Information Age: News, analysis & insight for IT & business leaders

Competition, commoditisation and client sophistication are forcing law firms to pursue technology-driven efficiencies

Given that knowledge and documents are its bread and butter, it is perhaps surprising that the legal sector has historically been rather slow to adopt information technology.

This may be because of the significance of precedent in legal culture. It may be because law firms have traditionally charged clients for their lawyers’ time, and have therefore not always been motivated to accelerate business processes.

But the backward-looking, manually managed law firm is now a thing of the past, consigned to the dustbin of history by a number of critical drivers.

One, of course, has been the recession: Although many law firms have thrived during the downturn thanks to their particular practice areas, others have suffered heavily. Halliwells, for example, once one of the UK’s top 50 law firms, went into administration in July 2010.

The recession has only accelerated the second driver, namely the technology-led commoditisation of legal services. The ability to assemble ever more sophisticated legal documents automatically means that many of the legal sector’s traditional revenue sources are under constant price pressure.

A related development is the increasing use of fixed fees for certain categories of legal work. Once a fee is fixed, the firm’s profit depends on its ability to provide services cost effectively.

A fourth driver is the growing technological sophistication of clients. Not only are they increasingly concerned with the way in which their information is handled by their law firms, clients are also demanding instant access to both documents and lawyers.

These drivers are forcing law firms to become more businesslike and more competitive, and to focus on a quality
that may not have been prioritised in the past: efficiency.

“Law firms are under such pressure from clients and other firms that you’ve got to find ways of being as efficient and as productive as you can,” says Derek Brookes, IT director of corporate law firm Manches.

For the IT departments of law firms, that means making information as easy for lawyers to access as possible and removing from their workload anything that can be automated.

Silo breakers

Much of what a law firm does is rather different from conventional business operations. Historically, therefore, the legal sector has been served by specialist software vendors selling niche applications. These include practice management systems (used to manage the finances of a law firm) and matter management systems (used to manage the documents and resources associated with a particular case).

The legal software sector has not seen the same supplier consolidation that has defined the mainstream enterprise applications business in the past ten years, which means that vendors and their products are still arranged in functional silos. This in turn means that law firms’ information assets are often similarly siloed.

According to Nick Taylor-Delahoy, IT director for commercial law firm Mishcon de Reya, this gets in the way of what he describes as ‘knowledge arbitrage’, the ability to get the right information to the right lawyer at the right time for the client.

“The knowledge that you have locked away in your IT systems is an extremely valuable resource that you need to get hold of and manipulate in sensible and meaningful ways,” he says.

However, Taylor-Delahoy laments, the matter-centric systems that the software industry has sold constrain firms to a case-by-case view of their own information. “Instead of having a matter-centric environment, we want to have an X-centric environment, where X can be a client, a referrer, a partner or an individual fee earner. We want to design our systems so that we can slice and dice our knowledge and information in any way the lawyers need.”

To achieve this, Mishcon de Reya is currently undertaking a systems integration project that will help it to “pull together all this disparate information into sensible pages of useful knowledge”.

Part of this project sees the firm combine search technology from legal software provider Recommind with Microsoft’s content management and collaboration platform SharePoint to create a single portal for key information. The resulting system, Taylor-Delahoy says, will allow a fee earner to find as much information associated with a given matter as possible, including relevant legal precedents, financial details of the case and whether any other fee earners within the firm have relevant experience.

Continued...