In the more than 20 years since law firms began to introduce computer technology – it has been argued – the only major impact has been the automation of existing processes and practices. Creating documents has got easier, but the documents are still the same. Computer systems add the numbers faster and more efficiently, bringing information to hand a bit faster, but really nothing fundamental has changed. Until now.

The agent of change is the ubiquitous high bandwidth internet connection, with its ability to enable secure, remote and highly-personalised access by clients to a legal firm's systems. This is changing the relationship between lawyer and client and changing the range and nature of services that lawyers provide. These changes are threatening to many traditionalists. For example, when faced with giving clients internet access to raw billing information – opening their kimono, as it were – many lawyers would rather fall on a Samurai sword.

The prospect of going far beyond that – and actually providing online legal advice and services to clients, sometimes free of charge – is enough to make those same lawyers seriously contemplate ritual seppuku.

These traditionalists need not feel seriously threatened just yet. Yes, the internet is changing certain aspects of the way legal firms do business, for example giving away services they used to charge for. But no, the internet and associated technology-driven change will not render lawyers obsolete, nor dramatically undermine the perceived value of the work that lawyers do.

In fact, I believe the reverse is true. The internet provides a technology platform for lawyers to
dramatically to increase the perception of value among their clients and to increase demand for specialist legal services.

Most lawyers are aware of the trend towards 'commoditising' legal services and delivering them at a low cost over the internet or 'extranet' – I will come back to that later. More revolutionary, I believe, is the use of the internet to give clients online access to detailed billing information and matters in progress. Many lawyers have a problem with this – and on a number of levels. First of all, legal billing for many firms has traditionally been more of an art than a science. Factors such as the client's perception of how much the work is worth, as well as what time was actually spent, what costs were truly incurred, etc, are blended, massaged and cosmetically enhanced to create an invoice which may not have a close relationship to the actual time and costs incurred. To be brutal, invoicing by some in the legal profession owes more to fiction than to fact.

Some firms have a cultural tradition of viewing the invoice with an Olympian disdain: a lofty paragraph or two referring to the matter and an amount owing at the bottom of the page – with much white space in between. Reading between the lines, one may infer that a query regarding precisely how the figure was arrived at may not actually be the done thing. And if the amount seems too high, then possibly you are unable to afford legal advice of this calibre… Or may even give offence: "as your trusted adviser, we of course will only bill you what is fair". To question the amount, the client may feel, would be tantamount to questioning their lawyer's integrity. These rather quaint attitudes – or fiendishly subtle, depending on your perspective – have been broken down by the more brash and pragmatic approach of US companies and their in-house legal counsel – not to mention a different attitude to lawyers than in the UK.

Let's face it, to a large section of the US public, a lawyer's integrity is similar to a stripper's wardrobe: scanty and dispensed with the drop of a hundred dollar bill.

Large US companies, with huge legal retainers and massive ongoing litigation costs, have led the way in demanding and getting detailed invoices, providing sufficient information to evaluate the performance of one legal firm against another. The information demanded is not just who, how much work and of what type, but if there was a meeting, what was the meeting about; if a document was generated, what document was it and who were its authors and how much time was spent and at what cost. It is now commonplace for US firms to provide this information. Unfortunately, it is also commonplace for this to be provided only once a month and as a thick wad of paper, which will have taken weeks for the law firm to collate (and cleanse) before presenting it to the client.

The desire to see an end to conventional 'closed kimono' invoicing is not a phenomenon restricted to US companies. In a recent survey of 100 in-house counsel, when asked what services they would like to see introduced, the most popular choice was a better breakdown of costs.

Two UK legal firms are in fact leading the rest of the legal market, including US law firms, in meeting the client's desire for more detailed and more timely invoicing and cost breakdowns. Walker Morris in Leeds, gives clients online access to billing information, using an application they have built themselves; DJ Freeman (now Kendall Freeman) is the first firm worldwide to go live with the Keystone OpenBook product. DJ Freeman's strategy is to use the internet to develop a much closer and more durable relationship with its clients. The first step is providing clients with online access to billing information.

But this is just one feature of Kendall Freeman's plan to provide a comprehensive 'extranet' (a personal website with content customised to unique needs of each client and with security features enabling different levels of access) to give clients a live window into progress on current matters, as well as other features which Kendall Freeman is keeping close to its chest. Kendall Freeman's willingness to open its kimono to clients, but not to competitors, is an indication of the potential the firm sees for using internet technology as the platform for a major shift in the traditional client relationship.

The ability to provide such client access depends – among other things – on the firm's faith in its own working practices for time recording and billing. You have to be confident that your people are correctly identifying the clients, matters, activity/task codes and that they are providing useful and accurate file narrative. Most importantly, however, you must have confidence that the amount of time recorded – and any charges shown for work-in-progress have a close relationship with the truth as the client understands it.

Meanwhile, another internet-driven trend is gaining momentum – that of 'commoditisation' of legal services. Traditionalists reject this trend – and not just as another example of the distressing trend towards using nouns as adjectives. For example, a number of websites offer a legal boilerplate facility, providing common legal documents such as wills and contracts, with online, interactive help to guide users through a simple process which results in a complete, personalised document. In the face of low-cost, high volume competition over the web, a number of large legal firms are putting this same automated document creation capability on their own websites – and making the service available free to existing clients.

This is smart thinking. It means their clients are still coming to them for legal advice and, since a simple, automated legal document is often the precursor to a higher level legal enquiry, it means that when the client requires more complex advice (which is more valuable and hence for which the client will readily pay) the legal firm providing the automated service is the natural source of the flow on advice. In the same way as financial services institutions now talk about financial 'products' – we are now seeing legal firms offering online wills.

UK firms such as Fidler & Pepper and Kaye Tesler & Co offer a range of automated services including change of name by deed poll and powers of attorney, as well as online forms for wills and instructions for a range of matters including conveyancing, unfair dismissal, estates administration, matrimonial and others.

Nevertheless, these initial developments have largely been restricted to high-volume, low-value, repetitive, 'high street' forms of work – and many large firms still do not take the concept seriously. An oft repeated mantra is "Our work is very high value and low volume and as it is not routine or predictable, it is not amenable to the application of automated techniques".

I never believed that this applied across the board in relation to case management in a large firm. In any event, Linklaters blew a hole in this argument once and for all when they launched their internet-based Blue Flag service and Clifford Chance soon followed with their own Nextlaw service.

The trend has now gained unstoppable momentum. As Richard Milhouse Nixon once stated, "you cannot put the toothpaste back in the tube".

The digital economy – fuelled by instant global electronic transactions over the internet – has created new rules and new expectations for business and has wide and immediate implications for professional services firms, particularly large legal firms which typically deal with corporate clients.

Most of these legal firms are still run by senior partners who are themselves not children of the digital age. Typically they do not have keyboard skills, depending on secretaries and paralegals to deploy digital technology at second hand. As a result, they view the internet with suspicion as an agent of change beyond their knowledge and hence beyond their control.

However, the advance of the internet has now reached the point where it can no longer be ignored. Today, the willingness and flexibility of a legal firm to understand, use and adapt to the internet and to re-invent itself as an e-business is becoming a serious, undeniable critical success factor.

The older guard of lawyers (of which I am one) need not be unduly concerned or alarmed by these developments. The routine will be automated and at times, for marketing reasons, given away as a service to valued clients. Valued clients will be welcomed within the kimono, given unprecedented access to detailed work-in-progress information as well as the costs incurred as matters progress. The result will be that really valuable legal experience and knowledge, hard gained over years of experience, will command a higher premium. Senior practitioners will be given the luxury of being able to concentrate on the high value, high fee earning specialised tasks which only they can do – the routine will be taken care of and often by the clients themselves using online resources.

Clients will be better serviced at all levels and will have a close and immediate insight into how their matters are progressing and the costs that are being incurred. Providing this information, online and in real time, builds trust and trust is key to the relationship between lawyer and client. This is potentially revolutionary in terms of its effect on client satisfaction – in other words, on the reputation of the profession. It could be the beginning of the end of all those lawyer jokes.

The devil, of course, is in the detail. Law firms must apply their group intelligence to charting their least cost/highest return path into the internet age.

Clients' appetite for transparency will prove insatiable. They will not only want to know that lawyer #15 was in a meeting from 2.00pm-3.00pm on 16 January in the detailed narrative attached to the bill, but who else was in the meeting and what was discussed; they will not only expect to see the various drafts deemed fit to 'publish' by the lawyers throughout a long transaction, but every draft – they have paid for them; they will not only want to be advised on the most appropriate course of action in the current circumstances following three internal meetings and various internal discussions – they will want to know what other options were considered and the relevant papers and e-mails – they have paid for them, they might be useful some other time.

Law firms will not know what has hit them – having opened their kimono, their reward will be a demand to start shedding lawyers of skin.

The technology tools to facilitate these ever increasingly close methods of inter-working are coming from a number of different sources:

* Generic collaboration tools
* Professional services automation tools
* Law firms collaboration 'portals'
* Client-driven law firm collaboration systems
* Client-developed firm collaboration systems

Generic Collaboration Tools
Microsoft is threatening to revolutionise the nascent collaboration IT industry with applications such as BizTalk and SharePoint, but these are still in their early iterations and as yet are not having much impact. Make no mistake though, when Microsoft determines to 'own' an emerging market – with its marketing muscle – eventually, it will.

PSA tools
These are specialist collaborative technologies for the professions, known as professional services automation (PSA) systems, from vendors such as ChangePoint, Novient and Niku. These are designed to be used by professional service firms in the planning, managing and delivering of services to their clients – as such the firm imposes the software up its client base.

Law firm collaboration portals
In this category we have legal matter management systems such as Logistics and Infographics and boutique legal collaborative applications such as Workshare. These are specifically designed to be used by law firms to manage and deliver their work, and to collaborate with clients – again, for this to work, the client's technology is rendered subservient to the firm's.

Client-driven collaboration systems
There are already a generation of law firm control and management applications written specifically for legal departments with which to control and value-test the services provided by law firms. These include systems from largely US-based vendors such as DataCert, TyMetrix, Bridgeway, LegalGuard and Examine.

While LegalGuard started out as an automated law firm billing abuse detection system – these systems now describe themselves as "legal e-billing and collaborative matter management technologies over the internet". The difference between these systems and those previously mentioned, is that these are designed to be used by the client – and if the law firm wants to do business with such a client then the firm has no choice but to use their technology.

Client-developed collaboration systems
Some commercial procurers of legal services have gone even further – they have developed their own proprietary collaboration software and imposed it on their panel of legal advisers.

The classic example of this instance is Du Pont, which developed a business model and related 'community' software in 1992 which they used in order to reduce their panel from 350 law firms to 38 – all of whom had to modify their business processes to fit in with Du Pont's. The key technologies in the system covered a shared knowledge-base, communication of information and e-Bills via VPN and litigation aids including automated document imaging and electronic
discovery.

They also introduced case tracking systems which allow them to compare the value for money obtained from each panel firm – furthermore, each panel firm has to agree to share know-how; and not just with Du Pont, but with all the other firms on the panel.

The Du Pont model has been held up as an example of 'best practice for years and is said (by Du Pont) to have saved them some $50m (£31.4m) over 10 years. Yet, despite this there has been no other similar business move by any legal department in any jurisdiction, in any industry — until now.

Over the last year or so, unlikely bedfellows BAT and Ford have been developing a joint system for managing and instructing firms on specialist IP projects, known as Anaqua.

This looks like a belated extension of the Du Pont principle, but is actually much more specialist and limited.

There are real obstacles preventing the proliferation of similar client-developed systems; such as:

* the difficulty that legal departments have getting attention from the IT department – 'legal' is seen as a cost drain, not a profit centre;
*presenting a strong business case to the board;
* establishing and maintaining a board-level vision – over several years;
* the ongoing funding burden – despite the eventual promised payback; and
* it is too much like hard work for the legal department – and always pushing water uphill.

For all these reasons it is difficult to see such technologies growing – on the other hand, one can envisage further take-up of legal department 'client' collaboration package software such as those described above. They can always be sold to the board as cost containment and risk reduction. But such ideas never die – and we have the recent example of the Deutsche Bank and Barclays Capital initiative as an example. Remember that when it comes to IT strategy the IT department gets one vote, the partners get 10 votes and the client gets 100.

So – to summarise – collaboration systems are already in the marketplace. They are emanating both from the law firms towards the clients on the one hand and from the clients towards the law firms on the other.

It will be in the law firm's interest to persuade as many clients as possible to come on board 'their' system – it simplifies the internal technology and training burden and ties the client into their systems.

Conversely, it is in the client's interest to institute standard collaborative technologies and use their bargaining power to 'persuade' their law firms to all use the same system – it gives them the same technology and training advantages as the law firms would wish to have and it allows them to compare and contrast services (and prices) and 'mix and match' services, from multiple advisers.

One can foresee that a 'battle of the systems' will result – with some law firms investing heavily in collaboration technologies that they will seek to impose on clients and – vice versa – some clients investing in collaboration technologies that they will seek to impose on law firms. You could find lawyers with several collaboration icons on their desktops and clients with even more.

How confusing for the users in both camps. Imagine the training and support burden.

Alternatively, we can look forward to the forging of a new generation of collaboration integration standards, utilising emerging standards like XML, SOAP and SharePoint/BizPoint (yes, they will become standards – see earlier point) that can be used to knit these various systems together.

The winners are likely to be those law firms that can offer demonstrable added-value from collaboration systems that do not overwhelm the legal department systems and which tie the clients in to the firm, not by invasive technologies, but through offering the most convenient method of instructing and managing law firms.

One thing is certain – there will be blood on the walls of IT departments either in the law firms, the clients or both – and it will be fascinating to watch.

Neil Cameron is the founder of Neil Cameron
Consulting, which advises law firms on IT strategy.