By Pravin Kulkarni, Co-Founder, PracticeLeague Legaltech
With constantly changing market demands and technological developments, professionals in various industries have had to adapt to new ways to stay relevant. The legal industry is perhaps the most unique and traditional of them all, but even law firms have now begun to embrace a modern, technology-driven future.
A law firm is the quintessential knowledge-based business and that knowledge is spread across its books, documents, emails – and among its employees in their relationships, experiences, insights, intuitions, etc. Because of this concentration of knowledge and relationships, it will in all likelihood remain a people-oriented company. This industry can take inspiration from other similar service-oriented industries, like management consulting, where automation has allowed consulting firms to scale massively by delivering higher-quality, higher-return work.
Due to the established nature of law firms and their practices, various processes have become embedded in the work culture. These processes – whether customer-oriented in terms of advice, research, discovery, negotiation, or concerning internal documentation or anything operational – are transmitted from generation to generation. There are industry-wide quirks, for example, complex billing terms, that have been difficult to resolve for mainstream technologies in the past. The resulting work culture was therefore geared towards manual processes.
History of change
Many law firms have been slower than others in the service industry to embrace technology. The reluctance to make this change was due to many factors, namely comfort with traditional, embedded methodologies and practices, and the need for confidentiality, both of which have acted as a deterrent in the past and led companies to rely on internal infrastructure that is expensive to maintain and scale. However, with the emergence of modern, state-of-the-art, and secure cloud hosting, these challenges have largely been eliminated and resulted in many cloud-based technology solutions for law firms. New technology solutions take advantage of secure cloud hosting provided by industry leaders such as Microsoft Azure, AWS, etc.,
to securely host their client applications and data while meeting the relevant needs of a law firm.
Additionally, over the past decade, the increasing automation of every part of our personal and professional lives has made customers, partners, and suppliers dependent on technology to manage and optimize day-to-day business, resulting in a increased business expectations.
The first step in any automation exercise is a thorough understanding of how the law firm works, its critical interfaces and operating procedures, and its culture. For automation to happen, it is important to develop an understanding of the key pain points in the business, as well as the scale and scope of internal processes. While modernization is important, a complete transformation cannot be achieved overnight, and implementing too much, too quickly can be daunting. Therefore, it is important to separate “must-haves” from “nice-to-haves”. One way to categorize requirements at a very broad level is to group them into “Operational” or “Transactional”.
For example, tracking time, expenses, approvals, attendance, project status, reports,
schedule, documentation, etc. can be qualified as operational. While billing, accounting, customer engagement, research, updates, etc. can be described as transactional.
The key point in introducing automation is identifying priorities and where to start. It depends on the business characteristics of each company. Are the main challenges related to the operational aspects of the transactional side of the business? Typically, one of the most critical operational requirements for a law firm is receiving business and tracking billable hours, activities, or expenses.
This, in a manual system, is not only tedious but also error prone. Even from a business perspective, a large portion of the lawyer’s time is spent updating timesheets, which is not a billable activity and can lead to long unnecessary hours of work. Therefore, many companies begin their automation journey by automating this element of their business.
On the other hand, transactional challenges may relate to proper invoicing, deal-specific deliverables, or maintaining customer relationships. The wave of automation means customers are now used to a web interface, making a customer portal and real-time status updates a must. Many transactional challenges are linked to operational challenges. For example, to improve invoicing and timely payments, the business must effectively track cases, timesheets, activities, and expenses.
Therefore, as stated earlier, many companies find it necessary to work on operational challenges first. However, many of these companies then find themselves with a whole new challenge of having multiple systems for different purposes that do not integrate with each other and increase complications for its users. This challenge is faced even by some very large and experienced law firms, which are now opting for integrated systems or platforms (commonly referred to as law practice management suites) instead of standalone applications. The goal is to ensure that a single solution can be incrementally scaled to address all operational and transactional challenges together or in an integrated manner.
In order to achieve a smooth transition, certain points are essential – the first is to understand the main challenges of the law firm and to focus on the “must-haves” rather than the “nice-to-haves”. Next, evaluate several market tools that match the business requirements. Taking suggestions or referrals from other well-known companies can be helpful as they may have undergone a similar exercise in the past. Third, be prepared to provide data and other information that needs to be migrated to your new systems. Finally, make sure your users get the right training, onboarding, and ongoing support from the vendor to make this adoption a success.