Editor: What technology advances had the greatest impact on law departments in 2006?
Behnia: Today more than ever, the legal department directly affects overall business agility. An inefficient legal team can be a costly bottleneck in key decisions, whereas an optimized one can be a competitive differentiator. I see technology as the strategic enabler that helps the entire organization be more agile and competitive.
Consider first the financial services industry, which has been subject to a whole slew of new regulations requiring documented processes to ensure financial organizations prevent illicit transactions. The impact of non-compliance here is far greater than imposed penalties. Recently, OFAC suspended the M&A activity of a multinational financial services corporation because, although they had the proper controls in place at each subsidiary, they did not have a comprehensive system across multiple entities to prevent suspicious activities. The right technology, serving as their corporate legal backbone, would have enabled them to act swiftly and execute on strategic acquisitions.
Now, let's turn to the pharmaceutical industry, where Pfizer had the vision to leverage TeamConnect technology in its legal and global security offices to report, investigate and respond to counterfeiting and other security threats with unprecedented agility. In the case of Pfizer, agility in fighting counterfeiting is more than just good business - it saves lives by taking bogus drugs off the market.
Finally, consider litigation holds and the challenges that new requirements taking effect December 1 are likely to present. Many organizations have already deployed various discovery solutions, often fragmented and dealing with targeted aspects of the process. The very purpose for which these solutions were designed - quick and efficient record destruction - will soon be a compliance risk rather than a benefit. Organizations will require a new management system to oversee the entire discovery process and prevent the destruction of records that may be subject to legal hold.
O'Donnell: A big change is how legal departments are using technology to go beyond the typical emphasis on record-keeping and to become more actively involved. Law departments are busier than ever, and by far the biggest legal technology "relief" in 2006 has come from "active systems" - designed to provide critical reminders and alerts, shoulder part of the workflow, and simplify analysis and reports. At the heart of this new development is Bridgeway's emphasis on systems for work processes - such as hold order management, outside counsel management and litigation risk evaluation - equipped with customizable rules to provide richer, more meaningful information. In short, 2006 has seen technology take a more active role in helping busy professionals keep up.
Weaver: I would say hands down, extranets and portable devices. Lawyers are now more connected than ever before. Many law departments have implemented Internet technology that allows them to share case-specific information with their outside counsel - in essence, creating a virtual on-line law firm. The use of cell phones, laptops with wireless Internet connections and extranets have increased counsel's ability to respond to pertinent work issues from any location. To add to this, the BlackBerry became one of the hottest items this year. It allows users to connect to their extranets where they can download various case-specific documents and data, receive and respond to email, and conduct conference calls via the built-in cell phone feature. In the quarter ended on June 3, 1.2 million BlackBerries were shipped, increasing the number of subscribers from 680,000 to 5.5 million. Corporate America has definitely become a more connected society.
Editor: How do you see technology advances impacting law departments in the coming year?
O'Donnell: Predictive, risk-analysis and decision-making tools are taking hold as performance metrics and outside counsel management become increasingly important to general counsel. Notifications and compliance will become less passive and more active. Technology will pull them into a more collaborative environment with both their outside counsel and their internal clients. Virtual alarm bells will automatically go off when certain things happen or fail to happen. By integrating legal software with email, calendars and other systems such as accounts payable, tax and human resources, law departments will become more vigorously involved across the spectrum - in specific cases, comprehensive compliance efforts and throughout their organizations as a whole.
Weaver: Because of the great strides made in web-based services, law departments will be seeking more ASP solutions to create a better means of communicating with their outside counsel. The biggest impact will be for smaller law departments who have not embraced new technology, mainly because of the cost. Fortune 500 companies have the means to implement extranets and purchase portable devices, but smaller companies feel the pinch of the cost for these services. In the coming years, more Fortune 1000 companies will seek extranets to streamline their legal management process. There are now vendors offering lower cost structures for these services so that the smaller companies can reap the benefits that larger companies have already been enjoying. One thing is for certain, more and more law departments are seeking web-based solutions. The demand is high, and technology companies who previously did not have a web-based solution are quickly moving in that direction.
Published December 1, 2006.
