A legal silver Lining in the cloud

Jonathan Flaws Large                 Readers will acknowledge that busy practitioners tend to focus on getting the job done, but that they seldom have time to consider the very thing that will help streamline, organise and protect their business. Most practice management systems to date reside on your PC or on your office IT network.

Jonathan Flaws and ActionStep founder Ted Jordan describe a Cloud-based practice management system that, amongst other things, enables you to share a secure workspace/document exchange with other lawyers – a workspace of the type defined by ADLS /REINZ in the 9th edition of the agreement for sale and purchase of land.

It seems hardly a month goes by these days without news of some privacy breach by New Zealand central government.

Many of these breaches are related to email systems (ACC, EQC, IRD) and they show how easy it is to accidentally send confidential information into the public Internet.

Paper letters are referred to now as snail mail because it is too slow and inconvenient in today’s fast paced world.

Virtually all lawyer-to-lawyer communication is by email. It is so convenient, so immediate and so efficient. Isn’t it worth trading off potential confidentiality breaches for efficiency?

Not really – you’re a lawyer and the integrity of your business, and the continuation of your client’s confidence in you shouldn’t be compromised – even if the risk is small.

At least that’s what ADLS believes and that’s why, if you look at the definition section of the 9th edition of the ADLS/REINZ agreement for sale and purchase, you will see it has defined a Secure Web Document Exchange. It was not only ahead of its time but ahead of the market delivery. But it’s not anymore.

The full defined term is a mouthful so let’s just call it SDX. Secure exchange would be even better, but its acronym has already been taken.

Email considerations
Besides the obvious problem with users selecting the wrong recipients or attachments, email has other attributes that make it a potentially problematic mechanism for distributing confidential information.

  1. Once you hit “Send” the email leaves the security of your local area network and travels over the public Internet. Even if the sender and the recipient are across the road the message may travel halfway across the world before being delivered.
    The route it travels depends on many factors but it will sometimes include a series of “hops” from server to server along the way, some of which can be in foreign countries. At each “hop” the servers will typically queue the messages on local disk before re-transmission and may or may not delete them afterwards. So it is quite possible that your message will leave copies of itself along the way. Whilst most email servers are operated by credible organisations, you literally have no control over the process once it leaves your office.
  2. You cannot recall an email once it has been sent and you cannot control the re-distribution of that message once it is in someone else’s hands.
  3. There are no receipt guarantees. All you know for sure is that you hit “Send” on your local computer, but you cannot guarantee when, or even if, the recipient will receive it.
  4. Because messages often travel through several servers along the way they can get trans-coded, or have one or more attachments stripped along the way, depending on the configuration and capabilities of each server.

With all that said, however, email is a good general-purpose communication tool. The question is simply whether it is the right tool for lawyers to use to send confidential information about a client or a client’s transaction.

If you’re involved in property transactions and receiving mortgage instructions from banks such as Kiwibank and ASB Bank you are already receiving instructions via a secure web document exchange.

Their systems are online, secure and enable your communication with the lender to be safe, secure, instant and paperless.

But electronic B2B communication is not just about security – it’s also about timing.

When time is of the essence and communication is critical to determine if a transaction has occurred, you need to know that what you send, the recipient receives. There can be no manipulating of the means of delivery by one party to their advantage.

Your client can’t afford to get caught out in another Larsen v Rick Dees Ltd situation where fax delivery of a notice fails and a contract is cancelled due to a failure to settle by the specified time. And you can’t afford to face a potential negligence claim because you chose the wrong method of delivery of a notice.

Clause 1.3(4)(f) of the 9th edition of the ADLS/REINZ form provides that a notice is deemed to be served when sent by SDX “at the time when in the ordinary course of operation of that secure web document exchange, a notice posted by one party is accessible for viewing or downloading by the other party.”

The vendor doesn’t have access to pull the plug on the ordinary course of operation of a secure web document exchange. And that ordinary course of operation means that as soon as the document is “posted” it is available for viewing or downloading.

The committee reviewing the changes for the 9th edition of the agreement considered the issue sufficiently important to lawyers that it was worth including provision for an SDX in the revised form, even if one wasn’t available at the time. The technology is not rocket science and sooner or later it would be made available. The benefits to lawyers are so obvious that the committee wanted lawyers to be able to use it as soon as one was available.

SDX using ActionStep
ActionStep is a Cloud-based, secure online application which allows users to exchange and track documents in real-time.

New Zealand law firms, government, and a variety of other businesses have been using ActionStep since 2005 to run their compliance-based operations. The application allows users to upload and share documents securely.

Permissions govern who can access the documents and an audit trail keeps track of the activity. Once a document has been uploaded to a matter it is instantly accessible to authorized users from any location in the world.

How it works
There are two scenarios whereby lawyers can exchange documents using ActionStep SDX:

Scenario 1: One or both firms already use ActionStep internally

Under this scenario at least one of the firms involved in the matter uses ActionStep internally for practice management.

In this case all the firm needs to do is add the other party (client, lawyer, etc) as a contact in their ActionStep system and grant them a login with the appropriate permissions. The party will automatically receive an email with directions on how to login and access the shared documents.

The external party will only be able to see the page containing the shared documents.

Scenario 2: Neither party currently uses ActionStep internally

ActionStep will create a central facility whereby lawyers can register and create matters document folders on an as-needed basis for the purposes of sharing and tracking the documents. The lawyers will then be able to invite other parties to access the shared documents by granting them logins.

But wait, there’s more:

Besides simply acting as a secure repository for documents, ActionStep also has the ability to automatically assemble documents by combining live data with Word templates.

This functionality will be extended to provide a link through to the ADLS Web-Forms which will grant members quick access to Web-Forms from within the ActionStep matters.

For firms that wish to create structured workflow around their document management, ActionStep provides a comprehensive facility for creating steps, tasks and dependencies to ensure that work is carried out in the correct sequence and that all the appropriate information is collected before the documents are generated.

The Full Monty
ActionStep is a complete practice management system which includes matter management, documents, calendars, email, contacts, time-recording, billing, accounting and trust accounting. Firms who are looking to upgrade their old practice management systems may want to consider moving their whole operation across to ActionStep.

Jonathan Flaws has been in legal practice in Auckland for many years and is currently a partner in Sanderson Weir. He has been on the ADLS Documents and Precedents committee for most of those years, has helped develop and deploy IT systems within his own practice and has a special interest in secure online communication.

Ted Jordan has more than 20 years’ experience in the global software industry, primarily working in the United States. Previous clients have included the US Federal government and Fortune 500 companies. He is the CEO of ActionStep which he launched in 2004.

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