Bermuda: Want To Know How To Build A Web Site? Just AS&K!

The partnership has decided that legal services provided over the Internet are the future. You’ve read the press – now go out and create the business!

How many articles did you read over the past year that addressed the effect of the Internet on legal services? How many pages have been written that have told you which IT systems your law firm should purchase or what your client’s requirements will be over the next few years? The old securities of an established business model are being threatened with a new and seemingly irresistible new technology. It is the responsibility of the management of the firm to make the business decisions that will enable the firm to survive and prosper in the future.

There are a multitude of problems when trying to do this in a normal business setting. In the world of the Internet these problems often appear insurmountable. How can you make effective business decisions when you do not:

• Have a full grasp of the technologies involved?
• See a demand within your client base?
• See many Internet businesses making money?

Appleby Spurling & Kempe have made these decisions – and many more. As one of the largest firms of lawyers in Bermuda, it has developed and put into operation the first online service for the incorporation of Bermuda companies – Just AS&K [Inc]^SM. A patent for this business method has been applied for in the US and Bermuda.

The Just AS&K [Inc] ^SM Web site takes clients through a series of interactive screens that request particular information relating to the formation process. It reports to the clients throughout the process so that they always remain in control of the formation process and it also produces all the internal and external documentation. The site collates data for marketing purposes and enables payment of the formation costs to be made on-line.

The Just AS&K ^SM Web site differs from other legal service web sites in that it provides as many back-end services as there are front-end. It uses Web technology to automate and re-engineer internal work processes for the benefit of the firm. It does not merely seek to create a new market and therefore does not rely upon success in that area for its existence.

This is the first of a number of online legal services based around the same business model.

This article examines the Just AS&K [Inc] ^SM site and the business model and explains why the development of such services is an inevitable result of the move to a world that is online.

The development of online technology raises wider issues for business than just the Internet.

The next ‘revolution’ in working life has begun. Whilst the industrial revolution drastically changed the world our ancestors lived in, the information revolution, many argue, will have a similar impact. Such arguments are based around the increasing need for the effective management and use of intellectual capital ("IC"). Harnessing and exploiting IC in the information age is seen as the key to future success and prosperity.

Evidence American Airlines. They now make more money from their Sabre reservation system than from the use of aircraft. American Airlines is only one of a number of businesses that have found their original ‘purpose’ has become less attractive as a business model than a new, related information-based model. Other companies are retaining their core businesses but re-engineering the model so that their workers are more productive and consequently more valuable. An example is the car manufacturer that employs fewer people to produce more cars and empowers workers to do their own troubleshooting and managerial work.

Other businesses are looking inwards to find assets that they can exploit more effectively. Companies such as Dow Chemical Corp. and Rank Xerox actively exploit the patents that they have registered in areas unrelated to their core businesses. Dow expects to increase its annual patent licensing from $25 million in 1994 to $125 million this year. This significant income stream from licensing revenue generates more money for research and that in turn fuels the business model.

Companies now seek to make more use of their brands to increase revenue. For example, many well-known brands now produce clothes - an area completely unrelated to their original purpose. The Virgin Group place their logo on products as diverse as wedding dresses to financial products to railway carriages. They have leveraged the goodwill in their brand to attract new business and income.

These changes are not isolated. They are repeated across the business world as companies seek to make the most of their human resources.

Employees and the work that they do are changing. With the advent of voice recognition software who will guarantee that secretaries will still exist in ten years time? Or even in five years time?

Intellectual capital in business includes the human resources of an organisation and the knowledge that they possess. In order to make optimum use of the human resource a business needs a structure to share and apply this knowledge. Once the structure is in place, it is the relationship with the customer that will determine how successful a business will be. This can be expressed by the goodwill in a trademark or the knowledge acquired of the marketplace.

How well a business can mobilise its IC will have a key effect on its future success, if only as a means of maintaining market share. Consider, for example, how a business reacts when a client wants a piece of work done that is slightly out of the ordinary.

If the business has a good grasp of its knowledge base, and is thereby able to identify the relevant skills for the job, it should react immediately. The job may be quickly turned around if the information that is required to complete the job is readily available. The client will be impressed, and in these days of client mobility, that will stop him from taking his business elsewhere. At the end of the job, the business should consider whether the skills required to complete it can be applied elsewhere.

If the structure is in place to effectively pass information onto others and quickly roll out a new service or product, then the business may be able to create a new revenue stream from one piece of work.

If none of these are in place, conversely, the business may lose a client.

It is the principles behind the above examples which have given rise to the development by AS&K of the Just AS&K ^SM range of services.

• Building Just AS&K [Inc] ^SM

Just AS&K [Inc] ^SM is the first online service for the formation of Bermuda companies. There are other Internet sites that make this claim but they do not provide the functionality of Just AS&K [Inc] ^SM. This Web site provides clients with the best attributes of the Internet whilst at the same time uses the technology to significantly improve internal operations.

The Web site took six months to create from the date of the first project meeting to the launch date. Inevitably when creating something as groundbreaking as Just AS&K [Inc] ^SM there were substantial hurdles to jump and mistakes were made. A key hurdle was to find a technical partner capable of turning the vision into reality. After an initial mistake with one partner, a company was found in Toronto that had sufficient expertise to produce the system.

The initial drafting of the specification proved a long and painful process and required substantial fee-earner time. This must be recognised as being a fundamental requirement. It is not possible to have a well-managed project that produces a high-quality product if key members of staff are required to have substantial client commitments. Having said that, finding staff who are willing to take a sabbatical from their clients is not always an easy task.

The drafting of the specification was in itself a useful process as it resulted in an ‘audit’ of current business processes. Whilst not a ‘time and motion’ study on staff, the fact that technical Web site designers were reviewing a labour intensive process highlighted areas that could be improved.

Once the specification was developed and the pencil mock-ups (the draft Web pages) completed, the Web site could then be built. Whilst this was time consuming, by far the majority of the time was spent in the planning stage. This has become more evident as further products have been developed which leverage off elements of the first.

At the same time as this was done work commenced to develop the ‘look’ of the Web site. With the prospect of future products any work done in this area had to take into account how they would all fit together. The marketing team also had to work out a plan to market the service. Spending large sums of money developing a superb online legal service Web site will be wasted if no one comes to visit it.

The benefit of putting a current service online is that there is a pre-existing market for the service. The decision thereafter is how you market the service to your clients. AS&K took the decision that the client would be offered two options. They may do the formation themselves online or we will do it for them, but will provide them with access so that they can control the process. Over time and with suitable marketing and training, the percentage of clients who will take over the whole process will inevitably increase. Whilst this occurs the same time the business still has its current client base, the system provides the firm with significant internal cost savings and is a tremendous marketing tool – particularly in the US.

• Technological Issues

Before examining the business issues it is worthwhile considering the technological issues. This does not mean which Web server should be used although such things are obviously of importance. It refers to a higher level of technical debate.

Many law firms use separate software packages for different divisions within their practice, or even within the same division. Appleby Spurling & Kempe are no different in this. The use of separate packages creates many problems and can be the cause of considerable expense.

Building an online legal service is similarly expensive. It is self-evident that the re-use of material optimises initial development costs and builds greater profitability into the business model. If you are sure from the start that you will only ever build one product then this will not be an issue.

As Just AS&K [Inc] ^SM was always to be the first of a number of products, these issues were addressed at an early stage. By doing so the site was designed to permit generic access through a Secure Client Centre to a page that lists all current client transactions. These transactions may be company formations in Bermuda, or any transaction using the Intellectual Property module which will be launched in the New Year, or any of the future modules the firm has planned.

New products merely ‘plug into’ the Secure Client Centre and only the front page will have to be altered. Back-end software will be reused although amendments will obviously have to be made to reflect the requirements of each service.

• The Business

After having made the leap of faith in order to decide to develop online legal services you must focus on what you wish to achieve.

The partnership at AS&K decided to develop company formations for a variety of reasons.

The work is relatively routine and labour intensive and so there were potential savings to be made by automating the process. This corresponds with the example of the car factory referred to earlier. By removing the routine tasks from staff they would be able to spend more time on more cost-effective work and increase their skills. The process would be streamlined, which provides a more efficient and higher quality service to the client. The increasing demand for staff with greater skills and the likelihood that the basic secretarial function will evolve into something different meant that the ability to free up staff whilst at the same time providing clients with a product like Just AS&K [Inc] ^SM, was too good an opportunity to miss.

Clients will therefore see direct benefits with their company formations but they will also receive a better service from staff with a greater skill base.

The product would allow clients to retain control over the formation process 24 hours a day from anywhere in the world. This is an important feature for a law firm where the majority of clients are overseas and provides a significant marketing advantage.

The firm has not chosen to try and provide a completely new service but re-engineered one that already existed for the benefit of both its clients and itself.

To obtain the maximum benefit you must be true to the original concept. If the system is to free-up staff for more productive roles those roles must be identified and a system of work put in place that provides them and the firm with that benefit. It would be too easy to allow such benefits to be absorbed with no return and careful planning should be made to ensure that this does not occur.

Freeing up staff in key areas permits the firm to be more responsive to client needs. The example given earlier regarding turning round work and re-using the skills acquired for the benefits of other apply.

Once the system has been developed that is not the end of the project! As with any software there will be bugs. However, the greater the planning effort prior to the building of the system, the fewer the bugs there will be. When staff and clients start using the system a long wish list will appear. This should be carefully monitored and prioritised so that the relevant changes may be made to ‘Version 2’. As with most software Version 2 is already well on its way as Version 1 is being launched. This again will take fee-earner time although far less than before.

• The Future

As the cost of development of online legal services is high, you must consider all possible opportunities for its exploitation. Company formations take place all over the world. Whilst the detail may differ in particular jurisdictions, the general principles are often the same – particularly in the English-speaking world. It is therefore possible to re-use the model that has been produced in other jurisdictions. AS&K has started to do this by developing an online company formation service for the Cayman Islands. However, more importantly, the underlying functionality of the system is very powerful and can be adapted for any number of services – not just limited to company formations.

Further versions for other jurisdictions are planned and the firm is willing to consider developing relationships with firms in other countries in order to achieve this. As Dow Chemical Corp. leveraged its patent portfolio, AS&K is willing to do the same and has already started discussing licensing the technology elsewhere.

The product has a distinct brand from that of AS&K. A series of Just AS&K ^SM products will be produced of which Just AS&K [Inc] ^SM is the first. This separate branding and ownership of the business by a Bermuda based company provides greater flexibility than if it was run directly by the law firm. It means that the services do not have to labour against market perceptions associated with a product provided by a law firm. As the product is rolled out across the world the mark will acquire a value of its own. The licensing of the technology can be accompanied with a licence of the mark so that a franchise arrangement occurs. Whilst a long time off, it is not impossible that an American Airlines scenario might eventually be reached where the firm makes more money from the Just AS&K ^SM business than by being a law firm. This would be assisted if the brand becomes sufficiently recognised on a worldwide basis to enable it to be used in the way that Virgin use their logo. This would create another distinct income stream.

• Conclusion

As AS&K is still in the early days of development and roll-out of Just AS&K [Inc] ^SM, a conclusion with regard to its external performance is a little premature. A further article on the subject is planned for early next year that will examine the introduction of the other online services and will attempt to draw some meaningful conclusions.

At the current date and after six months of operation, it is possible to say that client feedback has been very positive and benefits have already been seen from improvements in internal processes. Version 2 of Just AS&K [Inc] ^SM is due out in October and the intellectual property modules early in the New Year. These will broaden the market for the services and will build on the significant value that has already been created in the product.