Feature

posted 27 Jan 2003 in Volume 5 Issue 8

Information technology: It’s all about working practices

What do most lawyers want from IT? A likely response would be improvements in productivity, without too much disruption. Neil Cameron, of Neil Cameron Consulting, argues that such an attitude fails to appreciate the real difference IT can make to working practice and, ultimately, to the success of the firm.

As a lawyer, consultant and business adviser, with many years experience in advising law firms, I have found that I have spent most of my time talking to clients about technology. They want to know the root cause of most of the problems they have in procuring, implementing and truly exploiting new systems – working practices, procedures, attitudes and so on. The answer lies in understanding that many law firms are:

Implementing new systems and processes so that they operate in the same way as the old ones;
Refusing to believe that what commercial lawyers do can in any way be characterised as a process.

Both of these things cause an immense amount of wasted opportunity and result in the emasculation of very expensive and advanced IT systems – especially in law firms. They both relate to the fear of, and refusal to, change the status quo. I would like to examine these two issues in more depth using some examples.

Let’s take the first one. This is the old automation versus innovation debate – I say old because it is as old as computing itself. Early computer-system users would relish the fact that the new system was going to fundamentally improve and speed up the way that they work, as long as it didn’t involve too much disruption. Not much has changed.

I spent years attempting to drag users gently and persuasively towards a bold new dawn, where all processes are revisited and revised, new ways of working are enthusiastically adopted and all the potential benefits of new systems are exploited. I have realised, however, that this method does not work.

Several years ago, I thought I’d try a new tack. I was bold and brusque and told a law firm that they would only get the benefits they expect if they went after them. I managed them in a way I thought was aggressive, and the project apparently went very well. Looking back two years later – in my absence – they backtracked and made the same mistakes as all the others, although perhaps not as badly.

Now I do things differently. The decision makers of the firm and the prospective users are sat in a room and told:

This is a massive investment and will only be worth the money if you put the right amount of effort into it;
All assumptions as to the utility of existing procedures and processes are to be, and should be, questioned;
Your working life will change completely and forever.

Let’s hope things turn out differently this time.

Practice-management system implementation often goes wrong in two of the high-impact areas on the coalface of legal service provision: time recording and billing.

Let’s start with time recording. Everybody knows that lawyers fill in time sheets, either daily or weekly, either on paper or on screen. Well, “everybody” is largely wrong. What most lawyers actually do is maintain details of the work they have done throughout the day, on scraps of paper or occasionally a time sheet, and then they make their secretary enter the details accurately with all the additional details required by the system, such as accurate matter numbers.

This method is just as often used by lawyers in those firms that have online time-recording systems, including handy clocks that actually time how long an activity really takes – as opposed to the lawyer’s guess at the end of the day or the next.

Why do they do this? Because this is what they used to do before the new system was implemented.

There are firms with large numbers of fee-earners using their expensive online systems properly, but they are in the minority. Such change is usually achieved due to a massive level of change management, training and pressure from senior management. The majority of lawyers in other firms continue doing what they did before, and simply hand the same old paper output to their secretaries to be entered, by them, into the expensive new system.

Somewhere along the line they have missed the point. The new interfaces and applications let them enter the information directly into the system using about the same level of effort as it currently takes them to scrawl on their pieces of paper. Furthermore, the direct entry method, the way the system was designed to work, lets them have a direct relationship to the information, to have it at their fingertips, to add extra information, such as narrative, quickly, accurately and easily. The time they enter is also entered immediately, and – if posted – is directly available for billing.

In regard to billing, practice-management-system vendors have developed highly sophisticated methods of online billing that can be used to improve the standard billing process in law firms.

On one hand that is a fairly easy target – there are few administrative processes known to man that are as inefficient as the average law-firm-billing process – inefficient, inaccurate, abstruse, obtuse and downright mysterious as it often is.

The idea for a bill is usually generated by the third memo from the managing partner, drawing attention to the mountain of aging work-in-progress (WIP). This will cause the partner to generate a billing guide; or rather will cause the partner to ask a secretary to get one. When it arrives, the moment of guilt has passed and some urgent work has arisen, so it is put aside for several days or weeks. Statistically, most billing guides do not result in the production of a bill.

Some time later, the urge to produce a bill will be reinvigorated, possibly after another memo. The old billing guide is out of date, so a new one is ordered. The first thing that is apparent from this billing guide is that there is a bunch of missing time, from fee-earners who are late with time sheets. The recalcitrants are chased and a while later they have caught up with their missing time entries. Another billing guide is needed. Now we are getting somewhere, but not fast.

On a large and complex matter, where multiple departments may be managing the work, and where particular fee scales must be considered and fee budgets applied, the average biller will need a calculator and the file. After some strenuous mental effort, the billing guide will be scrawled over with manuscript amendments and instructions – write-offs, write downs, revaluations, instructions to leave WIP on file and, most important of all, how to apportion the fees between the various fee-earners who have worked on the file. The actual tax invoice, with high-level narrative and accompanying letter, still needs to be generated.

In some cases, and woe betide the biller in these circumstances, detailed accompanying narrative for each time entry is required. If the information for this detail has not been supplied with the time sheet, it is very time consuming to prepare it now, and prone to embarrassing inaccuracies.

Depending on the law firm, drafts and forms may also go back and forth to the accounts department. Finally, the invoice, postings, letter and maybe the detailed narrative all come together and we have a bill. It has taken too long to prepare, is a process prone to inaccuracy, and may not meet the client’s expectations.

And who has been doing all this work on the bill? Well, in many firms, much of the work in preparing the bills is actually done by our old friends, the secretaries. The partner will, of course, sign the bill, but the secretary will work out much of the preliminary work and the initial bill draft. This renders the process even more inefficient, as the people analysing the billing-guide numbers and preparing the bills, should be the same people that are managing the work. They need feedback as to progress and structure, would benefit from a direct relationship with the information and bill-drafting process, and the shape, design and acceptability of the completed bill would benefit from their direct attention.

US lawyers are even worse – “I am too busy to bill”, they say – implying that they do not bill. Of course they do, the secretary or assistant will do the preparation, but there is, I sincerely hope, an irreducible minimum of mental effort that has to be applied by the person in charge as to what should, and should not, be billed.

A new system, they say, will not change this habit, it will only make their delegates’ work easier.

I fundamentally disagree and this is my argument: new procedures, processes and IT systems can provide an easy-to-use direct mechanism such that, with the same expenditure of mental time and effort it would take to explain what was to be done, and check what had been prepared, the whole billing process could be finished.

There is another, even more powerful benefit. The partner has a direct relationship with the information, has a deeper understanding of the work, who is doing it, what is getting done, what value it is to the client, what the bill should include and exclude, and what it should say to speak to the client about the value of that work. It is those bills that get paid faster.

I have a fear, however, that even if my argument was proven correct, and it was shown that it was more efficient and effective to do it oneself rather that delegate the billing process, many partners would still prefer to pass the work on rather than do it themselves. There is no particularly good reason for this and the Greeks would perhaps have called this hubris. It is a powerful force against change, and thus against benefits realisation of new systems. The more senior the person, the more powerful the force. We shall meet this again further below.

These new billing systems allow a firm to sweep away the inefficiencies of the old billing process. They allow the user to be presented with on-screen billing guides that resemble pre-drafted bills, they take into consideration all the special billing arrangements, they remind you of fee budgets or fixed-fee levels, they integrate and automate the production of the accompanying letter and detailed narrative – they do all this and more. They also allow the process to be completely paper-free right until the final production of the bill.

Sounds good, doesn’t it? Most firms set out with the firm intention of implementing their new systems in this way, casting aside the ancient ways and moving forward boldly.

They rarely succeed however; bit by bit the ambitious plans get watered down, the suggestion is made that some of the old checks and balances should be retained – checks and balances that were only instigated 20 years ago to obviate the manifest weaknesses of old, poor systems. It is suggested that perhaps the draft should be printed out for review, maybe the preliminary work could be drafted by the secretary, and so on, and so on. In the end, an endemic resistance to change emasculates the visionary process, and the ego of senior staff is massaged by the acknowledgement that they do not have to stoop to the level of ordinary users and actually do the bills themselves.

In some truly visionary firms, the drafting is done by the system because it knows the charging basis and the budgets. The lawyers can do the finessing speedily and directly, producing a perfectly crafted bill to go out of the door in record time.

Now I come to the other key issue. Is what lawyers do capable of being described as a “process”? Most lawyers would agree that high-volume, low-value, factory-type legal work can be so described – but that this does not apply to what they do.

Why is this important? It is important because tools are now becoming available that can be used to assist the efficiency, effectiveness, accuracy, risk management and delegatory capabilities of almost all kinds of legal work, not just personal injury litigation and debt collection, but all kinds of legal transactions.

The high-volume, low-margin work has had so-called case management technology applied to it for some years, and with some success. In fact, it would be very difficult to contemplate making money out of personal-injury litigation in the current climate without an effective case-management system. It is obvious that other work that is not as routine and predictable is less easy to automate, but it is by no means impossible, with the right tool. However, the average commercial lawyer will tell you what they do is different in nature, not degree, from such work, and could not possibly benefit from such technology. “Everything I do is different,” “there is no process,” “our work could not possibly be amenable to such systematisation.” I do not believe this for a second.

What is needed is a more flexible tool, with a different approach to matter management, which can cope with transactions that, while they have basic shape to them, can change at any time, and are not as regulated as, say, personal injury work.

Such tools now exist; they are in the first generation and will undoubtedly improve, but they could be used now to improve efficiency, client service, client and third-party collaboration, transparency, risk management, speed and throughput.

The high water mark of the “difficult” areas of legal work is probably mergers and acquisitions; but to say that there is no process involved here is to fly in the face of reason. It may not be as amenable to flow-charting as some other legal work, but it can be tamed.

The tools I refer to are Legistics and Infographics FloSuite. Legistics is purpose built for M&A due diligence work, was created by two M&A lawyers with large law firm experience, and has just been purchased by PLC for further development and integration of their IP.

Infographics FloSuite is a more generic tool, and as such it requires a degree of imagination to see how it could help in such work.

The fundamental problem is that the corporate lawyers refuse to see how such technology could possibly be applied to what they do. They regard it as a belittling of their specialism and skills to think that they could. This is a major hurdle to overcome, but the first firm brave enough to bite the bullet, put these prima donnas in their place and implement such a system, will succeed. That firm will also steal a real competitive advantage over others, for possibly years.

I may be wrong about this, but any law firm has to be firmly convinced I am mistaken, as if they fail to follow up such potential, they may find themselves gambling on their future. Good luck to them.

Neil Cameron runs his own legal technology consultancy, Neil Cameron Consulting. He can be contacted at: neil@neilcameron.co.uk.