A technical business: Assessing law firms and their use of IT

An important element of Ark Group’s LEX Connect in London at the end of this month is the one-to-one meetings between lawyers and solution providers, where many aspects of legal technology will be discussed. In anticipation of the event, Caroline Poynton talks to solution providers that will be at the event, including Canon, eCopy, FloSuite, Thomson Elite and Voicepath, about their perception of IT in the legal market and how they intend to go about meeting their clients’ needs.

Technology advances have given us a world that moves faster than ever before, although many of us facing the rigours of another working week might wonder where the benefits lie. And, if technology has not made our lives as easy as we might have imagined, the business benefits of IT investment can prove equally illusive. After all, a myriad of hardware and software solutions, covering every aspect of business management and working processes, can easily result in poor integration, lack of use and, ultimately, a wasted investment.

For all the dangers, however, IT has become an essential part of client-service delivery in the legal profession, its impact revolutionising the way many law firms go about their day-to-day business. Even the image of the profession is changing, with antiquated oak-panelled offices, strewn with files, making way for glass monoliths that speak of clean style and high ambitions. It seems little coincidence that such make-overs parallel today’s preoccupation with cutting-edge technological capabilities. But, whether firms have indeed broken the mould of professional traditions to make the best possible use of available technology is a question that touches on the abilities of their solution providers to meet their needs, as well as the law firm’s ability to internally adapt to change.

Richard Bate, general manager at Voicepath, says that firms have made a lot of advances in their use of technology, but says that there remains a lack of commercial savvyness in their IT implementation. “If the senior partner is fairly forward thinking and can see the advantages of using technology, the commitment of the firm will also be there, and they will realise the benefits,” he says. Alex Thurgood, solutions product manager at Canon, agrees that firms have to be culturally committed to change. In partnership with eCopy, they provide multifunctional devices that can photocopy, print, scan and distribute information firm wide and beyond, but such capabilities can be overlooked if the law firm does not make its departments work more closely together. “The application side of the business, for example, the e-mail and content-management system, is within the remit of the IT department, whereas things like copiers traditionally lie with facilities,” he says. “The senior partner needs to drive those two departments to work together so that they are not duplicating investments in technology. Otherwise, IT will continue to buy printers and scanning devices, while facilities invest in multifunctional copiers that could do the lot.” It is a simple example of how technology investments can go awry.

For one of the longest-standing solution providers in the legal market, however, Thomson Elite has seen a lot of changes in law firms’ use of IT, with European sales manager Harry Pfeffer saying that in many respects they are ahead of the game. “Law firms tend to be at the forefront of adopting new technology, so we’ve had to be on the cutting edge all the time to remain competitive in the business,” he says. For instance, Pfeffer cites the move from client server to web-based deployment of software, changes in database-management tools, and most recently, the move by law firms to demand a complete and integrated solution across their practice-management and knowledge-management portfolios. While he agrees that people outside the business can think of law firms as being conservative and slow-moving organisations, he has personally been surprised by the close attention law firms give to the latest trends in IT.

Of course, flattery may get you everywhere, but Elite’s experience in the legal market suggests that there may be more to his comments than mere charm. And Pfeffer is not without some criticism, particularly of law firms and their approach to client-relationship management (CRM). “Law firms have been slow to embrace CRM and have been overly preoccupied by what non-legal firms are using CRM for. In my opinion, the more important use of a CRM system in law firms comes from the need to simply organise and maintain quality in the contacts, with less emphasis on marketing capabilities.” His argument dashes the efforts of some CRM providers, who are courting law firms with the marketing components of their CRM systems. For Pfeffer, such efforts miss the point. “I have spoken to many law firms that have spent a great deal of money trying to implement a CRM system with a marketing emphasis, and it has so often failed miserably because it wasn’t really what the law firm was after. If you talk to lawyers you’ll find that they are less concerned with going out and finding new business than they are with the reputation of the firm to the outside world,” he says. The key to getting this right is to have a CRM system that overcomes familiar problems, such as multiple lawyers contacting a client about the same matter, or misspelt names and addresses. It is also a capability that Pfeffer says is the strength in Thomson Elite’s CRM module.

Years of experience of working with legal clients gives Thomson Elite the obvious advantage of inside knowledge of the market, which can be used to refine its product offerings. But the company also has the solid grounding of a well recognised brand to support its growth. For firms looking to invest in a practice-management system, for example, it makes sense to go with a solution provider that is tried and tested, and as IT literate as Pfeffer says they are, law firms are not particularly renowned for taking risks. This can make life difficult for younger solution providers and create a marketplace that lacks competition or innovation.

Indeed, Voicepath, which was founded in 1998, began by offering the market digital-dictation and transcription services. In the last year, however, it has refocused its strategy away from digital dictation to focus fully on the transcription side. Bate explains: “The digital-dictation marketplace is pretty competitive and cut-throat, and we felt that there wasn’t much mileage in scrabbling to cut prices against the well established competition.” Such a conclusion demonstrates the difficulties for new entrants in the legal marketplace, but it is also one that has led Voicepath to reconsider its unique selling point and ultimately deliver a more innovative product to law firms.

By working in partnership with the digital-dictation suppliers, the company has developed the concept of Voicepath Inside. This enables lawyers to dictate their documents as usual, but then with a flick of a button, automatically outsource the transcription. Bate describes it as a “plug-in-and-go” service.

Bate also argues that the transcription service is unique in that the company uses legal secretaries based all over the UK, who can quickly and accurately return documents to lawyers (Bate says turnaround is typically under an hour). Other transcription companies may offer outsourced services from India or South Africa, and they will undoubtedly be cheaper, but Bate argues that you get what you pay for. “The quality and reliability you get from keeping it in the UK is really what we are trying to service to people. We are in fairness more expensive than some of the overseas operators but I think if you put an all-in cost to the operation, we are very competitively priced,” he says.

FloSuite is another recent addition to the legal market. The management team has been involved in process-management applications in manufacturing, finance, oil and professional services for over 20 years, but FloSuite was only established as an independent operating company in 2002. More significantly, the company came together to meet a specific end-user need or, more simply, to fill a gap in the market. “We saw a sector where large law firms increasingly relied on a mixed portfolio of best-in-breed solutions that each addressed specific operational areas, but collectively, did not work well with each other,” says Russell Wood, commercial product manager at FloSuite. In response, Wood says that FloSuite designed an application that could bind separate productivity tools into a single solution that could be matched to the needs of individual law firms. At a time when integration seems to be the buzz word of the day, it is a well considered addition to the technology stable that is currently on offer to law firms. It also demonstrates the ability of newcomers to make the most of the opportunities that arise as the technology market evolves.

For more established companies, there is little room to stagnate. For instance, Canon is a huge international company and a household name, but its partnership with the less well known software company eCopy has enabled it to offer new services to customers. Justin Bailey, sales manager at eCopy, says: “We have developed a system that enables people to securely convert paper [using the multifunctional copier described above] into PDF attachments, which can then be automatically distributed via a personal e-mail account.” There is other technology on the market that does the same thing, but Bailey and Thurgood claim that the combined Canon eCopy solution is different. “We are unique in that our system actually sends the attachment from your personal mail account, leaving a copy of that item in your sent-items folder,” says Bailey. At a time when efficient records management has become a priority, it provides an audit trail that is of obvious advantage, particularly in a sensitive environment such as a law firm.

Many commentators, including Managing Partner, have described the law-firm marketplace of recent years as highly competitive, with terms such as ‘survival of the fittest’ becoming common currency. In comparison, competition between the legal solution providers has seemed comparatively dull, with well-known faces looming large from one year to the next. In the past couple of years, however, there has been some interesting activity with new players competing alongside older organisations and some real innovations hitting the market. FloSuite’s Wood sums up the changing landscape, saying: “Now that IT budgets are beginning to recover, firms are able to look at a new wave of possibilities due to advances in the type of IT solutions available to them. Changes are particularly evident for improved hardware capabilities, network infrastructure and web-delivered software solutions.”

For many law firms, there still needs to be internal cultural change if they are to make the most of their technology investment by fully assimilating better IT processes into the day-to-day working practices of their lawyers (a task far easier said than done). But, as Pfeffer argues, the days when lawyers were really behind the times in their use of IT are long gone and some firms are really leading the way in adopting the very latest innovations. As for the solution providers, all the signs suggest that they are equally keen to ensure that what they offer is a truly unique proposition, which makes a tangible difference to their clients’ productivity.

From the commentator’s point of view, that makes a lively environment, which will be well worth watching in the months and years ahead.

LEX Connect 2005 is to be held on 24-25 February 2005 at One Whitehall Place, London. If you are interested in attending as a delegate, please contact Deborah Sowman at dsowman@ark-group.com. Alternatively, if you are interested in sponsorship opportunities, please contact Caroline Searle at csearle@ark-group.com