Continued decline reported in use of law firm extranets by law departments and speculation on four reasons other than inconvenience

Serengeti’s survey data from 2009 shows that “the use of law firm extranets decreased again this year with only 8.7% of the respondents using an extranet provided by at least one of their firms (continuing to decline each year from a high of 30% in 2003).” The explanation given in the short item in the ACC Docket, Sept. 2010 at 16, is that in-house lawyers “find it inconvenient to have to go to multiple law firm extranets to find their information.” While that bother may explain some of the decline, other factors might also be at work.

For example, mergers and acquisitions fell off dramatically during 2009 so one major impetus for using an extranet – due diligence – also declined. Second, and a less likely cause, could be convergence. If your department uses fewer law firms, the likelihood of one of them having and offering an extranet drops some. Third, other methods of storing documents for collective use may have edged out extranets, regardless of extranets’ convenience or ease of use. Fourth, relative to substitute methods, extranets may not have fallen in cost as much. Finally, if the implication is that legal departments have increasingly hosted their own extranet, that may not be true if specialist providers other than law firms have offered better value propositions (See my post of Sept. 8, 2010: extranet services.).