`Web-footed' lawyers dip, not plunge, into the Internet.

The explosion of desktop computer use among lawyers has altered the day-to-day practice of law, with the most noticeable changes occurring inside a firm's four walls. Today's lawyers, more often than not, toil behind computer screens to research the law, write briefs, e-mail colleagues, or use case-management software to organize their work.

But some enterprising attorneys are seeing great potential in using the Internet to discuss substantive case issues with their adversaries and to nail down settlements.

"The bar needs to be open-minded and willing to learn about this new institution instead of being prisoners to the old way of doing things," said Henry Perritt Jr., dean of the Chicago-Kent College of Law, who has written extensively on law and technology topics.

So what's the practical use of the Internet for trial lawyers who mostly handle auto or medical negligence cases? E-mail and electronic filing are already here, but new incarnations, such as cybermediation, are continually developing.

Many trial lawyers use e-mail every day, but how many use it to conduct substantive business with opposing counsel? Online dispute resolution is one of the newer avenues for applying electronic methods to traditional lawyering tasks.

In the past two or three years, mediators have begun using e-mail and private online "chat rooms" to conduct talks with opposing parties, while adventurous entrepreneurs have created online blind-bidding settlement services, with names like cybersettle.com and clickNsettle.com.

"The art of negotiating a settlement over the telephone is disappearing," said Michael Fitzpatrick, a personal injury lawyer in San Jose, California. Fitzpatrick said this is true not because hordes of Silicon Valley lawyers are rushing to the Internet to e-mail settlement demands and offers to each other but because of an effort by judges in Santa Clara County--and in most jurisdictions across the country--to ease the strain on the courts by mediating disputes where appropriate.

"I can't settle a case anymore without going to mediation," Fitzpatrick said.

Here's where the Internet comes into play, said Washington, D.C., mediator Deanne Siemer, a proponent of mediation by e-mail and the Web.

"Most mediators who do a fair number of cases find out quickly that it's easier to schedule things with opposing parties using e-mail," Siemer said. "I'm seeing more scheduling being done that way. But the interesting thing is that once the parties start using e-mail in this standard way, they get accustomed to that convenience and begin to discuss substance."

Most Internet service providers have private chat rooms, which can be converted into virtual bargaining tables at low or no cost. Opposing parties can "talk" about case issues and settlement sticking points from their computers while the mediator facilitates the discussion.

This may not seem like an attractive alternative to trial lawyers, who pride themselves on using body language and tone of voice as part of their negotiating technique, Siemer said. But, she noted, this posturing often gets in the way of a satisfactory settlement.

"You don't use words to convey an attitude," Seimer noted. "[From a mediator's standpoint], getting rid of that attitude is often a huge step forward in getting an agreement.

"The hook for plaintiff lawyers --the reason why they would want to use this system--is that many small firms need to get offers on the table quickly," Siemer commented. "This is faster, cheaper, easier, and more likely to succeed."

More successful than in-person discussions?

"In any mediation, the easy answer is always no," Siemer explained, adding that the act of writing an e-mail message rather than making off-the-cuff remarks in a face-to-face meeting gives parties a chance to respond more thoughtfully.

"With e-mail you invite people to respond whenever they get to it," she said. "People tend to be more informal on e-mail. It's more line having a conversation than exchanging formal documents. They also are less reluctant to tell about their position if they are sitting behind a computer screen."

Siemer said that face-to-face meetings are usually necessary during any mediation process, but including the option of e-mail as a forum for substantive discussions should not be avoided.

No-fuss settlements?

For cases that involve straightforward monetary settlements, lawyers can turn to the Web for blind-bidding services. Companies such as cybersettle.com and clickNsettle.com claim to be enjoying great success by putting a painfully simple concept to work: Opposing parties who are ready to settle write down their bottomline settlement figure and give it to a neutral third party. The third party, without divulging the numbers to the adversaries, tells them whether they are closing in on an agreeable figure.

With blind-bidding services, the third party happens to be a Web site equipped with the ability to perform a fairly simple logarithmic calculation that tells the parties whether their numbers are within $5,000 or 30 percent of each other.

Cybersettle.com and clickNsettle.com differ in some ways, but an example shows generally how they work:

An attorney for an injured motorist and a defendant insurer are about to go to trial. The insurer informs the plaintiff that it has referred the case to one of the settlement services and has placed three offers on the table.

Using a password provided by the service company, the plaintiff attorney goes to his or her computer, logs onto the Web site, and submits one demand. The computer shows whether the numbers are within the prescribed $5,000 or 30 percent margin. If not, the plaintiff attorney can halt the process or submit more demands, round by round, until settlement is reached.

Either party can initiate use of the settlement service, but typically the defendant does so, executives from both companies said. User costs vary, but they tend to run under a few hundred dollars for each party.

Ethan Katsh, a legal studies professor at the University of Massachusetts at Amherst, said lawyers should have no fear of being replaced by a computer. However, the advent of these electronic settlement services and technology in general may mean lawyers will have to adjust to new ways of working.

"As a general matter, technology begins by replacing rather simple tasks," said Katsh. "That raises the bar for lawyers' expertise. Lawyers will make money less easily by doing mechanical calculations that technology can do for them."

Roy Israel, president and chief executive officer of clickNsettle.com--owned by the National Arbitration and Mediation Corp., of Great Neck, New York--said the system takes the posturing out of the negotiating process, allowing for quicker, less contentious settlements.

James Burchetta, chairman and chief executive officer of cybersettle.com, of New York City, said that, on average, it takes from 12 to 30 months to settle an insurance claim by traditional methods. This is due, in part, to the difficulty a busy trial attorney may have in contacting a claims representative who can authorize a settlement, he said.

"You can have a settlement in three hours this way," Burchetta said of his company's service.

Washington, D.C., lawyer David Johnson, who, in 1996, helped develop an early online dispute resolution system called Virtual Magistrate, has no qualms with cybersettle.com and clickNsettle.com.

"There's significant value in having a machine be a semipermeable membrane between [opposing parties]," he said.

Collecting data

Not everyone, however, views these services as benignly as their makers. Both companies collect settlement information, including the type of case, amount of settlement, and region of the country, to form a database.

"The basic concept [of blind bidding on the Internet] is a fascinating idea," said Michael Fitzpatrick, the lawyer from San Jose, California. "But I have doubts as to whether this is a means of collecting settlement data as opposed to a way to facilitate a settlement."

Both Israel and Burchetta said their databases contain only benchmark information that is designed to help users value their cases by seeing what others have done before them.

Cybersettle.com, whose majority owner is NAC Re, a Greenwich, Connecticut, reinsurance company, said all parties as well as the public will soon have access to the database, removing fears that one party has an advantage over another.

Deanne Siemer, the Washington, D.C., mediator who is familiar with the settlement services companies, said the information collected from the Web sites is the same information that insurance companies compile on their own, based on settlements they work out.

"I don't think [the Internet-based companies] are collecting anything that would give [insurers] an advantage they don't already have," Siemer said.

Burchetta said cybersettle.com, currently designed for use by attorneys and insurance companies, will soon allow claimants to settle claims directly with the insurer over the Internet.

Is this bad news for consumers? At least one insurer, Allstate, has found that people who file claims with the aid of an attorney settle for two to three times more than claimants who do not retain counsel. (All-state's `Customer Service' Charade, TRIAL, Sept. 1999, at 42.)

Burchetta, a former plaintiff attorney, said his company neither encourages nor discourages attorney representation when using the settlement service. He estimates that 60 percent to 80 percent of claims are settled by traditional means by insurers and claimants who are not represented by counsel. Therefore, he said, there's no need to advise claimants about representation issues on the Web site.

Israel, however, said clickNsettle.com, which is meant for use by law firms and corporations, such as insurers, recommends that claimants consult an attorney before they enter the settlement process.

"I think it's a dangerous route to take," Israel said of individual claimants who decide to negotiate their own settlements. "You can't substitute the knowledge and expertise of an attorney who knows the value of a case."