A conversation between Bradford W. Hildebrandt (chairman of Hildebrandt International, a

consulting firm to the legal profession) and William P. Scarbrough (Practice Innovations co-editor)

SCARBROUGH The economic slowdown that has occurred in the United States over

the past year or so has begun to affect the legal industry. Several major law firms

have recently announced attorney and staff reductions. How is the current

economic climate similar to the recession we experienced during the early

1990s? How is it different?

HILDEBRANDT There are a number of differences between the current economic

climate and the recession we experienced 10 years ago. In the early ’90s, the

Federal Reserve Bank was slow to adjust interest rates, the real estate market was

poor, the bond market was weak, and the federal government and many state

and local jurisdictions increased taxes. Today, the Fed has been

INNOVATIONSM A N A G I N G I N A C H A N G I N G L E G A L E N V I R O N M E N T

C O M M U N I C A T I N G B E S T P R A C T I C E S A N D I N N O V A T I O N S I N L A W F I R M I N F O R M A T I O N A N D K N O W L E D G E M A N A G E M E N T T O L E G A L P R O F E S S I O N A L S

Editors in Chief

Austin DohertyHogan & Hartson L.L.P.

Washington, D.C.

William P. ScarbroughKirkland & Ellis

London

Editorial Board Members

Janet AccardoSkadden, Arps, Slate,

Meagher & Flom L.L.P.

New York, N.Y.

Cindy DiamondPENTA Advisory Services

Baltimore, Md.

John HokkanenLatham & Watkins

Los Angeles, Calif.

Kingsley MartinWest Group Advisory Board Member

Chicago, Ill.

Nina PlattFaegre & Benson L.L.P.

Minneapolis, Minn.

Al PodboyBaker & Hostetler

Cleveland, Ohio

Barbara SessionsWinston & Strawn

Chicago, Ill.

Linda WillGreenberg Traurig L.L.P.

Miami, Fla.cont’d on p2

ECONOMIC SLOWDOWN AS

opportunityfor GREATER LAW FIRM EFF IC IENCY

INSIDE THIS ISSUE

Keeping in Touch with Technology—Videoconferencing page 4

Book Review: From Gutenberg to the GlobalInformation Infrastructure page 5

Disaster Planning for Data Security page 6

Practice Innovator Tom Dyer,H&K Consulting, Inc. page 8

Industry Innovations:Practice Statistics of Note page 10

PRACTICEPRACTICEVolume 3, Number 1, March 2002

BradHildebrandt

quick to act in response to changing eco-

nomic conditions, the real estate market has remained

strong, the bond market is robust, and tax cuts have been

enacted (with the possibility of more to come). I believe

that the legal industry can glean some important lessons

from the previous recession:

• Associate layoffs went too far, fostered by knee-jerk

reactions in an effort to protect partner earnings.

This problem was exacerbated by the profession’s

reliance on profitability figures contained in

various public surveys, the accuracy of which

was questionable. Bad business decisions

were made based on this questionable

information. It also fostered a greed

mentality on the part of many partners,

who failed to understand the importance

of investment in the future of their firms.

• Firms carelessly reduced their marketing efforts.

• Cost cutting also went too far. Careless cutting

of expenses that had a negligible effect on

earnings and a huge negative effect on

morale was a serious problem.

• Firms lost sight of their

long-term focus.

• Firms that emphasized cost

reduction in nonlegal staff recovered faster than did

firms that emphasized cost reduction in their legal staff.

SCARBROUGH One consequence of the recession of the early

1990s within the legal industry was greater scrutiny by

clients of law firm bills and billing practices. There was

significant movement away from the “billable hour”

approach in favor of various “special fee arrangements.”

New standards emerged from the American Bar

Association and the American Corporate Counsel

Association regarding coding, categorizing, and tracking

lawyer time and expenses to allow apples-to-apples

comparisons across firms. The movement seemed to lose

momentum as the economy picked up again. Despite the

existence of alternative fee arrangements for particular

matters or clients, it seems to me that most law firms still

bill most of their clients on a time and disbursement basis.

Do you have that same impression? If so, what has

happened to the often-predicted demise of the billable

hour? Is the billable hour in danger?

HILDEBRANDT All the talk about the death of the billable hour

was really much ado about nothing. During the previous

recession, there was tremendous discussion about

alternative billing arrangements. Some alternatives were

actually implemented, but the reality is that most of the

alternatives amounted to fixed-fee arrangements. The fact

is that most clients are as conservative as law firms are

when it comes to fee arrangements. When push comes to

shove, general counsel tend to want to stick to the billable

hour. Frankly, the move to alternatives lost momentum

because change was advantageous to neither the buyer nor

the seller. Nevertheless, traditional firms are now doing a

little more contingency or quasi-contingency work, where a

part of the fee is tied to the attainment of certain results.

SCARBROUGH Opponents of the time and disbursement

approach to client billing have argued that it encourages law

firm inefficiency, or at least fails to reward law firm efficiency

and business innovation. Do you agree with that argument?

HILDEBRANDT That is an overstatement, based on a false

assumption that law firms are run inefficiently. In fact,

they are far more efficient than they were 10 years ago,

partly because they learned some important lessons from

their experiences during the last recession. Moreover, both

firms and clients have become much more sophisticated.

In the end, the best relationships are built on trust,

cooperation, and the concept of partnership between the

firm and its clients.

SCARBROUGH During times of economic uncertainty, law

firms (and other businesses, for that matter) tend to invest

less money in “bricks and mortar” capital such as

technology infrastructure. Law firms view themselves

essentially as cash businesses, so reducing expenses is a

logical way to conserve cash and enhance profitability.

Could the current economic environment be a good time

for law firms to use technology to enhance efficiency,

productivity, and their competitive edge? If so, how should

firms invest their technology capital right now?

2

cont’d from p1

Economic Slowdown as Opportunity

“Technologyis so much a part of the practice of law that

firms have to continue to make investments.”

3

HILDEBRANDT Law firms, like other businesses,

use economic downturns to slow down capital

investment. That is probably prudent. But technology

is so much a part of the practice of law that firms have to

continue to make investments. One particularly smart

investment is in knowledge management, a concept that

gets a lot of attention within law firms but questionable

implementation. We believe that for most law firms, their

investment in technology currently far exceeds their

lawyers’ ability to use it.

SCARBROUGH There have been many articles published

during the past several years on the topic of knowledge

management in the legal industry. Do you know of any law

firms that have truly seized control of their institutional

knowledge and enhanced their client work product while

also reducing client expense and product delivery time? This

seems to be the Holy Grail of knowledge management.

HILDEBRANDT Law firms in the United Kingdom–especially

the so-called magic circle of leading U.K. firms–are widely

regarded as being substantially ahead of U.S. firms in the

area of knowledge management. In the United States, only

a handful of firms have made significant strides in

effective implementation of knowledge management.

Frequently cited examples include Brobeck [Brobeck, Phleger

& Harrison LLP], Davis Polk [Davis Polk & Wardwell], and

Simpson Thacher [Simpson Thacher & Bartlett]. These

firms have built sophisticated “know how” systems that

allow them to quickly deliver high-quality transaction

documents while maintaining high profit margins.

Several U.S. firms have

developed knowledge-based online

legal advisory services. For example, Bryan

Cave [Bryan Cave LLP] has its Trade Zone, a

service focusing on international trade transactions. Davis

Polk has its Global Collateral System, which focuses on

cross-border financing. Both systems allow clients to enter

information about a specific transaction and receive an

immediate initial opinion. Trade Zone provides a concise

red-light/green-light response while the Global Collateral

System offers legal analysis. U.S. firms generally use a

subscription-based revenue model for these systems. They

provide the added benefit of driving additional services

under traditional hourly billing rates when lawyers are

pulled in to advise on potentially problematic transactions.

Bryan Cave has also developed another interesting

knowledge-based system called the No Zone. The No Zone

delivers sexual harassment training online to supervisors

and managers. It uses a contractual revenue model based

on the number of participants in an organization. It was

created to help general counsel reduce their spending on

outside counsel by reducing the number of harassment

suits. It has created entirely new revenue streams for Bryan

Cave. Since it is product-based rather than service-based, it

generates revenue while the lawyers sleep. cont’d on p4 ILLU

STRA

TION

BY

DERE

K LE

A

4

SCARBROUGH What about the areas of

system integration and work flow? During the past few

years there have been numerous presentations at legal

technology conferences about the sophisticated intranets

and portals used by some law firms. Have these

investments paid off? Are you aware of law firms that have

truly leveraged this technology to enhance law practice and

business management productivity and efficiency?

HILDEBRANDT There is no doubt that law firms have derived

significant advantages from their intranets. Successful

intranets capture large amounts of information and deliver it

electronically through the organization, reducing paper and

providing everyone with up-to-date information. Many firms

have also built special Web-based applications such as firm

directories and meeting-room reservation services. Firms that

have moved to a practice group orientation often use the intranet

to share information and resources among the group members,

such as descriptions of group policies and procedures, form

documents, work product, and links to useful Web sites.

Portals are much more problematic today. They offer the

promise of substantial improvements over intranets;

however, portals require that firms make substantial

investments in technology and that they think hard about

what information and resources they want to deliver to

specific lawyer and staff populations. To date, only a small

number of firms have built sophisticated portals to succeed

their intranets. While some will say anecdotally that their

efforts have been rewarded, they have not attempted a

formal analysis of return on investment. And a number of

other firms report dissatisfaction with their initial portal

efforts and are reevaluating their adoption of this

technology.

SCARBROUGH Thank you for your insightful comments and

ideas. Because you are a highly respected consultant to the

legal industry, it is encouraging to hear your optimism

regarding the relative position of large law firms in the

current economic slowdown and the legal industry’s

improving focus on, and use of, technology.

The legal community is increasingly

using videoconferencing to connect

far-flung, busy clients and law firm

personnel. Though not without its

challenges and limitations, video-

conferencing can be an effective, cost-

efficient, and timesaving way to meet

(virtually) face-to-face over a private,

secured connection.

In order to implement video-

conferencing services, a dedicated room

must be set up with the appropriate

computer hardware, software, and

audio/video (A/V) equipment. Firms

that don’t want to invest in such a

room can use a “room broker”

service to rent videoconferencing

facilities. Room broker services are

available in major cities around the

world. Most A/V firms that service

the legal and business professions

can assist you in finding a suitable

match for your firm’s video-

conferencing needs.

As with other new technologies, there

is more (and less) to video-

conferencing than meets the eye. For

example, you cannot take it for

granted that the videoconferencing

equipment at one location can be

integrated with different equipment

at another location. A/V specialists

recommend testing the connection

prior to a meeting. They also suggest

“bridging” the lines, an option that

will reroute a dropped line to avoid

connection failures and blips during

the meeting. One advantage of

videoconferencing over Web-based

conferencing is that the connection

can be made less susceptible to

disruption.

As the hardware and transmission

communication costs decrease,

videoconferencing has started to

become more widespread in the legal

community. The cost of a particular

videoconference depends on several

variables, including the vendors

involved, the bandwidth connection,

and the locations of the participants.

Videoconferencing sessions can cost

as little as $60 per hour or as much as

$500 per hour.

Whether you are trying to reduce the

expense and inconvenience of travel

or simply trying to find a more

robust way to stay in touch with

distant clients and colleagues,

videoconferencing technology can

accommodate your needs.

Economic Slowdown as Opportunity

cont’d from p3

BY ROBERT ROEMER JR., SHAW PITTMAN L.L.P.,AND ELISE BELLICINI, HOGAN & HARTSON L.L.P.

KEEPING IN TOUCH WITH TECHNOLOGY

Videoconferencing

This is a book about the Global

Information Infrastructure (GII),

which is something that does not currently exist and that

we do not yet know how to build. The GII is to be a con-

stellation of all the world’s telecommunication and com-

puter networks, a super-network that will support every

information and communication application. The hoped-

for benefits seem utopian: global cooperation; individual

empowerment; ever more productive labor; and open com-

petition in international markets.

Some commentators predict that the GII will have a revo-

lutionary and discontinuous impact, sweeping away the

print publishing industry and its supporting organiza-

tions, including libraries. Others anticipate an evolutionary

and continuous process wherein the GII supplements,

rather than supplants, the existing information infrastruc-

ture. Christine Borgman argues for a third scenario that

she terms co-evolutionary.

Digital, Hybrid,and Traditional Libraries

Digital libraries are likely to be one of the key components

of the GII. The term digital libraries is not well defined. It

is sometimes used to describe databases of rich content

along with tools to manipulate that content. In other con-

texts, the term refers to organizations or institutions that

have attributes of traditional libraries (e.g., staff, commu-

nities of users) and provide information resources in digi-

tal form.

Like all libraries, digital libraries operate not on knowledge

itself but on embodiments of knowledge—i.e., documents

or other objects. Some embodiments of knowledge are

“born digital”; others are digitized copies of originals in

nondigital media. The fact that digitized surro-

gates of originals can be easily duplicated,

manipulated, and transmitted makes digital

information well suited for some purposes.

There are other purposes for which only a

nondigital object will do. Hybrid libraries will

develop as digital technologies supplement—

but do not replace—traditional forms.

Like other libraries, digital libraries use metada-ta to administer resources, organize informa-

tion, and systematize access. Metadata is data about data.

Its core function is to describe documents. A familiar

example of metadata is the catalog record that serves as a

surrogate for the book it describes.

Today, many digital libraries are difficult to use. The vari-

ety and complexity of their functions, applications, and

user communities often obscure the relationship between

tools and tasks. For example, an interface that is usable for

the expert or specialist may bewilder the general user.

Similarly, an application that meets the needs of the local

community may be inappropriate for a national or inter-

national community of users. The next generation of digi-

tal libraries will serve an even larger and more diverse

community and manage ever larger and more diverse col-

lections of resources. Design trends are focusing on mak-

ing digital libraries easier to use.

Borgman reminds us that we need not choose between

libraries and computer networks. Instead, we need to

decide what to do about access to information. Some library

practices, such as shared cataloging, already form “the

underpinnings of a ‘global virtual library collection.’” These

practices, although designed for print

REVIEWED BY JOHN E. DUVALL HOGAN & HARTSON L.L.P.

by Christine L. Borgman

From Gutenberg to the Global

Information Infrastructure:

Access to Information in the Networked World

cont’d on p12

BOOK REVIEW

5

John Duvall

Iwill be forever haunted by a particular photograph taken

shortly after the World Trade Center towers collapsed.

The photo shows Liberty Plaza Park in New York City,

across the street from ground zero, covered with fallen

trees, shards of steel, and a thick, uniform coating of fine

white-gray dust. Amid the destruction, a realistic, life-size

statue by J. Seward Johnson Jr., “Double Check,” remains

intact. The bronze businessman still sits on his concrete

bench, looking through the contents of his briefcase. The

dust that floated down like snow includes the remnants of

critical documents.

According to real estate services provider Grub & Ellis

Company, 15.5 million square feet of commercial office

space in lower New York City was destroyed on September

11.1 The U.S. Army Corps of Engineers has estimated the

total weight of debris at ground zero to be 1.2 million tons.2

Businesses housed in the World Trade Center lost desktop

computers, network systems, applications and storage

servers, and communications infrastructure, as well as

files, records, documents, and other work product. Early

estimates suggest that between $2 billion and $5 billion

worth of telecommunications and computer equipment

were destroyed.3

The Value of Planning

Despite the devastation of the terrorist attack, many

businesses did not lose critical data or timely access to their

information systems. Many companies with offices at the

World Trade Center began preparing for business

continuity in the wake of a disaster after the 1993 bombing

of the towers. Moreover, data systems at many companies

were evaluated for recovery issues in anticipation of

potential disruptions associated with Y2K. Faced with the

possibility of a serious business interruption, companies

instituted systems and data recovery plans as part of

comprehensive business contingency strategies.

As a result, companies that had continuity plans in place

were better prepared on September 11 to make decisions,

mobilize efforts, and face the challenge of quickly restoring

business capacity. Joy Heath Porter, director of applications

at the law firm of Sidley Austin Brown & Wood, reports

that data restoration from backup tapes began as early as

noon on Wednesday, September 12, and e-mail was

restored to all lawyers by the morning of September 13.4

Remarkably, all Sidley personnel in New York City were able

to report for work just six days after the firm’s downtown

office was completely destroyed. Similarly, AmericanLawyer reports that Thacher Proffitt & Wood, which had

142 lawyers working on the 38th, 39th, and 40th floors of

the World Trade Center, restored its computer systems and

access to backed-up data within two days of the event.5

Tasks in Business Continuity Planning

Potomac Consulting Group’s Bob Dolinsky has outlined

major tasks in business continuity planning (BCP).6 The

most important task is securing management approval.

Convincing management of the importance of planning is

difficult because the benefits are not quantifiable or

realized until the plan is executed. Nevertheless, successful

implementation depends upon management support

because comprehensive plans are interdepartmental and

call for input and cooperation of all employees.

Another major task in BCP is strategy development, wherein

firms identify, assess, and prioritize critical functions,

services, applications, infrastructure, and data components.

Each department within the firm needs to consider the

levels of disruption to determine acceptable timetables of

recovery. Once a plan has been formulated, it is essential to

foster awareness of the plan. People need to know how to

react and what immediate actions to take in the event of a

disaster. The most meticulous contingency plan is

worthless if the staff does not know how to implement it.

The most common strategy to safeguard against loss of

electronic information is regular backup onto magnetic

tape or other storage media. As one company learned when

it lost the storage server and main server located in the

same room in one of the WTC towers, the backup media

needs to be moved to an off-site storage location.7

Other options for data storage are redundant server sites

within the company or new strategies such as remote data

mirroring. The frequency of data storage must be

considered as well. Data that is added to the system in

between storage cycles is vulnerable to loss. To ensure the

timely recovery of data, companies need restoration

procedures that are documented and tested.

6

D I S A S T E R P L A N N I N GBY CINDY DIAMOND PENTA ADVISORY SERVICES

ILLU

STRA

TION

BY

JOE

FLEM

ING

Schemes for business recovery are not limited

to the protection of electronic data. Planning

should consider potential equipment losses as

well. A detailed inventory will allow firms to

distribute supplies and equipment efficiently in

the event of a crisis. Also, companies can

establish relationships with vendors so that

replacement equipment can be quickly secured

and delivered.

One of the biggest challenges on September 11

was the loss of telecommunications infrastructure. When

phone lines went down in New York City, many people

communicated via the Internet using wireless devices such

as BlackBerry™. Businesses can reduce the risk of

sustained outage by contracting with multiple

telecommunications providers. Similarly, remote Web-

enabled systems can help ensure access to business-critical

information when phone service is disrupted.

In addition to data security, offices must prepare for

possible physical displacement. During the first weeks

after the attacks, nearly one-fifth of New York City’s

lawyers were unable to return to their offices.8 A

comprehensive contingency plan should consider

procedures for using appropriate alternative work spaces.

The business continuity planning and disaster recovery

industry contends that no one could have fully planned for

the destruction and disruption caused by the September 11

attack. Nevertheless, the legal community has been given

an opportunity to learn from the tragedy and understand

the importance of disaster recovery planning. Now is the

time to evaluate and improve recovery strategies. A

thorough, well-tested, and broadly implemented plan is a

form of insurance that will not only preserve critical data,

but also protect the firm’s practice, clients, and employees

against future losses.

ADDITIONAL RESOURCES

Disaster Recovery Institute International

www.drii.orgProvides disaster recovery education courses. Web site

includes Download Library and Professional Practices manual.

Disaster Resource Guide

www.disaster-resource.com/Web portal for disaster recovery. Includes full-text articles

and useful vendor and organizational resources.

Disaster Recovery Journal

www.drj.com/The journal is free to anyone charged with management

responsibility for business continuity planning (BCP) in

the United States. Web site includes sample plans and

special reports.

7

1 Building.com News, retrieved from www.buildings.com/Articles/detail.asp?ArticleD=324 (Sept. 14, 2001).

2 FEMA News Room, retrieved from www.fema.gov/emanagers.nat092601.htm (Nov. 26, 2001).

3 Richard L. Arnold, “Recovery from Sept. 11 Events Is SlowProcess,” Disaster Recovery Journal Special Report: Attack onAmerica, at www.drj.com/special/wtc/drjwtcspecialh.pdf (last visited Jan. 10, 2002).

4 Joy Heath Porter, Business Continuity Planning, Law.Net webcast(Nov. 14, 2001).

5 Alison Frankel, “Back on Their Feet: Thacher Proffitt Wood lostits office and everything in it when the WTC collapsed. But itdidn’t lose its people,” American Lawyer, Nov. 2001 at 22,

electronic version available at www.thacherproffitt.com/article.ihtml?id=407 (last visited Jan. 10, 2002).

6 Ashby Jones, “The Aftermath: Working Without an Office,” N.Y.L.J.Sept. 13, 2001, at 1, electronic version available at www.nylawyer.com/news/01/09/091301b.html (last visited Jan. 10, 2002).

7 Janette Ballman, “Terrorist Attacks Have Far-Reaching Effects onBusinesses,” Disaster Recovery Journal, at www.drj.com/special/wtc/1404-03.html (last visited Jan. 10, 2002); “StrohlSystems Discusses BCP Lessons Learned in the Aftermath ofSept. 11,” Disaster Recovery Journal Special Report: Attack onAmerica, at www.drj.com/special/wtc/drjwtcspecialh.pdf (lastvisited Jan. 10, 2002).

8 Ballman, supra.

for D A T A S E C U R I T Y

Cindy Diamond

8

Tom Dyer is leading the industry by

introducing ways to leverage law firm

expertise and personnel, and by developing

growth opportunities for traditional legal

practice. Dyer is the president and CEO of

Holland & Knight Consulting, Inc. (H&K

Consulting), a provider of consulting services.

H&K Consulting is a wholly owned subsidiary

of Holland & Knight LLP, one of the world’s

largest and fastest-growing law firms.

Prior to joining H&K Consulting, Dyer was vice president

and director of several family trusts managing more than

26,000 acres in the southeastern United States. His work

involved strategic planning, permitting, and land use issues

involving private, corporate, and public landowners. Often,

the focus of land management was directed at preserving

the integrity of trust ownership in the face of government

condemnation. This work brought Dyer in contact with law

firms and changed the direction of his career.

In January 1998, Dyer was recruited to Holland & Knight by

Bill McBride, at that time managing partner. Under McBride’s

leadership, Holland & Knight rapidly expanded from its base

in Florida to become a global provider of legal services. In

adopting its growth strategy, Holland & Knight faced

increasingly stiff competition from both law firms and

consulting firms. McBride engaged these organizations

head-on and sought to diversify into related consulting

practices. This vision will continue under Holland &

Knight’s recently elected managing partner, Bob Feagin.

Integrating Legal and Consulting Practices

During his first year at Holland & Knight, Dyer worked

with McBride and a committee of directors to implement

entrepreneurial spirit across the firm. While other

organizations were pursuing dot-com dreams and

developing packaged legal services, Dyer looked to the

unique expertise of the firm’s personnel. He was

determined to develop integrated multidisciplinary

ancillary services and convert cost centers, such as IT and

other support services, into revenue-generating units. Dyer

presented his business plan to the firm in December 1998.

It was accepted, and H&K Consulting was formed in

April 1999.

Today, the firm’s consulting business employs 40

consultants distributed among five units: H&K

Investigative Solutions LLC, H&K Real Estate Solutions

LLC, H&K Strategic Communications LLC, H&K Strategic

Business Solutions LLC, and H&K Translations LLC.

Many law firms have attempted to expand into other

businesses. Some of these efforts have been highly

successful. For example, Womble Carlyle Sandridge &

Rice, a law firm based in Winston-Salem, N.C., developed

FirmLogic, a company specializing in document coding

and review. FirmLogic generated $23 million in 2000, or

nearly 20 percent of the law firm’s income. FirmLogic is

expected to bring in more than $30 million in 2001. Many

affiliate businesses, however, have been sold by their law

firm sponsors.

INNOVATOR PROFILE

H&K CONSULTING, INC.

Kingsley Martin

TomDyer

BY KINGSLEY MARTIN

9

What has made H&K Consulting successful? In Dyer’s

opinion, “the factor that distinguishes H&K Consulting is

the integration of services between the law firm and its

consulting arm.” Unlike the diversification strategies of

other law firms, “H&K Consulting has been developed in

partnership with the law firm and the focus of the

consulting work is law-centric,” Dyer says. In fact, 90

percent of the consulting firm’s engagements are drawn

from the law firm’s clients.

Two Business Models

Under Dyer’s leadership, the consulting work follows two

business models. The first model targets services that can

support all legal practice areas, such as investigative

services. Generally, such support services are performed at

the direction of lawyers and do not directly interface with

the client. For example, H&K Translations was recently

engaged to help a South American university open an

extension in the United States and apply for accreditation.

The representation required the translation of nine

volumes of curricula in one week.

The second business model seeks to partner the consulting

business with one or more practice areas to develop

integrated solutions marketed to specific industries. In

these cases, consultants work directly with the firm’s

clients. Recently, H&K Strategic Business Solutions

developed an online maritime compliance program

designed to help multivessel owners and operators comply

with operational, environmental, labor, and security laws

and regulations. The site is updated daily by a Holland &

Knight attorney in the face of rapidly expanding

regulations promulgated by the Coast Guard following the

September 11 attacks. The solution also contains a separate

site for training and testing.

Dyer’s business approach is evident in all aspects of the

consulting business. Every engagement is charged on a fixed-

fee basis. Indeed, the pricing approach is illustrative of ways

that traditional legal services can migrate from the current

hourly fees to mixed fixed-fee models, based on the value of

the services. Dyer employs a two-step engagement process. In

the first stage, the consulting firm performs an assessment of

requested services. Then, in the second stage, H&K Consulting

develops its findings, makes recommendations, and

undertakes the engagement. By breaking the representation

into assessment and service components, much of the

uncertainty regarding the scope of services is reduced. In fact,

such risk reduction processes are now applied by Holland

& Knight in the pricing of traditional legal services.

Ethical and Management Issues

In order to preserve the independence and integrity of legal

practice, the ABA Model Rules of Professional Conduct

prohibit law firms from entering into partnerships with

nonlawyers. Nevertheless, law firms may employ

nonlawyers and, as in the case of H&K Consulting, form

wholly owned businesses. But the development of affiliate

businesses is not without risk. Hildebrandt International,

a consulting firm offering highly regarded business

advisory services to law firms, warns that law firms should

carefully consider the ethical and management issues

surrounding the formation of captive businesses.

Holland & Knight applies the same fiduciary standard of

independence to both its legal and consulting services. In

Dyer’s words, “while the lines between legal and business

consulting may be blurred in the eyes of the firm’s clients,

they can rely on the same high standard of representation.”

Dyer has also addressed the difficult management issues

surrounding the development of commercial ventures,

and in particular the difficulty of managing teams whose

work crosses multiple jurisdictions and requires expertise

in various specialized areas. Each representation has a

project manager responsible for assembling the team and

guiding the work. Dyer is looking into ways to automate

procedures and institute best-practices guidelines, but also

looks to interpersonal relationships and continuing

education for process improvement.

In managing these businesses, Dyer is introducing some

innovative ideas that can prove to be models for traditional

law firms and diversified ventures. One of the keys to the

success of H&K Consulting is the firm’s ability to deliver

services across geographic and organizational boundaries.

H&K Consulting has no home office and often partners

with its clients in delivering business solutions.

The Role of Technology

H&K Consulting is also focusing on innovative ways to

deliver services and manage knowledge within the firm.

Electronic systems are used to deliver and maintain client-

driven solutions such as online compliance programs,

satisfying client needs, and significantly reducing

maintenance costs. In the knowledge management arena,

Holland & Knight has taken a partner to focus on internal

and external knowledge solutions and the creation of

commoditized legal services. “Using technology has

brought about our biggest successes,” Dyer asserts.

While many other firms have followed their clients around

the world to serve their traditional legal needs, Holland &

Knight and Tom Dyer have pursued a strategy of

expansion through the development of affiliate consulting

business. In Dyer’s words, “the future for some law firms

is the development of subsidiary businesses and

leveraging nonlawyer services.”

“The future for some law firms is ... leveraging nonlawyer services.”

10

PRACTICE STATISTICS OF NOTE

Industry Innovations

44

50

55

64

124.7

141.5

157.6

60

173.1

187.5

68

200.5

71%

210.8

2000 2001 2002 2003 2004 2005 2006

ONLINE USERS PERCENTAGE OF US POPULATION

MILLION DEVICES60

50

40

30

20

10

2000 2001 2002 2003 2004 2005

74.9%

9.4%7.3%4.4%

VOICE-CENTRIC HANDSETS OFFLINE PDAs DATA-CENTRIC HANDSETS WIRELESS PDAs

200

160

120

80

40

MILLION US ONLINE USERS

1999 2000 2001 2002 2003 2004 2005 2006

CABLEMODEM

FIXEDWIRELESS

DSL SATELLITE

1.8

5.2

10.0

15.4

20.6

25.7

30.7

35.1

41 p

erce

nt o

f onl

ine

hous

ehol

ds

9 pe

rcen

t of o

nlin

e ho

useh

olds

35

30

25

20

15

10

5

MILLION HOUSEHOLDS

U.S. Broadband Households 1999–2006Source: Jupiter Internet Shopping Model, 5/01 (U.S. only)

U.S. Online Users 2000–2006Source: Jupiter Internet Population Model, 10/01 (U.S. only)

Mobile Appliances Installed Base 2000–2005Source: Jupiter Internet Appliance Model, 10/00 (U.S. only)

11

Argentina, Australia, Brazil, Canada, Denmark, France, Germany, Italy, Japan, Norway, Spain, Switzerland, United Kingdom, and United States combined

September 2001 – At Home

* represents an aggregation of commonly owned and/or branded domain names

* represents an aggregation of commonly owned and/or branded domain names

The Media Metrix ranking includes the top 10 Web and digital media properties according to combined unduplicatedhome/work usage in the United States. Unique Visitors—At Home and At Work Combined in the U.S.

Measurement Period October 2001

rank property unique visitors total usage minutes average minutes / month

1 AOL Time Warner Network* 83,871,000 44,894,000,000 535.3

2 MSN–Microsoft Sites* 70,720,000 10,994,000,000 155.5

3 Yahoo! * 68,364,000 10,494,000,000 153.5

4 Terra Lycos* 39,514,000 701,000,000 17.7

5 X10.COM 39,334,000 64,000,000 1.6

6 Vivendi-Universal Sites* 36,458,000 535,000,000 14.7

7 About/Primedia* 33,220,000 491,000,000 14.8

8 eBay* 25,945,000 2,498,000,000 96.3

9 Walt Disney Internet Group* 25,386,000 931,000,000 36.7

10 eUniverse Network* 25,156,000 298,000,000 11.8

rank all digital media unique visitors digital media reach %

1 MSN–Microsoft Sites* 137,895,000 67.4

2 AOL Time Warner Network* 114,808,000 56.1

3 Yahoo! * 113,160,000 55.3

4 X10.COM 42,148,000 20.6

5 Lycos Sites 40,047,000 19.6

6 About/Primedia* 36,537,000 17.9

7 Vivendi-Universal Sites* 35,632,000 17.4

8 Excite Network* 34,241,000 16.7

9 Terra Lycos* 33,650,000 16.5

10 Google Sites* 33,208,000 16.2

U.S.Top 10 Web and Digital Media PropertiesSource: Jupiter Media Metrix at www.jmm.com/xp/jmm/press/industryProjections.xml

Global Top 10 Web and Digital Media PropertiesSource: Jupiter Media Metrix at www.jmm.com/xp/jmm/press/industryProjections.xml

West Group610 Opperman Drive

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USA

Three editions of Practice Innovationsare published each year.

March 2002

Please direct any comments or questions

to either of the editors in chief:

Editors in Chief

Austin DohertyHogan & Hartson L.L.P.

555 13th St. N.W., Rm. 10W100

Washington, DC 20004

202.637.8701 (voice)

e-mail: radoherty@hhlaw.com

William P. ScarbroughKirkland & Ellis

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United Kingdom

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+44 (0) 20 7816 8800 (fax)

e-mail: william_scarbrough@uk.kirkland.com

Communicating best practices and innovations in law firm information and knowledgemanagement to legal professionals.

Managing Editor

Wil McClarenWest Group

610 Opperman Drive

Eagan, MN 55123-1396

651.687.1620 (voice)

651.687.8722 (fax)

The trademarks used herein are the trademarks

of their respective owners. West Group

trademarks are used herein under license.

© 2002 West Group

Printed 3/02.

Material # 40055322

PRACTICE INNOVATIONS publications, are evolving to accommodate

digital information and changes in technology; however, there

are questions as to how far such practices can be stretched. For

example, current systems of cataloging are too labor-intensive to

be scaled up to cover the mass of (often ephemeral) electronic documents.

Those who believe libraries will wither away cite some common

misperceptions—namely, that all useful information is available on the

Internet, where it can be located by anyone willing to spend the time to search

for it. Only a small fraction of the world’s information, however, exists in

digital form. Moreover, professional assistance in finding information is

often more cost-effective than self-service. Commercial vendors of online

information systems (Borgman cites Lexis and Westlaw® as examples) add

value in several ways: gathering content; providing user-friendly interfaces

and search engines; striving for accuracy, completeness, and currentness in

the information they provide; and providing editorial enhancements,

collateral services, and user support.

The Invisible Library?

Libraries do face a real danger of becoming invisible as they provide more

services electronically and users do not identify with the provider of the services.

Other challenges include managing hybrid collections, managing distributed

collections, and preserving information in digital and nondigital media.

As we move toward a global digital library, we encounter both opportunities

and challenges. We have the opportunity to make an enormous amount of

information available to communities with very particular interests and to

broad audiences. Our challenges include interoperability (getting systems to

work together); portability (enabling software to work on existing systems);

and data exchange among different systems. Moving from the Internet to the

GII will involve supporting users in new orders of magnitude and diversity,

and connecting communities that are currently outside of the electronic

information infrastructure.

Borgman concludes her book by saying that access to information is too

important to be left to professionals, corporations, and governments.

“[Access to information] is a problem faced by people in all walks of life, at

most stages of life, in all parts of the world.”

We’re Online!Recent issues of Practice Innovations are available online in Portable

Document Format (PDF). You can also subscribe to Practice Innovationsonline. Visit www.westgroup.com/aboutus/newsletters/practiceinnovations.

To enter a subscription, click Subscribe in the right frame. To view an issue

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cont’d from p5

Book Review