Technology matters: no really, it does

Charles Christian, editor of the Legal Technology Insider newsletter begins a regular Managing Partner technology column. In this month’s introduction, he explains why technology is so essential in the modern law firm.

As this is the scene-setter for a new regular column in Managing Partner, let’s start with a fairly fundamental question. Apart from quibbling over the size of the IT department’s proposed annual budget, when was the last time you took any serious interest in your firm’s IT strategy or indeed any of its other technology-related activities?

Perhaps it was during this summer, when there were a lot of e-mail viruses in circulation, as IT directors tell me that just about the only time they ever have the undivided attention of the partnership is when there is a problem with the e-mail system. That, or when a lawyer has forgotten a password and cannot access the firm’s systems from their laptop. Otherwise, in the words of a top-25 director at a recent IT conference: “Partners are not interested in IT until they hear several other firms have something they don’t. They just don’t read memos regarding technology.”

So what if technology does occupy a low place on the agenda – does IT really matter anyway?

There is a delusion among many lawyers that they still belong to some olde worlde profession where the only thing that really matters is the quality of the legal advice that they dispense. Lawyers holding this view should relocate from Sleepy Hollow as soon as possible because, unfortunately, the rest of the world takes the view that law is just another service industry. Furthermore, because it is virtually impossible to differentiate law firms on the basis of the quality of their legal services, increasingly the only factors that matter to clients are price and the way those legal services are delivered. And, like it or not, that brings us back to technology.

Yes, I know some firms have spent millions on IT in recent years (the average spend for top-100 firms is between five and seven per cent of their total annual fee income, although one magic circle practice reportedly spent £30m on a new practice-management-system project), but were you spending it on technology that actually improved the way you delivered your services to clients?

There is a great tendency for firms to spend huge amounts of money on administrative systems – in effect, systems to count beans – rather than client-facing systems that will actually help them earn more beans. Even when they do the latter, they often get it woefully wrong. For example, the first generation of virtual dealrooms cost some firms millions to develop and implement, yet the reaction of most commercial clients was: “No thank you, we’ll stick to e-mail and motorcycle messengers.”

Do not just take my word for it. At a conference session last year, in-house counsel from the likes of Cable & Wireless, DuPont and Equitas all criticised law firms for their non-proactive and unimaginative approach towards using technology to help deliver legal services.

When asked what recent innovations in law-firm IT had most impressed her, Julie Mazza, corporate counsel at DuPont said: “It is so rare that it would be most welcome if they were to offer something new.” Judy Baczynski of Equitas added that she felt all the innovations there had been in the delivery of legal services, even including how lawyers submitted their bills, had to date only been implemented by firms after her team had specifically requested them.

And even then there is no guarantee of success – at the time of writing this column, one of the UK’s largest banking groups is having to telephone its administrative contacts at panel firms to remind them that a new electronic billing system was implemented in September and that if the firms do not change their invoicing procedures accordingly, they are going to have to wait a lot longer before they get paid.

Or, to put it another way, lawyers may think that technology does not matter to them – but it does to their clients and ultimately that is going to have an impact on their firms. Next month we will be looking at e-mail management.

Charles Christian is the editor of the Legal Technology Insider newsletter. He can be contacted at: news@legaltechnology.com