Getting beyond mere case and matter management to truly effective overall business management is the objective, and evolving technology-driven options can help firms reach their goals.
COMPLEXITY AND INNOVATION IN LEGAL
Law firm managers and attorneys, like most businesspeople, are living in an increasingly complex, noisy environment where technology innovation and its effective use are accelerating. There are tools available that are extremely helpful for increasing efficiency and profitability and operational optimization. The challenge for many modern firms is how to define their strategic technology direction and select the best solution.
Managing all the business aspects of a law practice, while at the same time managing cases, clients and the workload, requires a broad skill set that increasingly involves technology decisions. In fact, nearly every activity in managing the business aspects of a law practice involves technology:
- Customer relation management (CRM) for client acquisition, relationship management and nurturing referrals
- Client intake process with automation
- Document drafting and filing
- Communicating efficiently with shared visibility in the firm
- Tracking billable activity and generating invoices
- Tracking receivables, accepting online payments and managing cash
Rapid innovation is creating excitement in the legal technology space. After years of steady progress, the past five years have witnessed skyrocketing innovation, in part driven by private equity investment firms seeing opportunities in the digital transformation that is revolutionizing the practice of law.
GROWING DEMAND FOR TECH
Client demand is a key driver of tech adoption. We hear from many firms that the drive to adopt new technology often starts with client expectations of upgraded experiences. Requests for a secure communications portal, case status alerts, digital signatures and electronic payments often come from clients.
Compliance obligations also drive demand. Growing complexity in data protection and privacy regulations requires a technology solution to help organizations identify and protect sensitive information and respond to consumer demands for control of personal data.
THE COST OF DOING NOTHING
Many firms will be pulled by client demands or compliance requirements into technology upgrades or new initiatives. Embracing technology may well be a critical factor in determining whether a law firm thrives or plateaus.
“While it may seem cheaper and easier to do nothing, not deciding is still a decision — and one that carries a number of costs and risks.”
Why now? Why not wait? Fight the natural urge to delay expenditures or postpone taking action. The time and cost of implementing a major system upgrade may be daunting, but too many people overlook the costs of doing nothing — namely that upgrading and maintaining old systems can be more expensive than investing in and migrating to a new solution.
While it may seem cheaper and easier to do nothing, not deciding is still a decision — and one that carries a number of costs and risks. Consider these unforeseen consequences that may come from a decision to do nothing:
1. Malpractice Claims
In a data-intensive operation, having information organized and accessible is important to avoid costly mistakes. Missing a deadline or court appearance without a continuance can end a client’s ability to pursue justice, and negligent failure to protect against such mistakes can result in a malpractice claim.
There are smart calendar tools that can track all deadlines for all cases and offer alerts or reminders of changing status.
2. Data Breaches or Cybersecurity Incidents
Legal organizations often don’t appreciate the inherent risks in running outdated software and systems when it comes to assuring the security, availability, confidentiality and privacy of clients’ data.
As guardians of sensitive client data related to business negotiations, assets and debts, and trade secrets, law firms’ data vaults are valuable targets for hackers. A cyberattack will result in downtime and can incur loss or exposure of important client information. Beyond the steep costs related to data recovery and ransom payments, a security incident can result in serious harm to a firm’s reputation and ability to retain existing clients or win new ones.
3. Missing Out on Top Talent
Outdated systems and ineffective tools sap job satisfaction, impact morale and increase the risk of losing key people. Staff turnover is disruptive for clients and extremely costly for firms. The departure of a valued attorney can cost a firm half a million dollars.
A robust and secure infrastructure supporting remote workers is also important for attracting and retaining new talent in a competitive market. Employees have greater expectations for work-life balance, flexible schedules and remote work options. Firms that offer the policies and technology to support this will have access to a much larger pool of talent.
CREATE A PLAN OF ACTION
Work with attorneys and other stakeholders across the firm to outline priorities and identify potential solutions for assessment. Designing the tech roadmap for your firm will take some time, but it’ll be worth the effort. There isn’t a one-size-fits-all solution, and this certainly isn’t a check-the-box, cookie-cutter technology adoption process.
A needs analysis with a technology vendor or consultant is a good first step. They will conduct a technical assessment to understand the firm’s current systems. They may outline options or recommendations for replacing the existing systems.
Innovative tools in practice management, accounting and finance, document automation, and collaboration are helping law firms grow and provide more value to clients. Stay a step ahead of clients and the competition, and don’t be caught unprepared by the costs of doing nothing.