key Numbers are, but do we really know them well enough to explain why the work the way they do, what biases are baked-in from over a century of growth and change? Without greater transparency, I can’t tell you.
How about annotated statutes: who knows how many of the cases cited on online platforms are holdovers from the soon-to-be print publications of yesteryear? In selecting those cases, surely the editors had to choose to omit some, or perhaps many, because of space constraints. How, then, did the editors determine which cases were most on-point in interpreting a given statutory section, that is, which were most relevant? What algorithms are being used today to rank the list of annotations? Again, without greater transparency, I can’t tell you.
And when it comes to citators, why is there so much discrepancy between a case’s classification and which later-citing cases are presented as evidence of this classification? There have been several recent studies, like this one and this one, looking into the issue, but more research is certainly needed.
Finally, research in many fields is telling us that human judgments of relevance are highly subjective in the first place. At least one court has said that algorithmic predictive coding is better at finding relevant documents during pretrial e-discovery than humans are.
I am not presenting these examples to discredit subjectivity in the creation of information tools. What I am saying is that the dichotomy between editorial and algorithmic, between human and machine, is largely a false one. Both are subjective. But why is this important?
Search algorithms, when they are made transparent to researchers, librarians, and software developers (i.e. they are “open source”), do have at least one distinct advantage over other forms of secondary sources—when they fail, they fail consistently. After the fact or even in close to real-time, it’s possible to re-program the algorithm when it is not behaving as expected.
Another advantage to thinking of algorithms as just another secondary source is that, demystified, they can become a less privileged (or, depending on your point of view, less demonized) part of the research process. The assumption that the magic box will do all of the work for you is just as dangerous as the assumption that the magic box will do nothing for you. Teaching about search algorithms allows for an understanding of them, especially if the search algorithms are clear about which editorial judgments have been prioritized.
Beyond Search, Or How I Learned to Stop Worrying and Love Automated Research Tools
As an employee at Fastcase, Inc. this past summer, I had the opportunity to work on several innovative uses of algorithms in legal research, most notably on the new automated citation-analysis tool Bad Law Bot. Bad Law Bot, at least in its current iteration, works by searching the case law corpus for significant signals—words, phrases, or citations to legal documents—and, based on criteria selected in advance, determines whether a case has been given negative treatment in subsequent cases. The tool is certainly automated, but the algorithm is artisanal—it was massaged and kneaded by caring craftsmen to deliver a premium product. The results it delivered were also tested meticulously to find out where the algorithm had failed. And then the process started over again.
This is just one example of what I think the future of much general legal research will look like—smart algorithms built and tested by people, taking advantage of near unlimited storage space and ever-increasing computing power to process huge datasets extremely fast. Secondary sources, at least the ones organizing, classifying, and grouping primary law, will no longer be static things. Rather, they will change quickly when new documents are available or new uses for those documents are dreamed up. It will take hard work and a realistic set of expectations to do it well.
Computer assisted legal research cannot be about merely returning ranked lists of relevant results, even as today’s algorithms get better and better at producing these lists. Search must be only one component of a holistic research experience in which the searcher consults many tools which, used together, are greater than the sum of their parts. Many of those tools will be built by information professionals and software engineers using algorithms, and will be capable of being updated and changed as the corpus and user need changes.
It’s time that we stop thinking of algorithms as alien, or other, or too complicated, or scary. Instead, we should think of them as familiar and human, as sets of instructions hand-crafted to help us solve problems with research tools that we have not yet been able to solve, or that we did not know were problems in the first place.
Aaron Kirschenfeld is currently pursuing a dual J.D. / M.S.I.S. at the University of North Carolina at Chapel Hill. His main research interests are legal research instruction, the philosophy and aesthetics of legal citation analysis, and privacy law. You can reach him on Twitter @kirschsubjudice.
His views do not represent those of his part-time employer, Fastcase, Inc. Also, he has never hand-crafted an algorithm, let alone a wheel of cheese, but appreciates the work of those who do immensely.
The first thing we do, let’s kill all the lawyers.
- Henry VI, Pt. 2, Act 4, sc. 2.
This line, delivered by Dick the Butcher (turned revolutionary) in Shakespeare’s Henry VI, is often performed tongue-in-cheek by actors to elicit an expected laugh from the audience. The essence of the line, however, is no joke, and relates to destabilizing the rule of law by removing its agents — those who promote and enforce the law. What no one could predict, including Shakespeare himself, is the horrific precision with which such a deed could be carried out.
The 1994 Genocide in Rwanda showed this horror and more, with upwards of one million killed in the span of three months. The effect on the legal system was particularly devastating, with the targeting of lawyers and the justice sector, resulting in the targeted killing of prosecutors and judges at its outset.
Rwanda’s Justice Sector Development
Since 1994, Rwanda has done a remarkable job rebuilding its society, establishing security, curbing corruption, and creating one of the fastest growing economies in sub-Saharan Africa.
One of the biggest areas of development in Rwanda, and in other areas of the world, has been strengthening justice sector institutions and strengthening the rule of law. In transitional states, especially those developing systems of democratic governance, the creation of online, reliable, and accessible legal information systems is a critical component of good governance. Rwanda’s efforts and opportunities for development in this area are noted below.
From 2010-2011, I played a very small part of this development when I served as a law clerk and legal advisor to then-Chief Justice Aloysie Cyanzayire of the Supreme Court of Rwanda. Working with a USAID-funded project, I was also able to participate with legal education reform, and the development of an online database of laws, the Rwanda Legal Information Portal (RwandaLIP). In the summer of 2013 I returned to Rwanda, with the support of the American Association of Law Libraries, to visit its law libraries and understand the role of law libraries in legal institutions and overall society. After learning the Rwanda LIP was no longer updated (and now offline entirely), investigating Rwanda’s online legal presence became a secondary research goal for the trip. The discovery also highlighted the importance of legal information systems and their role in justice sector reform. Part of this justice sector reform related to changes in Rwanda’s legal system. Once a Belgian colony, at independence Rwanda inherited a civil law system, codified much of the Belgian civil code, and today the main body of laws comes from enactments of Parliament. Rwanda’s judicial system, rebuilt after the 1994 Genocide, is made up of four levels of courts: District Courts, Provincial Courts, High Courts, and the Supreme Court.
With its civil law roots, courts in Rwanda were largely unconcerned with precedent. As Rwanda became a member of the East African Community in 2007 (and adopted English as an official language), the judiciary started a transition to a hybrid common law system, considering how to assign precedential value to court decisions. With this ongoing transition in Rwanda’s legal system, an online legal information system has become a significant need for legal and civil society.
Online Legal Information Systems
In order to establish the rule of law in a democratic system, citizens must have access, at the very minimum, to laws of a government. To make this access meaningful, a searchable database of laws should be created to allow users of legal information to find laws based on their particular information need. For this reason alone it is important for governments in transitional states to make a commitment to developing online legal information systems.
John Palfrey aptly noted: “In most countries, primary legal information is broadly accessible in one format or another, but it is rarely made accessible online in a stable and reliable format.” This is basically the case in Rwanda. Every law library, university library, and even the Kigali Public Library have paper copies of the Official Journal — the official laws of Rwanda. Today, however, the only current place to find laws online is through the Prime Minister’s webpage, where PDF copies of the Official Gazette are published. The website Amategeko.net (Kinyarwanda for “law”) was frequently used by lawyers and members of the justice sector to search Rwanda’s laws, and allowed the general public to not only access laws, but run a full text search for keywords. This site, however, was not updated after 2011, and is now completely offline. The result is no online source to search Rwanda’s laws.
Rwanda is using its growing information infrastructure, however, to create other online quasi-legal information databases. For instance, the Rwanda Development Board created an online portal for businesses to access information on “investment related procedures” in Rwanda. The government is also allowing online registration of businesses, streamlining the processes and making it more accessible. These developments make sense with Rwanda’s reforms in the area of economic development, and its recent ranking in the top 30% globally for ease of doing business, and 3rd best in sub-Saharan Africa. While economic reform has driven these changes, justice sector reform has not yet yielded the same results for online legal information systems.
Rwanda’s Legal Information Culture Despite the limited online access to laws, there is a high value placed on legal information in Rwanda. Every legal institution has a law library and a dedicated library staff member (although most don’t have formal education in librarianship or information management). Moreover, members of the justice sector, from staff members to Permanent Secretaries and Ministers, believe libraries and access to legal information is of critical importance. A common theme in Rwanda’s law libraries, however, is the lack of funding. Some libraries have not invested in library materials in years, and have solely relied on donations to add items to their collections. It is not altogether surprising, then, that the Rwanda LIP remained un-funded, and is now completely defunct as an online legal information system. One source close to the Rwanda LIP project indicated that funding has been sought at Parliament, but as of today has yet to be successful.
The failure of the Rwanda LIP is perhaps a victim of how it came to be; that is, through donor-funded development. Creating sustainable online databases requires a government commitment of financial support. Just as Amategeko.net before it, the Rwanda LIP was created through a donor-funded initiative, and at its conclusion the LIP’s source of funding also ended. For any donor-funded development initiative, sustainability is a key concern, and significant government collaboration is necessary for initiatives to remain after donor-funded projects end. This concept is especially true with legal information systems, and is perhaps the cause for the Rwanda LIP’s demise. While created in partnership with the Government of Rwanda, it failed to adequately secure a commitment for continued funding at its outset. Sustainability issues are not unique to Rwanda’s experience with online legal information systems. The availability of financial resources is one of the key challenges to creating a sustainable online database of laws. Working with developing countries in Africa, SAFLII found that sustainability issues come from “shortages of resources, skills and technical services.” While donor-funded projects have serious limitations, others experiencing the sustainability challenge have suggested databases supported by private enterprise, “offering free content as well as value-added services for sale.” One thing for certain is that long-term sustainability remains one of the biggest challenges for online legal information systems.
Print to Digital Transition and Overcoming the Digital Divide In addition to sustainability, transition from print to digital poses its own complications, and has emerged as a major issue in law libraries, from even the most established institutions. This challenge is especially unique in the context of developing and transitional states, where access to the internet can pose a significant challenge. This problem, known as the “digital divide,” has been described as something that “disproportionately disenfranchises certain segments of society and runs counter to the notion that inclusiveness and opportunity build strong communities and countries.” This is an even larger problem in developing and transitional states, where there is far less wealth and technological infrastructure for internet connectivity, and a greater disparity in access between and among communities.
Of all countries in the process of developing online legal information systems, however, Rwanda is perhaps the best suited to succeed. With high-speed fibre-optic internet cables recently installed throughout the small East African country, Rwanda has one of the best internet penetration rates in the developing world. So, while Rwanda’s law libraries (and other libraries) throughout the country have print copies of laws, there may be a legitimate opportunity to give a large number of citizens online access. For example, the Kigali Public Library, the flagship institution of the Rwanda Library Services, houses print copies of the laws of Rwanda but also has an internet cafe giving free access to online resources. Kigali Independent University has an “Internet Library” with more than 500 computers for student use. Rwanda’s law libraries are also open and accessible to the public, some of which have computers for use by the public as well. Other libraries, including the law library at the National University of Rwanda, have increasing access to online resources to serve their users.
In Rwanda, a new access to information law (Official Gazette No. 10 of 11.03.2013) makes online legal information even more critical in the developing state, and Rwanda’s current efforts can serve as an example for the importance of modernizing online legal information. The access to information law imposes a positive obligation on the Government of Rwanda, and some private companies working under government contracts, to disclose a broad range of information to the public and press. It has been stated that the law “meets standards of best practice in terms of scope and application” for freedom of information laws. Despite the law’s conditions to withhold information under Article 4, the significant shift in policy and the law’s broad range of information available are very positive signs. This and similar laws across the developing world have created a need for the improvement of existing legal information systems, or the creation of new systems to adequately make available essential legal information. A critical component to the implementation of this law, therefore, is a reliable and sustainable online legal information system.
Lessons Learned from Rwanda’s Experience
While Amategeko.net and the Rwanda LIP are no longer online, institutions within the justice sector of Rwanda are currently working on solutions. In the meantime, there is no meaningful way to search Rwanda’s laws online. It is possible that a stronger financial commitment at the outset of the Rwanda LIP would have solved this. In the future, long-term sustainability should be one of the primary qualifications for creating an online system.
In the meantime, there are other ways of expanding Rwanda’s access to online legal information through databases of foreign law and secondary sources. Talking with law librarians in Rwanda, I learned that there is little, if any research instruction being delivered from law libraries. Even in the few libraries with subscription electronic databases, users aren’t necessarily being directed to relevant legal resources. Furthermore, law librarians generally collect, catalog and retrieve legal materials for users, rather than directing users to relevant sources. Users of legal information in Rwanda (and elsewhere) would be well served by being exposed to other online sources of legal information. Sites like the LII, WorldLII, and the Directory of Open Access Journals offers access to a wealth of free online primary and secondary materials that could be useful to researchers. Creating research guides and offering research instruction in these areas costs very little, and opens up countless resources that could be valuable to users of legal information in Rwanda, and elsewhere. Those working in justice sector development should investigate the possibility for this, in conjunction with creating online legal information systems of domestic laws.
Finally, the majority of those working as librarians in Rwanda’s law libraries have no formal instruction in library or information science. Nonetheless, it is remarkable that those with little or no formal training are competent librarians. Formal training or not, qualified librarians generally do not have the opportunity to offer research training to users of legal information. Treating law librarians as professionals would open up many opportunities to increase the capacity of users of legal information, and the online resources available.
Brian Anderson is a Reference Librarian and Assistant Professor at the Taggart Law Library at Ohio Northern University. His research involves the use of law libraries and legal information systems to support the rule of law in developing and transitional states. In September 2013 Brian presented two papers at the 2013 Law Via the Internet conference related to this topic; one related to civil society organizations and the use of the internet to strengthen the rule of law, and another about starting online legal information systems from scratch.
Last June after a relatively brief 18 months of negotiations, the European Parliament adopted a proposal for a revised PSI Directive. Quite something if one takes into account the ‘horizontal’ and far reaching effects of the new rules, affecting the information position of almost any public sector body across Europe. So what’s in the new Directive? And how should we judge it?
“Today we can celebrate our efforts to bring government data closer to citizens and businesses in Europe. We are finally getting the much needed legal framework to boost the economy and create new jobs.” This is how EU Commissioner Neelie Kroes announced the adoption of the Directive of the European Parliament and of the Council amending Directive 2003/98/EC on re-use of public sector information in June 2013. Ms Kroes had initiated the process in December 2011, acknowledging evidence (in particular demonstrated in the the POPSIS Report and the Vickery Report) that European socio-economic potential was unexploited and complaints from large groups within the Open Data community that the 2003 legal framework required to be reviewed. This legal framework had been put in place by the European legislator with the aim of opening up Member States’ public informational resources in order to stimulate economic growth and enhance transparencies and to take away barriers that may refrain them to flow freely across Europe.
Slight sense of disappointment
Truly believing in the spirit of Open Data, but aware of the sensitivity of the subject especially in these times of economic crisis, I must confess that an appraisal of the outcome against the ambitions set in December 2011 leaves a slight sense of disappointment, as some of the more forceful, much-needed measures have been watered down. In my view, the original proposal held some remarkable provisions that would have significantly changed the equation between public data holders and re-users. Alas, they have been lost in the trenches of negotiations in Parliament and the Council in particular.
No charges and a watchdog
The first novelty the proposal had sought to introduce was a stringent pricing regime for public sector information (PSI), as a rule disallowing public sector bodies (PSBs) from charging above the marginal (reproduction, provision and dissemination) cost level, which is practically zero in a digital environment. Exceptions were to be allowed only if this would entail instant bankruptcy of the PSB. In such exceptional cases, higher charges could be set. The PSB had to show that the charges were determined by objective, transparent and verifiable criteria and obtain approval from an independent authority. That was the second novelty introduced. The independent re-use watchdog was also to be endowed with specific regulatory powers regarding PSI re-use, serving as a means of redress. Its decisions were to be binding and, in doing so, would mimic the fairly successful models used in the United Kingdom and Slovenia.
Lost in battle
Alas, we lost both. Now the Directive, by its article 4(4), also allows the independent authority to be an existing national judicial authority. This means lengthy and costly procedures instead of swift decisions, which are much needed by re-users, in particular small and medium-sized enterprises (SMEs). Article 6 continues to refer to a marginal cost regime by default, but the system is as solid as Swiss cheese: PSBs that are required to generate revenue to cover a substantial part of their costs relating to the performance of their public task, as well as documents for which the PSB is required to generate sufficient revenue to cover a substantial part of the costs relating to their collection, production, reproduction and dissemination are exempted. This means that costs can be recovered, including a reasonable return on investment (being the ‘old’ article 6 regime). However, even this cloud has silver lining: terms are to be set up-front and published, including the structure and the principles underlying the charges.
Synchronization access and re-use
Of course the revised Directive also introduces some new elements that are a step forward. Firstly, it introduces a new paradigm. Where under the old regime PSBs could disallow re-use of publicly accessible documents, the new Directive synchronizes access and re-use: if there is a right of access, then there is a right of re-use. And although PSBs can still impose conditions, including charges, under article 8(1), those conditions shall not unnecessarily restrict possibilities for re-use and shall not be used to restrict competition. This implies a kind of ‘compulsory licence’ for material protected by (Crown) copy and data base rights.
Secondly, the new Directive addresses the issue of accessibility. According to consideration 11, PSBs should make documents available through open and machine readable formats and together with their metadata, at the best level of precision and granularity, where possible and appropriate, in a format that ensures interoperability, e.g. by processing them in a way consistent with the principles governing the compatibility and usability requirements for spatial information under the INSPIRE Directive. Although not incorporated in the actual provisions — which are to be transposed into national legislation — this is a clear encouragement to the Member States to rely on the INSPIRE framework also for other areas of PSI. This being said, the Directive (article 5(2)) explicitly states that this does not imply an obligation to create or adapt documents or provide extracts in order to comply with that paragraph if this would involve disproportionate effort, going beyond a simple operation. Put differently, the success of expanding the INSPIRE regime will depend on the willingness of individual PSBs. One would expect that this will happen in those sectors that are close to or partly reliant on INSPIRE-related information.
The final judgement
My feeling is that if we ever had a chance to truly accelerate the adoption of Open Data in a fairly harmonised European context, this was definitely the moment: the Open Data movement had managed to arouse political attention and we had a Commissioner with a genuine connection to the dossier, where the PSI Directive is fuelled and driven by competition law spirit and concepts. On the other hand, looking at the bigger picture, the new Directive is the next and necessary step of a process started more than 14(!) years ago with the adoption of the 1999 Green Paper ‘Public Sector Information : A Key Resource for Europe’. It is part of the transition that we are witnessing: governments are gradually returning to their core public tasks and enabling companies and citizens to avail of opportunities (and take on responsibilities no longer catered for) and to fill the vacuum created by this retreat. This appears to be an irreversible process. The watering down by the Council (read: Member States, including some of the big ones like the UK) of the charging and redress provisions should be put in context of the time needed to reconsider public data holders’ funding models that are moving from fee-based models to general State budget financing. This shift is unmistakably taking place, judging from the ever increasing number of PSBs adopting Open Data policies across Europe. The new Directive will catalyse this process, where the transposition obligation will put these points on the political agenda for the next two years.
Marc de Vries has professional degrees in both law and economics (Utrecht 1991). He has been active in the field of PSI re-use for more than 15 years, both at the national and European levels. Any comments are welcome: email@example.com | www.thegreenland.eu | +31 653897002 | http://www.linkedin.com/pub/marc-de-vries
The legal profession has for long been notoriously averse to change, but now even the legal industry is affected by a new harsher reality with widespread changes impacting legal practice and client service. These changes come not merely from the aftermath of the economic downturn with price pressure and increased demands from clients, but also from the technological developments and regulatory changes that provide breeding ground for new kinds of competition. This post discusses the future of legal service, with a specific focus on how the current changes on the legal market demand a more strategic approach to knowledge management and efficient working processes and how technology is becoming more and more important as a way to develop new innovative ways to deliver legal services.
1. CHANGING LEGAL MARKET
For a long time, the legal market has been spared from some of the general business realities applicable to almost all other industries. Law has been something of a protected industry, with lawyers in a unique position as the only legitimate provider with access to legal knowledge and tools and no real competition – a “black box” exempt from normal rules of business, such as predictability in cost and time, budget restraints and value for money. After selection, the relationship with the client was controlled by the law firm, which decided almost entirely by itself how the service was to be delivered, billing it by the hour and dictating cost, pricing, staffing and strategic direction, with no need to innovate or provide cost-efficient legal services. Jordan Furlong has described this closed market more in detail and how the legal marketplace now is changing, in the series “The evolution of the legal services market stage 1-5”
But now, there are strong drivers for change affecting the legal market and rapidly forcing it out of the “black box” towards a new reality. One such driver is the regulatory changes in UK, with the Legal Services Act allowing different types of lawyer and non-lawyer to form businesses together, thereby facilitating the development of Alternative Business Structures, with external investments, in legal service providers. These regulatory changes have opened up the legal market for a new kind of competition from new entrants with disruptive business models. Unlike conventional law firms, these new providers tend to have a greater focus on rethinking legal services. They have developed both different kinds of legal services and new ways of providing them. They use technology to improve the way they connect to clients, offering new and easier ways to conduct legal tasks over the Internet, providing cloud-based customized legal documents and advice with arguments like “No surprise pricing. No hourly fees, no shocking bills.” This is a market that has gained a large interest from venture capitalists, for example by Google Venture in Rocket Lawyer (which recently also acquired competitor Law Pivot), Kleiner Perkins and Institutional Venture Partners in LegalZoom and Quotidian Ventures and others in Docracy. All this clearly indicates that there is a large market opportunity for these kinds of new legal solutions that are efficient, technology-driven and affordable to users. Other interesting new legal service or knowledge providers are VentureDocs, Docstoc and the Swedish Moretime Growth On Demand. Soon, we will probably also see global legal service providers outside the legal sphere, such as department stores or investment banks, accounting firms, insurance companies, or even Amazon.
Law firms also face a new kind of competition from Legal Process Outsourcing providers (LPOs), where legal work is exported to an outside law firm or legal support services company, often in low-wage markets overseas such as India, but also to new providers within the same country or to new brands established by the law firm itself, such as Herbert Smith’s document review centre in Belfast. The most commonly offered services are document review and legal research, but recently LPOs have started to move up the value chain by providing not only due diligence services but also the agreement drafting in M&A transactions. As reported in “LPOs Stealing Deal Work from Law Firms” alternative legal service providers are beginning to take the bread-and-butter of large law firms – handling whole mergers and acquisitions, not just the due diligence aspects of deals. Beyond cost savings, LPO has advantages like access to outside talent, 24-7 availability, and the ability to quickly scale up or cut back operations. According to the international LPO Market Study, general counsel are increasingly bypassing law firms and instructing legal process outsourcing suppliers directly. Currently worth over $1bn (£629m), the LPO market is forecast to double in size in the next two to three years.
A third major driver for change is the new client demands. Due to budget restraints, most general counsel face what Professor Richard Susskind refers to as the “more for less-challenge”, when clients have more legal issues to handle, but less in-house resources and less budget to spend on external advisers. This challenge has forced general counsel to examine alternative solutions, demand discounts and alternative fee arrangements, ask for predictability and metrics–all demands for added value and efficiency. When law firms are no longer the only providers in the legal market, clients have a diverse set of options to choose from for legal advice and they no longer accept hourly billing for inefficient work. General counsel are more closely reviewing external advisers and are very cost driven. More and more they turn to cost-effective solutions, like LPOs, or deploy the idea of “multi-sourcing” with the use of different legal service providers on different elements of a legal matter. Basically, the client has taken over the driver’s seat from law firms and is now dictating cost, pricing, staffing and strategic direction, which previously was in the law firm’s control. Together, these two factors — a decline in overall legal spending and new options for legal services — combine to reduce demand for the services of lawyers.
Susan Hackett, in her key note presentation at VQ Forum 2012, described current legal market developments, which are based on shrinking demand and increasing supply, competition from non-legal sources, and a lack of experience to guide us in this rapidly changing reality. Today, many law firms still continue to work as if they can charge whatever they want for the limited services they wish to provide, which makes it difficult to profit from the more efficient and effective service delivery demanded in this competitive marketplace, while delivering greater client value. Most law firm base the lawyer compensation on lawyer activity instead of on client results. Many law firms do not even ask for feedback but simply assume that they are doing well and don’t need to change: “While 85% of partners think clients love them, only 35% of clients recommend their existing outside counsel to other clients.”
To address this “disconnect” between the lawyers’ high perception of their value, and re-connect it to what clients actually want their lawyers to do is essential in order to improve the value of long-term client relationships. Susan Hackett also pointed to the decreased client loyalty. The 2012 Altman Weil Chief Legal Officer Survey makes it clear that clients are on the move without concern for loyalty. The study reports that 77% of the participants terminate their relationships with at least one firm last year, while only 17% give their law firms an “A” grade and 87% rate their law firms’ efficiency as “low.”
An interesting new initiative to pinpoint law firms’ inefficiency has been made by D. Casey Flaherty, who has developed a basic technology competency audit that he administers to his outside counsel to show how the lack of proficiency with the common software tools at their disposal (Word, Excel, Acrobat, etc.) result in an inordinate amount of time wasted that is still billed to clients.
The fourth major driver for change on the legal market is the collaboration trend. Today’s business conditions has completely changed with the so-called ”sharing economy” and the new generation of ”Millenials”, as defined by inter alia futurist Michael Rogers. Michael Rogers talks about the future of the legal industry as an era inspired by the Millenials; those who do not consider themselves limited to meeting people in their neighborhood but instead create relationships with people all around the world, based on interests instead of locality. In this era, new business is gained through referrals and by creating relationships through social technologies, collaboration and providing information for free. This ”freemium” trend has also been noted for legal professionals in the American Bar Association’s Legal Technology Survey Report, where 56% of the respondents use a free online source for their legal research.
Clients are becoming more and more aware of the collaboration advantage. There are more and more legal collaboration portals available, such as the Association of Corporate Counsel that provides templates and other legal documents to its members, and Legal OnRamp, a collaboration system for in-house counsel and invited outside lawyers and third party service providers. Another interesting collaboration example is Pfizer Legal Alliance, a collaboration program for Pfizer’s outside counsel, which makes them work more closely and collaboratively both with Pfizer and with each other using standardized fixed-fee billing arrangements. Richard Susskind also talks about the “collaboration strategy” for law firms, where clients can come together and share the costs of certain types of legal service, as well as collaboration projects between law firms and clients, by online closed communities for collaboration, online legal services, automated drafting and electronic legal marketplaces. Although some lawyers might find this controversial, such collaboration has already started to take place: six major banks and the law firm Allen & Overyhave created a joint online legal risk management tool.
2. NEW STRATEGIC APPROACH TO KNOWLEDGE MANAGEMENT AND EFFICIENT WORKING PROCESSES
Analysing what is happening on the legal market with the new trends with LPOs, new legal service providers, virtual law firms and the increased collaboration and knowledge sharing within legal networks, you can see that clients are becoming more and more aware of new tools and processes and will start demanding their lawyers to adapt to the new technology to become more efficient. Law firms, therefore, have to review the value of their services and the use of technology to streamline processes and take better advantage of a firm’s accumulated knowledge to ensure better service than their competitors.
For the first time in legal history, there is now a true incentive for law firms to deliver results faster, through the right combination of internal and external resources and the better use of IT as a competitive edge.
This means that law firms have to take a new strategic approach to knowledge management as a business development tool, a way of delivering the changes and innovation that will help law firms to survive and thrive in today’s dynamic and uncertain business and professional landscape.
Furthermore, clients are no longer depending upon their law firms to receive standardized legal documents, since there are several sites with online legal documents easily available, often for free, as well as collaboration portals. Law firms have lost control over the legal documents they earlier considered the “crown jewels” of the firm. It also means that demanding and skilled clients, like in-house counsels, have easy access to more affordable legal resources and are becoming less willing to pay high fees for some of the work done by junior associates.
Law firms, therefore, have to rethink their view of these legal documents and realize they are only the basis for their legal service and are already easy available for the clients. Instead, they have to look closer at how to better share knowledge from their experience, better re-use documents they have developed, standardize more routine work, and to analyse their most valuable knowledge in order to leverage it to fully support their clients.
The American Lawyers’ survey reported recently that law firms seem to have realised this need for a more strategic approach to knowledge management (KM) and that firms were pushing for greater efficiency in their internal operations. Nearly half of the 200 responding law firms said they had aligned partner compensation with a willingness to cooperate in new initiatives, such as knowledge management. Mary Abraham has discussed the impact of this report in “Guiding Partners to Better Law Firm KM” and how KM professionals best should take advantage of this windfall by avoiding the traditional precedent collection projects or model-document drafting projects and instead focus on high-impact KM activities. This means investing in the KM projects that will provide the greatest return on investment for the firm. This also means that legal knowledge management is transforming, from the previously dominating precedent and knowledge-base building, to focus on problem solving and business development. Legal KM today is something very different from legal KM in its early days. Ron Friedmann has provided his inside insights on this transition in “The Evolution of KM from Content to Tools to True Productivity”:
“In the 1990s, we talked about work product retrieval and precedents. That continued into the new century until we finally realised how hard it is to find work products and to write, maintain, and organize precedents. Moreover, we also realised that content is not enough. We broadened our focus to finding experienced lawyers and finding relevant matters. /…/ More recently, KM has shifted again. Many KM professionals today focus on legal project management, alternative pricing arrangements and process improvement. In my view, this reflects more a discontinuity or abrupt shift than evolution. Legal KM sees the light: content is not an end. Even software is only a means to an end. The real end, the real goal, perhaps the Holy Grail, is improving lawyer productivity; is solving real problem.”
Michael Koenig also points to how “legal KM has its roots in helping attorneys practice more efficiently and effectively, by drawing on colleagues’ prior work product and through sharing information, expertise, and documents within the firm. Historically, much of this sharing happened without colleagues realizing it—KM was at work behind the scenes finding and organizing resources created by individual attorneys and providing searchable, efficient access to that product to all attorneys.” But when “combining strategic development of template or master resources with document automation, KM can shift attorneys from the ancient practice of search/save as/edit to web-based questionnaires that generate a customized “best practice” final document, at a fraction of the time and cost it would take to start from scratch and without the propensity for errors inherent in editing an older document.”
What is really interesting today is that not only legal KM professionals sees this “Holy Grail of legal KM” that Ron Friedmann refers to, but also recent developments in the legal publishing world prove that legal publishers are on the same path; e.g. Rocket Lawyers acquisition of LawPivot and Thomson Reuters’ launch of client-centric platforms. Thus both legal KM professionals and legal publishers seem to agree that it is not enough to provide information, work products or precedents. Instead, focus is on supporting lawyers to improve the way they work and serve clients, and ultimately to improve how law firms operate as businesses.
In “Is KM a Real Force Multiplier?” Mary Abraham explained how KM needs to improve productivity and problem solving and how “the key to force multiplications is not to settle for incremental improvements but to aim for dramatically improved results”. With such a new focus, the Holy Grail of legal knowledge management appears to be within reach – where the goal of KM is to provide true competitive advantage by developing a combination of tools and content to improve lawyer productivity, solve real problems and make the business more profitable.
By using IT in the right way, the possibilities of finding relevant information will be substantially improved and the internal knowledge sharing will be leveraged, since previous lessons learned, best practices and new ways of solving problems can be better shared and taken advantage of by all lawyers. Through these methods, substantial efficiency improvements and increased profitability can be reached. Developments in information technology will enhance the efficiency of legal work, not only by the use of standard documents like templates and checklists, but also by proceduralized processes and automated workflows. Systematization can also extend, however, to the actual drafting of documents by the use of document assembly technology. By implementing automated document production to support standardization, firms will be able to deliver the same quality legal services and still maintain profit margins regardless of fee structure.
Richard Susskind predicts this to be the future of legal service: “These systems, which can be used within legal businesses or made available online, are disruptive for lawyers who charge for their time, because they enable documents to be generated in minutes whereas, in the past, they would have taken many hours to craft. The end result is a tailored solution, delivered by an advanced system rather than by a human craftsman. That is the future of legal service.”
With a new approach to knowledge management as a management issue for the whole business, with embraced technology and new approaches to standardization by using document assembly tools and buying basic documents externally, substantial improvements in efficiency and increased profitability can be reached. Law firms will prosper by finding new legal services to offer their clients. New business opportunities will arise in the provision of services to fixed prices by the use of new specialized and individualized solutions for clients.
Helena Hallgarn and Ann Björk are founders of Virtual Intelligence VQ, a Swedish consultancy firm that combines the practice of law with IT and knowledge management skills. They are two of the most experienced knowledge management professionals in Scandinavia, with backgrounds from legal practice and KM work at Scandinavian law firms Vinge, Mannheimer Swartling and Gernandt & Danielsson. Their focus is to strategically develop legal KM and drive innovation in the legal profession.
Helena and Ann blog at Legal Innovation Blog and manage the LinkedIn-discussion group Legal Innovation. Each year they also arrange VQ Forum with a focus on the most interesting ongoing discussions worldwide on strategy, leadership, innovation, technology and knowledge management for the legal sector. Helena and Ann can also be found as @VQab on Twitter.