HOW MANY LAWYERS CAN YOU FIT ON A FLOPPY DISK?
When Metropolitan Life Insurance Co. gets ready to close big commercial real estate financing, it doesn't automatically call in its top legal guns. Often, the financial-services company has its paralegals call up a software program called clint, which asks questions about the property, type of borrower, and so on. In 15 minutes--voila--the computer spits out a checklist of the documents and research needed to complete the loan.
It's almost every company's dream: getting rid of the lawyers. Although replacing lawyers with robots is still a fantasy, leading-edge companies increasingly are turning to software for legal expertise. The programs help assemble contracts and close deals. In some cases, "expert systems" let lay people do the work of senior partners.
In recent years, "smart" programs that incorporate human expertise or knowledge have been catching on in diverse areas--finance, energy, and marketing, to name a few (BW--Mar. 2). Law has been lagging. But in a scramble to control spiraling legal bills, more general counsels are embracing the software and other technology, such as electronic mail, to boost productivity and cut costs. Yet for those very reasons, outside law firms that bill by the hour "view this technology as a threat," says lawyer Henry Koltys, chairman of the American Bar Association's expert-systems group.
But Motorola Inc., for one, views legal-services software as a competitive edge. As part of a companywide quality program, Motorola last year created a data base for drafting speedier contracts. Before, in-house lawyers would rifle through files searching for contracts from similar prior transactions. Then, they would cut and paste the old forms to create a new document.
Now, with the push of a computer button, the lawyers can retrieve clauses from Motorola's 100 "best" contracts that are on-line, says Edward W. Jacobs, senior division counsel, who helped devise the system. That's just the first step, he says, toward a more ambitious program of "pushing down" legal knowledge to sales and administrative workers, who'll be able to design contracts on their own.
At Sears, Roebuck & Co., the search for efficiencies has progressed even further. A legal program, known as Matter Manager, can track lawsuits and then use the data to draft summonses and form letters. It can even provide information for answering pretrial "discovery" requests. Besides saving time on drafting, the program lets administrative assistants do paperwork once handled by attorneys, says Matthew Petrich, legal-systems analyst at Sears.
BETTER SERVICE. Cost-conscious general counsels such as Chrysler Corp.'s Leroy C. Richie also are pushing law firms to exploit technology. As a result, small and medium-size law firms that use software can win market share. In the mid-1980s, attorney Charles E. Pear Jr. developed a program that could draft documents for conveying real estate. In a year, his small Hawaii law firm saw such business jump from about $10,000 annually to about $250,000, and it continued to rise. While the firm didn't undercut rivals on price, it did work faster and with fewer errors, says Pear, now a visiting professor at the University of British Columbia's law school. By the time a competitor recruited Pear to design a similar system, its real estate work for a common corporate client had evaporated, he says.
Forward-thinking large firms are turning to advanced software to provide better service to demanding clients. Wash- ington's Wilmer, Cutler & Pickering is using software technology known as hypertext. Similar to an electronic book, it lets users browse instantaneously through relevant information about a law or legal issue--and answer client inquiries more rapidly and thoroughly.
Despite exceptions, most law firms remaine convinced that what they do is unique and cannot be programmed into a computer. Often, that's true--no software in the world could defend against a hostile takeover. Still, it's amazing what some programs can do. And in the face of increasing competition, law firms may have little choice but to turn to computer technology for help. "If they have the capacity, I want to use them," says Richie. "If not, I wish them luck."Michele Galen in New York