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ADVOCATING FOR TECHNOLOGICAL CHANGE IN LAW FIRMS

A recent article noted that technology is now a “differentiator, and a key to future profitability.” In fact, for countless law firms, efficiency and the ability to tap into the firm’s collective intellectual property through the use of technological resources will make the difference between prosperity and mere survival in the next few years.

Our observations in working with smaller and mid-sized law firms (up to about 100 lawyers) are highlighted by the following:

•    Law firms and individual lawyers often fail to grasp what new technology means to them in terms of their own practice (which is the basis by which most will make their decisions).

•    Because of this lack of understanding there is an unwillingness to pay for important software developments, let alone new technology.

•    Those non-lawyer individuals who are in control of the software choices (upgrades, etc.) are not always individuals who understand technology from the manager/user/lawyer perspective.

•    The relationships between those individuals and their suppliers are such that they are far more likely to buy an upgrade for already existing stand-alone software solution (that is no longer useable or plays a negligible role in real technological change) than they are to help plan for the firm’s future needs.

Demands today for needed transparency in the practice in order to achieve efficiency and avoid professional liability claims go well beyond what most law firms employ. The Windows® platform provides the barest of basics for word processing, a calendar and electronic mail. For many lawyers that is, in fact, the sum total of their interest level. Unless the firm is fortunate enough to have a “technology partner” with substantial sway and/or a worldlier non-lawyer IT staff, the firm is stuck in a revolving door with little opportunity to “sell” change in the firm.

Demands for efficiency, predictability and transparency in the practice of law now “make tangible” the connection between technologies, the law practice and business goals. Lawyers are a tough sell in terms of opting for any change whatsoever. Consequently, to advocate change in a law firm is an uphill battle and it is generally more difficult in smaller firms. There are ways, however, to make a case for new technology. Here are some ideas on how to accomplish that end.

Make the argument for efficiency by discussing Knowledge Management (the current watch-word) including the issue of efficiency, practice standards, cultural integration and the ability of the firm to perform at the highest level on a consistent basis no matter which attorney in the firm is involved. Making the case to very senior partners that technology will help other lawyers rise to their level of acuity generally works well with a senior lawyer who wants the firm to continue and to prosper.

•   Evaluate technology on the basis of what the firm will accept but that will extend the firm out so that you are at least close to what the more sophisticated software will provide.

•   A great deal has been discussed and is being written about what has been termed “Value Billing.” That is defined by suggesting that the actual value of the lawyers’ services has little in little in common with to the actual time spent (strict hourly billing). Making the argument for efficiency and utilizing the firms’ extant intellectual property can often be used as a means to convince lawyers to spend money in order to make money. It isn’t difficult to make the case (as an example) that $100,000 spent will equal a return of many times that amount in the next few years by utilizing value billing made possible by appropriate use of the new technology. In fact, forty lawyers billing an average of only $350,000 (bare minimum) a year with an increase of only 5% in billings value, nets nearly that same $100,000 spent the first year alone!

• Take time to "connect the dots" between your technology tools and future profitability. Be sure that presentations to partners are jargon-free, so that everyone can grasp what you are saying. There is no magic involved and no “slight-of-hand”. In the same vein, stress the new technologies that empower your firm's ability to monitor matters and expenses. Understand how technology realizes the firm goals of expense to income ratio. Using financial data is often effective because it can serve to dramatize the benefits of new technology in terms everyone can understand.

• Client technological change is sometimes a reasonable means by which to convince lawyers in the firm to opt for their own change. Often times, in fact, when a client wishes to be billed using a particular extranet program, for example, the firm is put in a position of having to upgrade its own tools simply in order to comply with the client’s needs. That same lesson or methodology can be used absent a particular client’s requirement by simply introducing the subject of technological change by the client as reason enough for the firm to upgrade its own. Marketing the firm’s services often begins today with a pronouncement of the firm technological advantages. The argument sometimes works in the approach to marketing inside the firm. That is to say that if that argument is to be made to potential clients that the firm is on the “cutting edge” then the firm must actually be prepared to perform in such a way as to convince the potential client that they are in fact “ahead of the curve”. Make technology itself into a marketing tool which the lawyers can understand as a means of increasing their ability to acquire new clients.

Although it may be an uphill battle, lawyers are acutely aware of the need to be competitive and to demonstrate to clients that the firm can be trusted with the client’s best interests, therefore an argument which centers upon the efficiency and the quality of the practice will generally succeed. Coupling that argument with a demonstration of how the changes will benefit the firm’s bottom line should put the argument “over the top” and provide the impetus to get things moving in any law firm.

Thomas Berman

Thomas Berman is involved in all phases of law firm practice management, including Mergers and Acquisitions, Systems and Structure, Partnership/Shareholders Agreements, Planning, Succession, Compensation and of course, Risk Management. For the last twenty two years, he has worked with well over a thousand law firms of every kind, a single lawyer to several hundred lawyers; Intellectual Property to Plaintiffs Personal Injury Law. He can be reached at: tberman@bermanassociates.net

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Filed Under: Technology

About the Author: Thomas Berman is involved in all phases of law firm practice management, including Mergers and Acquisitions, Systems and Structure, Partnership/Shareholders Agreements, Planning, Succession, Compensation and of course, Risk Management. For the last twenty two years, he has worked with well over a thousand law firms of every kind, a single lawyer to several hundred lawyers; Intellectual Property to Plaintiffs Personal Injury Law. He can be reached at: tberman@bermanassociates.net

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