Managing Unstructured Documents to Increase Productivity and Your

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Managing Unstructured Documents to Increase Productivity and Your Powered By Docstoc
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       Managing Unstructured Documents
to Increase Productivity and
       Your Firm’s Bottom Line




        Bruce Lewis,
        Payne Consulting Group

        Ross Kodner,
        MicroLaw, Inc.

        November 2004




        A Strategic White Paper from Microsoft for Legal Professionals
                   Managing Unstructured Documents to Increase Productivity
                   and Your Firm’s Bottom Line

                   The technological landscape for attorneys working in midsized law firms and in-house
                   legal departments has shifted dramatically over the course of the past decade. The
                   proliferation of e-mail, document, knowledge- and case-management systems, along
                   with many other types of collaborative technologies, has permanently changed the
                   way legal professionals practice law. Communication with clients, co-counsel, and even
                   opposing parties has become practically instantaneous. Handheld wireless devices,
                   tablet PCs, and other technology tools have become so ubiquitous that it is hard for
                   most attorneys to remember what life was like before they were so readily available.
                   High-speed video conferencing has made it possible for members of a practice group
                   in Chicago to have real-time meetings with their counterparts in London. Attorneys in
                   Hong Kong, New York and San Francisco can access, edit and review the same set of
                   documents through the use of centralized document management software.

                   But despite the investments firms have made in collaborative technology, gaps still
                   exist. Many of the products that law firms use to promote collaboration between
                   attorneys, offices, and clients operate autonomously—like small unconnected islands
                   floating in a sea of information. In many firms, client files are saved in network folders
                   or in proprietary document management systems while e-mail, notes, and other
                   items related to the files are stored elsewhere. Contact information used to track and
                   identify clients, expert witnesses, and other key persons is tucked away on individual
                   Palm Pilots or stored in relational databases. Litigation support and case management
                   software runs from individual desktops. The technologies designed to automate
                   processes and promote collaboration often create redundancies between disparate
                   sets of applications and systems. Implementation, training and maintenance costs can
                   be staggering. Perhaps the biggest gap in collaboration results from the never-ending
                   paper trail of notes, documents, memos, letters and other similar files that end up
                   piled high on desks, stuffed in boxes or stuck to keyboards and monitors.

Understanding the Role of Knowledge Management in a Legal Environment
                   The term “knowledge management” often takes on different meanings in various
                   contexts. Defined in a way that is relevant to law firms, it is the “systematic
                   management and use of the knowledge in an organization;” or, to put it in more
                   technical terms, “the leveraging of collective wisdom to increase responsiveness and
                   innovation.” In today’s highly fluid and competitive legal environment, knowledge
                   management plays a critical role in helping firms improve internal communication and
                   productivity while strengthening client relationships through increased responsiveness.

                   As trial teams prepare for court, they must be able to easily communicate with
                   one another and quickly access a wide range of documents including depositions,
                   complaints and trial notes. Furthermore, they require the ability to quickly recall
                   expert witness information and other critical components related to the case on a


               2   MICROSOFT WHITE PAPER FOR LEGAL PROFESSIONALS
                  moment’s notice both before and during trial. They rely on knowledge management
                  to accomplish these goals and build the strongest possible case for their client.

                  In order for attorneys to effectively leverage the collective store of physical and
                  intellectual capital that exists within their firms, they must possess the technological
                  tools that enable them to work more efficiently and cohesively.

What Are the Costs of Unstructured Knowledge Management?
                  Unstructured knowledge management can be loosely defined as “intellectual and
                  physical capital that is unaccounted for and spread throughout an organization in a
                  disconnected or unorganized fashion.” In other words, it represents lost opportunities
                  to leverage the collective wisdom of a firm to increase responsiveness and innovation.

                  Imagine the following scene: The busy litigator has spent the last two hours in a
                  heated negotiation with opposing counsel in a case involving “bet the company”
                  litigation. The lawyer reviews her notes—a legal pad filled with various comments,
                  concerns, thoughts, ideas, suggestions and a few nervous doodles for good measure.
                  In short, these notes represent the substance of a key discussion which may lead
                  to settlement for her client. She thinks, “I barely had time for this meeting that was
                  supposed to take 15 minutes—how am I ever going to find the time to rewrite all
                  these notes back at the office?”

                  Precious billable time will be spent and lost as this and other similar scenarios are
                  re-enacted in law firms every day. Reduced to the base economic level, consider this
                  question: How many other billable hours are being wasted just looking for case-critical
                  information that can only be found somewhere on a scrap of paper? What is the
                  cumulative cost of subsidizing a paper-centric law practice?

Getting a Handle on Unstructured Knowledge Management: A Case In Point
                  In an effort to reduce the costs associated with unstructured knowledge management,
                  the law firm of Hughes Hubbard Reed deployed a firm-wide collaborative solution
                  specifically designed to improve productivity, streamline internal workflow processes
                  and strengthen client relationships. After using the new system for approximately two
                  months, they retained the services of an independent consulting firm to analyze and
                  quantify any resulting reduction in costs. The results of the study found that:
                  • The amount of time spent taking, sorting and rearranging notes decreased
                    by 54%.
                  • Attorneys and secretaries reported a 15% improvement in information and
                    document retrieval time.
                  • The firm realized a significant reduction in printed paper usage.
                  • Attorneys were able to complete short projects 27% faster.
                  • The firm would realize a net savings of U.S. $2,458 per-user, per-year,
                    projected over a three-year period.

              3   MICROSOFT WHITE PAPER FOR LEGAL PROFESSIONALS
The Myth of the Paperless Office
                    The promise and the ideal of the “paperless office” still remains an elusive and distant
                    goal. While many of the inefficiencies associated with the paper-based office have
                    been eliminated, attorneys continue to struggle to keep afloat amidst an unending sea
                    of paper. Piles proliferate, threatening to spill over under their own weight into waves
                    of paper-confusion on our desktops. Is it a lost cause or can technology come to the
                    rescue with a practical remedy for this paper-clogged insanity?

                    In the past, attempts have been made to provide products to help firms reduce the
                    amount of paper. Microfiche was supposed to be the answer, at least at one point.
                    But microfiche just really isn’t used very often in law firms because of the general
                    inability to access the material from the PCs we use to do our work. Scanning was the
                    next great answer. But up to this point scanning has generally been perceived as an
                    unsatisfactory solution. Since the dawn of document scanning, the term “scanning”
                    has been synonymous with “OCR” (Optical Character Recognition). In other words,
                    most people equate scanning with trying to use software to identify the characters
                    on a page and turn it into an editable word processing document. A good idea
                    conceptually, but in practice, even with the latest, greatest technology available, this
                    process does not create the operational efficiencies once imagined.

Digital Note-Taking Gains a Foothold in the Legal Environment
                    Recently, a series of innovations have quietly been transforming the march to digital
                    paper beyond what scanning can accomplish. Handheld and keyboard input devices
                    combined with improvements in handwriting and voice recognition technology have
                    profoundly changed the way attorneys take notes, draft documents and record other
                    critical information as they finalize mergers, prepare for trial and communicate with
                    clients and co-counsel. Each of these technologies, along with the latest audio and
                    video recording software, have in their own way helped to facilitate the acceptance
                    and growth of digital note-taking in the legal environment.

                    The concept of handwriting recognition combines the oldest of human methods for
                    recording information―handwriting with a pen―and the newest office technology―
                    personal computers. The ability to take notes in handwritten form and then convert
                    them reliably and accurately to electronic text represents a step in the evolution of law
                    practice management and technology akin to the invention of the light bulb—it’s that
                    dramatic.

                    Attorneys have also used audio and video recording devices for years in depositions,
                    as part of trial presentations and often to record their own thoughts for later review
                    and analysis. Advances in PC-compatible audio and video technology have made
                    it possible for an attorney in Los Angeles to digitally record the testimony of a key



                4   MICROSOFT WHITE PAPER FOR LEGAL PROFESSIONALS
                   witness during deposition and quickly send the file back to a trial team in New York
                   using the Internet or firm VPN as a conduit. That same file can be easily dragged and
                   dropped—just like a document—directly from the audio device directly into a local
                   network or shared folder as part of a larger project.

Digital Paper—the Paperless Solution

                   One of the key benefits to emerge from the digital note-taking revolution is the fact
                   that “digital paper” takes up no physical space and is manipulated easily by software
                   on PC systems. In the process of digital note-taking, it IS the piece of paper—just one
                   made of electrons rather than processed wood pulp. When you take notes digitally,
                   you no longer have to worry about later tracking down the physical file. All the time
                   spent searching for physical documents costs money—economic dollars wasted,
                   whether it is lawyer time or staff time.

Digital Note-Taking Facilitates Knowledge Management
                   Our own notes often hold the keys to our cases. Imagine for a moment if you had the
                   ability to digitally “write” your trial notes and transfer them directly into a centrally
                   located Web server for the rest of your team to access just minutes later―regardless
                   of where they are located on the planet. Or what if you could put your thoughts down
                   on digital paper as you brainstorm ideas for an upcoming merger and acquisition and
                   immediately make them available to your corporate finance group.

                   Digital note-taking like this is the only logical step—the next progressive in the quest
                   for knowledge management and “thought processing.” Any digital note-taking-aware
                   applications represent a new class of software that has not previously existed for
                   lawyers—“thought processors.” In other words, just get your thoughts down on “digital
                   paper” and focus on practicing law, not manipulating a computer. The naturalness
                   of the concept and the simplicity of it are instantly appealing. Digital note-taking
                   represents perhaps the best chance for attorneys and law firms to get a handle on
                   the inefficiencies and hidden costs caused by unstructured knowledge management.
                   It provides attorneys with the opportunity to take off the pocket protectors and
                   propeller hats required to use far too much of modern legal technology, and instead,
                   just practice law.

                   How much time do you or your secretary spend deciphering and transcribing notes
                   scribbled hastily on a wrinkled yellow legal pad from a phone conversation that took
                   place more than a week ago? With digital note-taking, you can jot down notes in real
                   time while meeting with a key witness during deposition, or while consulting with a
                   CPA on the merger and acquisition matter that is coming to a close, with no need to
                   later transcribe them into electronic format.




               5   MICROSOFT WHITE PAPER FOR LEGAL PROFESSIONALS
Digital Note-Taking Is a Practical Necessity
                     Digital note-taking should not be considered any type of “peripheral” technology
                     for the law firm or legal department reviewing its technology usage and systems.
                     Rather, sound law practice management practices should acknowledge digital note-
                     taking as a core, mission-critical function—as basic as the traditional Big Four of legal
                     technology: word processing, e-mail, time and billing, and docketing. Digital note-
                     taking hovers above all of these critical toolsets, offering the potential of offering the
                     most common and best understood human-to-computer interface—the pen.

                     One of the core problems any lawyer will quickly identify about the law firm
                     environment is the fact that information related to a single client or case is often
                     stored in multiple locations. The documents for a trial are typically saved in a
                     document management system while the peripheral components related to the case
                     are stored in separate applications. If you want to view all the correspondence on
                     a client’s file, you have to look in many different places and then you need to track
                     down the paper file and rifle through it to view the externally generated letters and
                     all your scanned note pages. That is, of course, if no one happened to have that
                     particular file in their briefcase at home or sitting on a kitchen table in suburbia.

                     Once your client files become electronic and totally contiguous, they’re all in one
                     place. Additionally, you no longer have to worry about who has access to different
                     sets of notes or files, since they are electronic. You can save them to a central network
                     or Web location and use rights management to control the level of access for each
                     member of a trial team or practice group.

Breaking Down the Cost/Benefits
                     The economics of digital note-taking as a facilitator for helping law firms become
                     more collaborative are stunningly compelling. As lawyers, we may have to
                     acknowledge that most of us have come from liberal arts backgrounds. With few law
                     schools providing any significant business education, basic business concepts like a
                     “Return on Investment Analysis” seem foreign to us. But a Return on Legal Technology
                     Investment Analysis, or ROLTI, is just what smart, profit-focused lawyers need to apply.

                     Think about how much time you, your fellow lawyers and your staff waste every
                     single work day looking for your paper client files or information that can only be
                     found in a paper file. What would it mean to you if you never had to waste that time
                     again? Would it mean to your law practice as a business if every lawyer and staffer
                     could generate 15 more billable minutes per day? 30 more billable minutes per day?
                     60 more minutes some days? The ROLTI approach then takes this data and converts
                     it to something every law firm managing partner or corporate General Counsel
                     understands—dollars.



                 6   MICROSOFT WHITE PAPER FOR LEGAL PROFESSIONALS
                    Generating 15 extra billable minutes per day for a lawyer billing at $200 an hour is:

                    • An extra $50 per day, per lawyer

                    • An extra $250 per week, per lawyer

                    • An extra $1000 per month, per lawyer

                    • An extra $12,000 per year, per lawyer

                    In a 40-lawyer firm, that is as much as $480,000 of “found” money yearly. In a 75-
                    lawyer firm, it can be as much as $900,000. In a 150-lawyer firm, it could reach
                    $1,800,000!

                    And this doesn’t even begin to take into account the recovered staff time that can
                    often be billed or most certainly focused on far more productive client work. Just think
                    of the effect this would have on reducing levels of stress from the managing partner
                    down to the overworked paralegal. ROLTI aside, this added benefit alone would be
                    reason enough to move towards a paperless environment.

Tying It All Together and Filling the Collaboration Gap
                    From a functional and collaborative perspective, digital note-taking is the practical
                    alternative to the frustrating search for the elusive and mythical paperless office.
                    Digital note-taking can and should become entirely ubiquitous. Notes, documents,
                    recordings and other critical information can be stored, searched and retrieved from
                    centralized locations, allowing members of your firm to more easily leverage the
                    collective wisdom of the group.

                    Adopting digital note-taking as a uniform practice will allow your firm to realize a
                    far greater degree of collaboration than is presently possible—which will result in
                    measurable benefits, including:

                    • The reduction of inefficiencies and hidden costs caused by unstructured
                      knowledge management.

                    • Improved internal communication, workflow processes and productivity.

                    • Strengthened client relationships through increased responsiveness.

                    • Real savings in billable time resulting in a noticeable increase to your firm’s
                      bottom line.




                7   MICROSOFT WHITE PAPER FOR LEGAL PROFESSIONALS
About the Authors


Bruce Lewis, Payne Consulting Group
Bruce Lewis is Vice President of Publishing for Payne Consulting Group. Payne
Consulting Group is a software training and development company headquartered
in Seattle, Washington. Payne has authored eleven books on Microsoft products
including Word 2003, Word 2002, Word 2000, and Word 97 for Law Firms. The
company also specializes in developing software that includes the Metadata, Forms
and Numbering Assistants. Payne also offers high end and end-user training,
courseware, project management, and custom development.



Ross Kodner
Ross Kodner is an attorney, having graduated from Marquette University Law School
in Milwaukee, Wisconsin in 1986. He founded Milwaukee, Wisconsin’s MicroLaw,
Inc. (www.microlaw.com) in 1985, an international legal technology consulting firm
and legal-exclusive training company, having served over 700 law firms and legal
departments across the U.S., Canada and the Caribbean.

Ross is a frequent speaker and author internationally on a broad range of legal
technology topics, having conducted over 1200 CLE sessions since the late 80’s. Ross
is serving as the Chair of the Milwaukee Bar Association’s Technology Committee and
Chairs the Wisconsin Law & Technology Conference - a regional legal technology
conference that attracts more than 300 attendees every every year. He also is the
founder and Chair of “The Annual Consultants & Technologists Dinner” held every
year in Chicago during ABA - an event which brings together the top personalities in
the legal technology world.

He served an unprecedented four years in the ABA as Chair of the ABA Law Practice
Management Section’s Computer & Technology Division. He was also a member of the
ABA TECHSHOW Executive Board for five years, held every March in Chicago. He has
also been the Planning Co-Chair for all U.S. Legaltech events since 1999.

				
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