A recent Fortune 1000 survey found that 49% of U.S. legal departments want extranets, however, only a few companies have them. Seize the opportunity to gain marketing advantage and improve counsel/client relations with this web-based collaboration tool. Tredennick provides the experience and necessary resources for you to get started.

For us it started almost a decade ago. In 1998, a large corporate client called my partner Tim and told him the company had been sued. That, of course, is not unusual in our business, nor was the fact that there were dozens of law suits spread across the country. However, this time everyone in the industry had been sued. Ultimately, 340 companies and their law firms would be on the defense against a well-heeled plaintiff.

"We need your help," the GC said to Tim. "We've got to coordinate our defense among all the players; everyone needs to be on the same page." Next came the windup. "What would you charge," he mused, "to dedicate a secretary full-time to making (what would be) 340 copies of every document that comes in on this case and mailing it to all the defendants and their counsel?"

Tim jumped to attention and told his client we'd be happy to help but then he got to thinking. "Wonder how much we should charge for that service?" So he sent an email to our managing partner and sent me a copy as well.

At that time I was CIO of Holland & Hart as well as a litigation partner. I had just started thinking about using extranets on cases and I decided to lob a grenade into the process. "Why don't we create an extranet for the matter?" I suggested via a reply email. "An extranet is like a private website," I explained. "If we set it up right, only the people on the defense team can get in and we can keep other people out. The beauty of it is this: we can put all these documents on the website and everyone on the team will have instant access. All they need is a web browser and an Internet connection."

All this seems second nature now. But back in 1998 it was pretty radical thinking. I really didn't expect much in the way of a response so I was surprised a few weeks later when I received an RFP for "extranet services" in the mail. Turns out that Tim had passed on my idea to his client and, in turn, he had passed it on to a newly-formed management committee. As all committees seem to do, they decided to send out an RFP, to us as well as a bunch of other firms and even some big 5 types (when there were 5).

So suddenly I was filling out an RFP for the provision of "Technology Services." The RFP stated in bold, all cap letters: "This RFP is for Technology Services and not for the provision of legal advice. No attorney-client privilege will be formed or is contemplated in this proposal." Looking back I don't know why they felt moved to include that warning but I recall sitting in my corner office chuckling at the thought of preparing a proposal for "Technology Services."

But I filled out the proposal and sent it in to see what would happen. Our site was to be "data-driven" which means the webpages were derived from a database rather than static HTML pages. The advantage of this approach was that we could administer the thing without knowing any code. Anyone with administration rights could add documents to a page, add text and create new pages. This meant site management could be done by anyone. Indeed, we set it up so that a savvy legal assistant from the defense team could handle almost all of the administration. We merely provided the infrastructure and the hosting.

To my amazement we won the bid and soon got our extranet up and running. As a document center, the site was an instant hit. Each day our legal assistant uploaded more and more documents in Adobe Acrobat PDF format. What I hadn't expected is that the site became useful for other purposes. Members of the defense team began using the bulletin board section to discuss joint work product and other projects. They set up a private area where they posted Word documents that involved less than the whole team. And, they used the calendar module to keep track of deadlines and tasks.

We found that the concept had legs. People found useful the ability to access documents and other case information at any time from anywhere. Five years later, that site is still running (big cases move incredibly slowly) and we started putting up sites for other cases as well. Sometimes the concept was hard to explain or sell but little-by-little people began to see the utility of it. Having quick access to the files and being able to search them in an instant is a powerful thing.

A lot has happened in the past decade but this essential concept has remained the same. By 1999 it had become clear that extranets were not a passing phase and that there was tremendous potential to do something useful for clients and their lawyers. So, I suggested to management that we spin off a business. We did and Catalyst (then called caseSHARE Systems) was born. Now with Catalyst in its seventh year as an independent company, it is clear that our vision still has legs.

In the remainder of this piece I will share some of my thoughts about extranets and extranet technology. I don't promise the gospel, but I have done a lot of thinking about these issues and made my share of mistakes.

Extranets are a good thing

Once they realize the paper is available with a mouse click, clients and lawyers love these things. Telling your client that you will no longer be charging for the obligatory fax, courier and photocopies of routine documents will make them happy and it solves their own document management problems as well. Lawyers are typically hesitant to try anything new, but even they will warm up to the concept. One of my partners recently marveled at his discovery that the paper copies of the pleadings from his extranet were in a filing cabinet near his secretary. "I haven't looked at a paper copy of these documents since the extranet started," he exclaimed. "I just use my computer."

In for a penny...

You can't do extranets half way. If you are going to set one up you might as well set them up for most major cases. The cost of organizing for one extranet is almost the same as doing it for many cases. You have to set up the server, software, security, etc. and you have to staff for 24 by 7 support. Likewise, you will have to make scanners available to your secretaries and teach them how to use them. You might as well do it for a bunch of extranets rather than one.

Lots of extranets get confusing

The only thing worse than having to log into one extranet is having to log into a bunch of them. Our system evolved such that the users go to a single location to access all of their extranets. Our notion was to build an integrated home page that will pull data for every matter in which the user is involved. From there, he or she can access any file as needed.

Taking that approach, the user is presented with an opening screen that shows the various matters with which he/she is associated. It also provides a list of tasks assigned to the user from his/her case, upcoming calendar events, news and a listing of documents recently added to any of his/her cases.

From there, the user can click on appropriate links or navigate via the left-frame folders to specific cases, calendars, documents or contacts.

The advantage of the approach is a single log-in (and a single system to manage). This benefits clients as much as the lawyers. Even if the client is connected to one matter, the site retains its utility. All the documents and other related case information are there.

Make the Interface familiar

There are as many approaches to web design as there are web designers. However, we figure the best approach is to design around already familiar concepts. That's why we build current systems to look and run like Microsoft Outlook. That is not to say that Outlook is the apex of the design world. Rather, it is the universal simply because most people use Outlook on their business or at least home computers. Sites that look like and work like Outlook are instantly familiar to users.

Make them secure

If you are going to build and deploy an extranet system for your clients, don't skimp on security measures. Most of your larger clients have stringent security requirements for their data and they will expect you to provide an equally secure environment if you are going to make confidential information accessible on the web. You also should consider whether HIPAA (medical), Graham Leach (financial) or other regulations impact you because of the data you are hosting. If so, there are all kinds of steps you need to take with security being one of the most important.

There are a variety of views on what constitutes proper security. What I would say is that deploying a Notes server outside your firewall with a password challenge is not sufficient. Most Chief Security Officers at large corporations expect intrusion monitoring, a demilitarized zone, locked-down boxes, daily virus updates and a host of other protective measures. Talk to your client about this before you get up and running.

Use a Data Center

One way to solve some of the physical security problems and to provide redundant connectivity is to place your servers at a co-location facility. Every city has one these days (many will have several to choose from) and, besides, it doesn't much matter where your servers are located so long as you can have someone at the facility to do a hard reboot when you need it. Still, we find having a good facility nearby is better simply because you have quick access for upgrades, backup and general maintenance/troubleshooting.

A data center will rent locker or cage space to house your servers. Essentially, they provide bandwidth to the Internet, redundant power, physical security and climate control. Most facilities will also offer a range of management services from backup to server monitoring to complete management. Prices can vary from facility to facility and the more services you request, the greater the cost. Full management can be an expensive proposition although it may make sense depending on your circumstances.

Equipment

If you are hosting mission-critical data, you need to consider industrial-grade servers for your applications and storage. For example, we store all files on a Network Appliance device. This is a Unix box whose sole function is storage and retrieval of files. It will hold terabytes of hard drive storage (Raid 5, hot swappable) and it makes a snapshot of its data files four times a day with a nightly backup. Figure on spending a substantial amount for one of these devices with sufficient storage for your data needs.

We buy Dell rack-mounted servers for our general servers, typically with at least dual-Pentium processors. Rack-mounted servers are very thin and are designed to fit in data-center cabinets. This is a must because space at a data-center is at a premium.

Technical Staff

To make all of this work, you will need a bunch of very talented programmers, network and web gurus. Despite the dot.com crash, good people are still in high demand and command associate-size salaries. Convincing your management committee to hire these kinds of folks to get your program up and running is quite a trick. Convincing them to allow your folks to wear T-shirts and shorts and bring their dogs into work is an even bigger trick. Good luck.

When you start looking, recognize that you need applications programmers, not simple website developers. These applications are far more complicated to build than the typical website. They need scalability, security and a whole lot more work on the user interface than you might imagine. Consider hiring outside help but make sure they have the knowledge you need to build these kinds of tools.

Options for extranet software?

Once you are convinced of their value, there are a number of ways to approach extranets. Each has its pluses and minuses and the right choice for you will depend upon a number of factors including your size, existing technology, internal technology team and your appetite for developing and managing the stuff yourself.

Let's start with the basics. In covering these options, I don't promise to hit every alternative, indeed my only hope is to mention enough of the players to get you thinking. Nor do I intend to provide a critique on these alternatives. Aside from my inherent bias, the products seem to change by the week and comments or criticisms valid today might not be tomorrow. Just take the following as food for thought and a start on your internal discussion.

1. Extend Your Intranet

Let's start with an obvious question: do you already have an intranet working? If you do, you might be able to extend its reach outside your firewall. The security built into your intranet may allow you to expose some pages to outside clients without compromising internal security.

Firms have taken a number of approaches to intranets ranging from home built to custom install. Typically the home built systems are based on SharePoint or Lotus Notes. Each of these tools allows for external users, albeit in slightly different ways. Work with your administrator to see how you can start making appropriate information available to external users—whether client or co-counsel.

If you don't have an intranet, there are firms which will provide customizable software for this purpose. Two reputable vendors who provide this service are SV Technology and Hubbard One which is now owned by Thompson. Their products, at last contact, provided extranet capabilities as well as internal collaboration options.

2. Use Your Document Management System to Share Documents Externally.

Many firms have invested in sophisticated document management systems like iManage, Hummingbird and Documentum. If you fall in that category, you should look into adding extranet features to your DM system. Each of these products provides some sort of web interface for external connections either as part of the basis package or as a separate module.

Typically these systems are limited to sharing documents externally and can be expensive to implement. If you want more functionality, you might want to look at the Workshare product that comes as an add-on to iManage. Or, consider eRooms which is also owned by Documentum.

3. Build Your Own Extranet

Another option is to build and host your own extranet system. When we were getting started, a popular option was a product called Legal Anywhere. It was based on the Microsoft Access database and seemed to be quite useful. Alas, the company was purchased by a larger technology company who ultimately folded during the technology recession. The product never made reappearance.

These days you can use SharePoint and Notes as an extranet, even if you haven't created your own intranet. At first blush, these seem like easy and inviting options. Neither product is prohibitively expensive (I understand some of the earlier mentioned extranets systems can be expensive when you include installation and customization). However, you will have to get development help if you hope to customize either product. SharePoint, for example, has some attractive templates to get you started but developers I have worked with suggest there is more to getting things working than you might think at first. Certainly the idea is worth a look if you have motivated (and free) technology staff to put on the project.

If you are considering this route you need to think beyond simply building the system itself. The minute you start operations you convert from development to support. Suddenly you have key responsibilities to keep the system running, to train and support users, to deal with the inevitable technology problems at all hours and to make sure security is not compromised. Also, don't forget to back up your documents and data and get a disaster recovery plan in place. Remember, you have moved into the realm of a technology provider rather than law firm. Your clients and co-counsel will expect the system to run without flaw and for one of your staff to answer their questions (politely) at 3am on Saturday morning.

4. Outsource Extranet Services

While this option can be the hardest to swallow for law firms, there are a lot of reasons to consider outsourcing extranet services including those mentioned above. Simply put, the outsourcer provides specialized and focused services around your extranet delivery and remains on the hook if anything goes wrong.

There are at least two approaches to take here as well. One group of vendors provides generic extranets that can easily be adapted to most legal uses. For example, eRoom, mentioned earlier was one of the early pioneers for document management extranets and is widely used in the general business world. It was purchased by EMC who also bought Documentum and the two likely have some overlap in functionality. Intralinks is widely used in the financial space and is a leading deal room product. Over the years it has tried to enter the litigation arena but so far has not been successful.

Other general products to consider include Intranets and doubtless a dozen others. All of these provide folders to store documents, along with calendars, contacts, etc.

The other category includes vendors focusing on the legal market itself. On the litigation side, you have companies focusing on electronic document repositories as well as general document management. Examples of the former include CaseCentral and Lextranet, to name two good ones. In addition, several of the EDD companies also offer document repositories, although primarily in support of review for documents they have processed. Kroll, bought by Marsh McLennan, and Applied Discovery, owned by Lexis, are two of the largest in this category.

On the collaboration side, Merrill Corporation is offering deal rooms as well as litigation support and is also worth considering. There are a number of smaller players in this space as well including Xerdict and Worksmart.

However you approach it, outsourcing to a reputable provider makes tremendous sense to me (recognizing my own bias). This is one case where economies of scale are linear if not exponential. Once you have the facilities, equipment, software and support team in place, the marginal cost of an additional site becomes negligible. Having one team managing security and updating the system beats doing it firm by firm.

Prices and pricing schemes are all over the map, with each vendor emphasizing its own approach and bundle of services. Figure on some form of setup fee, a monthly base fee and some variable fee based either on the number of users or the volume of documents stored.

Most extranet companies will provide an online demo of their software offerings and that is the best place to check for a fit. Once you have the choices narrowed down, the next step is to call references. If the references are happy and the software does what you need, then move to pricing. While the fees can seem steep, consider carefully the price of doing it yourself. It will cost a lot more than you might expect and the results may not be satisfactory.

Conclusion

The BTI Consulting Group out of Boston, MA recently surveyed Fortune 1000 legal departments and concluded that 49% of them want extranets to connect with their law firms. Corporate counsel cited benefits like:

• Information Sharing
• Matter Tracking
• Discovery Management
• Patent/Trademark Management
• Contract Tracking

The survey also disclosed that only a few companies have extranets and would like their law firms to provide them. This suggests there is still a marketing opportunity for those firms that get their extranet show on the road.

Back in 1998, I thought my extranet proposal was a cool idea but I didn't think it would have such profound implications for document management and counsel/client relations. Today, I see a clear path for a few firms to take the lead on web-based collaboration with their clients and to provide new kinds of information services. Eventually every firm will jump on board but today, few have. That suggests to me an opportunity exists for firms in different regions or with different specialties to gain marketing advantage by offering extranets today rather than waiting to play catch-up later.