Is Your Law Firm’s Technology Eroding Your Bottom Line? Here’s How to Prevent It
A reliable assessment process is the first step to ensuring technology will keep pace with your firm’s needs.
Recently, a colleague shared a confession with me. While her law firm of 30 attorneys continues to gain new clients, efficiency has plummeted. It’s taking longer to finish tasks that were once simple to complete. Lawyers and staff complain, and ultimately, the firm’s bottom line is suffering.
I’ve seen this situation many times before, and normally it’s a sign that the law firm has outgrown its technology. A firm expands. Attention naturally focuses on clients and away from IT. But processes and roles become more complicated, and technology doesn’t evolve. Your firm is eventually left with clunky technology, expensive maintenance costs and a high level of frustration.
How can your law firm avoid this predicament? I recommend a three-step approach that ensures technology will keep pace with your firm’s needs. It includes an assessment process, enacting a plan and continuously revisiting and refreshing the technology vision for the firm.
The Assessment Process
The assessment process starts simply: figure out what is working and what isn’t.
- What types of technology is the firm using?
Create a complete list of technologies your firm uses daily, including hardware, software and cloud services. Add the costs of these technologies and services. Determine if all of the technology is necessary and supports the firm’s needs. For example, will your business-specific applications scale up to match your firm’s growth? Determine the stability and reputation of the software vendors you currently work with. Will they be around in five years? Do they have a reputation for innovation? If you’re unsure, consult with legal applications specialists to gather more intelligence.
- What do other members of the firm think?
Ask attorneys and staff members to share their perspective of the firm’s technology. Can it do what they need it to do (and do it well)? Does it offer mobility, flexibility and ease of use? Request their “technology wish lists” as well.
- Is the firm’s technology secure?
With increases in compliance and security requirements, evaluate your IT infrastructure and software to see if it offers the safeguards needed to protect your firm, such as multifactor authentication and encryption. Law firms are prime targets for hackers due to the large amount of confidential data collected and stored.
- How does IT fit into the firm’s long-term plans?
Create a technology vision plan and road map that aligns with the firm’s business plan. Your five-year IT plan should incorporate considerations such as:
- What processes can be automated to make the firm more profitable?
- How would you like to see your firm operate from a technology point of view?
- Are there technologies you would like to add?
- What’s the road map for this journey?
- If the firm doesn’t grow as expected, can you scale down when attorneys retire or break off to start their own practices?
Once you have developed the five-year IT plan, you can determine what types of structures will support it. Is it viable to keep your IT on-site and continue with extraneous costs for hardware, maintenance and IT consultant support? If not, you may explore alternatives like the cloud. By outsourcing your firm’s applications, you can decrease maintenance costs and add consistency and predictability to the budget process. Remember to outline goals so you can define what success will look like and track its progress.
As the firm grows, IT needs and costs will also increase. A technology budget will help you ballpark what expenses to prepare for now and long term. Creating an entire five-year budget will be challenging since you don’t know exactly how your IT needs will evolve, but it should have the ability to scale up or down as needed. Perhaps your technology can accommodate the addition of two or three new firm members, but will it support even more over (for example) a five-year span? Will you have to buy more expensive licenses or invest in IT consultants to set them up? Conversely, if your firm consolidates team members, can you “right-size” your technology investment to reflect that?
In the next post, I will detail the second portion of this project: implementing and executing your IT plan.
Joe Kelly is the founder and CEO of Legal Workspace, a service that offers law firms virtual computing workspaces in the cloud.