Legal Technology Journal

Over the years we have heard a lot about the quest for the ‘paperless law office’, but is it just a pipe dream? SJ Berwin’s digital approach to matter management has closed filing cabinets across the firm – and is potentially saving millions in the process.

Lawyers love paper. For centuries, it has been the defining working currency across the world, and for good reason – it’s highly portable and it’s readable in a wide variety of situations. But that passion for paper is turning out to be an expensive one in the modern world. As law firms have grown and international business has forced them to collaborate across borders, paper-based ways of working have become a source not just of frustration, but also of significant risk and cost, the burdens of which affect clients as well as the firms themselves.

Paper-based files and folders might be convenient places to store all information relating to a matter, but they are also easy to leave in taxis or restaurants. They are extremely expensive to file and store. There’s an access problem – if one lawyer takes a file for dictation purposes, it is no longer available to anyone else. They’re easy to damage or destroy accidentally. And critically, they’re becoming impossible to maintain in any sort of complete state. This latter point has grown enormously in importance since the advent of electronic communications – people forget (or simply do not have time) to print or file the vast number of e-mails and other documents relating to a matter, with the result that it is often impossible for someone to get an accurate picture of the state of a deal by simply looking at the file.

In 2002 SJ Berwin started to look at new and better ways of managing this growth and providing a better service for its clients. The result is an ongoing project that has had a dramatic effect on everything from client service to the design and workings of the firm’s new offices at Queen Street Place. In the process, it has helped define and create policies that dictate everything from paper usage and storage to compliance with new regulations. And the real benefits have been substantial in all sorts of ways, not least in terms of a return on investment that has translated into a saving of £700,000 a year in storage costs alone.

In the beginning

While SJ Berwin’s IT team had been aware of the burden of paper and the rapidly emerging complexities of new technology for some years, their real implications started to become much clearer around this time. The volume of e-mail, in particular, was becoming much harder to manage and audit. ‘We were seeing a significant shift away from paper to electronic transmission,’ says Simon Kosminsky, SJ Berwin’s IT director. ‘Certain cases were becoming wholly electronic, and we were getting significant quantities of matter-related e-mail. That created its own problems – secretaries were often printing hundreds of e-mails every day, often only a few lines in length, but which contained the same forwarded information and disclaimers from the entire conversation thread, which became a substantial chore and created enormous waste.’

Further problems quickly became apparent. Most notably, matter folders were hard to keep complete, as relevant e-mail was not always finding its way to the right place. So Kosminsky’s first task was to create a proof-of-concept system that could at least demonstrate the potential of new technology to force significant change within the firm.

He had some very clear aims in mind before he started work. ‘To be successful,’ he explains, ‘our project had to meet a long list of criteria that ensured that not only were our working practices made more efficient and streamlined, but that the interests of our clients were preserved too.’ Some of his key considerations were:

• Lawyers must have instant access to all their information, wherever they may be working – a significant challenge in a world where paper documents must co-exist with millions of e-mails and other electronic documents.
• Excellent audit trails must be available for all information generated internally and externally – absolute proof of where a document or e-mail has been, and who has access to it.
• The high costs associated with paper must be reduced – not just those immediately related to storage and retrieval, but the costs of photocopying and printing, messengers delivering internal and external mail, secretarial filing time and myriad others – costs that are often not recoverable from clients.
• Concerns of clients about environmental policy, security, disaster recovery and compliance must be addressed.

An optimistic Outlook…

SJ Berwin’s first major foray into this territory was inevitably based around Microsoft Outlook. While levels of technical knowledge and literacy vary enormously within any law firm, most lawyers feel very comfortable working in Outlook and spend large proportions of their day using it. Even so, the first implementation of the IT team’s thinking, based around a system of public Outlook folders, was not, according to Kosminsky, universally loved: ‘It had some flaws that compromised our requirement for a system that was fully auditable, accessible and comprehensive in its ability to include all information relevant to a particular matter.’ Removing duplicate files in public folders was hard, for example, and it was difficult to include scanned material. Perhaps more crucially, it was very hard to profile e-mails accurately and extensively within public folders, limiting the extent to which information could be automatically indexed and cross-referenced.

As a result, the home-grown Outlook implementation didn’t meet Kosminsky’s aim for a wholly electronic system across the entire firm. Some partners were still choosing to open traditional paper-based folders at the start of each matter rather than electronic ones. And despite extensive training, only a small percentage of the firm was using the system. ‘Lots of files were still incomplete, creating a significant risk,’ says Kosminsky. ‘We got to the point where what we had was only a partial electronic file, consisting of someone’s inbox as well as the paper material, neither of which were complete.’

It soon became clear that SJ Berwin needed a more powerful and flexible alternative to the Outlook system, but one that retained its look and feel. Turning to third-party suppliers, Kosminsky discussed the firm’s requirements with Hummingbird, whose PC Docs document management system was already in use by SJ Berwin at the time. ‘Within PC Docs it was possible to achieve some of the requirements, but the product lacked sophisticated and straightforward e-mail profiling, and the ability for our lawyers to work in an Outlook environment,’ says Kosminsky. A new product was promised which would contain these features but after an extended period of waiting for a working version, he decided to look elsewhere.

After some months of deliberation, Interwoven’s WorkSite 8 was chosen. The package met all of the IT department’s criteria for the creation of a truly workable system. ‘Not only would WorkSite hold all of the e-mails, electronic and scanned documents and faxes related to a matter, but it worked in a way that appealed to the lawyers used to living in Outlook,’ says Kosminsky. It showed the possibility of working with a single matter file, created as the matter itself was created – something that few law firms can yet exploit. In Interwoven’s product, all the documents relating to a matter can be held securely in one place, and information moved around by simple drag-and-drop procedures. It also features a profiling system, which ensures that data and associated metadata can be correctly captured, identified and filed for easy access – a key requirement for any firm relying on swift and accurate retrieval of information.

Millions of mails

Interwoven’s system is now used by 800 people within the London and Brussels offices of SJ Berwin. The remaining offices (in Italy, Germany, France and Spain) will start using it this year. When WorkSite was implemented in March 2006, SJ Berwin added nearly two million extra e-mails to its knowledge base almost overnight, creating a total of more than six million documents – a number that is expected to rise to more than 12 million by the end of the year. This has resulted in repositories of matter-centric information that can be accessed simultaneously across the entire firm, thus dispensing entirely with one of the principal limitations of a paper-based approach.

As a result, it allows key know-how to be shared, thus freeing lawyers from the demand for them to be in several places at once. But according to Kosminsky, the real benefit is to the firm’s clients: ‘Most importantly of all, it allows us to provide them with a significantly better and more flexible service – any lawyer receiving an urgent call at 2am can deal with problems instantly, without the need to return to the office or carry cumbersome folders home with them.’ That facility will be extended in the near future with a portal system that will provide access for clients who need access to their own matter data, billing records, contact information etc.

These are powerful benefits in their own right, but many others have emerged to create a working environment that is much more than the sum of its technological parts. In a world where SJ Berwin knows where everything is and how to retrieve it, new policies covering security, e-mail retention, compliance and disaster recovery have been much easier to design and enforce. Now, it can be sure that people who need access to particular information – and only those people – can have it, irrespective of where they happen to be working. At the same time, it has been able to make guarantees about retention and storage policies that have affected everything from the relationship with clients to the size of insurance and indemnity premiums.

The paper principle

But what about paper? Unlike most firms running similar projects, SJ Berwin has been able to quantify some of the benefits of its technology in paper terms alone. Its new paper policy is simple, but extremely effective. It has two principal components: every new matter must be created and managed wholly electronically, and no new paper content can be filed anywhere. To enforce the latter, Kosminsky has adopted not just technology but social engineering techniques too. ‘We’ve even given secretaries incentives in the form of M&S vouchers to scan and electronically file paper documents or shift them offsite,’ he notes. At the same time, the firm has implemented advanced new scanning technology that can not only create image-based and OCR versions of documents, but can also automatically recognise employees, file those documents according to their specific matters or interests and even generate appropriate client billing documents for each activity.

And while employees can create, print and read documents within the building, they must destroy them afterwards. So while SJ Berwin recognises the continued value of paper within the organisation – ‘At no point have we disregarded the fact that paper is a very convenient medium, and ironically we now have more printers than we did before the implementation of the Interwoven system,’ says Kosminsky – it is also making sure that it doesn’t create and store any more documents than are absolutely required by the legal systems within which it works.

The implications of this have been enormous. When the firm was planning its move to a new building in London this year, it knew that it could be designed without being enslaved to paper storage considerations. Calculations showed that it could reduce the storage requirements by half, from about 30 linear metres to about 15 – thus simultaneously halving existing storage costs of £1.3m a year. But it has done much more than just save £700,000 annually in storage. Unrestricted by filing cabinets, the firm has been granted the freedom to create a much more open environment designed to facilitate movement and communication.

Kosminsky says that the move to a policy based around usage of less paper has had an impact on the firm that extends well beyond the facilitation of better working practices: ‘It has helped us create a place which looks and feels like a single, well-integrated organisation rather than a maze of cramped and untidy offices – a key element of our commitment to the best people and the best service.’ Wireless technology throughout the building encourages people to work anywhere within its many open spaces and informal meeting areas, whether on laptops, BlackBerrys or other mobile devices. And not only do lawyers now have more space within which to work and meet, but the firm can fit more fee-earners into a given space, with a corresponding impact on profits.

The paperless office is likely to remain a myth, both in SJ Berwin’s own future and that of society more generally. But the firm’s innovative use of technology to support its strategy and objectives has shown that you don’t have to be completely paperless to be more effective, more robust and more profitable. Paper alone cannot determine the strategy of modern law firms – only business objectives and client interests can do that. But by cutting the paper chain, some very real and measurable benefits accrue.