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LAWYERS are beginning to realise that the internet is a lucrative new way of providing or marketing legal services but, they argue, their attempts to climb aboard the hi-tech bandwagon are being hampered by the lack of a workable legal framework for online business.
Although a number of firms are setting up their first websites, they have stopped short of completing deals on-screen because there is no legislation to cover confidentiality, verify signatures or make on-screen documents legally binding.
While the profession as a whole waits for the infrastructure necessary for real e-business, several firms are setting up systems and services ready to take advantage of the new marketplace. Linklaters recently launched its internet-based advice service Blue Flag Funds giving advice to investment fund managers. The firm is also working on additional internet services covering shareholding (set for launch in June) and custody rules in different jurisdictions. The firm promises a host of other services in the future.
Paul Harris, head of investment funds at Linklaters, says the site gives specific information about the investment fund rules in 21 countries. It also has a news page which flags up changes to the rules.
"I don't know of any other method than the internet that can be so easily updated, and is so accessible and quick," he says.
"Our service has been on-line for two weeks and has generated new business from clients who can see that we are at the cutting edge of international business law."
Investment managers pay an annual subscription starting at £1,400 per country for the first year to access the service, which was developed with the Investment Company Institute, representing investment companies in the US.
Elsewhere, barristers at 11 Stone Buildings have partnered with the LawNet service and software developers Epoch to launch the Desktop Lawyer service due to go live later this month. Their web-based service will allow the general public to draw up a tailor-made legal document, such as a lease, by answering a series of questions. When the document is ready, the user will pay a fee and download the finished document.
The chambers has produced the elements that make up the documents and Epoch's Rapidocs software puts them together online. Jonathan Arkush, a barrister at the chambers, is adamant that the motivation for setting up the scheme was to provide a swifter, cheap er and more accessible service for the customer.
Clearly, though, there will be significant rewards for the chambers in terms of both marketing and business development, particularly because Epoch and the chambers will be creating co-branded versions of the Desktop Lawyer service in partnership with existing consumer web retailers. This will generate revenue and push the chambers' brand.
Arkush anticipates that the typical client will be an ordinary person in a small town where it might be difficult to find a lawyer with the necessary expertise to draw up the required documents.
But he admits the online system is not a substitute for one-to-one advice and believes the online service should not harm the livelihood of the family solicitor. "It is not about taking work away from lawyers but enabling them to be more efficient and enabling the law to be more accessible to the client. The system contains a clear warning that people should seek advice once they have the basic document."
Epoch is also launching a service that enables law firms either to use the Rapidocs software in-house to speed up the creation of documents or to bolt onto their own websites. Epoch would host and manage the service and the online payments in return for a management fee and a 20 per cent cut of all transactions.
Grahame Cohen, CEO of Epoch, claims that the new system allows lawyers to turn their knowledge and information into commodities to sell. "If law firms can get their heads around this, they have a massive marketplace," he says.
Also keen to capitalise on the technological revolution is Shoosmiths & Harrison, which rebranded its conveyancing operation as Property Direct 18 months ago and went on to scoop The Lawyer's 1998 Client Care Award. A wave of other firms are following the lead, seeking to reposition themselves in a variety of online media offering extras such as an out-of-hours service and direct access for the customer via e-mail or telephone.
Hammond Suddards last week announced the launch of HammondsDirect, after spending three years preparing for the rebrand of its conveyancing services. There are 10 in-house IT people working on the project and £1m has been spent on technology in the last year. The service is advertised on the internet and the firm aims to carry out increasing amounts of work on-screen and less on paper.
Lucci Dammone, partner and chief executive of HammondsDirect, believes that it was high time for a revamp. "Firms of lawyers have a traditionally conservative image and are seen as being perhaps a little slow on occasions to take up initiatives that are available to them. We wanted to drag conveyancing into the 21st century with a quicker, more effective direct service to customers."
It could be argued that HammondsDirect's online launch is more to do with marketing and less to do with service delivery, but Dammone insists his firm's changes are part of a broader look at the firm's service. "You can be as fancy as you like and have all the logos you like but whether you succeed or not depends on the quality of service."
The Beaumont Partnership in Wakefield is clear about the link between the use of the internet and branding. The partnership is about to follow Hammond Suddards and rebrand its conveyancing side online.
"When we go on the internet we hope that business increases from all areas of the country. Re-branding and IT, rather than paper, is definitely the only way forward. To be ahead of the game in conveyancing you will have to be on the internet," says Philip Smith, conveyancing partner.
Experts say it is essential for law firms to wake up to the internet because their clients will soon expect it.
Graeme Foux, of Momentus (CRCT) Ltd, a company helping firms to make use of new electronic media, says the legal profession cannot afford to dismiss the internet as a fad or just as a way of cutting costs.
"Clients are consumers and our expectations of how quickly we can get information has been transformed by the internet. We are not interested in waiting for the partner to come back into his office. Responsiveness has to increase significantly and it can do so on the internet," he says.
The legal profession has always been reticent about using technology, even in the way firms are run, Foux believes. Many still send even non-sensitive documents by bike-courier when they could be sent electronically, he claims.
Sole practitioners are also looking to the internet for ways to compete with the big firms and to extend their catchment areas outside the local town.
Monty Martin, spokesman for the Law Society's Sole Practitioners Group, says the potential appears to be unlimited. Customers can surf the net, choose a suitable solicitor and then input their credit card number for an on-screen consultation.
"There are few services that cannot be sold over the internet. This way maintains the personal, one-to-one relationship with the client. It speeds up payment and the client receives the advice very quickly," he says.
Few of the major corporate legal services on the internet, however, will be able to start without a change in the law. The key problems holding back services and client confidence include the legal standing of on-screen documents, confidentiality and the need to verify signatures.
Many lawyers feel that technology and business thinking are outpacing the law and that the Government has been slow to respond. Paul Harris of Linklaters says: "We would like to extend our services beyond advice sites on the internet, but completing contracts, for example, cannot be done until we have statutory regulations. The law is falling behind the drive that people have taken."
Computer conveyancing is likely to be given its own set of rules shortly as the Law Commission prepares to publish a draft Land Registration Bill in July or August, detailing how such transactions will be safeguarded.
But the Lord Chancellor's Department, along with all other government departments, has happily handed over the work needed for new legislation governing business on the internet to the Department of Trade and Industry. Although it could be argued that issues in electronic commerce and communication go far beyond the experience of the DTI, the Government intends to draft its e-commerce Bill on the basis of responses to the department's consultation paper, Building Confidence in Electronic Commerce, to which companies including Olswang responded.
Harris believes it makes good business sense to keep up with other business sectors and says the profession itself would make it happen.
"The change will come from the bottom up instead of from the top, because the new generation of younger lawyers demand that we use this technology."
Law firms are preparing systems and marketing strategies ready for work online. The new law when it eventually comes may open up a flood of legal services on the internet, whatever the level of reluctance from traditionalists but many fear that the issues holding back online legal services are far from being solved.
Lawyers may be hoping that the online market will soon be opened up but some believe the current proposals, with their emphasis on law enforcement, will not provide the necessary infrastructure.
E-commerce expert Steve Johnston does not expect an immediate solution but rather sees any progress being made gradually over a long period.
"The problems are complex and the current proposals don't help," he suggests. "The solution is going to be an iterative process. Standards will be the key. Practitioners who believe they will be able to plug into an internationally accepted system that works this year are dreaming."