Matter-centric management: IT hitting the bottom line

Law firms have traditionally invested in systems to manage various areas of the business, whether it be client relationships, document management or accounts. However, a new concept has arisen, business-process management (BPM), which focuses on integration as the key technology challenge of the day. Jonathan Swan, IT director at Browne Jacobson, assesses how BPM can move technology from back to front office, allowing fee earners and secretaries to seamlessly engage in processes that connect different systems through a uniform interface.

Matter centric, or case management, has traditionally been in the vanguard of high-volume, lower-value work types, such as conveyancing, debt collection and personal-injury litigation. Increasingly, however, the underlying principals (and some of the technology components) are being successfully applied to higher-value, non-routine work types. Perhaps not surprisingly, the highly descriptive but unsophisticated terms ‘case management’ and ‘workflow’ required an upgrade, resulting in the creation of the terms ‘matter-centric management’ or ‘business-process management’ (BPM).

BPM provides the opportunity to measure tangible benefits from IT and adds value to investments already made. While similarities exist between traditional case management and BPM, there are some significant differences, which need to be understood before embarking on a BPM project. This article draws upon the experiences of BPM at Browne Jacobson, which led to winning the The Managing Partners Forum’s European Practice Management Award 2003 for Best Use of Technology by a UK Law Firm.

What is business-process or matter-centric management?

According to Charles Christian, editor of the Legal Technology Insider newsletter: “Matter-centric computing is another impressive name being used by some suppliers to describe a relatively simple concept: how to create the digital equivalent of the old manila file, where all the documents are located in one place, rather than spread across different IT systems. If you have an integrated case and practice management system, then you are already a long way down this road.”

Neil Ewin, chairman of Visualfiles, adds: “Many law firms are now close to the full collection of ‘essential’ applications; the opportunity lies for process-driven applications using advanced integration techniques to properly bring these applications together in a single integrated system that truly releases the benefit of all components to the organisation.”

Whatever the definition, BPM initiatives must be sympathetic to the fact that not all work types can be workflow driven. However, there are elements of administration, quality control and procedure, which do lend themselves to system support and are common to virtually all work types. Support systems, therefore, should be specifically focused upon supporting process fragments rather than an end-to-end process. This approach helps reduce the commonly perceived ‘threat’ in terms of automation (a key factor in terms of resistance) often felt by lawyers, and provides them with functionality, which delivers benefits that they can immediately identify with.

Browne Jacobson’s approach was to develop a matter-management solution for higher-value, lower-volume and non-contentious work types. Features include document management, time recording, automated billing, rules-based document assembly, document management, contact management, precedent libraries and system-assisted processes, for example, matter inception, money laundering, conflict checking, referral tracking, cost estimates and alerts, status reporting, and routine workflow.

The system, which was designed for and by lawyers, succeeded due to its simplicity, relevance and focus upon the universal attributes of legal process. Figure one sets out the Browne Jacobson BPM technology framework.

Systems and process integration represent the key technology challenges and, where this is achieved, a basis for change is created. In the past, too much emphasis has been placed on the best-of-breed fallacy. This assumed that once the right legal office technology was in place, given training and support, full utilisation and benefit would follow. BPM is a means through which synergy can be achieved between different office systems. By focusing on outcomes, process, people and systems, in that order, there is a catalytic effect in terms of overcoming resistance to change. Behavioural shift is achieved by moving the focus away from how fee earners and secretaries should use technology to facilitating how desired outcomes can best be achieved.

Stuart Clarke, head of professional claims at Hiscox Insurance Company says: “We have developed an online attitude and expect the same of our service providers. Wherever possible, we seek the streamlining of workflow processes and the automation of routine tasks. Browne Jacobson empathise with our attitude towards technology and have collaborated with us to develop systems and procedures that save us all time and money – after all isn’t that what office automation is all about?”

Business value of BPM

There has been much discussion in recent years in terms of the ‘IT productivity paradox’, which debates the link between investment in technology and organisational performance. While proponents of the paradox argue that the link is inconclusive, others take the view that, while often difficult to measure benefit in ROI terms, technology investments do provide many forms of intangible value. In the legal profession, measurement of the business value of systems, such as document management, CRM, knowledge management, portals and client extranets, are notoriously difficult to quantify in terms of business value. This is largely due to the often intangible nature of perceived benefits, such as improved value, client service, quality, risk management, security and service differentiation. The problem is compounded where resistance to change undermines usage of such systems. Value measures are a grey area within legal IT, as evidenced by the PA Consulting/Legal IT Survey of 2002¹: “While 80 per cent of business respondents and 90 per cent of IT respondents believe that their firm receives good value for money from its IT expenditure – this opinion may not be fully supported by fact or measurement as only just over 50 per cent of firms measure the value or level of IT service received.”

In this context, BPM enjoys a differential unlike many of the aforementioned legal technologies, in that it lends itself to more tangible value measures. For example, through the automation of the bill process at Browne Jacobson, a typical 460-per-cent speed increase was achieved when benchmarked against previous methods. Such tangible value measures are consistent with anecdotal feedback, as one secretary said: “I used to spend days doing bills, now it only takes an hour or so – it’s great.” As part of a wider benefit-assessment exercise, research was undertaken, which found that:

Aspects of fee-earner productivity increased by up to 74 per cent;
Aspects of secretarial efficiency increased by 222 per cent;
Lawyer to secretary ratio increased from 1.7 lawyers per secretary to 2.13;
There was measurably increased time recording by up to 17 per cent.

Such hard-edged measures have gone a long way to demonstrate the business value of BPM within the firm. They are powerful forces in driving change and stimulating an embracing attitude towards technology, while also reducing resistance.

Derek Bambury, partner and head of business and professional risk at Browne Jacobson, said: “The use of technology to enhance client service and improve our overall efficiency of operation is a clearly stated business objective that I am confident to say we have delivered on. Moreover, the change has been brought about in such a way that there now exists a positive attitude and demand-led culture towards IT, since the benefits are clear and measurable.”

Business challenges

As BPM technology moves away from high-volume, low-value work types, it needs to develop its own identity and value proposition. Resistance may occur as a result of fee earners making assumptions about the technology, based upon preconceptions that their work is radically different to the high-volume, low-value arena. BPM projects need to dispel such assumptions at an early stage and promote themselves as business-support solutions, not prescriptive, standardised case management. Measured-benefit assessments can have a significant impact here and few partners would dismiss metrics that illustrate a 17-per-cent increase in time recording. After all, if converted into paid bills, this would equate to £3.4m additional net profit on a £20m turnover.

Along with the drivers for change, there are also other resisting factors, which need to be understood and planned for if change is to take place. It does not follow that all fee earners will readily identify with the ‘do more in the same time’ premise of BPM. Although more fixed-fee arrangements are anticipated, the hourly rate remains the predominant basis upon which legal services are charged for. In some respects, within less progressive firms, time-based charging might act as a disincentive to achieve efficiency gains, since less time spent might be regarded as less time charged.

Persuading fee earners of the merits of being able to produce more work in the same time by changing established business habits requires effort. Despite benefits being clear and measurable, an additional stimulus is needed to engage fee earners and secretaries in change, and the business needs to select an appropriate benefit-realisation strategy to unlock the potential value of BPM. This will of course be linked into the firm’s business model, but some questions to ask might include:

If the business is seeking to compete on cost, will savings through efficiency gains enable us to be more competitive in terms of price?

Is the business seeking a value-billing proposition, where the view is taken that there is a market rate for a piece of work or component of a transaction? Against that rate, the firm aims to compete, so any benefit through efficiency savings should pass through to the bottom line rather than reduce fees;
Efficiency gains provide a basis to increase productivity by doing more work with the same or less resources. Is the business therefore seeking to produce more fees without increasing costs? How is the productivity gain to be measured?
Is the business taking a proactive approach to the advent of fixed-cost arrangements and getting its process cost base right now, while it has the time to do so?

Whatever the answers to these and other such questions, the key point is to link the BPM effort to business objectives. It is not sufficient to measure efficiency gains alone, no matter how spectacular. To realise business value, BPM benefits have to be linked to strategies designed to ensure that the value does not get marginalised in outcomes, such as the same fees generated in less time or the same volume of work produced for the same or less fees. In such cases, the technology investment represents no more than an investment in potential rather than an investment in profits.

Integration

Integration is the key technology challenge of BPM and it is through integration that technology will move from back to front office, as fee earners and secretaries seamlessly engage in processes that connect different systems through a uniform interface. To use referral tracking as an example, this important business-development function is adequately provided for within practice management, case management or CRM systems. However, if the collection of referral data is not an integrated component of the routine process of doing work, referral tracking and consequential application of such business information can be a hit and miss affair. Despite having systems and directives in place, fee earners and support staff may not always engage with the process unless it affects them in some way, or is seamless. At Browne Jacobson, and from a BPM perspective, the source of introduction of new instructions is captured as part of the process of opening the file. This is not onerous and can be made compulsory in order to obtain a matter number. Since the case management system (SolCase), the CRM system (InterAction) and PMS system (FirmWare) are integrated, the source of the referral is then tracked across systems. From a CRM perspective, the firm is, therefore, aware of the relationship between the referrer, the receiving fee earner, the matter referred and the value of referrals made via the particular referrer over time. In short, business intelligence is being gathered as part of the process of doing work, rather than as an addendum process. This represents a very low overhead on the fee earner and secretary and does not require them to visit different systems.

Ewin concludes: “I have been extremely impressed with Browne Jacobson ‘s achievements. The applications they have developed tightly integrate core system, but more importantly provide features and functionality necessary to deliver real benefit to lawyers in areas of work not historically associated with case management.

Their vision of applying many of the core principles of case management, such as document production, process automation, document management, time recording, quality control, online services and reporting solutions to a wider range of work types is now a proven reality.”

Integration however does not come for free and it is important that firms have access to the right level of expertise available, in terms of the technology, as well as the co-operation of forward-thinking suppliers. Additionally, integration will have software licence and systems-support implications. Suppliers are unlikely to miss the opportunity to charge for licences relating to systems that integrate, whether on a push, pull or read-only basis.

Cultural resistance to change, especially technology-based change, remains a key challenge throughout the legal profession. This factor is especially significant at a time when external pressures are mounting to make law firms reflect carefully upon the economics of the business. The need for technology initiatives to deliver real returns on investment has never been more apparent. This situation represents a critical window of opportunity to challenge and overcome the prevailing culture of passive resistance towards technology. Within this context, BPM provides a framework for change; the challenge lies within the application of many of the core case-management principals in non-standard work-types. Browne Jacobson’s success is due to simplicity: focus upon achieving tight integration between core systems and the streamlining of processes fragments that are universal to virtually all work types, rather than specialised end-to-end workflows. While BPM projects have the potential to deliver real efficiency gains, success must be measured in terms of the effect on the bottom line. For this reason, BPM initiatives should always be linked to an appropriate benefit-realisation strategy.

Reference:

1. ‘Benchmarking technology in the global economy. The use of IT in law firms.’ PA Consulting/Legal IT survey 2002/3

Jonathan Swan is IT director at Browne Jacobson. He can be contacted at: jswan@brownejacobson.com.