Roger Skalbeck is the Technology Services Librarian and Webmaster at George Mason University School of Law in Virginia, and he is a web committee member for the Law Librarians’ Society of Washington, D.C. Opinions expressed in this column do not necessarily reflect those of his employer or any other organization. This column, of course, is 100% free of any legal advice.

As readers of this column might recall, last month I took an initial look at Application Service Providers, with an overview of this relatively new business phenomenon, as it relates to the legal profession. To recap very briefly an Application Service Provider (ASP) is a company that rents applications to clients, such as law firms or corporations, on a monthly basis. These applications are hosted and maintained by the ASP, to be used for litigation support, time and billing, document management, collaboration and/or accounting, to name just a few of the existing services.

For this month’s column, I spoke with representatives from three ASP companies who provide services tailored specifically for the legal market: CaseCentral.com, Niku for Legal and ELF. Below I provide basic details on each company, framing these in the context of some of the broader issues I see in the legal ASP market.

Service, Specialization and Corporate Partnering (example: CaseCentral.com)

It is probably somewhat unfair to describe the legal ASP market as a single entity, as existing companies provide unique and specialized services, with diverse options emerging for hosted applications. For each of the discreet tasks that a law practice demands, there might be a single company that provides a focused hosted solution. As an example, a firm might need help with litigation support and document indexing. CaseCentral.com is a company that provides a very targeted service in this area. They offer Internet browser-based access to litigation support databases, which also serve as secure and remote document hosting locations. Their area of specialization is in managing litigation documents in all forms. Further evidencing the specialization in the market, CaseCentral.com partners with RealLegal who provide support for transcription services. Taking the corporate partnering even further, both of these companies also provide services as partners in Serengeti, which is provided by ELF.

As needs overlap and demand expands, corporate ASP partnerships will play a key role in the success of each participating company. Additionally, for companies providing a range of hosted applications, the specialized service providers will provide key strategic elements to round out offerings for individual clients. I think that many more specialized companies will develop, which will be available as suites of applications and/or as discreet services.

As an interesting comment on the nature of the technologies being implemented by ASPs, most seem to be moving towards browser-based access for their applications, as opposed to thin-client or remote access technology. According to CaseCentral.com President, Craig Freeman, they had initially developed their platform for access through a Citrix-based remote access client. Freeman noted that browser-based access has allowed them to expand available functionality, while making it considerably easier for end-users to adapt to the technology.

Extranets are Coming and ASPs (obviously) Aren’t Just for Legal (eaxmple: Niku for Legal)

When talking about ASPs, it’s only a natural corollary to also consider them in the context of extranets as well. Extranets have been around conceptually for a while, and the advent and establishment of ASPs geared towards collaboration products will make them much more of a reality. One company that is doing a lot in this area for law practices is Niku, with their Niku for Legal program.

Niku for Legal provides a platform for collaborative work product development and document sharing, which are billed as intranet/extranet solutions. In a collaborative environment like an extranet, if document control is well implemented, issues of version control in working drafts should become nonexistent. This, coupled with security concerns, is not uniformly the case with email.

Legal practices represent only a small fraction of the ASP market, so this model obviously is not just for legal environments. To these ends, Niku provide a wide range of solutions tailored for other industries, such as advertising and IT consulting. Niku for Legal, which incorporates the LegalAnywhere technologies that they recently purchased, is the brand of their services, which are specifically tailored for legal environments.

I expect that we will see other companies like Niku develop, whereby the legal profession is one of many industries served. It’s great to see this too, as it should result in even greater economies of scale in terms of developing and refining products and services. This should bring about the advantage that multiple clients in a single area benefit from experiences of their peers as well as those in other industries.

Corporate Counsel as Potential Driving Force ASP Adoption (example: ELF)

In discussing legal ASPs with each of the representatives from these three companies, it seems clear that corporate counsel will likely play a key role in the adoption and growth of ASPs to support legal work. The company that evidences this probably the most is ELF, who provides Serengeti. They were founded as a company geared towards working primarily with corporate counsel in the insurance realm.

Robert Thomas, Director of Strategic Development and Associate General Counsel at ELF indicates that corporate counsel comprise the core of their clientele. Thomas indicated that a big attraction of ELF and Serengeti for corporate counsel is that they can manage relations with multiple firms through a uniform, consistent platform.

Beyond extranet and collaboration platforms, Thomas indicated that ELF will begin to develop a suite of applications and services, all to be made available on a matter-by-matter basis through what they term Matter Vault. This means that a firm might use only document sharing for a certain client, while a different client might have a range of services integrated, differing for each matter. As mentioned earlier, RealLegal and CaseCentral.com are two of the strategic partners available through Serengeti.

I don’t think that corporate counsel are the only driving forces behind ASP adoption, and especially collaboration-oriented models. It is just as likely that co-counsel in a case, and even geographically disparate members of the same firm will have as much to gain from a browser-accessible collaboration tool. Nonetheless, since it is the clients who select the law firms to represent them on matters, they are likely to be key players in any new developments.

Some Additional Concerns and Issues

As clients and firms begin to enter into the world of renting applications and IT functionality through ASPs, it seems likely that they will do so first on a limited, low-exposure basis. Security is still a major concern in terms of controlling confidential documents, but I think that people will soon begin to accept and trust the levels of available security. Only a few years ago, very few people felt comfortable in using credit cards online, but now it is very commonplace to do so. In brief, since there is so much money at stake in the ASP market, security will be worked out and people will trust it soon enough

After the initial talks and vendor demonstrations have taken place, it’s time to negotiate contract terms, defining who will be responsible for what elements. While I think that people will soon trust security provided by ASPs, clients still need to spell out the details of security concerns and remedies in writing. To these ends, Susan Avery wrote a good article entitled “Tactics for negotiating with application service providers” (1), which offers very sound advice and explicit terms to consider in negotiating for an ASP service.

Supplementing these contractual issues, a story from Network News details some of the more nitty-gritty technical issues and challenges to be faced in setting up application-hosting arrangements. (2) This author gears the coverage towards identifying likely infrastructure issues that ASP companies might face themselves, such as whether it is truly a viable option to provide each client with separate servers for data storage. For law firms and other potential ASP clients, this article provides some very specific situations to consider and discuss with potential providers.

In closing, I don’t think that ASPs are the end-all, be-all solution for technology problems of legal practices, but I think that the model is attractive enough that they will gain acceptance very soon. The driving factors will likely be from the following:

• Corporate Counsel and clients will begin to demand and require access to work product through ASP providers, so that they can use and review it uniformly.
• Small law partnerships and new firms will probably be more willing to start out to test the waters with a multi-purpose ASP, as there is much less of an initial investment in terms of systems and personnel expenditures.
• Law firms will probably begin to use ASP solutions initially for single client matters and/or for very discrete application support, to keep the risks to a minimum.

Finally, I predict that existing enterprise-wide, in-house applications won’t be going away any too soon. The model for renting remote-access applications is not yet established well enough for people to be able to rush into embracing them. For critical systems such as accounting and invoicing, if an existing system isn’t broke, a lot of folks will say “don’t fix it”, for a long time to come.

Other Information

For those interested in hearing more about ASPs in legal and general contexts, there are a few conferences this summer, which are very likely to be of interest. The one geared towards legal practice is LegalTech in Los Angeles , which takes place from June 20-22^nd. Based on the list of vendors and programs offered here, ASPs will certainly be a hot topic.

For a conference that goes somewhat beyond just the legal market, check out the ASP Summit Chicago: Unveiling Business Opportunities in the ASP Industry , which runs from July 12^th-13^th in Chicago. For those in (or planning to be in) the southern hemisphere, there is also the ASP 2000 Summit in Melbourne, Australia from the 22^nd-23^rd of August. For detailed information on ASP-related events across the U.S. and around the world, check out the Industry Events Calendar maintained by the ASP Industry Consortium .

If you have questions or comments on this column, please don’t hesitate to send me an email . I’d like to extend special thanks to everybody who took the time to provide insight for this column. Though this is the conclusion of the ASP topic as a whole, I will certainly keep watching it.

Footnotes

(1) “Tactics for negotiating with application services providers” by Susan Avery. In: Purchasing, vol. 128, no. 8, May 18, 2000, p. 124.

(2) “ASPs; The Gamble of Renting the Brains for your Operation” by Danny Bradbury. In: Network News, p. 48, May 31, 2000.

Copyright © 2000 Roger V. Skalbeck. All Rights Reserved.