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Trends in Law Practice Management – Calculating the Risks


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Presented by the CBA’s Legal Profession Assistance Conference, the Canadian Lawyers Insurance Association and the National Law Practice Management and Technology Section live via webconference.

The advantages of cloud computing, virtual or online law practices and unbundling of legal services are getting a lot of press – convenience to clients, reduced overhead expenses, remote access, and enhanced access to justice are among the benefits touted. But there are also very real and practical risks, and ethical implications, for each new tool or practice implemented. As these trends infiltrate legal practice in North America, lawyers and law firm leaders need to exercise due diligence to assess the potential risks and benefits.

Our panelists, Nicole Garton-Jones and David Bilinsky will provide a practical overview of these trends in law practice management. In doing so, they’ll provide you with tools to reduce the risk and identify the questions you need to ask yourself, as well as potential third party service providers, your insurers and your law society, when conducting your own risk-benefit analysis.

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Trends in Law Practice Management – Calculating the Risks

  2. 2. WHAT QUESTIONS DOYOU WANT ANSWERED? What: • Issues • Topics • Questions do you want answered to make this session a HIT? Speak up now!!!
  3. 3. LET’S MAKE THISINTERACTIVE!!! Please don‟t hesitate to add a comment, suggestion or ask a question! Aiming at sharing some „out of the box‟ ideas! The more we share today, the more we all get out of the day!
  4. 4. ON WITH THEPRESENTATION!! The world hates change, yet it is the only thing that has brought progress. Charles Kettering
  5. 5. TOPICS TO BECOVERED1. Why focus on new technologies?2. What are the new technologies?3. What are the opportunities and risks of the new technologies?
  6. 6. WHY THE FOCUS ON NEWTECHNOLOGIES?•The democratization ofinformation and forms on theinternet, client demands for morecost effective solutions and theincreasing encroachment on theprofession by non-lawyers usingnew technologies are all drivingsignificant changes to the legalprofession
  7. 7. WHY THE FOCUS ON NEWTECHNOLOGIES?•Lawyers, in addition to keepingcurrent with their practice areas,increasingly must also keep up todate with new developments inbusiness and technology in order toeffectively compete in a rapidlyevolving and competitive legalmarketplace
  8. 8. WHY THE FOCUS ON NEWTECHNOLOGIES?•Professional responsibility in thecontext of new technology is oftendiscussed in reactive terms, for exampleensuring the preservation ofconfidential and privileged informationin the use of cloud computing (which wewill cover)
  9. 9. WHY THE FOCUS ON NEWTECHNOLOGIES?•There is also a pro-activeprofessional responsibility in regardsto technology, specifically a duty tokeep abreast of innovation to ensurethat you are delivering the most costeffective, timely and high quality legalservices possible
  10. 10. WHERE DOES INNOVATIONCOME FROM?•An idea is not a single thing.Rather, new idea is a network onthe most elemental level – a newnetwork of neurons firing in synchwith each other inside your brain.It‟s a new configuration that hasnever formed before.•How do you get your brain inthese environments where thesenew networks will form?Specifically, what is the space ofcreativity?
  11. 11. WHERE DOES INNOVATIONCOME FROM?• the “slow hunch” - importantideas take a long time to evolve•the process is to borrow fromother people‟s hunches, combinethem with our own hunches andthen create something new•“chance favours the connectedmind”•To differentiate your firm andpractice from competitors,consider trying new technologiesand tools that expose you to lotsof new and different ideas
  12. 12. THE CYCLE•Columbia University law professorTim Wu weaves together stories ofinformation empires to examine howdisruptive technologies enter anddevelop within society•Ultimately, new companies thatchampion new and superiortechnologies win out•Wu relies on Joseph Schumpeter‟sconcept of “creative destruction” andClayton Christensen‟s notions ofdisruptive and sustaining innovationsto explain the eventual supplanting ofthe old dinosaurs by robust,entrepreneurial newcomers
  13. 13. THE CYCLE•The cost of delay for innovationand for consumers is oftensubstantial•Think shrinking profit margins fortraditional law firms and theaccess to justice crisis facinggeneral society•Who will solve these problems?Lawyers, or our non-lawyercompetitors?
  14. 14. THE END OF LAWYERS?•Richard Susskind poses achallenge for legal readers toidentify the capabilities that theypossess that cannot, crudely, bereplaced by advanced systems orby less costly workers supportedby technology or standardprocesses, or by lay people armedwith online self-help tools
  15. 15. THE END OF LAWYERS?•four main pressures that lawyersnow face: to charge less, to workdifferently, to embrace technologyand to deregulate•Susskind predicts that manytraditional law jobs will be erodedor changed by two forces: amarket pull towardscommoditization and a pervasivedevelopment and uptake ofinformation technology
  16. 16. THE MEDIUM IS THE MESSAGE•Independent of concerns ofprofitability and business survival,it is also important to note thatinnovations in practicemanagement and specifically legaltechnology are not peripheral tothe fundamentals of legal thoughtand practice• Rather, commentators haveharkened back to MarshalMcLuhan‟s aphorism that “themedium is the message” and havenoted that changes in the structureand delivery of legal informationare also changing the legal mind
  17. 17. THE MEDIUM IS THE MESSAGE•Legal practice is increasinglymore about editing existingelectronic precedents, managinge-discovery and mining forinformation held in private andpublic knowledge managementsystems•Add the ever presence of socialmedia, and the assault ontraditional legal thought andreflection is magnified
  18. 18. 2. WHAT ARE THE NEWTECHNOLOGIES?Today, we are going to focus on:•Cloud Computing (SaaS, StorageClouds, IaaS)•Virtual law practice, includingunbundling of legal services•Social Networking
  19. 19. THE CLOUD
  21. 21. TYPES OF CLOUDS “Traditional” Hosted by 3rd party Accessible via the Internet
  22. 22. TYPES OF CLOUDSInternally hostedAppear to be on thecloudRemain at all timeswithin the controlof the enterprise“Virtual Cloud”MicrosoftSharepoint enabled
  23. 23. TYPES OF CLOUDSBlend of „public‟ and „private‟ applicationsTypical for most organizations
  24. 24. TYPE OF CLOUDSERVICESSoftware as a Service (SaaS): • Gmail or Clio or RocketMatterStorage Cloud: • Dropbox or SpiderOakInfrastructure as a Service (IaaS): • Rackspace, i-worx
  25. 25. SAAS: PROTECTINGCLIENT DATA ONLINE•lawyers must ensure thatclient information isprotected in the hands ofthe technology provider orthe hosting company thefirm chooses
  26. 26. SAAS: PROTECTINGCLIENT DATA ONLINE•Companies providing practicemanagement technology will hostapplication data either in their ownservers or will have a relationship(usually a lease) with a third partyprovider that owns the data centrewhere it houses the data on itsservers•If the provider offers geo-redundancy, then the law office datawill be housed in two different datacentres in different geographiclocations
  27. 27. SAAS: PROTECTING CLIENTDATA ONLINE CON’T•Research the technologyprovider and understand theterms of service agreement•Understand the relationshipand review any agreementcovering data access andconfidentiality that may existbetween the service providerand the hosting company
  28. 28. SAAS: PROTECTING CLIENTDATA ONLINE CON’T•Understand: data return and retentionpolicies, transferring data andcompatibility issues for restoringdata, backups, export features andoffline versions of the software, thirdparty hosting, server locations and geo-redundancy, international laws that mayapply if the services are located inanother country, response time of theprovider and techsupport, confidentiality of law office data(including who has access, proceduresfor government and civil search andseizure actions, procedures for potentialbreach of confidentiality) and theprovider‟s industry reputation andinfrastructure to support growth
  29. 29. SAAS: PROTECTING CLIENT DATAONLINE FURTHER READING•Black, Nicole, Cloud Computing for Lawyers, ABA/LPM, January2012•Law Society of British Columbia, Report of the Cloud ComputingWorking Group, July 15, 2011
  30. 30. ETHICS OF PRACTICINGON THE CLOUDCloud is moving ahead of theethics curveABA Ethics 20/20 Commission“Impact of Internet technologyon the delivery of legal services,both globally and within theUnited States”Law Society of BC CloudComputing Working Group FinalReport - hailed as a leadingthoughtful document
  31. 31. LSBC CLOUD REPORTGUIDELINESLawyers must ensure: • Confidentiality and privilege are protected • Ascertain where the data will be stored • Ownership of data does not passWhat happens if: • Cloud provider goes out of service? • Circumstances under which a cloud provider cuts off access? • Access to source code/software?
  32. 32. LSBC CLOUD GUIDELINESDoes the Cloud provider: • Support e-discovery and forensic investigations? • Sell or commoditize the data? • Releases independent audits of their security?
  33. 33. LSBC CLOUD GUIDELINESCompare: • Cloud service with existing services • Determine if cloud is appropriateDocument all this due diligence! • May be important if something goes Wrong
  34. 34. LSBC CLOUDGUIDELINESAsk Yourself: • How easy can you migrate the data to a different provider? • Who has access to the data? • Under what circumstances do they gain access? • What are the archive times for the provider? Do they match the LSBC requirements? • Is data „deleted‟ or „erased‟? • What are your remedies if they breach the SLA, privacy policy, terms of service, security policy?
  35. 35. WHAT IS A VIRTUALLAW FIRM?1. A law firm where legal services are delivered to clients entirely online through a secure web- based portal;2. A law firm with a centralized administration, management and brand but the lawyers work remotely (at client sites, home, satellite offices etc.)
  36. 36. PRACTICING ENTIRELY ONLINE:EXAMPLESOnline Firms: - shut down in 2011Vendors of Online Platforms:
  38. 38. UPL RISKS IN ELAWYERING/VIRTUALLAW FIRMS•When using online methods ofelawyering, a lawyer must ensure thatgeographic boundaries are monitoredto avoid the risk of unauthorizedpractice of law in a particularjurisdiction•The firm website and onlineadvertising should clearly define thescope of the firm‟s practices andcontain disclaimers explaining thereach of the firm and how technologywill be used to deliver legal servicesonline
  39. 39. USING TECH TO UNBUNDLELEGAL SERVICES•Unbundling or limited scoperepresentation is a growing trend inthe delivery of legal services as newtechnologies for online practicemanagement make unbundlingeasier for traditional firms•Entire web-based practices can becreated providing only unbundledlegal services online•Document assembly andautomation programs may be usedto streamline the creation of legaldocuments for review by the lawyer
  40. 40. UNBUNDLED LEGAL SERVICESBEST PRACTICESLawyers should understand thefollowing:•How to draft a limited scope agreement,how to define the scope of unbundledservices online, using documentassembly and automation programs,how to deliver clear guidance andinstructions to the client on how tocomplete their matter, how to use fixedfee or value billing, how to integrateunbundled services into a full servicefirm by offering existing clientsadditional services online and otherbest practices
  41. 41. UNBUNDLED LEGALSERVICES READING LISTKimbro, Stephanie, Limited ScopeLegal Services: Unbundling andthe Self-Help Client, ABA/LPM 2012Kimbro, Stephanie, Serving theDIY Client: A Guide to UnbundlingLegal Services for the PrivatePractioner (April 2012) – e-book
  42. 42. INTERNET SECURITY•Lawyers need to understand basicInternet security in order toresponsibly communicate withclients and collaborate with othersonline (for e.g,, how a hackeraccesses unsecured data from apublic hotspot and how to safelywork on a wireless network)•Know best practices for securinghardware and mobile devices aswell as safe practices for using web-based or cloud computingapplications to protect clients‟confidential information
  43. 43. INTERNET SECURITY•Things to know: encryption, securesocket layer (SSL) and https, wirelessnetworks, remote access to firmcomputers, mobile device security,security of cloud-based services, VPNs,security risks on public computers andnetworks, the most common onlinesecurity breaches and computervulnerabilities, enabling encryptionhardware and software firewalls,password protections and disposing ofhardware when upgrading
  44. 44. INTERNET SECURITYFURTHER READINGLegal Technology Resource Centre.Resources on Wireless Networkingand Security. American BarAssociation, Web.Securing Your Clients‟ Data While onthe Road, David Ries and Reid Trautz Under Siege: Law firmsare likely targets for attacks seeking tosteal information off computersystems, Ed Finkel
  45. 45. SOCIAL NETWORKING•Microblogging - Twitter•Social Networking - Facebook,LinkedIn, Legal OnRamp, MartindateHubbell Connected•Videos – YouTube, Vimeo•Slides & document sharing: SlideShare,Docstoc, JD-Supra• Location sharing – FourSquare•Review & rating sites: Avvo, Yelp
  46. 46. SOCIAL NETWORKINGRISKS•Drawing the line betweenpersonal and professionalnetworking in online socialenvironments is difficult becausethe applications were createdwith the purpose of sharing withas many people as possible•User error: imprudent posts,breaching client confidentiality,“friending” a judge
  47. 47. SOCIAL NETWORKINGRISKS•At each step, the user must considerwho has access to and control of theaccount info he or she is providing to thesocial media application•Applications change privacy andaccount options and the user will need tomonitor his or settings regularly, as wellas the content posted•Be wary of third party applications; maybe third party applications running onsocial networking websites that requestaccess to user information and contactdatabases
  48. 48. SOCIAL NETWORINGFURTHER READING• Nicole Black and Carolyn Elefant, Social Media for Lawyers: The Next Frontier, American Bar Association, 2010• Steve Bennett, Ethics of Lawyer Social Networking, 73 Alb. L. Rev. 113 (2009)• Adrian Dayton, Social Media for Lawyers: Twitter Edition, Ark Group, 2009
  49. 49. MS SHAREPOINTAll about team collaboration • “War rooms” containing: shared documents, tasks, calendars, to-do‟s, integrated with Office 2010 and enabled by remote access etc…
  50. 50. PBWORKS
  51. 51. PBWORKSSecure, encryptedcollaborative workspacesInside and outside the firmCase management, clientextranets, knowledgebases,deal rooms, document hostingand more…*Wish* it had theonline/offline “Box” capabilityof Dropbox
  52. 52. PBWORKS Craft a separate workspace for every file Upload documents, assign and track tasks, have chats and conferences and share documents Customizable security settings Craft dealrooms and share documents without email
  53. 53. SPIDEROAKMac, Windows or Linux“free online backup, synchronization,sharing, remote access, and storage.”„zero knowledge‟You create your password on your owncomputerno trace of your original password is everuploaded to SpiderOak
  54. 54. SPIDEROAKSpiderOak cannot know even the namesof your files and folders. All thatSpiderOak can see: sequentiallynumbered containers of encrypted data.You alone have responsibility forremembering your password!
  55. 55. SPIDEROAK VS DROPBOXDropbox Spideroakprice: price: • 2GB free • 2GB free • 50GB $9.95/mth • 100GB increments • 100GB $19.95/mth $10/mth or $100/yreasy to use more powerfulSecurity Security • staff: see file names • staff: see #d • reset password containers online • cant reset password online
  56. 56. CLOUD SUPPORT QUESTIONS:Are the servers inCanada?Review SLA with CloudproviderReview Privacy statementReview Security audits
  57. 57. CLOUD QUESTIONSUptime record (reliability)?Availability (support)?Proprietary software?Bandwidth (capacity)?Reporting (feedback)?Capacity?Security: • By user, employee & in-transit
  58. 58. BACKUP AND DISASTERRECOVERYHelp desk hoursEmergency contact list andprocedures to recover dataBackups and recovery • Recovery Point and Time to RestoreLSBC or other regulatorycomplianceWhat is/are yourrole/duties?
  60. 60. QUESTIONS?Nicole Garton-Jones• Heritage Law•• 778 786 0615•• www.bcheritagelaw.comDave Bilinsky • Practice Management Advisor • Law Society of British Columbia • • 604 605 5331 • david_bilinsky •