An innovative approach to IT development

Faced with the tidal wave of online legal services launched this year by magic circle firms, a casual observer might conclude that the rest of the sector is being left behind as the industry leading giants stride ahead.
But some of the most innovative development work is being carried out, behind the scenes, by the City's other large corporate firms. So as not to be excluded from the innovators' club, top-10 firm Lovells revealed to Legal Week the fruition of a three-year extranet development project to rival those of industry leaders such as Linklaters & Alliance and Allen & Overy.
One of Lovells' largest, most lucrative and longest-standing clients is the Prudential Assurance Company. Lovells carries out a lot of banking transactions for the company and handles over half the property work generated by the mighty Prudential - the country's biggest landowner, which by itself constitutes 3% of the London Stock Exchange.
In 1997, Lovells developed its intranet system using a new development package called Silverstream. The system so impressed property partner Robert Kidby that he started thinking of ways to use web-based technology to lock lucrative clients such as the Prudential securely into a relationship with the firm.
Kidby researched ways of using IT applications to streamline the relationship. He admits that at the time, the firm was lavishing far more attention on pitching for new clients than on keeping established relationships.
At the beginning of 1998, Kidby arrived at the Prudential's head offices armed with what he describes as "a basket of e-goodies". Foremost among these were plans for a comprehensive client extranet service. According to Kidby, the company was doubtful about the idea because it was not easily persuaded that a client extranet would add value to its business and save it money, while increasing the firm's profits.
He explained to the Prudential that technology lent itself to property law, much of which could be easily commoditised, streamlined and automated. City firms faced stiff competition from regional firms with lower overheads and staff salaries, which were driving down costs for property work. It was difficult for Lovells to justify its fees for work that could be carried out more economically - and just as reliably - elsewhere. But with the help of technology, the firm could differentiate itself from the competition and deliver its services at a competitive price.
Kidby admits that the firm had another agenda for developing the extranet. There was a great pressure on junior fee earners to reduce the time taken to complete the dull, repetitive process of drafting standard documents and the factory-chain nature of the work was causing motivational problems. He was convinced automation would lead to more creative and less mechanical working conditions.
He says the firm had considered but discounted setting up a dedicated unit in a low-rent area, staffed by paralegals and a few lawyers, to drive down costs. Kidby says the technology option was more appealing because the firm valued its centralised command chain.
Once he had the client on board, Kidby went to Lovells' IT department with instructions to make a working prototype of the system, with case searching and reporting facilities. The team comprised development manager Tanya Collett, a Silverstream-trained web developer and a technologist specialising in the Elite billing and time recording system.
The team started with the most mundane functions: licence applications. Kidby says Lovells receives thousands of requests for license drafting each month - routine work but with a high degree of associated liability. He set up a dedicated licence unit, staffed by four paralegals and three part-time lawyers. Using document generation software from HotDocs, the unit was soon churning out licenses at a rate of two per minute.
"Instead of losing a couple of hundred pounds per licence, we now make a small profit," Kidby says. The Prudential's main requirement from the extranet service was a simple reporting service to handle the thousands of cases on which Lovells was acting for them. Kidby and his development team decided to offer the client access to all time recordings, kept in context by a 'narrative' - a phrase explaining the nature of the work billed for, which was added every six minutes. While this may seem like overkill for low-margin property transactions, Kidby explains that the dividing line between the firm's property and corporate departments has become increasingly blurred over the last two years.
The extranet went live in November 1999, at a cost to Lovells of about £40,000, plus the price of a new server. Kirby says the vast majority of the outlay went on the developers' salaries.
To protect against hackers, the extranet uses 40-bit encryption, but this is set to be upgraded to 128-bit by the end of the year, bringing the site in line with benchmark systems such as A&O's NewChange and Linklaters' client extranet in terms of security.
The reporting system enables the Prudential to enter a case code, or click on a link from the home page to monitor progress on a matter and examine the productivity of an individual fee earner.
The extranet can be set to recognise individual client users and to take them to a version of the home page that enables them to access and cross-reference all matters for which they are responsible. "It is very low maintenance now," says Collett, the development manager for the project. "Now that we have given the Prudential control of access privileges, we just need one person to run it part time." Following a request by the Prudential, Lovells gave surveyors and property management agencies working for the company access to the extranet.
As well as giving the client access to dynamic, internal information, the extranet contains blank specimen copies of Lovells' standard property forms for transactions such as property leases, in PDF format. These documents are for reference only because, according to Kidby, the Prudential - which disbanded one of the UK's biggest in-house legal departments before engaging Lovells - was not keen on taking responsibility for filling out forms.
The site also features comprehensive contact information, a current awareness update service, which is sent to many of the firm's clients, and hosts a bulletin board for the client organisation's social events and internal news service. When new features are added to the system, users are notified by a scrolling animation in one corner of the screen.
Since a member of the Prudential's IT department was involved in the development process and knew the system inside out before the rollout, after an initial joint training session the company decided to set up its own internal helpdesk. Collett says that the Pru deals with 90% of enquiries and problems itself.
"The system was a success because technically, we brought ourselves very close to the client," Collett says. "Now the development work is mostly done, we can set up a dealroom in two days. We will have a prototype for another client relationship site ready to go in two weeks' time." Kidby says Lovells does not offer the same service to its other clients because they do not want it. He claims the firm will build a personalised client extranet site for any client, as long as it would add value to the firm-client relationship.
The extranet was not the only idea up Kidby's sleeve. Back in 1998 he also offered the Prudential a fast-track instructions system for leases and licences. The forms are filled out by applicants, drafted automatically using a HotDocs template and is sent directly to the relevant solicitor, who simply has to read, think and click their approval and the document is sent out automatically with a standard form letter for each party. "This system cuts the transaction time to grant a lease by up to a month, which means a month's more rent for the Prudential," Kidby says.
Another idea, which Lovells is about to develop, aims to further streamline the licence application process. Kidby explains: "Why wait for tenants to apply for the form?" he says. "Put the form up on the extranet for the tenants to fill in, adding a list of supporting details." Lovells would police the system, it would require no effort on the part of the client, surveyors would approve the licence without having to refer to Lovells and the firm's lawyers would not have to waste time on unprofitable, low-margin work.
Collett sees XML as an important tool for further innovation. She is considering joining the legal XML working group to contribute to setting XML standards for the legal sector. The group aims to enable much closer integration of different systems, which would prove invaluable in the event of a merger and may pave the way for more collaborative working between firms.