Since the mid-1990s, Jaymes ("Jay") Littlejohn, now a shareholder at Minneapolis-based Moss & Barnett, has been managing real estate development transactions throughout the upper Midwest.  He used an antiquated, paper-based tracking system to marshal daily correspondence and documentation from multiple project managers, outside real estate brokers and various environmental consultants.  Beginning in 2000, he moved to a Microsoft Excel tracking system that was supplemented by a weekly four to five hour conference call with teams of lawyers and other interested parties to address the status of developments, zoning approvals and contracts.  "A substantial amount of time was spent just using the tracking system," Littlejohn says.

That all changed in January of 2004, when Moss & Barnett began using an extranet, which is defined by noted legal technology expert Dennis Kennedy as "a secure private website that allows users to access centralized documents and communications at their convenience."

Using a leading company's collaboration tool, all of Littlejohn's status reporting has been consolidated online.  Each party involved has immediate access to his or her unique documents and project status, and the conference calls, now attended by a single paralegal from Littlejohn's office, only take place once every two weeks.  Also, the client has 24-hour access to a master report that is revised in real time.

As an added benefit, Littlejohn has also modified and centralized the form documents used in his work and employs the extranet to streamline training for new hires by both Moss & Barnett and the client's outside consultants.

Welcome to the future of the practice of law.

Why Use an Extranet?
Online collaboration is a concept that has received a lot of attention lately, and with good reason.  Law firms are being held to a higher standard for communication and accountability by their clients.  Clients have become frustrated by the wasted time and money expended requesting and re-requesting documents from their attorneys and then having to pay for those documents to be faxed, e-mailed, messengered or overnighted to them.  As a result, law firms are providing central Web-based collaboration extranets to satisfy the continuing requests from clients for anytime-anywhere access to information.  Simply using e-mail as a delivery tool is not sufficient, and law firm clients are asking for more.  Online collaboration or extranet connectivity is filling the void.  The efficiency and cost-savings offered by today's extranet solutions make adoption of this technology more than a passing trend.
It signifies a fundamental change in the way firms manage their cases and client relationships.

The ease of development and multifaceted functionality of extranet technology have sparked increased interest from law firms.  John Halbleib, Director of Knowledge & Web Solutions for Mayer, Brown, Rowe & Maw LLP, a law firm with a diversified global practice, notes that growth in his firm's extranet use took off in 2004 and exploded in 2005.  "The participants are interested in using extranets to expand collaboration," he says. "The growth is due to the multi-country/time zone, more sophisticated and global nature of our practice with clients who are often best served through a team of lawyers out of more than one of our offices, as well as the fact that the market has become more accustomed to using technology, particularly on the client side," Halbleib adds.

The market for legal services to which Halbleib refers has become much more diversified, sophisticated and competitive, requiring "round-the-clock" attention to client matters frequently served well by a team of lawyers, each with his/her particular experience and knowledge.  By centralizing documents and matter materials in one online resource, the client realizes on-demand benefits in terms of organization, flexibility and cost savings.  In fact, the use of extranets tends to reduce wasteful billable time spent searching for current versions of documents or transmitting documents among parties.  It also eliminates disbursements for telephone, fax, copying and shipping.

How Can Extranets Enhance Client Satisfaction?
In addition to streamlined communication with attorneys, clients want access and updates at their convenience and will often require firms to demonstrate capability to provide extranets to be considered for new business.  Firms that provide clients with this technology are likely to develop an unprecedented level of collaboration with those individuals they counsel.

They are satisfied because extranets allow law firms to do old things in new ways.  Instead of repeatedly locating the latest version of a document or an e-mail update, the extranet houses every piece of information related to a particular matter.  It is so versatile that it can be used simultaneously as a back-up tool and to keep clients updated on the progress of a particular case or matter.

In addition to the productivity benefit mentioned above, firms are reporting that they need to offer extranets to stay competitive with their peers.  Increasingly they are being asked to complete requests for proposal (RFPs) to bid on legal business for both prospective clients and existing clients as well.  In many cases, these RFPs stipulate that applicant firms must demonstrate the ability to provide turnkey collaboration extranets before they can even be considered as a candidate for the business.  This shift indicates that extranets are no longer an added value but are becoming a possible new deal-breaker for law firm clients.

Understandably, these emerging realities are powerful motivating factors for law firms, forcing them to create extranet sites not only to facilitate communication and attract and land clients, but to shore up their existing client relationships as well.  The modern-day law firm needs to strategically sell their use of extranet technology to be competitive and to get (and stay) in the game.

Buy or Build?
That rebirth of extranet collaboration that Kennedy observes is a function of the enhanced understanding of technology and increased comfort with outsourced security protections for most clients.  Unlike the late 1990s when users were building their own programs for customization needs or to ensure absolute security, today third-party software has extraordinary versatility and functionality as well as key advantages.

Building an extranet in-house today is an expensive proposition because firms have to maintain both the product and the talent.  Kennedy highlights that internally hosting an extranet is like throwing another log on the IT staff because it requires security, uptime guarantees and a complicated protocol for management of the data.  As the use of extranets increases in popularity, the process of supporting them becomes a larger burden for those firms that manage the technology from within.  These factors have created greater incentive for retaining outside experts, rather than an in-house team, to create an extranet capability.

A third-party extranet vendor generally has a server farm that is totally secure and always available with back-up support.  The monthly fees are usually very reasonable, and extranet providers offer "wizard-based" tools for easy set-up allowing paralegals to manage their own sites.

Extranet vendor products also offer the benefit of consolidating input on features and functionality from hundreds of customers.  One such company has seen an overwhelming growth in demand for extranets, and they are benefiting today from all of the features that have been incorporated into the product from clients over the years.  They actively solicit new ideas from existing and prospective clients and, to some degree, view their clients as an extension of their development team.

Law firms can consider a host of products specifically designed for their industry which provide DMS integration and other tie-ins to legal software.  "Third-party extranet programs created specifically for extranet development are often turnkey, deeper and more granular with rollouts occurring over the course of days, rather than weeks or months," says Kennedy.

The Future of Extranet Technology
Extranets started as centralized document repositories, but they are facilitating more interaction between clients and firms, encouraging shared calendaring systems and enriching discussion groups.  Customized Web databases are also increasing in popularity to track matter information and create audit trails for due diligence purposes.

Many firms are using extranets to launch elaborate automated solutions.  For example, King & Spalding has developed 127 extranets so far and adds about 5-10 new sites each month.  According to Zach Wood, the firm's Extranet Product Specialist, each department within the firm has devised unique applications of the technology.  Wood states that, "King & Spalding's financial transactions group uses the extranet to store closing documents related to a particular transaction.  We used to store documents on a CD and can now leverage the extranet to store and share these documents.  There are approximately 40,000 closing documents on the system now.  Also, certain litigation practice groups are using the new database feature of the extranet as an e-discovery tool.  If they have longstanding Access databases, they can import that data so they can have all the documents and images in one place."

The future of collaboration extranet technology is infinite and still evolving.  As more lawyers like Littlejohn realize that extranets offer a competitive advantage, a strong response to 24/7 client demands, and reduction in the cost of delivering information, their use will continue to transform the practice of law.

About our author . . .

Ron Huffman is General Manager of AMS-Legal, a leading provider of collaboration extranet technology.  He is a past ILTA Board Member, and prior to joining AMS, he was IT Director and CIO of various large international and regional law firms.  Ron is a frequent speaker on legal technology issues.  He can be reached at rhuffman@ams-legal.com.