Firms Take DIY Approach to Tech, but With Limits

The Legal Intelligencer

Immigration services firm Fragomen recently announced that it’s opening a new center in Pittsburgh, staffed with up to 50 employees, where it will develop or redevelop much of its software and cybersecurity technology in-house.

Fragomen’s aggressive do-it-yourself approach to technology sets it apart in the industry. But leaders at several Pennsylvania-born law firms insisted it isn’t all that different from what they’re doing themselves—even if their firms only plan to tackle so much tech innovation on their own.

“What Fragomen is attempting to do, we have it,” said David Pulice, manager of practice innovation at Reed Smith. “That’s pretty common among law firms.”

Reed Smith has created multiple apps with specific applications. Most recently, the firm launched Breach RespondeRS, which walks clients through the basic steps to take following a cyberbreach. If the problem seems complicated, the app suggests they seek legal counsel.

Duane Morris trademarked its original analytics software last year. The firm created the tool several years ago, and updates it continually to include new case data.

Blank Rome said it creates about 40 percent of its software in-house, including client-facing portals and internal applications, like a matter-tracking tool for the consumer finance group and a database for accessing information on any other platform.

Morgan, Lewis & Bockius has developed more than 50 custom applications, according to chief information officer Michael Shea, and holds a competition in which teams can suggest new technical solutions to client problems. And K&L Gates has several proofs of concept in the works to apply technology such as blockchain and artificial intelligence, said CIO Neeraj Rajpal. Dechert; Buchanan Ingersoll & Rooney; and Fox Rothschild also have developers working on various applications.

And it’s not just large firms getting creative with technology. Babst Calland has been in the game for more than 15 years, through its sister company Solvaire. It started as a due diligence management project, and grew as developers created systems for various Babst Calland clients. The software is legal-related, but business-focused, said Chris Farmakis, Babst Calland partner and Solvaire president.

Competitive Advantage

All of these firms gave two simple reasons for their in-house tech investments: cost and differentiation. By using their own staff to make a tool, they can tailor it to the needs of a particular practice or client. And taking the DIY route is often less costly than outsourcing the job.

“With purchased applications … you’re really at the mercy of the vendor,” said Don White, Blank Rome’s director of application systems. Having in-house developers lessens the firm’s reliance on vendors, he said, and gives the firm more detailed knowledge of how the technology and its security features work.

Steve Agnoli, Reed Smith’s chief information officer, said his staff has a better understanding of client needs than an outside vendor would, so they create more useful tools.

“We’re in the space, we live and breathe the stuff, and we’re part of this firm,” Agnoli said.

Reed Smith has tried to create technology in commercially available platforms, Pulice said, but it wasn’t always ideal. That approach limited the ability to customize, and it was expensive, he said.

“If the client needs it, we want to focus on it and build it, which is going to make their lives easier, which in turn is going to make our attorney’s lives easier,” he said. “We’ll never do all the technology, all the software in the firm, but we have been doing more and more of it.”

Farmakis said Babst Calland developed Solvaire as a way to compete with large law firms on the East Coast, by offering clients a unique and specialized set of tools.

“Our advantage will last as long as we continue to be innovative … we’re already focused on what’s next,” he said.

Eventually, offering tailored technology, including client-facing applications, will be the standard, said David Cybulski, Blank Rome’s director of business intelligence.

“You wouldn’t go to a bank that didn’t offer online banking,” he said. “How that’s going to show up for a law firm isn’t known yet.”

Going to the Experts

While they are eager to create certain technology from scratch, no Pennsylvania firm said it’s planning to forsake outsourced technology anytime soon.

“There’s a lot of great products out there and we don’t want to go and reinvent the wheel,” said White, of Blank Rome. “You have to weigh the number of programmers and analysts in-house who can support it at that same cost.”

Fox Rothschild CIO Michael Rinehart said his small team of developers places a priority on partnering with vendors when possible, rather than creating technology from scratch.

“We’re more valuable being partners to the firm and experts on legal services we provide,” he said. “We’ll still continue to extend our solutions and differentiate ourselves.”

Pulice, of Reed Smith, said his group has been successful outsourcing less customized technology, such as time-recording software.

“I don’t know that we, or frankly any firm or any company, would get to that point” of insourcing all technology, said Agnoli of Reed Smith. “Our job is to find the best tool and apply it … sometimes in-house and sometimes something created by a software provider.”

Even with a sister company focused on development, Farmakis said Babst Calland will continue to use third-party vendor software.

“We know where we’re good at our internal development stuff, and we know when we need to source it externally,” he said. “If someone can do it better than us and it’s a solution that benefits our clients, we’ll source it.”

And that leaves time to focus on the future. The next big development is artificial intelligence, he said, and Solvaire is looking into ways to apply and license that technology.

“It’s just starting to come onto the landscape. It’s the next five to 10 years before this stuff becomes ubiquitous,” Farmakis said. “It’s not going to eliminate the need for people but it’s going to allow us to be cheaper and more efficient.”

*Reprinted with permission from the 7/13/17 issue of The Legal Intelligencer. © 2017 ALM Media Properties, LLC. Further duplication without permission is prohibited.  All rights reserved.

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