Q&A: Down to business

Legal technology suppliers have offered firms a plethora of packages over the years, from fairly simple accounting to practice-management systems (PMS), case management and matter management. The latest in this line-up is business process management (BPM), which strives to bring greater control to the complex legal enterprise. Richard Brent asks Axxia managing director Stuart Holden how technology helps firms behave more like businesses.

Why do law firms need a new generation of legal technology tools?

Law firms were fairly cushioned before the last recession hit, but then they recognised things really weren’t where they should be. They woke up to being businesses – more importantly to being businesses within businesses. Some sectors were affected more than others and the challenges today vary between practice areas. And although most law firms are now more professionally run, the smaller firms face making potentially costly mistakes because of increasing regulation. Clients have also started becoming more savvy, looking for more efficiency and deciding they can demand lower prices in some cases – in insurance and remortgaging, for example. There was a realisation that areas like these could be automated. Firms need to be flexible enough to respond to changes, whether in client perceptions or the profession at large.

How do you see the market for legal technology changing as we enter 2007?

From a supplier perspective the bar has been raised in recent years. From competing to be the best in the legal software market there is now competition from those outside the legal market looking to come in. In the future there will probably be first fewer suppliers overall, and secondly more niche players.

What differences do you see between the various products available?

The difference between ‘best of breed’ systems out there and the Axxia unified approach is comparable to a Hi-Fi. Some people want all the very best elements, taking different pieces from different suppliers to form the whole. There are advantages in this, in that everyone gets what they want, but the downside is that the overall direction of the business may be forgotten. A unified system considers the needs of the firm as a single entity – rather than just catering for the demands of disparate groups.

How responsive do you find managing partners to new technology? Do they see it as an integral aspect of their wider strategies?

Some managing partners are enlightened and actually drive new IT take-up. Others still see it as a ‘necessary evil’. Understandably maybe, as some firms have found they put technology in place and then it only makes things worse. They have a natural reluctance to chase technology. It’s also important to question whether an upgrade will actually lead to a tangible benefit. If there is no compelling reason, it may be better to leave things as they are. Getting the wrong product can increase risk rather than manage it. However, I would say that with the introduction of alternative business structures in future, a BPM product may be particularly appealing to the non-lawyer managers that may be coming on board. These law firms will have no partnership legacy and will be looking to operate as competitive businesses from the off. Some CEOs have highlighted the effort that can be required to get things changed in a monolithic structure like a law firm. You have to be agile to stay competitive and alert to risk management.

How would you describe the typical relationship between the managing partner of a law firm and its IT department?

There are some law firms where all people work as a team – where the IT department is more proactive and has more input. On the other hand, there are others where IT has no influence at all over strategic decision making. How can that work? Communication is vital to making wise technology investments, as IT directors may perceive a different set of benefits and risks than the managing partner.