A new study by The BTI Consulting Group shows that 49% of Fortune 1000 clients still want an extranet with their outside law firm but don't have one. Fortune 1000 clients expect the highest value when information technology applications are incorporated as a core part of delivery of legal services. Client and law firm use of technology will have substantial and lasting impacts on the relationship between clients and their law firms.

BTI conducted 100 open-ended, unprompted telephone interviews of corporate counsel at Fortune 1000 companies during December, 2001, regarding their technology needs, goals, priorities, and the benefits they see in extranets and other information technology tools and applications. BTI also asked clients to rank 37 different uses of information technology. The study found:

• 49% of corporate counsel surveyed want an extranet with their outside law firm but don't have one.
• Corporate counsel see information sharing as the best way law firms can help them improve corporate counsel's performance, without cutting fees.
• Out of 37 key areas, clients see the most valuable uses of information technology in areas that are central to the law firm/client relationship and delivery of legal services.
• Among its overarching impacts, information technology will ultimately reshape law firms' relationships with clients to include new roles, responsibilities, and expectations for law firms, and expanded definitions of the services law firms provide.

We found a common thread where information technology can improve service delivery, cost and quality, both for law firms and their clients. We discuss these 4 key findings below.

Our research shows that only 14% of Fortune 1000 corporate counsel are using extranets provided by outside counsel.

Extranets provide an excellent opportunity to leverage information technology to the 49% of clients who are still looking for robust, interactive, and value added extranets from their outside law firms.

We asked corporate counsel what their law firms could do to help them improve performance, without cutting fees. Sharing information electronically tops the list, with 23% of clients looking for law firms to help them develop ways to share information more effectively. Legal services are information and knowledge intensive with an inordinate amount of time spent on information origination and transfer. Clients want to streamline that process.

Clients ranked 37 uses of information technology, including a wide range of applications and functions, delineating both their priorities and the value they expect to derive for their legal department. Our research shows that clients see 16 of these applications are both a higher priority and a higher value than others in improving their department's performance. These priorities fall into 4 major types of client needs.

• Centralized Information and Data Management
• Tracking and Reporting
• Law Firm Management
• Key Corporate Information

We note that the applications and aspects of information management that clients value most, and determine are most important, are also those applications that are most closely tied to the services delivered by law firms. For example, the applications under Centralized Information and Data Management include:

• Litigation Documentation
• Case Management
• Document Management
• Discovery Documentation
• Matter Detail
• Patent/Trademark Management
• Contract Terms

These applications represent and are tied directly to the main body of the services law firms provide for their clients. They provide a direct link to service delivery outputs and deliverables. The activities under Tracking and Reporting and Law Firm Management are all tied directly into tracking and reporting the outputs of, and managing activities generated by, law firms on behalf of their clients.

These guidelines help law firms target investment dollars and information technology goals to the activities most important to clients, while boosting client satisfaction and meeting more of your clients' needs.

Information technology will have wide-ranging impacts on legal services and legal service delivery. Our analysis uncovered 6 overarching impacts on client relationships that law firms can expect.

Our research shows that the information management activities and functions most valuable to clients are also those activities at the core of the law firms' service delivery process. Clients' information technology priorities translate into information technology having a potentially larger impact than with some other professions and industries.

These impacts, discussed below, represent an opportunity for law firms to change and improve the nature of services they deliver, and to increase efficiency and cost effectiveness for themselves as well as their clients. The law firms that move to stay ahead of this curve will gain a tangible, quantifiable competitive advantage over the firms that don't. The 6 major impacts are:

1. Law firms will begin to take on the role of data and information management and maintenance for their clients.

• This will result in new roles, responsibilities and expectations for law firms.
• This will also result in an expanded definition of the services law firms provide.

2. The streamlined data and information management process will help drive down legal costs for the client and the law firms and boost quality.  This will result in changes in both the cost of doing business and actual work process.

3. Increased focus on technology to improve management of data will in turn drive increased focus on work process.  This will further result in changes in actual work process.

4. Information technology will increase the transparency between law firms and their service delivery, and the clients that receive those services.  Clients will become a bigger part of the process.

5. Information technology will also increase the collaborative nature of providing legal advice to clients. This will alter the nature of client relationships, making them more interactive.

6. Use of information technology will continue to bring law firms into the arena of becoming business consultants, moving beyond the role of legal advisor. Information technology services, traditionally the purview of management consultants and the Big 5 accounting firms, help define the new, broader future of legal services.

Taking steps to leverage technology

The law firms that take steps today to understand what these impacts mean to their own client relationships will find themselves with better client relationships, and will get more out of these relationships. As in other professional services fields, law firms have a strategic opportunity to improve service delivery and reduce costs for both their clients and themselves through information technology -- given the information intensive nature of legal services delivery. Our research suggests that your clients are really looking for you to do this, and the potential is there for the seizing.