New EU rules and lawyers’ increased comfort with digital formats are sparking a sea-change in the way law firms manage their documents
What have been the biggest changes in the way you manage documents in the past five years?
Neil Mirchandani, partner, Hogan Lovells: We’ve undoubtedly moved from a predominantly paper-based system towards electronics-based systems.
We’re not completely electronic yet, and it varies across the levels of experience of the lawyers and how far the firm as a whole embraces digital and paperless storage.
The people at the more senior end of the scale are probably still more used to paper-based management of their documents. On the other hand, even the most senior partners use email routinely and file their emails electronically, often without printing them out. At the more junior end they’re probably increasingly working only in a paperless way.
Practices vary, of course, and one of the downsides is that people now send an email rather than pick up the phone. I’ve still got a lot of paper around my room as I prefer to take my working papers to meetings, but some rely on iPads, for example.
David Williams, partner, Walker Morris: Documents have always had a big part to play in the legal world, so one of the skills of a solicitor has always been the effective management and storage of documents, whether these are received from a client or generated during a transaction or dispute. What has changed in recent years is the increased volume of documentation and the role played by electronic documents.
We’ve developed a bespoke document management system (DMS) that enables all the documentation relating to a particular matter to be stored electronically. This applies both to internally and externally generated documents, and means paperless working is a real prospect.
There has also been an increased focus on providing clients with fully secure electronic document rooms so they have 24/7 access to information and documentation, together with online and real-time information about their legal spend. Our aim is always to work in partnership with clients to benefit their businesses and technology has given us new ways of doing this.
Tim Hyman, IT director Emea, Reed Smith: Arguably, the biggest change has been the slow shift from hard to soft copy. The digitisation of data has resulted in multiple systems with complex integration layers designed to create, edit, store and retrieve digital data.
Ironically, once the fundamentals of a digital system are in place the end product is still almost always paper. The knock-on effect of this digitisation is the impact on transportation of data.
While paper was either faxed, posted or couriered, today’s digital copy is emailed, carried on removable media, posted online, sent by File Transfer Protocol, shared in social media or even sent by Internet Messenger. Ultimately, management has changed from a structured library-style classification system to an unstructured ‘protect and track’ system.
Jason Plant, applications manager, DLA Piper: The biggest challenge that has led to a number of changes has been email. A DMS now has to cope with email effectively to keep the matter file intact.
The growth of email in DMSs has been much faster than traditional Word documents and managing this growth has been the biggest challenge in the past five years.
We now see more than 80 per cent email compared with traditional documents in the electronic matter files. Technologies have been introduced to most DMSs to integrate in some way with email, to allow easier filing.
How are law firms dealing with the shift from paper to digital storage?
Mirchandani: We now predominantly rely on digital storage because so much of our communication is electronic. Within our firm we still have documents – confidential partnership documents, for example – where printing access is restricted. These documents are principally intended to be retained digitally and not printed.
In large matters, increasingly we’re seeing a central filing system that is electronics-based. Some firms are more aggressive about putting that sort of approach in play than others.
Williams: Most documents are now generated and exist electronically, which means that electronic storage is by far the most effective system. Those few documents that exist in a paper format simply need to be scanned in, electronically tagged and added to the document management facility for a particular matter so that the entire file exists electronically.
Investment in IT has been and will continue to be necessary, in order that systems can be maintained and developed continually.
Of related benefit have been the tools that electronic storage provides. Good examples include the development of the workflows and case management systems that have been important to our own IT development.
Hyman: Firms are dealing with the change in different ways and at different paces.
While nearly all firms now use digital storage, the extent to which that is document management-based varies depending on culture, size and client base.
The many advantages of digital copy – including security, search, automation, speed of production and back-up – also bring a new set of challenges around the user experience. Stability, performance and functionality were words not known in the paper world, but now define lawyers’ perception of a DMS.
Plant: It’s not a technology problem anymore. The shift really depends on the lawyers. Some are more comfortable managing a paper file, while others are totally electronic.
To make the shift there needs to be an understanding that the e-file can replace the paper file. The tools are there that enable the storage of all types of document created, and scanning can bring in the paper documents received. The use of electronic documents can be a constraining factor – it’s easier to flip through a lever-arch file of paper than click through multiple Word documents and emails – but this will change as tablet and e-reader devices propagate at law firms.
As managing costs becomes increasingly important things may accelerate. Law firms can make huge savings on print costs by reducing the paper they produce just to keep files.
Is document management best handled in-house, or is it something that can be outsourced easily?
Mirchandani: Document management is best handled in-house. The only way you can outsource it usefully is if you mandate a system for document management and then you can give clear guidance to an outsourcing entity.
We outsource paper storage as papers are routinely archived offsite, but trying to outsource all your document management, especially if it’s electronic, is pretty difficult. We may have different document requirements for corporate as opposed to litigation or real estate; trying to get the economies of scale by outsourcing that is pretty difficult.
Williams: Many law firms have developed their own solutions to document management, based on a variety of factors ranging from their size to the features they are looking for from a DMS. We have a team of experienced IT developers that has enabled us to develop our own DMS tailored to our needs. It can also be adapted to suit the requirements of different departments and evolve as circumstances change and new uses are identified.
Hyman: Today, document management is best managed in-house. This will change. There are many cloud or offsite solutions coming online and users are becoming ‘cloud-savvy’ due to their personal technology experience. Apple, Google and Microsoft are all educating technophobe users to embrace technology in mobile and easy-to-use ways.
Plant: Traditionally, this was always managed in-house, but there are a number of options becoming available that allow law firms to outsource document management in various forms, from cloud-based solutions that provide a number of best-of-breed technologies for law firms to cloud-based DMS products.
It’s difficult to give a definitive answer on which is best – there are pros and cons with each – but interestingly, key traditional players in the in-house model are now available in both in-house and cloud-based variants, indicating that vendors realise the need to meet the varying demands of law firms.
What effect will EU proposals to reform data protection have on the way law firms handle document management?
Williams: Law firms have been following with interest the EU’s proposals for a new regulation and directive to bring data protection in step with the electronic age, as the changes will apply to their businesses and to their clients’. While there is still some work to be done before these become law, the reform is to be welcomed in providing a more meaningful regime of data protection for the times in which we live.
Law firms have always taken data protection seriously and we do not foresee any problems ensuring compliance with an updated regime.
Hyman: The biggest impact I can see relates to the ‘right to delete’ proposal. If employees, customers, clients and consumers are given the right to delete any data that is personal, authored or owned by them, law firms will have serious challenges identifying all instances of said data.
Apart from the obvious challenges of internal systems and back-up tapes, there are complications such as social media sites, cloud-based storage and third-party back-up.
Plant: I’m not sure it will have a big impact on EU-based law firms. Most firms are well-versed in meeting data protection requirements across a number of countries and jurisdictions. If anything, it could simplify things if regional variations are removed.
For non-EU firms, the fact that the EU rules will apply if personal data is handled abroad by companies that are active in the EU market and offer services to EU citizens, may make things more complicated.
What do you think the future holds for document management?
Mirchandani: As trainees and junior lawyers become increasingly comfortable with working in electronic formats – with taking a draft document and amending it on-screen – we’re only going to move increasingly towards digital storage and a reduction in the amount of paper sitting on people’s desks.
However, we won’t move 100 per cent to digital because there will always be people who say, “This isn’t how I want to work”, or, “It’s too late for me to change”. When the people who are students now become junior lawyers and eventually partners, they’ll be comfortable with having minimal paper in their rooms. It’ll be good for the forests and still quite good for retaining full records of what’s happened.
Our document management audit trail will probably be a lot better, provided electronic archiving keeps pace with working practices. Everything points in that direction.
Williams: The explosion in electronic communications, new technology and new ways of working means that document management will become less the responsibility of the individual to conduct proper file management and more the responsibility of the firm to put in place effective systems.
A firm’s IT department will be crucial to its success, and firms will need to set aside increasingly large budgets to allow them to stay ahead of their competitors.
Technology is not only a fact of life, it also has the ability to save time and costs. This cannot be achieved without continuing investment.
Hyman: The future of document management is that it ceases to exist as a solution category. The functionality built into today’s high-end systems will be taken for granted and included in firms’ data management infrastructure.
Today, there is far too much user interaction with a DMS and the future will demand simplified and transparent interaction. Tomorrow’s users will want a dropbox-style, simple, anytime, anywhere solution.
The problem is security. We need to protect the confidentiality of our data but at the same time make access convenient. That, above all else, is the challenge facing technologists.
Plant: A lot of people think document management problems are solved, but continuing growth in the volume of data, greater security requirements from clients and the consumerisation of technology will mean the traditional DMS will need to adapt. It will need to be more flexible, simpler, have the ability to scale (for volumes of data and for a global workplace) and be available on whatever device the lawyer wishes to use from wherever.
Then there’s the need to look beyond internal demands and look at allowing access to clients, whether this be access to key documents or tools that allow documents to be collaborated on online yet still be controlled in the firm’s DMS.
Law firms have traditionally been heavily reliant on paper and physical files, but times are changing and they are now having to cope with a massive increase in digital documentation. This week’s panel look at the main issues and what the future might bring.