The Internet increasingly represents a massive challenge to law firms, and if lawyers ignore the demands of clients to provide the latest on-line services, their credibility may be called into question.But while it is imperative that firms invest thousands of pounds in new technology to keep up with their competitors, the expenditure will be wasted unless clients are consulted first and asked what they want.

This is perhaps most relevant to law firm Web sites, which are still in their infancy so far as being more than just an on-line brochure.A recent survey of the top firms' sites by Horwath Consulting found little signs of interactivity and generally significant room for improvement (see [2001] Gazette, 14 June, 20).

Worse still was how many search engines failed to come up with the firms' sites.Derek Southall, corporate finance partner and head of strategic planning with Birmingham firm Wragge & Co, says: 'We have invested in systems to focus on clients so we can deliver what they want.

The worst thing is to invest in technology for technology's sake.

We spend a lot of time ta lking to clients to know what they want before investing.'He says they have an obligation to spend the money effectively.

The most apparent -- and surely one of the most important -- aims of law firms' Web sites is to advertise their services and attract new clients.London firm Olswang, known for its IT and media work, has to show its clients that it is not behind in their field.

Its Web producer, Piers Thornewill, says: 'The main body of the site has been developed as an information portal, adding service value to our existing and potential clients by providing them with timely industry information, general legal news such as case reports and Olswang-specific information such as brochures and newsletters.'He adds: 'We've tried to break the mould of other law firm's Web sites by being more interactive, interesting and user-friendly -- and this philosophy has been borne out in the positive client feedback and industry reviews we have received.'So, how can a Web site become interactive? Most large-scale law firm Web sites employ the use of an Intranet and Extranet.

An Intranet -- the exploitation of Internet technologies within an organisation -- is not a particularly innovative tool and is becoming a common feature of Web sites.Extranets are password-protected sites which permit clients to access documents, financial information, billing records and so on in relation to a particular transaction.Wragge & Co is going further.

It has a pilot in place which, according to Mr Southall, is 'a generic Extranet site for our existing clients, providing details of foreign lawyers on request, checklists and so on.

It is only available for existing clients'.City firm Reynolds Porter Chamberlain has a similar aim.

Sue Miller, head of client relations, says: 'Our Web site functions jointly as a firm showcase and an information conduit for our clients.

It contains all our publications, details of our seminars for clients, and specialist weekly or monthly updates.'The firm has also developed CaseMan, a secure Web-based interactive reporting system for its insurance clients, which is not currently accessed via the Web site but a link will soon be available.Ms Miller says: 'CaseMan is at the cutting edge.

Several insurers are using it at present and we are currently taking it to the next phase.

As well as an interactive reporting system, it will be able to collate claims-related data for our clients.'Deal rooms are being developed and utilised across the board, pioneered by the likes of Clifford Chance and Allen & Overy.

Wragge & Co is working with some development clients to post all documents and transactions in a deal room, to enable clients to gain access to the process of their transaction and to enable parties to the transaction to post comments during the process on a secure basis.It can be a form of negotiation -- without the physical presence of the parties in a boardroom.

Mr Southall says this will save on secretarial requirements and photocopying.City firm Theodore Goddard is in the process of developing an on-line deal room for clients.

Marketing executive Clive Hocker says: 'Clients are able to inspect, augment and change documentation, correspondence and so on.

This has the potential to save a lot of time as it makes everything accessible from the client's own desk.

In addition, once a specific deal is closed, the archive can be written to CD, thus providing a client with a definitive record of the transaction.'In addition to the deal room, Theodore Goddard is developing French and German language sections of its W eb site for European visitors.The global aspect of legal services is being recognised in some quarters as an imperative part of on-line services in major law firms.

Global player Baker & McKenzie has ensured that its site is rich in content on the European front.Ross McKean, associate solicitor and IT specialist, says: 'Our site includes a vast amount of content on e-commerce, including the recent addition of a 258-page guide to doing e-commerce in Europe.

We also operate various alert services.

Probably the most popular of these is the Baker & McKenzie global e-alert which summarises international developments in e-commerce law and is a free subscription service.

We have been instructed on a number of large IT projects as a result of our weekly e-alerts.'In addition, Baker & McKenzie is encouraging more and more clients to use Extranets to help manage their relationship with the firm.

Mr McKean says: 'They are particularly useful for large multi-jurisdictional reviews for clients with multiple current active projects.

They are also a very effective marketing tool which we often use when pitching for new projects.'Unlike most firms -- which tend to have one or two people working part-time on their Web sites -- Baker & McKenzie employs a large team of IT professionals to support the requirements of the firm's on-line services.

Mr McKean says fee-earners also take an active role in developing the IT systems.It is just as well that fee-earners are actively involved when some firms, such as Clifford Chance, are using an Intranet for training purposes.Its e-learning initiative was launched last month, and allows trainees and lawyers to download onto their desktops more than ten hours of presentations, including links to the Intranet and Web sites.Feedback from trainees and lawyers piloting the system is said to be good, and the costs savings are apparent as attendance at face-to-face courses will not be necessary.David Adams, head of finance education at Clifford Chance, says: 'E-training is an important complement to the traditional classroom-based training.

It gives our lawyers around the world the flexibility to choose when and where they undertake the courses, and to determine the pace with which they progress through each one.'However, it is acknowledged that the advance of on-line services is a means to an end, not an end in itself.

Ms Miller emphasises: 'Web sites are a great way of communicating and an essential part of any modern law firm's communications toolbox.

However, they are only one aspect of client relationship building.'She adds: 'It is important not to lose sight of the fact that it is the quality of the actual service provided, and the communication between lawyers and their clients, which is the key to maintaining successful client relations.'