Software for the Up-and-Up
from
November/December 2003
by John R. Engen
Imagine a software application that could help your company keep tabs on insider trading, safeguard it against fraud, watch out for harassing e-mails, and provide early warnings of the various events you’ll ultimately need to report under the Sarbanes-Oxley Act.
To do all this would require a program that searches hard drives for telltale words and phrases in the millions of e-mails and other documents. Far-fetched? Not at all. Lawyers at Preston Gates & Ellis, a powerhouse Seattle outfit, are already using a prototype of such software to quicken the pace of the discovery process for clients like Amazon.com Inc. and Microsoft Corp. (The Gates on the law firm’s shingle is William, father of Bill.) The consulting firm KPMG uses the same software to check for possible problems on behalf of a number of clients. And Kelly “KJ” Kuchta, president of Forensics Consulting Solutions in Phoenix, Arizona, has tapped the technology to conduct due diligence on clients’ mergers-and-acquisitions transactions. “We can identify if there’s a second set of books on the system, or if the accounting practices are on the up-and-up,” he says.
The maker of the software is Attenex Corp., a privately held Seattle start-up and one of several companies intent on bringing search-engine-style powers to the labor-intensive world of legal discovery. Rivals include more entrenched players such as DolphinSearch Inc. of Ventura, California, and Seattle-based Applied Discovery Inc., part of LexisNexis Group. But Geoffrey Bock, a senior vice president of Patricia Seybold Group, a Boston consulting company, says the “secret sauce” of Attenex’s solution, dubbed Patterns, is its visualization and natural-language capabilities. These allow a user to cut through mountains of computerized clutter by producing a “road map” that shows how documents are related to one another, and thus which are most relevant to the task at hand.
For now, the chief beneficiaries of this technology are law firms and their clients, which can shave as much as 90% off the time and cost of discovery. In fact, Attenex was founded by Preston Gates & Ellis at the prompting of oft-sued Microsoft to come up with a faster, cheaper way to search its systems. Eventually, says Bock, the technology might monitor computer hard drives for risky clauses in sales contracts or for potential frauds, and even watch internal e-mail for indicators of sexual harassment or other things that could put a company at risk.
Skip Walter, Attenex’s CEO, says Patterns could have saved some trouble for a former employer, Primus Knowledge Solutions Inc. When Walter was a vice president there, Primus made a sale that looked like a bottom-line winner. A few months after the contract was signed, however, the customer demanded that the company station four engineers overseas—a costly proposition that Primus thought could be safely ignored, since it wasn’t part of the agreement. But unbeknownst to senior management, a company salesman had committed to the provision in a pre-deal e-mail. “We had to unwind $200,000 in revenues, and the stock took a big hit,” recalls Walter, noting that a tool like Patterns could have identified the related correspondence before the deal closed and enabled Primus to make adjustments.
Most companies that use the software prefer to remain anonymous, wishing to avoid civil-libertarian ire over the programs’ Big Brother aspect. An exception: Waste Management Inc. Last year the company acknowledged that it used Patterns to help it find certain documents the government wanted to see.
