Bolstering Its CaseBy Mel Duvall | Posted 2006-12-18 Email Print
Legal auditing firm Stuart Maue installed new databases and tools to help its clients red-flag counsel who might claim to work 36 hours a dayat Pebble Beach.
Bolstering Its Case
Stuart Maue initiated a major overhaul of its technology infrastructure three years ago, partly because it had no choice. The market was changing rapidly. More competitors had emerged in the legal auditing field, and its clients were demanding better access to their own data and tools to analyze that data.
Clients like Lorillard Tobacco wanted more than to have Stuart Maue pore over their legal bills to find irregularities or overcharges. They wanted to have greater electronic access to those same bills and to be able to perform a number of queries to better determine how their money was being spent.
It's not just a matter of squeezing every nickel and dime from lawyers' pockets, says Stephanie Dirscherl, vice president of customer service for Stuart Maue. It's about applying the same rules and measures to legal affairs management that a business would apply to any other aspect of its operations.
Bradley Maue says the firm had been looking at upgrading its system for several years and had, in fact, considered implementing business intelligence software around 1999 or 2000 from Sagent, which had a reputation for playing well with Oracle products. However, the Sagent business intelligence initiative was moved to the back burner, primarily, says Maue, because clients weren't yet pushing for the tools and the technology team also had other projects on the go.
But by 2003, several important clients threatened to take their business elsewhere if they could not have access
to self-service reporting tools so they could perform more customized forms of analysis. At that time, the company had also decided to upgrade to the latest version of Oracle's data warehouse, Oracle 10g. The upgrade meant Stuart Maue could take advantage of features built into the 10g platform, including Oracle Business Intelligence and Oracle Portal.
The system revamp, which Maue says took about a year to implement, cost around $2 million, including additional enhancements. The main 500-gigabyte Oracle data warehouse is on a Dell 6800 series server, while online transaction processing (OLTP), which is the workhorse for data entry and retrieval, is housed on a Hewlett-Packard Itanium 2 server platform. Applications such as the company's proprietary software for auditing bills run on a rack of various models of Dell servers, and the Internet portals are dished up on Apache Web servers running Red Hat Linux.
When it initiated the project, the firm had set a number of targets. It wanted an infrastructure in place that could accommodate at least a 20% percent annual growth in audited billings, and it wanted to handle that increased business with existing staffing levels. It wanted customers to be able to access their own data through self-service portals and run their own reports, reducing the involvement of Stuart Maue's technology staff by 80% to 90%. Prior to the Oracle 10g implementation, clients would order custom reports from Stuart Maue, such as a list of the law firms the company uses ranked by billable hours. But those reports tied up the firm's employees and usually took at least a day to turn around.
Not long after the 10g suite was implemented, the system was put under a major test. Stuart Maue was hired by Steadfast Insurance, a unit of Zurich Insurance of Switzerland, to audit legal costs associated with the OxyContin prescription painkiller drug. The drug's manufacturer, Purdue Pharma, claimed it spent more than $400 million defending some 1,400 lawsuits filed over OxyContin. As its insurer, Steadfast was being asked to reimburse Purdue for those costs as part of a product liability policy it had written. Steadfast questioned the claim, and a fee dispute followed.
The audit task was the largest ever undertaken by Stuart Maue, involving 40 law firms in 32 states, some 322 partners, 850 associates and more than 1,000 paralegals. All told, the legal team billed the company for more than 1.2 million hours of work, plus associated costs and expenses. It took Stuart Maue about six weeks to load the Oracle database with all of the bills and documents associated with the case.
The process would have taken many more months, but as part of the 10g implementation the company also installed a new FlexiCapture Studio optical character recognition (OCR) system from Abbyy Software, a company with headquarters in Russia and U.S. offices in Fremont, Calif. The OCR software allowed Stuart Maue to quickly load bills and forms into the database as long as the law firms followed a standard LEDES 98b billing format. If they didn't, the data had to be entered manually, an expensive and time-consuming fallback, according to Dirscherl.
The dispute was resolved in June, using Stuart Maue's upgraded database and portal platform; however, terms have not been disclosed. "The project was not undertaken with that business in mind, but it's safe to say we wouldn't have been able to handle it without this technology," says Bradley Maue.
Stuart Maue clients say the new offerings, in particular the business intelligence tools, are providing a much clearer window into their legal bills. "I can use the [Internet] portal to access reports that break out billings by year, by law firm and drill right down to a particular bill," says John Reilly, associate general counsel for Greensboro, N.C.-based Lorillard Tobacco. "It's a very powerful tool for a legal staff that has to monitor a lot of law firms at any given time."
George Lumpkin, senior director of product management for Oracle, says Stuart Maue is representative of a larger trend taking place in the market. Business intelligence (BI) and data mining have been put to good use by large corporations in sectors such as retail for a number of years, but now they are filtering quickly into the mid-market. "Stuart Maue is a clear example of the implementation of business intelligence in an area where BI really had not been used before," he says. "A big reason for that is the pre-integration [of BI into data warehouses like 10g]."
Lumpkin notes that Oracle has offered business intelligence and portal products for a number of years, but those products had to be installed and integrated separately. "The difference is, BI has become much more accessible," he says.
For its part, Maue says the company has met or exceeded its initial targets for the project. Business, measured by the amount of billings the firm processes on behalf of clients, has grown from about $400 million in 2003 to $2.2 billion in 2006, an annual growth rate of 53%. The additional workload is being handled with the same staffing levels as in 2003. And clients are now running the vast majority of reports on their own through the self-service portal.
As Bradley Maue puts it: "The big difference is, instead of just offering our clients the data, we now offer them intelligence."