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Document Management System Deployment Part of Law Firm's IT Overhaul

Law firm Paul Hastings LLP was operating in the technology dark ages. Bringing users into the 21st century required cutting-edge change management.

Law firm Paul Hastings had a case for migrating to VoIP, centralized storage and document management: entering the 21st century. But for the firm founded by Harvard Law grads, change didn't come easy.

One Monday last September, hundreds of lawyers and paralegals showed up to work in Paul, Hastings, Janofsky & Walker's nine U.S. offices and found a laminated page sitting by their computers. "Get Started in Six Steps," it began.

It sounded simple, but over the weekend Paul Hastings had actually reinvented the way the global law firm works, replacing a cumbersome legacy application with a new document management system that completely restructured the way files were organized. It combined email and documents into one centralized system instead of splitting them between different systems and offices.

"Before, you had information dispersed everywhere," says CIO Stova Wong. "There were such inefficiencies in the old system. All our client files were in different conditions. Attorney[s] A and B had their own files in their own offices. If Attorney C came into the case, he had to ask for someone to email him that file."

Now it's all in one location. And while this may mean more work for individual attorneys who have to access the master document instead of just their own draft, it also means that the overall process is streamlined and more efficient for the client.

"Our old system sucked, but everyone got used to it," says Derek Smith, an attorney who is the chairman of the firm's technology committee, which oversees the IT department. "It was crappy but familiar."

Changing the way people work is never popular, but it's often necessary for the business. The new document management system is but one of myriad technologies that Paul Hastings has deployed in its transformation from a regional law firm where the business day ends with the FedEx deadline to an international practice where the workday never ends. Technology deployments can be relatively easy. Transforming work habits is almost always more challenging.

"There was tons of resistance," says Wong. "Users have to live in a world that's more like a public domain, sharing files. The fear that anyone might have the appropriate rights to see the whole file makes attorneys very careful. When you're centralizing something like this, you have to give up speed. You're saving to a central location. It was really difficult for attorneys to learn a different application, even in the Outlook application. Searching documents was different. It's really a change in culture, switching to a client-centric model."

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L.A. Law

Paul Hastings doesn't look like your typical midmarket firm. Headquarters spills across several floors of a gleaming high-rise in downtown Los Angeles. The spacious reception lobby is clad in acres of white marble with designer furniture and a corporate art collection on display. Picture windows look upon expansive views of the hills north of the city; far below, Southern California's ceaseless traffic courses through a freeway interchange, and the flitting cars are reflected in the other glass office towers of downtown.

"We're not driven by IT, but there's a high degree of collaboration between senior management and IT engaging in a dialogue to set priorities," says managing partner Greg Nitzkowski, the firm's No. 2 executive. "We look at technology through the prism of 'How does it help our clients or give us a competitive advantage?' We sell responsiveness. We sell excellence. That's what distinguishes one law firm from another."

The firm was founded in Los Angeles in 1951 by three Harvard Law School grads: Lee Paul, Robert Hastings and Leonard Janofsky. In 1974 the firm expanded into nearby Orange County. But the real growth surge started in 1980, when the firm began opening offices around the country. And in 1988, Paul Hastings went international, hanging a shingle in Tokyo.

In recent years, the firm has added two offices a year, giving it a total of 17 locations and 1,000 attorneys from Brussels to Shanghai. The American Lawyer ranked Paul Hastings 23rd in revenue in the U.S. -- one of only two firms founded after World War II to have made the top 25 list. This year, revenue is projected at $667 million.

Yet when Derek Smith, whose undergraduate degree is in computer science, joined Paul Hastings in 1991, the firm was far from the cutting edge of technology.

"When I started, we didn't have email," Smith says. "Standalone PCs were pretty much all we had. Any document was on a C drive. Electronic file transfers required a dedicated line. We were slow in upgrading some of our operating systems. We were on Windows 95 for a long time. We don't fall behind like that anymore."

In 2000, Smith became chairman of the technology committee, which works closely with the CIO to figure out how IT can best serve the business. Often that means negotiating new work habits, which can be difficult because a professional focuses on his or her own task, not its overall impact on the organization's efficiency.

That was the case when Paul Hastings revamped its conflicts process. Whenever the firm takes on a new case, it first needs to vet the client to ensure that the firm has no conflicts of interest, such as representing rival clients. Such a check used to require substantial manual labor until the firm moved to a process that automates folder creation and filing.

"It used to take several days and tons of paper," says Smith. "Before, there were eight different manual processes. Now it's an electronic process. The perception for the secretaries is [that] it's more work, but in the whole scheme of the firm it's so much less. It might be double the work for a secretary, but as a whole it's 90% less work."

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The Change Agent

Dressed in a sharp, dark pinstriped suit with a baby-blue shirt, Stova Wong looks more like one of the firm's attorneys than the guy you call when your computer crashes.

Born in Hong Kong and educated at California State University, Long Beach, Wong had worked at aerospace giant Rockwell International and real estate company Grubb & Ellis before joining a consulting firm called LAN Systems, which did a lot of work with law firms. One of Wong's clients was Paul Hastings, where he worked on a two-year project converting the firm from DOS to Windows.

"Legal is a very difficult business," says Wong. "The business is about information and documents; that's lawyers' bread and butter -- contracts, pleadings. How to manage that information and make that information available in an organized fashion at any time is a challenge."

In 2001, when Paul Hastings' CIO decided to retire, she hired Wong as director of engineering. Two years later, he became CIO. When Wong took the job, the firm's IT department numbered 75 people; today it has 120.

"I have a very lean organization," Wong says. "We do a lot of things in-house. We spend between 3.5% to 4% of revenue on IT. We're still at the lower end for law firms. I've seen law firms spending 4.5% to 8%. My biggest challenge is to take what we've invested and continue to capitalize on it to allow what we pay for to provide the proper return."

As one example: When the firm converted to Microsoft XP two years ago, power users such as attorneys got new, top-end machines, while clerks who use computers mostly for mundane tasks such as printing labels got hand-me-downs.

"We buy," Smith says. "Most firms lease. We got more bang from those 7-year-old Dells, fully depreciated. We have users who do nothing but print file labels. We're not going to do something because it's cool and sexy. There has to be a business benefit."

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Putting in the Pipes

Derek Smith remembers how the work culture changed at Paul Hastings after the firm embarked on its global expansion.

"When I first started," Smith recalls, "5:30 was 'Whew.' That was the FedEx cutoff. Everyone rushed up to then. Then there was a great sense of relief. That's history. There's no cutoff anymore."

When Wong took over as CIO, he needed to make sure that the IT department would be able to keep up with the firm's rapid growth plans.

"My first priority was to build an organization that could support a demanding business model 24 by 7," Wong says. "The infrastructure was doing what it was supposed to, but we put in major upgrades."

A project for a client might involve teams of lawyers around the world, all working punishing hours. For example, when the firm put together a $440-million joint venture called Helio for Korea's SK Telecom and Atlanta-based EarthLink, the undertaking roped in attorneys from the firm's offices in Atlanta, Washington, D.C., and Hong Kong.

"It's extremely difficult to have even a minute of downtime in the legal business," Wong says. "We schedule downtime, but it's a window of a couple hours per month. That's a very small window for an operation of this complexity."

To meet those needs, the firm's network infrastructure went from a single wire to a triple-redundant big pipe: a dual layer Multiprotocol Label Switching (MPLS) system. Wong also added a network operations center with a round-the-clock help desk.

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Staying Frugal

Another major project was upgrading the firm's aging Nortel phone network. Going to a Voice over Internet Protocol (VoIP) network was a natural alternative. But Wong was wary.

"Phone calls are a huge expense for a law firm," Wong says. "Should we invest $5 [million] to $10 million to be a state-of-the-art company? How much money should you invest to save making phone calls? Can we still achieve those VoIP applications with existing technology? In most cases, it doesn't make sense. Taking a hard look is key."

Wong tested Cisco's VoIP technology in a laboratory environment and calculated the total cost of ownership. He didn't like the numbers. Nortel then offered a virtual VoIP conversion with its gateway hardware for a fraction of the cost. Wong was sold.

"I ended up spending less than $500,000 to enable all our existing phone systems without changing a single phone out," Wong says. "It's the same phone we used 10 years ago. The attorney doesn't have to learn a different phone. The ROI was almost instant. Cisco would have taken two years, perhaps even longer, and required investing millions of dollars. I'd have to replace the entire infrastructure, from phone units to cabling. I hear CIOs saying, 'We saved millions upgrading to Cisco phone switches.' They spent about $10 million to do so. I don't know how some CIOs get away with that. You have to change the network for parallel infrastructure. It's a complete turnover of the world you live in. For what? I took a shortcut."

For Smith and the other partners, that was just the kind of solution they were looking for.

"I know two large firms here in Los Angeles," says Smith. "One spent $20 million to go to VoIP; Cisco sales did a fantastic sales job. The other firm spent $10 million."

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The Winds of Change

On launch day for the new document management system, the IT department braced for a siege. The project had been in development for two years. Wong's team had customized Interwoven's FileSite system, creating a virtual file cabinet that centralized case files by client. It used the Outlook email interface.

Pilot groups tested the system in Los Angeles, and in the weeks leading up to the switch the firm cajoled users to take training classes. Some actually did. But getting high-paid attorneys to break away from billable hours to learn a new software application proved predictably difficult. And since various offices often collaborate on a case, the firm had to roll out the system all at once across the U.S.

So on that September morning, in addition to a six-step guide, lawyers were greeted by an army of temp support staff swarming the firm's U.S. offices. Their technical assistance was needed. Even with the roaming techies, help desk calls still jumped from a normal 450 to 2,500.

"It was potentially very disruptive," says Smith. "This was a very drastic change, very different from anything in the past, shutting down the entire country and switching at the same time." Smith was pleasantly surprised when his e-mail about the system was 9-to-1 positive feedback from lawyers. Still, half a year later, Wong says, the complaints continue to come in from users who liked the old system better. Even so, the firm is preparing for its global rollout.

"Clearly we had a lot of unhappy people," adds Smith. "Even when we don't do anything, I get e-mails all the time. Anytime there's change, people are uncomfortable. I expect people to complain, and they do." After all, lawyers never hesitate to object.

Michael Ybarra is a contributing writer for SearchCIO-Midmarket.com. To comment on this story, email editor@ciodecisions.com.

This was last published in June 2006

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