I have an annual tradition of identifying the key trends in legal technology for the coming year and making some predictions about where we are headed. The current economic turmoil has made 2009 an especially difficult year for which to assess trends. The economy also makes it difficult to be very positive about what to expect this year.

In fact, I’m actually quite pessimistic about what we’ll see in legal technology, even though I’ve tried to take a more positive outlook in this article than what I might say to you in private. Keep in mind that the economy could dramatically and negatively affect these trends. Let’s face it, when firms are laying off lawyers and staff and fighting to keep the doors open, technology is going to be less of a priority that it might be in a normal year.

There’s no doubt that there are pockets of great opportunity using technology in 2009 (think collaboration tools and client-focused technology), but it will be the rare firms or organizations that will be able to decide to make those investments. As a result, it’s what happens OUTSIDE the legal profession with technology that will ultimately be the most important trends inside the legal profession over the long haul. With that in mind, the best legal technology investment to make this year is to buy (and read) - Richard Susskind’s book The End of Lawyers? - which is a great all-in-one resource on the big trends changing the profession and the outside pressures that will change the way lawyers practice.

With that said, here are the big trends I see for legal technology in 2009.

1. Technology Budgets Get Decimated. At many firms, technology spending has crept up to be a substantial line-item on the firm’s budget. If it comes to cutting the tech budget or laying off people, most of us would like to be at a place that puts people first.

My headline originally was going to be that technology budgets stay flat, but I changed my mind. I use the word “decimate” deliberately. The word originally meant the killing of one of ten soldiers in a Roman legion. It later had the sense of drastic losses. In many firms, a large portion of the tech budget is set in stone and can’t realistically be cut during the year. That’s why my initial thought was that we’d see freezes rather than cuts. Now I believe that we’ll see cost-cutting, in some cases quite drastic, as the year progresses. For the average lawyer, don’t expect to see a new laptop this year. In fact, don’t expect to see much of anything new this year.

What to do. Technology audits will help you to determine what you are doing and where you can make cuts. Reduce duplication and increase standardization. Look for volume discounts, renegotiate large IT contracts and software licenses, and consider outsourcing as an option in many more instances. Require our IT department to explain and justify each item in their budgets.

2. Making Do with What You Have or Doing More with Less. Sensing a theme? We’ll be hunkering down as a profession in 2009 in all phases of the practice, not just technology. That new Mac laptop you wanted might turn into a $350 netbook, if anything. I wouldn’t be surprised to see law firms consider moving to low-priced netbooks rather than laptops for the average non-techie lawyer with standards needs. Cost is definitely an issue. Moving to a new software version? Not likely. You better learn how to do more with the features in the version you already have. Perhaps most interesting, we could see the majority of the legal profession essentially miss a whole generation of Microsoft software (Windows Vista and Office 2007).

However, I’m not completely negative on this point. Constraints often help lawyers be creative. I expect to see more use of Web 2.0 tools and Open Source software and making better use of software lawyers already own. Remember those WestKM licenses you already own but haven’t used – maybe it’s time to take a closer look. Software vendors might be willing to help you make better use of the versions you now use, provide you with specialized training, and explain unused features of your existing programs.

What to Do. Learn more about what you have. Talk to vendors about features you don’t use and training opportunities. Look for better pricing and Internet deals when you do buy something.

3. The Mobile Phone as Platform. This trend flows from the previous one. The love affair between lawyers and the BlackBerry is well-known. Lawyers are also using the iPhone and other smartphones. If you aren’t likely to get a new laptop and your smartphone can do more and more, what is likely to happen? Yes, the phone is likely to become a mobile working platform that gives you access to data, documents, people and other things you need when you need them. The Apple Apps store for the iPhone and iPod Touch is looking to be a game-changer, and Blackberry and others are opening similar stores. These applications make smartphones even more useful than they already are. Don’t overlook the growing role that texting and instant messaging will play for lawyers.

What to Do. Haven’t I just given you the business reason you were looking for to justify getting an iPhone? Look for ways other than email to use your phone to access your office and data. Experiment with applications for your phone. Drop your request for that new laptop and ask for an upgraded smartphone instead. For firms, consider ways to enable access through mobile phones as a way to delay or avoid new PC or laptop purchases.

4. Looking to the Cloud. You will hear even more talk about “cloud computing” and “software as a service” (SaaS) in 2009. In simplest terms, I’m referring to ways both programs and data can be hosted and managed on the Internet through a third-party provider by means of using your web browser to connect to a web application. Google Apps and other online SaaS options have gotten a lot of attention in the past year or so. SaaS options for existing legal software and new legal-specific SaaS services have become increasingly available to lawyers. The benefits: manageable monthly costs, lack of need for infrastructure and personnel investments, access from anywhere, and the provider handles patches, upgrades, security and the like. The concerns: data hosted elsewhere, business prospects of providers in a tough economy, unique legal concerns like ethics, confidentiality, applicable law, and data privacy issues.

Law firms, especially start-up firms, have been testing this water for the past few years. Budget constraints will also make this a compelling option that must be explored in many cases. There will definitely be more attention to this area, and probably increased usage.

What to Do . Please, please, please do your homework and due diligence on this option, especially in this economy. Take a hard-headed, realistic approach and make sure you compare SaaS options with what you are currently doing now rather than against some ideal of perfection that you aren’t close to achieving. Pick some areas to experiment with this approach rather than jumping out all the way into the cloud at once.

5. Using Tech to Get the Word Out and the Money In. My approach to technology planning is really quite simple: does the technology you are considering save you money or does it make you money? I’m shocked when firms launch new tech initiatives without having a clear, quantifiable answer to this question.

In 2009, firms will be focused on bringing in new work, retaining existing clients and getting paid for the work they do. If your technology initiatives don’t directly address these concerns, you are missing the boat. It’s definitely not the most exciting area of legal tech, but investment in back office technology to get better bills out faster, improve collections and evaluate the profitability of clients and projects would be something I’d recommend for every lawyer and every practice. Boring is good in 2009.

On the exciting end of this trend is using technology to get the word out to market yourself, your practice and your firm. There is so much happening in this area that it is difficult to keep up with it all. The one thing I can guarantee is that by the end of 2009 lawyers will be using an Internet marketing vehicle that no one expected today (actually, my guess would be something in the SMS/instant messaging family). The one thing I can’t guarantee is that the print publications you currently use for marketing will still be around by the end of the year.

Had you even heard of Twitter a year ago? Now you can’t turn around without seeing something about using Twitter, Facebook, social media tools, blogs, podcasts and online video for marketing. You can put video up on Youtube, publish PowerPoint slides on Slideshare, create your profile and groups on LinkedIn, have a blog, create a podcast and do many, many more things to get your message out and create a brand. The financial cost of most of these tools is next to nothing. Think about how your clients (and potential clients) get their information today. Create a channel to reach them that way.

What to Do. Look at the ways to use back office tools to streamline and standardize billings, improve collections and truly analyze the financial aspects of your business. Take better advantage of reporting functionality in these back office tools to give you reports that help you cut costs and improve profits (even a simple list of your most profitable and least profitable clients will help you greatly). Evaluate your current Internet presence (hint: Google your name). Pick one or two of the Internet and social media channels to try. Don’t be over-influenced by what “everybody else” is doing. One or more of these approaches will suit you best – go with that one.

6. Focus on Client-focused Technology. Some might argue that I see this trend every year, but it’s definitely out there. It’s also a trend that Susskind’s book highlights. If you are looking for a simple approach to technology, this is what I recommend. Are your technology plans driven by what your clients want and by their needs? Technology in this category includes simple extranets, collaboration tools, 24x7 access to documents, providing documents in preferred formats, and electronic billing. I’ve written extensively on this topic (http://www.denniskennedy.com/blog/client_driven_technologies/) and posted some slides on SlideShare [http://www.slideshare.net/search/slideshow?q=dennis+kennedy+collaboration&submit=post&searchfrom=header&x=0&y=0] so I won’t add a lot here, other than to say that this economy dictates that you find better ways to work with your best clients. The best way to start: just ask them.

What to Do . Simple client technology surveys. Identify pain points clients have with your technology, such as document compatibility or preferred formats. Focus on simple, practical extranet functionality (e.g., access to copies of documents) rather than gold-plated, all-inclusive extranet platforms. In general, keep it simple. And find ways to make it easy for clients to stay with you.

7. E-Discovery in Still Waters. No area of legal technology receives more attention than e-discovery, and deservedly so. 2009 will be a deceptive year in e-discovery. At the surface, it will appear that not much is happening. Some contradictory decisions, some industry consolidation, some talk of reform and a lot of concern about costs. There will definitely be discussion of cooperation and collaboration as part of the Sedona Conference principles and from judges. But you won’t see game-changing new technologies, magic bullets or tectonic movements. As I’ve said before, lawyers have won the first round of EDD battles and successfully resisted wide-scale changes to business as usual litigation.

But that’s just the surface view. Still waters run deep and, like the Internet, we overestimate the impact of EDD in the short term and we underestimate the impact of EDD over the long term. Under the surface, the changes are huge and will transform the practice of law. Those involved in this area need to keep their eyes and ears open and monitor developments.

There are a few trends I’ll highlight. First, the growing emphasis on cooperation and collaboration, just one aspect of the growing role judges have been forced to play because of slow-moving lawyers. Second, technologies and techniques to produce usable and workable datasets out of enormous amounts of data. Third, an increasing amount of focus on high costs of EDD, with the parallel trend of treating some EDD procedures as commodities, with commodity types of pricing and off-shoring.

The main trend you will want to take notice of is one that started a few years ago and has continued to grow. It’s the movement of the lawyers who know the most and who are the best at EDD out of law firms and into the employ of EDD service providers. This really is a tectonic shift with the probable long-term result of EDD service providers largely taking this work away from law firms and EDD, perhaps, no longer even considered part of the ordinary practice of law, leaving litigation lawyers to redefine what they actually do as clients route around them to the EDD service providers who have all of the talent. I invite you to give that some serious thought.

What to Do. Watch the developments. Keep up with industry developments by reading some of the excellent EDD blogs. Watch the flow of talent out of law firms. There are still plenty of opportunities for lawyers in EDD, but I suggest looking for niche areas of EDD that you can do well or new roles, like project management. If I were a litigator involved in EDD, I’d look for one EDD niche to become very good at in 2009.

8. The Perfect Storm for Collaboration Tools. Tom Mighell and I recently released a 2009 CD update of our book, The Lawyer’s Guide to Collaboration Tools and Technologies: Smart Ways to Work Together. One of the features on the CD is our take on top trends in collaboration tools. Among the trends we note include cultural issues caused by mergers, layoffs and other economic turmoil, reduced travel budgets driving adoption of conferencing tools, the ability of employees to find their own collaboration tools when you don’t provide them, the growth of instant messaging and Web 2.0 tools, and the growing role service level agreements play in collaboration tools.

If you go back and look at articles making predictions about legal technology at the end of 2008 and the beginning of 2009, you’ll notice that most, if not all, of them made one or more references to collaboration technologies. Since the beginning of 2009, the changes brought about by our economic situation have accelerated the move to collaboration technologies. The most obvious example at most organizations is the reduction in travel budgets and how that has renewed interest in all forms of conferencing. As I write this, we wonder about swine flu and pandemics. There is no question that this, too, will place more emphasis on online collaboration.

New features added to programs almost invariably involve collaboration and interest in Microsoft SharePoint among both large and small firms continues to be high. Perhaps most important, however, is the growing sense that email may be broken as a tool or platform to use when working together because of its limitations as a platform to exchange large documents, the difficulty we have in keeping track of the working draft and all relevant discussions in email threads, and the sheer volume of email coming into most people’s inboxes.

What to Do. I always recommend starting with a simple “audit” of how you are collaborating now and determine how you might better collaborate with others by using collaboration features of programs you already have or free collaboration tools. Look at alternatives to email, especially for simple tasks like sending large files (e.g., YouSendIt.com). Experiment with some of the web 2.0 tools – Google Apps is an easy place to start. And, of course, ask your clients how you can make it easier for them to work together with you.

9. A Potpourri of Predictions . In “down” technology years, I have always argued that innovative lawyers and firms can greatly widen the gap between themselves and those who stand still. Similarly, firms feeling that they have fallen behind can catch up to or even leapfrog today’s leaders by making a concerted effort in down years. In 2009, the retrenchment will be so great that I don’t expect to see a lot of innovation or investment. But the opportunity is definitely there.

Here are a few predictions/trends that don’t really fall into specific categories, but I didn’t want to leave out of this article.

· I’m intrigued by interaction of encryption and confidentiality, the way encryption might offer a technological solution to confidentiality obligations.

· I’m quite concerned that a lack of understanding of, or an unwillingness to understand, how technology works by ethics regulators, especially in the area of web 2.0, social media, Twitter, cloud computing and metadata could result in rulings and regulation that negatively affects legal innovation at exactly the time innovation should be encouraged. I expect to see several important negative examples of that by year-end.

· For innovation, I’m looking to the newest generation of lawyers and, equally important, those involved in provided services to lawyers. You’ll find them out there in blogs, on Twitter and Facebook, and other places on the Internet. I’m impressed by their energy and creativity. I learn a lot about new uses of technology from them and, as a profession, we’ll find them a source of innovation.

What to Do . My best recommendation for 2009 is to read Richard Susskind’s new book, “The End of Lawyers?” and familiarize yourself with the two biggest influence on the legal profession he mentions – commoditization and information technology – and the way they will disrupt and change the profession, probably faster than we expect. Attend one of the big national legal technology conferences or one of the state bar solo and small firm conferences with some technology tracks. Explore the legal tech blogs and those who use Twitter to talk about legal technology. Then find some ways to engage in the conversation about where technology is taking us.

Concluding Thoughts. At ABA TECHSHOW 2009, I had a great conversation with Marc Lauritsen, Jordan Furlong and Ariel Jatib about where the next game-changing development in legal technology might appear. It arose out of a discussion about Twitter, which, interestingly, we all seemed to think was a bridge technology that was taking us to something else. My contention was that audio and video was the easiest and most obvious answer. I had also just listened to a fascinating podcast of a presentation by Rajesh Jain in which he discussed innovative uses of SMS (simply put, instant messaging) in India. This also relates to the idea of mobile phones as a platform I mentioned above. We actually spent quite a bit of time on this possibility, which I believe holds a lot of promise. Finally, we talked about one of Marc’s long-time pet projects of combining artificial intelligence concepts, decision trees and related technologies into tools that assist lawyers or take the place of routine aspects of the practice. The conversation we had around that topic and related topics like crowd-sourcing and recommendation engines was quite energizing and, as Jordan noted later, what makes a visit to a legal technology conference like TECHSHOW so worth the trip.

My conclusion: while many hunker down with eyes closed and narrow their perspectives, big changes will be taking place under the surface and this is the year to take some time and think some bigger thoughts. Hunker down, but keep your eyes and ears, and your mind, open.

[an error occurred while processing this directive]