Well informed law firms around the Asia-Pacific are keeping a close eye on Clifford Chance and Microsoft’s recently announced business relationship – to develop a document management system (DMS) based on the latter’s SharePoint suite of products. The usual DMS functions - storage, version control, auditing and sharing of documents will operate using SharePoint under the new system.
Clifford Chance has spent at least £1m; Microsoft – reportedly happy with being associated with one the world’s largest law firms – is providing funding. The fundamental point of difference between the new system and conventional document management software is that one shared platform will be used to provide all of the abovementioned services as well as functions related to intranet and client access to documents; currently no other system providing that range of functionality is available from one shared provider.

There has been speculation as to what led Microsoft to participate in the venture. Some agreed that there has been increased interest in document management services from clients in areas outside the legal profession. “Different industries are seeing the value in developed document management,” said Mark Andrews, director of knowledge and I.T for Baker McKenzie in Australia. Indeed, firms outside the industry such as Vodafone are going live with SharePoint and similar DMS systems to that used by law firms, making the venture a logical step in terms of client/firm relationships. Within the M&A, banking & finance and commercial practice areas firms agreed that fast, trustworthy document sharing and client confidentiality are crucial for success. As for alternative motivations, others have said that Microsoft is using the tie-up to gain a foothold on the legal processes market and that ultimately it will introduce the new must-have DMS for any law firm or large corporate.

Clifford Chance has also stated that the aim of the project is to cut costs – and the potential for savings is significant according to CIOs from Mallesons, Freehills, Gilbert + Tobin and Baker McKenzie. “A sharepoint solution [to document management] would be a cheaper solution,” said Nicole Bamfourth, director, information and technology for Freehills Australia. Apart from cutting costs, the potential for Clifford Chance to market a new system to other firms would also be significant. That seems to be the expectation as when asked, no competing service provider or law firm information professional suggested that other companies were planning to launch their own similar product.

A shared platform at what cost?
The main concern accompanying the anticipated cost savings is that moving to a shared platform for document management could lead to security issues, which would mean lost revenue and lost reputation for those firms that choose to implement a shared platform.  “SharePoint is not necessarily security minded. It hasn’t passed that stage yet in my view. Until it has there is a risk involved, but having said that I can’t imagine that Clifford Chance won’t bring security into focus” said Gerard Neiditsch, executive director of business integration and technology for Mallesons Stephen Jaques. Neiditsch also pointed out that Microsoft has tried in the past to charge for an on-line database and not succeeded. Nonetheless, the chances of Microsoft coming up with a useful, interesting and robust platform were rated as ‘quite high’ by Bamfourth.

Others have also pointed out the fact that £1m is not a high investment for a project of this scale. ”When I was working on technology deals up to 4 years ago $50-60 million US dollars was a common deal size. This isn’t a significant investment,” said Gabriela Kennedy, IPIT partner with Hogan Lovells in Hong Kong. Kennedy did qualify her assessment of the situation, however. She said that the potential for the venture would be big and that development, testing and design will most likely be carried out in Asia because of the market and lower costs.

For the most part, firms use separate providers such as Autonomy i-manage to provide document management solutions and use tools such as SharePoint for intranet sites only. The attitude is that firms are using systems which already deliver what they need in a fast, efficient manner. The attraction in moving to a new platform, such as that proposed by the Clifford Chance/Microsoft tie up, would be the ability to purchase a one-off licence. Such a licence is not an operational consideration and doesn’t impact on the day to day function of a law firm document management system. That also doesn’t take into account the costs involved in migrating data and installing the new system, which it is still too early to quantify.

A document management solution for all firms?
Firms with an international presence spanning continents, which obviously includes Clifford Chance, will face the additional costs associated with having offices in multiple jurisdictions and clients or associate firms in jurisdictions such as China and India; which are still developing data protection legislation and a suitable regulatory system for international business. For a firm such as Hogan Lovells, with a number of partners and lawyers interested in I.T and with strong I.T support, Kennedy predicted that implementation of a shared system would be possible without compromising too much on day to day work and revenue. Following the merger which created the firm Hogan Lovells, Kennedy said the transition from one I.T system to the other was seamless but there was ‘a lot of backend work’ in areas such as accounting software, record keeping and tax. She did comment that startup costs for Clifford Chance would be very high and may be prohibitive for firms which aren’t in the category of international ‘mega-firm’.

Other I.T professionals in law firms were also cautious of the need to migrate data from system to system. “The volume of content we are talking about is huge and firms would likely need to migrate everything – it would be a multi-year project,” said Freehills’ Bamfourth. The sheer volume of data and the need to take into account different rules and jurisdictions means that there will still have to be documents that stay in individual firms and remain on location, according to Kennedy. This highlights the difficulty in creating a single solution that can be adopted by all types of firms. Though there is great flexibility in the SharePoint system itself to adapt to individual firms’ requirements Microsoft and Clifford Chance need to come up with a way to convince law firms that it will be worth the monetary outlay and risk involved in going through with implementation.