Technology company Cisco is planning to spend $5m (£3.5m) developing software for its legal department in the next 12 months. Dan Scheinman, vice president for legal, government and corporate affairs at the company, said only those corporate legal departments and firms that built applications to simplify the delivery of legal services would prosper. He predicted that "the law firm of the future would be lawyers and a bunch of technologists".
Scheinman, who gave the keynote address at the LawNet conference in Palm Springs, California, told the audience that Cisco's legal department "had made
significant strides but still had a long way to go."
One of the major reasons for investing in technology was to remove repetitive tasks from its lawyers. The company that he joined seven years ago had an annual growth of 30%-50% and faced enormous problems keeping "the talent" happy. "It was more like running a Hollywood studio than a legal department," he said. The legal department had to support "a far-flung and growing sales force". The company faced an uphill struggle in building institutional and cultural knowledge. There was also the realisation that "people
working on our teams one day might be working for the competition the next".
Helping staff commoditise their work so "they were not stuck doing the same jobs" was one step taken to aid retention.
The legal department also outsourced 75% of its work, allowing other departments to manage their own legal costs and deal directly with outside firms. "Our clients manage legal costs better than the lawyers. People who are spending their own money really manage it. I am not sure I can now trust lawyers to manage lawyers."
Cisco was built around a web-based system with a
24-hour service requirement. The internet model gave Cisco's legal department the opportunity to follow suit.
The criteria used for the project was: to look at where the department could commoditise existing services; to look at how this could help job satisfaction/recruitment issues; and to save money. Scheinman claims the
department saves at least $5 for every $1 spent annually and wonders why their external law firm did not offer to set up the systems if the company was willing to split the difference.
The object was to build a user-friendly process and to use it for training.
Scheinman says the department has come up with nine applications that have been "revolutionary for us".
These include Cisco Patents online, which was "a real challenge. We had no process for filing patents. The
engineering team was hostile because they did not want to file patents. The situation was ripe for disaster and we could have put the company at risk".
The legal department introduced a web page and the issue went away. Now the engineers are filing patents and the system can assess which divisions are filing and which ones are not. "It allows us to manage what is going on."
This was one of the most successful web initiatives undertaken by the department and the patent page is now one of the most effective ways of communicating with the engineers. "We have become one of the news vehicles to the engineering team."
The site cost between $40,000 and $50,000 (£28,400- £35,500) to develop and $30,000 (£21,300) a year to
maintain. "It has saved us much more," says Scheinman, "and now I know what the engineering team is doing."
The second initiative – negotiating contracts – was less successful. "We have spent a lot of money on this."
The first database was intended to provide all
information, but it was nine months behind and Scheinman said it would have taken armies of people to update. The department then tried to look at what people really wanted and were faced with the problem of how to get the data in. Tracking what went on to the system was another tricky task. The department tied an Adobe database to it and can now look at any contract that has been signed worldwide.
Another problem was the task of managing the external calendar for the various organisations across the company that the legal department was supporting. "The law firm is charging $100,000 (£71,000) dollars a month so why not build a calender program that deals with the process of managing it." As a result, it now only costs the department $8,000 (£5,680) and $10,000 (£7,100) a year to maintain.
"It paid for itself in a month and a half," Scheinman said.
The department also had to deal with trademarks that were mushrooming, but the department had no ability to track them. "We were spending a lot of money. Outside counsel knew what was going on and would do us a report that we would copy on to our system."
It set up a trademark database that was a "relatively simple application". It allowed the monitoring of
trademarks and alerted the department to deadlines
and correspondence actions.
Another action that vexed the department was the approval process, which took six weeks from when a
document was approved to getting it signed. Now the department does it electronically, and has reduced the time to 48 hours. Another problem was non-disclosure agreements (NDAs). "They were the bane of our lives. We sign 100 a week, but there was no way to track them. They took up 10% of the department's time."
The solution was the self-populating NDA, which asks various questions and has cut NDA time significantly,
reducing them to about 10 a week.
On the training front, Cisco's task was to bring staff
into the culture of the company. Cisco's first mandatory web-training programme for its sales force was on antitrust law with a link to Brobeck Hale & Dorr. Also launched was a voluntary insider trading awareness programme that had 500 trainees in its first month. Scheinman says there are 100 Cisco employees on any one day engaged in legal training.
The training site has 750 facts and statistics on the new economy and is getting 25,000 hits per month. It includes briefs on the hottest public policy issues and links to critical websites on 17 issues.
Legal departments have to think about applications and what benefits the client versus what benefits the law firm. Scheinman predicts: "A lot of the history of law firm automation is that you do things that make you efficient and the client never sees."
But he adds: "Smart law firms will lock in clients with smart applications. The departments and clients that will prosper are those that build in applications."