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I coach soccer, and one of the hardest things to teach an 8 year-old is to go to where the ball is going to be, instead of where it is. Without this knowledge, all of the players bunch up
around the ball. The problem really becomes apparent when a few players on the other team figure this concept out. Whichever players or team master this concept first, have tremendous
advantages on the field. The games can end up with very lop-sided scores (and frustrated coaches).
Admittedly, lawyers are much more mature than 8 year-old soccer players, but the
same problem currently applies. The nature of the game is going through qualitative and rapid change. And the ability to be successful lies in the ability of participants to understand
the impact of change before it happens. For lawyers, technology is changing the way legal services are and will be delivered. So now is the time to figure out where the ball is going to
be and arrange to be there when it arrives.
A significant part of the difficulty in anticipating change is understanding the impact of technology and staying abreast of it. Thus
the title of this article: The New New New Thing. This article is an attempt to help you, as lawyers, understand some of the potential impacts of developments in e-commerce technologies
and to look at an evolving approach to how these technologies are being applied in the market.
Essentially we want to understand the third 'New' in the title. But before we can
understand New 3 we should first cover New 1 and New 2. As we cover these topics, we will look at them from a value proposition perspective instead of a technology perspective. One
challenge all organizations face is integrating the business decisions with the technology decisions. Decision makers need to understand the value of technology, without necessarily
knowing how it works. Or in other words, decision makers need someone to help translate technology from geek to business. That is how we will explore New 1 and New 2.
New 1 is the
Internet. You've probably heard enough about this. But to recap its value proposition, it provides a powerful interactive connection between business, customers and government. This
interconnectedness has already driven the price of information down significantly, which, by the way, is one of the things lawyers sell.
New 2 requires a bit more intensive
explanation. It is the concept of providing an application or service over this connection. Whereas New 1 allows users to share information, New 2 enables these users to do something with
the information.
You may have heard of the terms "Hosted Application" or Application Service Provider ("ASP"). These terms describe how New 2 is implemented. Up
until now, most computer technology was bundled up in software. You decided what tasks you needed your computer to perform. Then you purchased a software program designed to perform those
tasks. Many times this software is loaded in a client / server environment. This means that the main part of the software is loaded on a 'server' on a network. Then a smaller piece of the
program is loaded at the work-station (or 'client' to geeks). The two pieces work in a coordinated fashion to complete your tasks. This approach allows you to centralize your data on the
server for sharing between other people on your network. A great example of this technology is document management software for law firms. It allows a central repository of documents to
be shared by the whole firm.
In an ASP environment, the server portion of this equation is pushed out to a server on the Internet. In this situation, the user does not need to be
on a specific network, but can access the application from anywhere on the Web. In this hosted environment, there are many advantages and some cautions. At the top of the caution list is
security. Where exactly are your clients' documents when you use an ASP version of document management?
Before we address the cautions, let's explore the advantages of an ASP
approach. First and foremost, an ASP puts you on the Internet for your clients. It allows you to work in a more collaborative fashion. You can share documents and applications over the
Internet with your clients. Well used, this collaborative approach can greatly enhance your ability to meet your clients' needs. It allows you to deliver services when you are not in your
office. And it allows your clients to access their legal information where and when they need it.
A final reason for using an ASP is that it moves you out of the IT business. In a
client / server approach, you and your firm need to be IT experts or directly employ IT experts. You spend a portion (an ever expanding portion) of your resources on IT instead of on
delivering legal services. The ASP approach effectively out-sources an IT function.
But can you trust your ASP? This is where the caution part comes into play. You should take
steps in due diligence to qualify your ASP. Are their systems secured? Do they back up your data? What happens if their systems fail? How fast can you get your data? A good ASP can
address these questions. And a good ASP will likely provide better answers to these questions than you can currently give. If your clients asked you these questions today (and I think
they should), how would you answer them?
A geek friend has recently been exploring disaster recovery options for lawyers. He is coming to the conclusion that the best disaster
planning a law firm can have is not to hold their clients' data. Don't put yourself in the position to need a data disaster recovery plan. Push that problem onto a partner who specializes
in it.
An ASP approach may not be the best solution to all of your IT needs. But it is becoming a better and better option with each passing day. Hopefully I have at least given
you a good idea of what an ASP is and why you should consider using one. Before we move on to New 3, you should think for a minute about how New 2 might impact your practice. If customers
have access to ASPs that provide these functionalities directly to them, what will that mean for you? If a bank offers an online (a.k.a. ASP) solution for wills or contracts, the need for
a lawyer goes down. Keep this issue in mind as we move on to New 3. Currently you have the opportunity to move to ASPs to better serve your clients. But if you don't make the move, others
may move ahead of you.
So now we move on to New 3. New 3 is being referred to as Web Services. New 3 takes a bunch of New 2s and combines them into a full solution. So instead of
accessing a single application over the Internet, clients will access services and solutions. Clients will go to an online service solution provider with a problem. The provider will have
available all of the software applications needed to solve that problem.
To better explain this concept, let's apply it to a possible example: residential real estate transactions.
A buyer has a problem Ð they need a house. In order to solve this problem the buyer will need: 1) a way to find homes for sale. 2) To apply for and secure a mortgage loan. 3) To secure
title insurance, and 4) to record the transaction documents with the appropriate land records agency.2 Imagine a web services provider who delivered a group of applications that could perform these functions. The buyer goes online and searches for houses in her price range.3 Once she finds the house and negotiates a price, she submits and application online.4 When the loan is approved, she applies an electronic signature to the loan documents.5 Once the purchase is finalized, she files her documents with the land records clerk or county recorder.6 Our buyer has just experienced web services.
This brings us back to my soccer analogy. As lawyers you should be looking at ways in which you might provide your clients with web services options. In my example above, most of
the applications exist for providing real estate transactions services over the Web. Someone just needs to put all the pieces together and take it to market. That is where the ball is
going to be. The question will be which team figures this concept out first. Will it be the legal profession or will it be someone else?7
Everyday progress is made for
automating all kinds of services and towards the delivery those services over the Internet. This is where the game is headed. Now is the time to look at your practice and explore how you
might deliver your services in a new way. Take a look around the field and do your best to figure out where the ball is going to be. You will find that the game is getting more
interesting as it evolves and you will be in a better position to serve your clients.
Footnotes
1. With apologies to Michael Lewis, author of The New New Thing.
2.
This example obviously simplifies the transaction. Other services will be needed, but could be included in the service system.
3.
Many companies already provide this service. Most connect you with an agent for site visits. Check out www.utahrealestate.com for an example of this.
4. Ditech advertises heavily for this service (www.ditech.com).
5.
In Sept. 2002, Quicken announced a new e-signature service for loan documents. See www.inman.com/InmanStories.asp?ID=32108&CatType=R for an article on this.
6. See www.pria.us for efforts to standardize e-recording filings across the US.
7.
Such as real estate agents, mortgage companies, and title companies. These groups are all working feverishly to establish standards for these transactions. For an example see www.mismo.org. It is likely they will implement them once they are in place.
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