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The Lawyer's Guide to Extranets

by Mark Tamminga
November 2004

There's something about new technologies that makes people give them awkward and contrived labels. Extranets are no exception. First, there was the Internet, a reasonable enough name for a wonderful basket of technologies. Then came Intranets as a play on the Internet name. An Intranet is like a small private Internet living within the confines of an organization. Employee manuals, access to accounting and a variety of similar internal matters are all now frequently entrusted to a company's Intranet.

However, when early adapters began giving selected outsiders access to parts of their Intranets and creating private online communications tools for visitors, customers and clients, some Intranets stopped looking all that, well, intra. Inevitably, someone coined the word "Extranet" to describe these new tools and techniques, and the name stuck.

Big deal. Just another addition to the opaque jargon of the computer world. True, but if you dig into the concept a bit, there emerges a promising idea of real utility to law firms: the reduction or elimination of barriers between clients and lawyers, or in other words – the ability to communicate better with clients with much less effort. Where time is increasingly at a premium, it only makes sense for lawyers to learn a little something about what Extranets can do for their practices.

Extranets: the Basics

So here’s the first thing to understand. Extranets are not really a thing so much as they are a service—the service of creating novel and effective ways of communicating and sharing information with a client.

At its most basic an Extranet is a means of networking two or more entities so they can securely share information. In some cases an Extranet is simply an extension of a law firm's Intranet to include a connection to a client. In other cases an Extranet makes use of the public Internet combined with security features to create a new, more private, environment.
Extranets generally have the following features:

  • The use of Internet technologies and standards. These include the standardized techniques for transmitting and sharing information and the methods for encrypting and storing information, otherwise known as the Internet Protocol, or IP.
  • The use of Web browsers. Users access Extranet information using a web browser like Microsoft Internet Explorer, Netscape Navigator or, more recently, Mozilla’s Firefox. Browser software uses relatively small amounts of memory and resources on a computer. The great thing about browsers is that an application written for a browser can be read on almost any computer without regard to operating system or manufacturer. That makes an application developed for a browser a snap to deploy. A browser on a user’s machine is all the software he or she needs to take full advantage of the Extranet application. No messy and confounding installation disks; fewer clogged hard drives.
  • Security. By their very nature, Extranets are embroiled in concerns about security. To protect the privacy of the information that is being transmitted, most Extranets use either secure communication lines or proven security and encryption technologies that have been developed for the Internet.
  • Central Server/Repository. Extranets usually have a central server where documents or data reside. Members can access this information from any computer that has Internet access.

While these are the broad attributes shared by most Extranets, Extranets vary dramatically in their design and implementation. They can be employed in a wide variety of environments and for very different purposes, like:

  • Sharing case information
  • Sharing of case-related documents—many Extranets contain document repositories that can be searched and viewed by both lawyer and client on-line
  • Calendaring—key dates and scheduling of hearings and trials can be shared on-line
  • Providing firm contact information
  • Acting as a “work flow engine” for various suppliers
  • Providing access to firm resources remotely
  • Sharing time and expense information

Is there a point?

Extranets have a high risk/reward factor. A successfully implemented Extranet can result in significant expansion in clientele and profitability for a law firm. An Extranet that is poorly designed or badly executed can be an endless headache. The failure to implement or join an Extranet can also have a negative impact on a law firm if it means that a more willing, entrepreneurial or adventurous competitor gains a significant advantage.

Let’s look at some of reasons why Extranets matter to lawyers:

Improved communications. The most common reason for building an Extranet is improved communication between lawyer and client. An Extranet can eliminate telephone tag, or worse, the failure of a lawyer to respond to calls and the delays involved with traditional correspondence. An Extranet is available 24 hours a day; both lawyers and clients can update or review information whenever it is convenient for them to do so. This can greatly reduce the friction between lawyers and clients and make life easier for both.

From the client’s perspective, an Extranet can make the arduous task of monitoring and following up with a roster of law firms much easier. Many clients decry the deeply frustrating process of chasing law firms for status information on the matters assigned to them. Extranets liberate the status information (“where are you on the Bloggs matter?”) from the physical file (a memo on the correspondence spike confirming that discoveries are scheduled for next Friday) by making that information open to review by the client online at any time.

Client retention and integration. High on the list of law firm motives for participating in or creating an Extranet is the desire to retain clients. Many law firms will create an Extranet around a key client or practice area where they have a significant volume of work. In an effort to enhance and solidify the relationship, an Extranet can build and reinforce deep links between the lawyer and client. Taken to the extreme, an Extranet can make it hard to tell where the law firm ends and the client begins.

Client marketing. Extranets can attract new clients or gain additional business from existing clients. A law firm that builds an Extranet can differentiate itself from those that don’t. What you are saying to the client is: "Not only do we provide excellent legal services and advice, but we do so in a way that makes it much more convenient for you to use, consume and monitor those services". And never underestimate the “wow” reaction that technology creates: the simple viewing of a computer screen with all of their file information available at a point and a click can seduce even the most cynical of clients.

Improved workflow management. Many legal matters involve a complex series of steps that must be completed in a specific order to get a file done properly. Some steps must be completed by the lawyer; other steps by the client or third parties. These steps can often be defined by a series of rules often referred to as the "workflow". An Extranet can be designed to incorporate and manage the workflow for handling a wide variety of legal matters. If properly designed, the workflow management built into an Extranet can be a boon to all parties. Done poorly, it can become a rigid straightjacket that does not conform to the realities of legal practice. Flexibility must be an inherent part of the design.

Higher quality. Implementation of an Extranet can significantly raise the level of quality control within an organization. Extranets can be built with real-time status reporting on the progress of matters. In other cases, information from the client's or law firm's core systems can be transferred automatically into the Extranet, eliminating the error-prone task of transcribing information or re-keying data. It all adds up to better product.

Community building. Something quite interesting happens when a well-designed Extranet gets properly implemented. In a very real sense, you have just built a new kind of community, a community where a shared set of values and purposes is given a new forum. The members of the Extranet community normally include the client but can include other law firms, suppliers, government offices or the courts. Rather than each of these community members working through or around each other with the benefit of only partial or third hand instructions, they can all be brought into the same circle and work toward the common goal by the very structure of the Extranet itself.

The Client wants it so. Some clients mandate participation in an Extranet as the cost of doing business with them. For this reason alone, it behooves the law firm to familiarize itself with the technology and to indicate a willingness to participate. Remarkably, many law firms, when confronted by a client who wants to introduce an Extranet, will raise objections and complain loudly about the costs of doing so. These objections often ignore the benefits that can accrue to the client and pessimistically ignore potential savings and benefits to the law firm. All talk of savings and benefits aside, if a client wants an Extranet, then a client will have an Extranet. The law firm that drags its heals will quickly lose that client.

Build or Buy

Extranets are still novel tools. So most law firms approach the world of Extranets gingerly and do so primarily at the behest of clients. Increasingly, however, leading law firms are taking steps to get in front of these things and have begun considering whether to build or buy their own Extranet applications.

If you or your firm are heading in this direction, the first task is to research whether there are existing Extranets that meet your requirements. It may be that the vendor or service provider for an Extranet could tailor an Extranet to meet your needs. Here are some things to keep in mind as you go through your planning.

Buy. If there is an existing application that meets most of your requirements and it can be customized with a modest amount of effort, you will be hard pressed not to choose this option. Here is why buying is generally considered the most effective solution:

  • An existing application may be far less expensive than designing your own. The vendor will likely have developed a series of Extranets using tools that it has developed specifically for that purpose. It can license the application on a one-time or periodic charge. The vendor can spread the development costs over a greater number of users, meaning the cost is lower for each user.
  • The vendor may host the solution on their web servers so that you do not have to build and maintain the hardware/software infrastructure internally.
  • Where an Extranet is developed by a third party or on behalf of more than one law firm/one client, the features developed by or at the request of one company can benefit all users of the Extranet.
  • Law firms specialize in practicing law and, generally speaking, not developing software. So it may make most sense to work with an organization that specializes in Extranet development and implementation.

Build. On the other hand, you may not find what you are looking for on the open market and so may have no choice but to construct your own tools. This has some real benefits:

  • You can specify the application to precisely meet your needs. You can accommodate the wishes of the law firm and client and the solution can have a unique look and feel.
  • You would have free reign over subsequent changes or modifications to meet the needs of users. You are not dependent on a third party's willingness to update the application.
  • You have the ability to support the application internally, meaning you can determine the level of support and training required.
  • You can show your client something proprietary that other law firms cannot offer.

And some real disadvantages:

  • It’s generally quite costly, even with the contemporary design tools that have gone a great distance to simplify the job.
  • If you don’t have the resources and expertise internally, you may have to hire them or contract with a third party to provide them.
  • If you do not have existing web servers you will have to invest in additional hardware and software.
  • If you host it yourself, then you alone are responsible for all security issues and the risk of any breaches.
  • It may also take a substantial amount of time to construct your own Extranet from scratch.

There is usually a considerable learning curve associated with creating an Extranet. It takes time to assemble the hardware and resources. If you are doing a custom "design and build" it will take time to develop the web pages and features and test them thoroughly. Usually, there is a pilot phase where users test and provide feedback. It may take months before the application is ready for full implementation.

Whether you build or buy, those firms that have taken an aggressive approach to Extranet development and deployment are beginning to see some reward for their efforts. What is clear is that Extranets are not a passing technological fancy. They matter and, increasingly, clients want them.

Note: this article was adopted from The Lawyer’s Guide to Extranets, by Mark Tamminga & Doug Simpson. © 2003 by the American Bar Association. Reprinted by Permission.

Mark Tamminga is a Partner at Gowling Lafleur Henderson LLP in Hamilton, Canada. He is past Chair of ABA TECHSHOW and co-author of The Lawyer's Guide to Extranets: Breaking Down Walls, Building Client Connections. (ABA 2004)