TemPositions, which had about $30 million in revenues in 2001, spent $250,000 building its intranet in 1998 -- primarily, Essey says, on Web design and for the salaries of a chief information officer, a programmer, and a technology troubleshooter -- and it continues to spend liberally on salaries, equipment upgrades, and maintenance. "It's not free," he acknowledges. At the same time, he expects the intranet to reduce the company's head count -- eliminating, for instance, the need for data-entry staffers. Essey says those savings are well worth the investment.
GRAND SCALE: James Parks credits his firm's extranet for letting Eckert Seamans go national.
Speed was the issue at Eminent Research Systems, in Minneapolis, where clogged procedural arteries were stunting the company's growth. The $7-million, 22-employee company specializes in coordinating trials for heart and blood-vessel devices such as stents -- products that typically have a market life span of only 18 months before they're replaced by newer models. Previously, Eminent sent 150- to 500-page study-protocol documents to participating physicians and regulators, who marked them up and mailed them back. Sometimes the hefty hard copies made several round trips before everybody agreed on protocols -- a process that typically took at least two months. The lengthy procedure caused some customers to forgo putting their devices on the market altogether, which meant less work for Eminent. "Turnaround time is key," says Linda Laak, vice-president and chief operating officer. "Our competition is not necessarily another company but whether or not the client will do the study at all."
That changed in February 2001, when Eminent launched an extranet that allows doctors nationwide to collaborate on protocols electronically. The system sliced the approval process from two months to two weeks. Meanwhile, although Eminent spent $50,000 to launch its private Web site, Laak estimates that the company saves 10 times that amount by eliminating the "heavy lifting": shipping, storage, and paying the salaries of two administrative people who handled all the documents. And the company can handle 10 times as many projects at once as it could before, resulting in a 40% increase in revenues.
At Eckert Seamans Cherin & Mellott, the Pittsburgh law firm, an extranet became the key to going national without opening any additional offices. The 44-year-old firm wanted to serve as the national coordinator for thousands of product-liability claims against a major client. But the firm couldn't possibly set up shop in all the affected jurisdictions: 50 states, Puerto Rico, and the Virgin Islands. Instead, the firm's executive team decided it needed two things: a network of partners and a network connecting them.
Those partners were, and are, "local counsel" -- dozens of far-flung law firms that Eckert Seamans hired to handle claims in their own states. The network that connects them is Eckert Seamans's extranet, which contains all related documents, including briefs, transcripts, interviews, research, medical and scientific information, and correspondence.
Obviously, storing paperwork in one location helps everybody access documents faster. But Eckert Seamans argues that the extranet provides two more important benefits. First, it's an unprecedented way to provide clients with a consistent nationwide defense by making sure that all the lawyers are literally on the same page. In addition, it saves time and money by providing those far-flung partners with research to strengthen the cases in their states. And the extranet lets the firm's 215 lawyers coordinate cases in a way they couldn't have before. "There is no way we could have managed and provided oversight to claims in Texas or California," says the firm's executive director, James Parks, citing the time and cost of constant travel, telephone calls, and shipping tons of hard copies cross-country.
The system, part of a firmwide technology overhaul, didn't come cheap: Parks estimates that Eckert Seamans has invested nearly $1.3 million so far, including construction costs to create a separate technology center. But chief operating officer Dennis L. Veraldi is philosophical about the cost. "Sophisticated, larger clients just expect that you're going to be able to do those things, that you have the capability to service them," he says. The firm doesn't even worry much about tracking the system's return on investment. "It's part of the infrastructure, part of the overhead," Parks says. "You have to manage it the same way you manage supplies or telephones or receptionists or libraries or anything else." But he credits the technology with cutting legal-work costs by 6% to 7% annually and allowing the firm to take on more clients.
But Eckert Seamans does worry about security breaches -- and not just those involving hackers. The firm must also protect itself against possible security breaches involving the very partners for whom it established the intranet: those local-counsel firms. "Yes, we're working with them, but they're still competitors," Veraldi says. So the firm relies on a combination of firewalls, multiple passwords, and encryption to make sure those faraway lawyers get access only to the appropriate cases -- and only for the length of their contracts.
